The coronavirus has brought the global economy to a practical standstill. Amid social distancing, hundreds of millions of people are shut in and spending less. Businesses are shutting down and financial markets are collapsing. Policy makers and central bankers have reacted like they have always done – print trillions to prop up financial markets. Goldman Sachs is predicting a sharp decline in Q2 GDP due to the coronavirus, which will plunge the U.S. back into recession.
Martin Wolf, chief economist for The Financial Times, recently highlighted how the world economy is collapsing and so-called world leaders appear totally inept:
In its latest World Economic Outlook, the IMF calls what is now happening, the “Great Lockdown”. I prefer the “Great Shutdown”: this phrase captures the reality that the global economy would be collapsing even if policymakers were not imposing lockdowns and might stay in collapse after lockdowns end. Yet, whatever we call it, this is clear: it is much the biggest crisis the world has confronted since the second world war and the biggest economic disaster since the Depression of the 1930s. The world has come into this moment with divisions among its great powers and incompetence at the highest levels of government of terrifying proportions. We will pass through this, but into what?
The Financial Times would have you believe that Wolf is informing us about something. This is quite the contrary. Ralph Baker’s Shock Exchange: How Inner-City Kids From Brooklyn Predicted the Great Recession and the Pain Ahead, explained how he and the kids of the New York Shock Exchange predicted the Great Recession, yet no one listened. They also pointed out (1) how policies set by Barack Obama, David Cameron, Angela Merkel, Mario Draghi and Ben Bernanke were pure economic folly and (2) the globe would shortly plunge into another recession worse than the last.
Martin Wolf, The Financial Times and other corporate media outlets have ignored Baker and Shock Exchange. Meanwhile, Wolf is now mimicking Baker and trying to co-opt is message. Wolf is now late to the party. He, Martin Sandbu and The Financial Times had years to tell the world about the pending economic collapse. President Trump would call this “fake news”, yet others would call it unpatriotic. Wolf calls policy makers inept, but where was he when Shock Exchange was released years ago?