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The lockdowns’ greater economic impact

The lockdowns’ greater economic impact

The differential impacts of the pandemic and its lockdowns are now unmistakable. Originally, the pandemic, lockdowns and recession so closely overlapped that it was possible to mistake cause for effect. Only as they have extended and altered, has the true relationship become distinguishable: The lockdowns’ have had the greater economic effect. 

Illusions rest on compelling simplicity. The coronavirus and recession relationship is no exception. Today’s pandemic is the greatest in 100 years, and the unexpected economic collapse is the greatest in over 90. Unquestionably joined, the two had to be cause and effect. 

As tempting as this circumstantial evidence is, there is a superficiality to this logic. After all, going to the theater did not kill Abraham Lincoln; being shot did.   

The current pandemic’s biggest canard is that coronavirus killed America’s economy. Such shorthand explanation leaves out the lockdowns’ decisive role. With sufficient time having elapsed, and the ebb and flow of pandemic and responses having occurred, it is possible — and important — to establish the real relationship.

On Jan. 21, America documented its first known coronavirus case. Cases then spread, likely to a greater extent than then known; however, lockdowns would not begin until March. During the pandemic’s pre-lockdown phase, the economy continued to function, with employment increasing in both January and February.  

Not until March’s lockdowns did the real economic impact occur. According to the Bureau of Labor Statistics, nonfarm payroll shed 1 million jobs (from 151.076 to 150.073 million). So great was the late impact that the gross domestic product (GDP) in the first quarter fell a dramatic five percent. However, this was just a foretaste of lockdowns’ full impact.   

As lockdowns extended and tightened, employment plunged unprecedentedly. Employment in April fell almost another 20 million jobs (from 150.0073 to 130.317). This led the way for

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Mayors in northern England call for greater financial support

Mayors in northern England call for greater financial support

Mayors in Northern England have asked MPs across the region to force the government to improve the financial support offered to people and businesses hit by local lockdown measures and prevent tens of thousands of job losses.

With the government set to announce on Monday that many hospitality businesses in Merseyside, and possibly elsewhere, must shut on Wednesday, the four Labour metro mayors in the region have written to the 158 MPs.

Paying people just 66 per cent of their salary to stay at home and offering small grants to businesses is not enough, the mayors said.

“To accept this package would be to surrender our residents to hardship in the run-up to Christmas and our businesses to collapse,” Andy Burnham, mayor of Greater Manchester, said.

He said hospitality workers were being treated as “second-class citizens”. 

The mayors want MPs to press for a separate vote on the support package, outlined by chancellor Rishi Sunak on Friday.

As well as furlough, it includes cash grants to companies forced to close of up to £3,000 per month payable every two weeks.

They want at least 80 per cent of wages paid — as in the original furlough scheme — and the scheme extended to companies in the supply chain. They also want it to cover self-employed trades such as taxi drivers and security staff. 

Steve Rotheram, mayor of Liverpool City Region, said: “You cannot do Covid lockdown in Liverpool City Region and the north on the cheap.”

Since cases are far higher in northern England than southern England, the measures will inflict far more economic damage in places already disadvantaged.

Scotland took measures across its central belt including Glasgow and Edinburgh this week.

The government is negotiating with the mayors about a new three tier system of restrictions to

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Greater Houston Partnership talks Houston economic recovery

Greater Houston Partnership talks Houston economic recovery

An executive from the Greater Houston Partnership spoke with Houston Northwest Chamber of Commerce members about the struggle for economic recovery, with forces pulling the economy both in and out of the recession.

Patrick Jankowski, senior vice president of the group, said Thursday the struggle was like a tug of war, with some factors pulling Houston’s economy into recovery, and others keeping the economy from progressing and bringing back jobs.

Some positives include consumer sentiment at its highest level since March; single-family home sales and car sales are back up, according to data from the US Census Bureau and the US Bureau of Economic Analysis. Jankowski said an increase in automobile sales was a short-term indicator of consumer confidence, while home sales were a long-term indicator of consumer confidence.

Jankowski also said retail sales overall have risen since the pandemic first hit in March and April, according to census data, like how sales go up around hurricane season.

“Think back about after Harvey hit the region and how regional sales surged because people were having to replace everything that was lost,” Jankowski said. “People weren’t able to shop early on in the pandemic, so now you’re starting to see this increase in retail sales.”

There are still some factors holding back economic recovery, he said, including the still present risk of COVID-119, turmoil in the stock market, high unemployment claims and the lack of a new economic stimulus package.

At the worst part of the great recession in 2009, there were about 600,000 unemployment claims weekly, he said, while the highest the U.S. has seen during the pandemic was 7 million weekly, but that

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