Five Conditions for Corporations About to Receive Coronavirus Bailouts

Wall Street and the Federal Reserve are getting ready for massive bailouts, so here are the conditions to put on large corporations who need cash from the government: 1) No bailouts for shareholders; 2) No more buybacks ever and no more dividends for five years; 3) Strict executive compensation limits; 4) No more lobbying and limits on public relations spending; 5) No more mergers and acquisitions for five years. 

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This Is Not the Time to Be Cautious. We Need to Contain the Economic Contagion of the Coronavirus

A real danger is that the virus mutates and infects our economic system, even as we manage to root it out of our bodies. The objective of economic policy cannot be to eliminate the recession altogether. The priority is to short-circuit all the negative feedback loops and channels of contagion that otherwise amplify this negative shock. 

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Keeping Business Alive During the Coronavirus Crisis: Government as Buyer of Last Resort

The government has to compensate businesses and workers for their losses so that each business can re-emerge almost intact after the hibernation due to social distancing ends. An economy-wide fall in the demand for goods and services of 40 percent over 3 months leads to a 10 percent drop in annual GDP. The government can transfer 10 points of GDP to the private sector, financed via public debt.

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Captured Western Governments Are Failing the Coronavirus Test

In deciding on possible countermeasures, residents of Western democracies often hear only two opposite perspectives: Is the priority to minimize the loss of human lives, or to minimize the impact that the countermeasures might have on the economy? Even the simplest cost-benefit analysis suggests that the US government should be willing to spend up to $65 trillion and lock down the country to avoid extra deaths.

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The ECB Can Save the Italian Economy and Prevent a New Euro Crisis Triggered by Covid-19 Fallout

The Italian government’s effort to contain the coronavirus will have significant economic consequences. Italy should be allowed to ask for emergency help with one single conditionality: Spend what you must on crisis containment and commit to wind down everything once the crisis is over. In the meanwhile, the ECB can buy Italian government bonds at a given rate and save the single currency. 

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How to Save American Middle-Sized Businesses from the Coronavirus Supply-Chain Crisis

Congress passed an $8.3 billion spending bill to address the coronavirus epidemic, but the bill will not protect small companies. Republican Senator Marco Rubio put forward the idea of mass direct government lending to American small and medium-sized businesses. But Democrats, who have traditionally advocated for such a policy, now oppose it. 

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Sanders Is Leading the Democratic Primaries, but Don’t Bet on an Open Convention

Bernie Sanders is a polarizing front-runner, but there are many reasons to believe the Democratic convention this summer is unlikely to repeat the drama of 58 years ago, when Adlai Stevenson was nominated on the third ballot. The most important is the increasing number of “pledged delegates” chosen on Super Tuesday. 

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