COVID-19: Fiscally Recoverable?

We know that the global COVID-19 crisis is hitting firms and individuals very hard in many ways, not least of all financially.  What economic experts and financial organizations saying about this?

On the one hand, Kristalina Georgieva, IMF Chief, points out that there has not been a fiscal crisis this bad for over a hundred years, since the Great Depression.  She believes it to be “the worst crisis since the Great Depression a century ago,” and not only that, but there will likely be lasting damage.

In the space of merely three weeks, 17 million US employees are now hitting the unemployment line.  New York Federal Reserve Bank economists are thus comparing this to a natural disaster (such as a massive earthquake) as a standard financial crisis usually happens over a longer period of time.  However, given that there are not the same physical consequences, it is believed that a faster economic recovery will be more likely.

Former US Treasury Chief Economist and Peterson Institute for International Economics  contributor Karen Dynan – while noting the 20 percent plummet in the US economy in April and May – is predicting a 7.2 percent rebound in the US economy next year, year-over-year.

Further, on the other hand, some economists are predicting a “solid rebound” once people can get back to work.

Coronavirus Relief Bill

There is a $2 trillion Relief Fund Bill for Employee Retention set up by President Trump.  But should that run out of money, he has pledged to seek additional funding from Congress.  During a COVID-19 White House briefing, Trump said:

 “This is money that’s really going directly to the people who need it, the small businesses who need it, and the workers that need it. When we open, we want to open strong with businesses that are going.”

Known as the CARES Act – the Coronavirus Aid, Relief and Economic Security Act – this has been hailed as “the largest economic stimulus bill in modern history,” more than 100 percent higher than the Stimulus Act initiated during the Financial Crisis of 2009.

Hope for US Economy

President Donald Trump said Tuesday he wants the U.S. economy to “open” back up by Easter Sunday, despite expert warnings about the deadly threat of the coronavirus. Easter is April 12, less than three weeks away. Medical experts had recoiled at Trump’s suggestion that Americans could gather en masse amid the coronavirus outbreak.

Staying connected while working from home

Munear Ashton Kouzbari Offers Bosses Direction on Managing a Team Working from Home

Most of us spend a substantial portion of our waking hours at our workplace. Or at least we did before the corona pandemic upended our lives and forced us to spend all our time at home. Managers and employees, CEOs and support staff, are all navigating this new reality. Munear Ashton Kouzbari offers insight for bosses and administrators looking to weather the transition to remote employment successfully.

Have your Resources Ready

The 21st century is ready for working from home. There are so many free or low-cost options to establish and maintain a virtual office team.  Sit down with your tech crew and review your specific needs. Then you can select the set-up that is most suitable for you and your employees. Some managers mistakenly believe that they can rely exclusively on email to communicate with workers. You’ll want to use some kind of chat platform for regular check-ins and maintain an “administrator only” channel for updates.  Make sure that all the internal platforms and files that employees need to do their jobs are available outside of your office network.

Munear Ashton Kouzbari recommends the best tools for your business

This whole work-from-home thing happened very quickly. Few employers had time to properly train staff on using all the remote tools. Tech support will likely need to do some online training sessions, or even one-on-one calls, to guide people through the new processes. It will take time, but it is worth the investment.

Also, if practical, let employees take office equipment home. Laptop computers might be obvious, but office chairs, screens, keyboards, and even desk lamps can greatly enhance the home office experience.

Be Clear and Reasonable

Just because your team is now scattered, it doesn’t mean you should not be clear about what is expected of them. Set well-defined parameters of acceptable behavior and gently remind everyone that working from home is not a pseudo vacation. If you had weekly meetings in the office, maintain that schedule in a virtual forum (zoom, workspace, etc.). Attendance, and reasonable attire, should be mandatory.

BUT, keep in mind that many of your workers will also be juggling childcare during the pandemic. While most workers can stay task-focused while in the office, school and daycare closures have most parents struggling to find a work-life balance. When scheduling online meetings and calls, give plenty of advanced notice and ask for optimal times. Give as much leeway as possible on deadlines and understand that most parents will be putting in a lot of late-night hours once the kids are asleep.  

Maintain the Positive Office Environment

One of the reasons social distancing is such a struggle for most of us, is because we are social beings. As bosses, it is important to maintain a friendly and positive office culture so that employees enjoy coming to work and spending time with their colleagues. Now that working from home is the reality, your teams are probably missing each other, which can have a tangible impact on output. Use the tools mentioned above not only for work-related meetings but also to simulate kitchenette camaraderie.  Encourage colleagues to connect and consult with one another.

Encourage everyone to work together, even when they are apart

Communicate Regularly

When you and your staff are working remotely, keep the lines of communication open. Now that they can’t just pop their head into your office, make sure they know how to find you—and that you want to be found. Touch base with each member of your team on a regular basis. Whether you call by phone, ping them on a workplace platform, or initiate a video chat, take the time to genuinely express interest in how they are doing. This reality isn’t easy for anyone. Show them that you care about more than just the bottom line.  Your workers are likely to surprise you with their resilience and motivation to do well in this less-than-optimal situation. Use this time to uncover hidden talents or interests in your employees that didn’t necessarily come across in the regular work environment.

As we all figure out how to work through the current corona crisis, it is worth viewing this period of working from home as an opportunity rather than a challenge. Digital teams and communities are effective. Productivity, engagement, and even business growth can be obtained, even remotely, when managed correctly.

America’s Economy

America’s Economy is the world’s wealthiest and most powerful.  Even macro-economists find it challenging to picture this as it is just so large.  But the numbers speak for themselves. Since 1871 America has been the world’s largest economy.  Indeed in 2018 it was measured at $20.58 trillion in 2018 in nominal terms.

For comprehension purposes the only way even macro-economists can fathom this enormity is by looking at GDP and labor force numbers as well as trade balances.

So let’s now look at trade balances.  Last year goods and services trade deficit was valued at $616.8 billion; imports – $3.1 trillion and exports – $2.5 trillion – not the best figures.  Adding insult to injury the trade deficit just for goods was $866 billion.

However, there was still a decline in the overall trade deficit for America in 2019 so that is definitely a good sign. Moreover, the US’s goods deficit with China declined too. Still, experts believe that many more stringent policies must be put in place to further reduce the deficit.

Recharge Your Community’s Economy

Four one-day workshops are being offered – at no fee – by Native American Development Corporation, Rural Community Assistance Corporation and the People’s Partner for Community Development. The first one is next week, March 24.  This will be followed by April 28, May 12 and June 16 – each one will follow from the one before and will last for 6 hours.

To be held at the Charging Horse Casino Bingo Hall (on East U.S. Highway 212), they will start at 9am and finish at 3pm.  The subjects covered include: an analysis of where the economy is today; pinpointing emerging economic opportunities for the future; how to select the right leaders who are best equipped to respond to those opportunities; a development of plans to make those visions a reality.

US Economy: Growth Industries

The cement industry in America seems to be faring well. One measuring tool is cement consumption and right now it has been relatively high. What’s more is that experts anticipate it will continue to grow (albeit modestly) over the next few years.  As Portland Cement Association’s Senior VP and Chief Economist Ed Sullivan pointed out:

“The economy doesn’t have the zip and the vigor that it had 10 years ago, and so what we’re seeing is the economy’s now in late stages of economic growth and recovery. That suggests that overall growth is going to start to slow, which is reflected in a slowdown in GDP numbers. It’s also reflected in our slow-down in job creation numbers.”

Sullivan added that both job creation and consumer sales numbers have not plummeted at all which is also a good indicator of stabilization and continued growth as well as an increase in home prices.

There have been some upturns in solar job industry following a dip in employment in the industry.  Employment in the solar industry jumped by 2.3 percent in 2019 and 5,600 jobs were added during the same time frame.  In addition, 31 states had an increase in solar jobs in 2019.

America is currently harboring an overwhelmingly huge debt right now, owing more than four times what it did just two decades ago. oXYGen Financial founder and CEO Ted Jenkin said:

“Like any budget that you have in your household, we have too little income and too many expenses. [However, this could have valuable significance for the consumer.  It doesn’t look like interest rates will increase all that much in the short-term since if they did reach 6 percent or over] the net interest on the debt in our fiscal deficit would actually be the No. 1 line expense on our budget.”

But is this really the case?  If – as Jenkins would have us believe – the consumer is in a better position now, how come the recorded number of new vehicles purchased was lower last year than in previous years. According to research from Cox Automotive, Edmunds and J.D. Power/LMC Automotive, there was a 1 percent decrease in sales from 2019 as compared to 2018 – the lowest in sales since the 2014 figure of 16.5 million.

President of Americas Operation and Global Vehicle Forecasting Jeff Schuster said:

 “Despite a lot of noise and some uncertainty with light-vehicle sales, 2019 has turned out to be a strong year. Much of that uncertainty has dissipated with USMCA nearly across the finish line, the progress with the China trade deal and an economy that is expected to be supportive.”

Trump supporters also believe that this will help business leaders believe that any bolster in consumerism will lead them to put faith in politicians for the upcoming 2020 election.

2020 Economic Outlook

The outlook for 2020 for the US economy is overall good, according to key indicators including: interest rates, stock market, consumer expectations, inflation, employment and, in particular GDP rate as that is an accurate indicator of America’s production output.  However, others have suggested a reduction from the 2019 2.2 percent figure to 2 percent this year. Indeed since 2017, real GDP growth was actually higher than average with a 2.5 percent figure for each calendar year.  This was mainly attributed to fiscal stimulus.

With Trump’s promise to boost advancements in the economy to 4 percent which is extremely fast, and – some would say – even too fast leading to overconfident consumerism. This could then result into a problematic boom and ultimate bust to the economy.  Indeed, there has been a marked growth spurt in the nation’s economy, especially as compared to other developed economies.

The dollar is also encountering a safety net, similar to the Swiss franc and Japanese yen.  This means that investors will more likely want to put money into US bonds and stocks.  There is an anticipated 3 percent growth within the next two years of the US dollar.