The other coronavirus contagion concern

The other coronavirus contagion concern

As governments around the world put their countries on lockdown to slow the spread of the coronavirus, there is a growing fear that the global economy and financial system could soon experience another kind of contagion. This week, as the scope of the outbreak became clearer, dire economic data from China and forecasts of a looming global recession started rolling in. Some experts are even starting to use the dreaded D-word, drawing comparisons with the 1929 financial and economic crash that led to the Great Depression.


Coronavirus, and the responses to it, pose two major risks to the economy and financial system. The first is the hit to companies' sales and profits, and workers' wages and jobs. The worse the outbreak, and the harsher the social and economic clampdown needed to manage it, the worse the economic hit will be. Airlines are already warning they may face bankruptcy by May without government assistance. Carmakers and other large manufacturers are closing assembly lines. Millions of restaurant and other service industry workers that are forced into lockdowns may soon be out of jobs and unable to pay bills, student loans, and make rent or mortgage payments. That's one reason stocks have been hammered this week, despite attempts by the US Fed and other central banks to stem the bleeding and shore up confidence.

The second big risk is harder to pin down – that's the risk of financial contagion. Companies going bankrupt and firing workers is bad enough, but it can become an even worse problem if it creates a domino effect where companies can no longer pay back loans, generating losses that could shake confidence in banks and the broader financial system.

Offsetting the coming economic shock would reduce the risk of wider financial contagion, but will require governments around the world to unleash huge resources: both fiscal stimulus to help workers and companies (Italy has already suspended mortgage payments and declared a holiday on household bills, while President Trump has promised support for the airline industry and is now considering sending cash directly to Americans) – and possibly other measures to ensure the smooth operation of the financial system that go beyond what central banks have done to date.

The catch: Decisions about whom to bail out and whom not to will be every bit as politically fraught as they were in 2008-09, when governments around the world were forced to intervene to prevent a much worse collapse – and during a US election campaign, to boot. This time, though, the political wrangling will also take place during an ongoing pandemic that is already stretching many governments around the world to their limits.

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The European Union is, for better or worse, the most ambitious experiment in human history in institutionalized multinational cooperation. Its success depends on the willingness of its members to abide by its rules.

In recent years, the populist-nationalist governments of former Communist bloc members Hungary and Poland have flouted some of those rules in order to boost their own popularity with citizens suspicious of the EU's liberal values on issues like immigration and minority rights. In response, the EU has scolded these "illiberal" governments and threatened forceful action – so far without much effect.

The fight between EU institutions and Poland and Hungary has escalated.

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Ian Bremmer is joined on GZERO World by artificial intelligence scientists Kai-fu Lee, who recently wrote about how AI will change the world over the next two decades, precisely to talk about AI's future. After this week's Facebook debacle, how can we align interest to regulate AI-driven algorithms? Will AI steal all our jobs? And what should we do to learn from AI to improve our lives before it gets smarter than us?

Watch this episode of GZERO World with Ian Bremmer: Is a robot coming for your job? Kai-fu Lee explains AI

US elections officials have always persuaded losing candidates that they've, ahem, lost. Now it's worse because there's a new paradigm, according to former DHS and Election Assistance Commission official Matt Masterson, policy fellow with the Stanford Internet Observatory. Candidates that won't accept defeat regardless of the margin or evidence of fraud, he says, are undermining trust in the system — and election officials are ill-equipped to deal with this problem.

Matt Masterson made these remarks during a live Global Stage event, Infodemic: defending democracy from disinformation. Watch the full event here: https://www.gzeromedia.com/global-stage/virtual-events/disinformation-is-a-big-problem-what-can-we-do-about-it

Who's most responsible for spreading misinformation online? For Ginny Badanes, senior director for Democracy Forward at Microsoft, the problem starts with those who create it, yet ultimately governments, companies and individuals all share the burden. And she's more interested in what we can do to respond.

Ginny Badanes spoke at a live Global Stage event, Infodemic: defending democracy from disinformation. Watch the full event here: https://www.gzeromedia.com/global-stage/virtual-events/disinformation-is-a-big-problem-what-can-we-do-about-it

Some of the worst sectarian clashes since Lebanon's 15-year civil war (1975-1990) broke out in Beirut this week between supporters of Hezbollah and Amal, both Shiite political parties, and Christian, far-right Lebanese Forces. Shiite protesters were rallying against the state probe into the Beirut port blast, which occurred last year. They say authorities were singling out Shiite politicians for questioning and blame. In this video, watch Ian Bremmer's conversation with Lebanese journalist and author Kim Ghattas on GZW talking about the future of Lebanese politics and sectarianism in the county after the after the blast. It was originally published on August 19, 2020.

In Lebanon, "a majority (are) united in wanting a different future, a future that is non-sectarian, that is non-corrupt, that provides prosperity, justice, dignity for people," journalist Kim Ghattas told Ian Bremmer on GZERO World.

In this interview, Ghattas discusses the opportunity that could arise from the tragedy of the Beirut explosion which killed 200 and injured thousands more. The Lebanese are "fed up" with the militant group Hezbollah, she tells Bremmer, and want to strive for a government that better resembles the diversity and cosmopolitan nature of its citizens.

Watch the GZERO World episode: Lebanon Post-Blast: Rage in the Streets of Beirut.

Some of the worst sectarian clashes since Lebanon's 15-year civil war (1975-1990) broke out in Beirut this week between supporters of Hezbollah and Amal, both Shiite political parties, and Christian, far-right Lebanese Forces. Shiite protesters were rallying against the state probe into the Beirut port blast, which occurred last year. They say authorities were singling out Shiite politicians for questioning and blame. Below is our original piece on the Beirut port explosions published on August 5, 2020.


The twin explosions at Beirut's port on Tuesday were so powerful that the aftershocks reverberated as far as the Eastern Mediterranean island of Cyprus, 150 miles away. The specter of fire and smoke was such that many suggested on social media that Beirut had experienced a nuclear blast.

In the days ahead, more details will come to light about why a deadly cache of materials was haphazardly stashed at a port warehouse, and why Lebanon's government failed to secure the site. So, what comes next for crisis-ridden Lebanon?

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Jon Lieber, head of Eurasia Group's coverage of political and policy developments in Washington, shares insights on US politics:

What does it actually mean to cut $1 trillion from the Democrats' $3.5 trillion social spending bill?

President Biden has proposed one of the most ambitious expansions of federal spending in recent memory. If he gets everything he wants, it would probably be the largest expansion of government since the Great Society, but he's not going to get everything he wants. Democrats have basically said they cannot do all $3.5 trillion in spending. They're probably going to end up around $2 trillion. So what gets cut? Well, we don't know yet. There's kind of two ways to go about this. They could either cut the number of programs that have been proposed, doing fewer things with more money on a permanent basis, or they could try to do more things, each program getting less money and potentially doing them on a temporary basis. So, a future Congress would have to extend it. What does this mean for you? Well, a lot of the money in here is designed to go directly to families, either in the form of cash payments, through the tax code, the Child Tax Credit and the Earned Income Tax Credit, or subsidies for things like child care, early childhood education, and community college. And if you cut these things back, it means less money is going to go out the door to the American people. It also means less tax increases to finance it. So the implications of what's being proposed could actually end up being a big deal for a lot of Americans who would qualify for benefits under these new programs.

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