By Jack Kelly
Federal Reserve Chairman Jerome Powell said the central bank will continue to use its policy tools to mitigate the impact of the novel coronavirus on the U.S. economy. Allow me to translate: “I’m gonna keep printing money and buying all types of securities to prop up the stock market because if I don’t, we’re all f**ked!” As of the time I’m writing this piece, the stock market is down about 2%. The way things have been going lately, it could either fall another couple of percentage points or just as easily jump 5% on algo trading.
As a side note, if you think we’re still a capitalistic society, you’re sadly mistaken. It’s capitalism when CEOs and their cronies buyback stocks to artificially inflate their share price, which enriches the already-bloated wealthy executives, as their personal stock holdings and options boom in value. When things go poorly—and boy did they when the coronavirus hit—the shift happens. Now that the fatcats spent all of their money on themselves, they had to go hat in hand to the government for bailouts. The billions given to companies that did not govern themselves properly is nothing less than corporate socialism.
Back to Powell. He went on to say that we have a rough road ahead of us and it won’t be easy. Powell also pointed out that 40% of the job losses came from households earning under $40,000 a year. This means the most vulnerable, who according to research don’t have three months of emergency funds saved up, are hurt the most. Don’t worry, as they may be bailed out too.
Evidently, according to Congress, we’re in such dire straits that another round of stimulus is needed. House Democrats want to send American families $6,000, as part of a new $3 trillion coronavirus relief package. This is in addition to the last multitrillion dollar plan. Powell’s team at the Fed must be super busy printing money.
Twitter CEO Jack Dorsey, in a paradigm-shifting, COVID-19-inspired move, informed his employees that they can continue working from home “forever.
With all of the technologies available, what difference does it make if the remote worker is based in Long Island, Utah, Idaho or Texas? Companies could recruit the best talent nationwide. Job seekers, in turn, may apply to jobs everywhere as well. They won’t be restricted to work within the confines of their geographic boundaries. By throwing a wider net, a job seeker has a greater chance of finding the perfect job.
There’s the possible downside, in which the well-intentioned policy could backfire. Once people work from home, there will be an employment arbitrage occurring. Companies will quickly realize that they don’t have to draw upon job seekers from their immediate vicinity. They could hire people nationwide. With over 30 million people recently unemployed, this would make it much more competitive to find a new job.
Don’t believe all of this corporate talk of furloughs. Furlough implies that a person will soon return to his or her job. The company hopes that business conditions will improve and it can bring back its employees. In this current combination of a health, economic and job crisis all rolled into one big mess, using the term is misleading and disingenuous. It’s a feel-good ruse constructed to make it seem that everything will be okay and the corporation is actually in sound financial shape.
The sad reality is that companies won’t be able to rehire people until they get some sort of clarity or actually see a resurgence in business.
Due to the increase in unemployment benefits offered through the multitrillion government stimulus plan, some furloughed workers may elect to keep collecting unemployment, as opposed to returning to work. It’s a reasonably sound business decision for a person to accept the additional $600 per week, in addition to the $300 or so given by the state—rather than go back to a lousy, back-breaking, go-nowhere job. They could wait things out and hope for better times ahead.
We kind of know Facebook thrives on conflict and heated political arguments with a little bit of cat pictures thrown into the mix. It seems that a court believed Facebook is so toxic that the social media giant agreed to pay $52 million to its content moderators. The money served as compensation for mental health issues caused by making the moderators read everyone’s dopey posts. If Mark Zuckerberg is reading this, I’d gladly take half of that to read through all of the nonsense.
Boeing CEO David Calhoun said that one of the major U.S. airlines will “most likely” go bankrupt. He didn’t name names, but he intimated it could be either United Airlines, American Airlines, Delta or Southwest. Whichever one it is, it’s not good for Boeing, as the company is an aircraft manufacturer. Calhoun also said that the airlines won’t be back to even 25% business by the autumn, and “maybe by the end of the year we approach 50%.” Isn’t there a public relations person over at Boeing to watch over what this guy is saying?!
Who would have guessed that America’s most fervent and ardent supporter of capitalism and freedom is African-American Elon Musk (he was born and raised in South Africa). Musk maintains that the COVID-19 pandemic is overblown and the numbers are fudged higher than they really are. He attributes this to the extra income that hospitals get when they treat patients with the virus and as not to make the medical folks who forecasted millions of coronavirus deaths don’t look wrong.
Musk wasn’t too pleased when a petty bureaucrat assembly person tweeted “F*ck Elon Musk” because he had the temerity to want to maintain running his electric vehicle factory. Musk naively believes that it’s American as apple pie to keep people employed and make products that people want. In an act of defiance, he kept the factory opened and challenged authorities to arrest him.