By Tank Murdoch @TheNatSent
(TNS) We’re getting close to the economic point of no return in America, thanks to coronavirus-related shutdowns that have shuttered hundreds of thousands of businesses and thrown at least 10 million people out of work.
That’s the diagnosis from economist Stephen Moore, who warned Sunday we could be â€œfacing a potential Great Depression scenarioâ€ if the country remains on lockdown into May.
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In addition to the economic holocaust, Moore told New York AM 970 radioâ€™s â€œThe Cats Roundtable” program that the death rate from violence will likely rise too thanks to a massively increased unemployment rate.
â€œ[A]t some point soon, weâ€™re going to have to make some real decisions about what kind of a calamity we are causing through this lockdown of our economy,â€ Moore told host John Catsimatidis.
â€œIâ€™m not saying we shouldnâ€™t be inattentive to the public health concern â€” we should. â€¦ But at some point, we have to worry about what weâ€™re doing to our society, and what kind of economy weâ€™re going to have after this is all over,” he added.
Moore said a combination of concern and smarter public policies could get businesses open again, Americans back to work, and ‘bend’ the curve of the COVID-19 pandemic.
President Donald Trump and governors across the country should get the economy â€œup and running for the good of our countryâ€ by coming up with â€œsmart policies,” he said.
â€œIf we go much past May 1st, we are facing a potential Great Depression scenario,â€ Moore added after agreeing with Catsimatidis that the economy needs to be started back in the next 30 days.
Moore is not the only economic and financial expert sounding this alarm.
Jamie Dimon, CEO ofÂ JPMorgan Chase, said that he expects the coronavirus crisis to include at least a â€œbad recessionâ€ and elements of financial strain similar to the 2008 downturn, CNBC reported.
Dimon said the country’s largest bank is in a good financial place and that lenders have prepared for this. However, he added that what we’re seeing now with coronavirus is â€œdramatically differentâ€ from the industryâ€™s Federal Reserve stress tests.
â€œWe donâ€™t know exactly what the future will hold â€“ but at a minimum, we assume that it will include a bad recession combined with some kind of financial stress similar to the global financial crisis of 2008,â€ Dimon said Monday in his annual shareholders letter. â€œOur bank cannot be immune to the effects of this kind of stress.â€
While the lender is fresh off a record year for revenue and profit, Dimon warned that the bankâ€™s earnings â€œwill be down meaningfully in 2020â€ because of the coronavirus. He also warned that in an â€œextremely adverseâ€ downturn in the U.S. economy,Â JPMorgan ChaseÂ would probablyÂ consider suspending its dividendÂ to preserve capital.
That message is likely to reverberate among bank investors and analysts. Executives have said that while the biggest U.S. banks voluntarily pulled back on share repurchases at the onset of the crisis, their dividends were safe. Now, with the leader of the worldâ€™s most valuable bank by market capitalization broaching the topic of a dividend cut, it would seem that most banks could also be vulnerable if the economy doesnâ€™t recover later this year.
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