Trickle-down policy settings aren't working
- The effects of blunt monetary policy have created a divide between the have and have-nots, and the populist agitation could lead to more binary policy alternatives, and unstable investment conditions.
- Thirteen years ago, lawmakers and central bankers responded to a financial crisis that became an economic crisis by unleashing significant taxpayer-funded support and slashing of interest rates.
- Asset price inflation will continue to be linked to central bank activity, unless the consumer kicks in and plays a more significant role.
- With that lesson learned, it explains why central banks have emphatically responded to threats to asset prices, over the past decade, by injecting liquidity into the financial system.
- Thus, central banks have been the major avenue to provide stimulus, by cutting borrowing costs and adding incentives for capital to seek returns in assets and projects, via quantitative easing.
Biden Covid-19 Relief Plan Aims to Ease Poverty, Advance Democratic Priorities
- President-elect Joe Biden’s economic-relief plan places low-income families at its center, delivering cash, housing assistance, food and child-care support to the most vulnerable Americans.
- The Biden proposal and its money for vaccinations and households would address rising risks to the U.S. economic recovery, even if the final version is smaller than the $1.9 trillion plan, said Robard Williams, senior vice president of Moody’s Investors Service.
- The Biden plan would extend a 15% increase in food-stamp benefits through September and expand federal support for child-care providers and parents.
- The Biden proposals, including paid leave and money for child-care centers, would be especially beneficial for women—and women of color in particular—who are more likely to work in front-line jobs or hard-hit sectors that have seen steeper job losses, said Melissa Boteach, vice president for income security and child care at the National Women’s Law Center.
An Engineering Argument for Basic Income
- Realism demands that we recognize human beings need money to live within a system of private property that withholds legal access to basic resources on the condition of having money or qualifying for government assistance.
- Graceful failure means that a failure does not result in catastrophic failure (e.g. sickness or death), and instead fails in a way that protects people or property from injury or damage.
- With UBI, people who lose their jobs would fall to a state above the poverty line, meaning that failure would never result in poverty.
- During good times, when most people are employed, you might be paying $1,000/mo in taxes to receive $1,000/mo in UBI, meaning a $0/mo income boost due to earning over six figures.
- This is the engineering argument for UBI: We are all living, breathing, human beings, and we all need money to obtain the food and housing and everything else we need to stay alive.
Biden unveils $US1.9trn economic and healthcare relief package
- The package is designed to take aim at the twin crises Mr Biden will confront upon taking office January 20, with a provisions delivering direct aid to American families, businesses, and communities, and a focus on coronavirus testing and vaccine production and delivery as the pandemic surge continues.
- Mr Biden described it as a package of emergency measures to meet the nation's immediate economic and healthcare needs, to be followed in February by a broader relief plan he will unveil in his first appearance before a joint meeting of Congress.
- Mr Biden's proposal is divided into three major areas: $US400 billion for provisions to fight the coronavirus with more vaccines and testing, while reopening schools; more than $US1 trillion in direct relief to families, including through stimulus payments and increased unemployment insurance benefits; and $US440 billion for aid to communities and businesses, including $US350 billion in emergency funding to state, local and tribal governments.
Data Center Giant Digital Realty Moving HQ from California to Texas
- Following in the footsteps of Oracle and Hewlett Packard Enterprise, Digital Realty Trust, the world’s second-largest data center provider, is moving its headquarters from California to Texas.
- They are moving because it’s easier to hire and keep employees in the Lone Star State, which offers relatively low cost of living and doesn’t collect an individual income tax.
- For a company like Digital, it’s also important that the state offers abundant opportunities for renewable energy development and an energy market that’s deregulated enough to take advantage of those opportunities relatively easily.
- The company expects its recent investments in wind and solar energy generation in Texas to supply 70 percent of its data center load in the state, once the projects come online sometime by the midpoint of this year.
Here's what's in Biden's $1.9 trillion economic rescue package
- Billed as the American Rescue Plan, the package augments many of the measures in Congress' historic $3 trillion coronavirus relief bill from March and in the $900 billion legislation from December, which was scaled back to garner support from Senate Republicans.
- The plan calls on Congress to create a $25 billion emergency fund and add $15 billion to an existing grant program to help child care providers, including family child care homes, to pay for rent, utilities, and payroll, and increased costs associated with the pandemic like personal protective equipment.
- Biden wants to send $350 billion to state, local and territorial governments to keep their frontline workers employed, distribute the vaccine, increase testing, reopen schools and maintain vital services.
- The proposal would also invest $50 billion in testing, providing funds to purchase rapid tests, expand lab capacity and help schools implement regular testing to support reopening.
The Richer You Are, the More Likely You’ll Social Distance, Study Finds
- The higher a person’s income, the more likely they were to protect themselves at the early stages of the Covid-19 pandemic in the United States, Johns Hopkins University economists find.
- When it comes to adopting behaviors including social distancing and mask wearing, the team detected a striking link to their financial well-being.
- The team, which included economics graduate student Matthew Zahn, found that while almost everyone changed their behavior in some way to try to stay safe, people making the most money made the most changes.
- Compared to somebody who continued to work, people able to telework were 24% more likely to social distance.
- All of these burdens ensured those earning the least would have a harder time adopting social-distancing behaviors, which could have prolonged the pandemic, the team found.
He spent his stimulus money on 30,000 masks for the homeless and others in need
- CNN Business heard from many readers who say that since they remain financially stable, they have chosen to use their stimulus payments to help those in need.
- While the stimulus money could allow him to live with greater ease for a short while, he decided last spring he wanted to use it instead to buy masks for the homeless and indigent.
- Sheldon Joseph, who works at a credit union in the Seattle area, decided to take advantage of his employer's three-for-one match when he donated his stimulus checks to a local food bank and the Lavender Rights Project, which provides legal and other services for low-income people in the LGBTQ community.
- To counter her feelings of grief on both counts, Alonzo decided to create the nonprofit Obi's Pet Pantry to help people who are having a hard time financially providing for their pets.
Loop launches out of stealth to make auto insurance more equitable
- The other part of its business is based on telematics technology, which allows Loop to understand how and where a driver is going at all times.
- While legacy carriers might use lack of accidents to incentivize lower rates, Loop is using data to both set the rate and lower it.
- Exchanging data for more flexibility could raise some eyebrows, but the co-founders think their customer-base, largely millennials and Gen Z, are comfortable with the model as it promises fairer prices.
- Loop also pointed to Ohio-based Root Insurance as an example of how consumers are growing more comfortable with sharing location data.
- Flexible insurtech has been on a tear recently, with MetroMile’s SPAC, Lemonade’s IPO and, on the early-stage front, Marshmallow, a U.K. based auto insurance startup last valued at $130 million.