Adam Tooze/Shockwave

David and Helen talk to Adam Tooze about what we know about the crisis that we didn't know a month ago, and what we still don't have much of a clue about. From fights inside the French government to the fate of the planet, from shale gas to corona bonds, we try to join up the dots. Plus a small update recorded after news of the oil price-drop. Read 'Shockwave' by Adam Tooze in the LRB https://www.lrb.co.uk/the-paper/v42/n08/adam-tooze/shockwave.

Talking Points:

The dominant reality is the scale of the unemployment rate, especially in the U.S.

Michigan’s unemployment rate soared to 25% in a single month.We have often seen an extraordinary policy response. 

The Fed’s initial policy response was a failure: they didn’t stabilize share and bond markets. But it has now, at least in part, succeeded.

It also seems to have stabilized dollar funding markets.The Fed did in about 3 days what took roughly a year in ‘07/’08.Will these actions make democratic politics more difficult in the medium term?

The Fed’s ability to act in certain ways has depended on congressional cooperation. 

This could change if Biden were elected. Trump’s presidency enables the GOP to behave more pragmatically.The shale industry is being bailed out—this is a tricky issue for the Democratic party.

Is data the new oil?

The tensions between Russia and Saudi crashed into the virus. It’s hard to see how oil prices will recover any time soon.Are we entering the oil endgame? If so, seizing market share immediately is much more important.  The oil and the financial elements of this crisis are closely connected.

Has anyone moved the dial on corona bonds?

The Germans didn’t want the question to be put, but the French went ahead and did it.But Macron’s recent interview with the Financial Times was vague. How serious are they?How does the Eurozone engage in common borrowing without engaging in common taxation?

Mentioned in this Episode:

Our last episode with AdamDavid and Helen talking to Nate SilverAdam’s piece for the LRB on COVID and the global economy Macron’s interview with the Financial Times… on YouTubeThe transcript of Macron’s FT interview

Further Learning: 

538 on American unemployment numbersMore on ‘coronabonds’

And as ever, recommended reading curated by our friends at the LRB can be found here: lrb.co.uk/talking