Fox Business/Brittany De Lea
Biden adviser warned of capitalist ‘implosion’ without post-pandemic economic restructuring
President-Elect Joe Biden announced members of his economic team this week, including a longtime adviser who has some ideas for reinvigorating the economy when the pandemic passes.
Jared Bernstein, who has been tapped to serve on Biden’s Council of Economic Advisers, previously said the U.S. economy would need to be reinvented – centered largely on a reimagined relationship with the government.
“The coronavirus, too, demands a thorough restructuring of the relationship between government and markets — one that leaves us much better prepared for a set of challenges that tend to recur but that somehow always surprise us,” Bernstein said in an op-ed published in The Washington Post in March. “We need to restructure the role of government in the economy to avoid, at best, being back here again in a few years — and, at worst, the implosion of a capitalist society that large swaths of the public have every right to question.”
Restructuring could involve more direct federal aid for businesses, in addition to a “comprehensive system of social insurance, from cradle to grave.” The latter would include federalized unemployment insurance, as well as a different form of retirement security.
Bernstein, who previously served as chief economist and economic adviser to Biden during the Obama administration, said the globalized economy and inequality are driving the need for changes.
During testimony before lawmakers in July, Bernstein said the most important factor in jumpstarting the economic recovery was getting the virus under control.
“By forcefully taking charge of the public health aspects of the crisis and by ensuring that fiscal relief will be there as long and as deeply as people need it, Congress can help reduce the American people’s uncertainty and economic insecurity,” Bernstein said before the Joint Economic Committee.
Gold jumps 2%, silver 5% as dollar slides
Gold jumped over 2% on Tuesday, rebounding from a five-month low in the last session, and silver soared over 5%, as the dollar slid, with U.S. stimulus bets due to mounting COVID-19 cases adding to bullion’s appeal as an inflation hedge.
Spot gold climbed 1.9% to $1,810.02 per ounce by 11:41 a.m. EST (1641 GMT). U.S. gold futures gained 1.8% to $1,808.90.
Gold plunged to $1,764.29 on Monday, a trough since July 2, driven by a rush to riskier assets.
“We saw gold recapture the $1,800 level and a lot of that has to do with the weakening dollar trade,” said Edward Moya, senior market analyst at OANDA.
“The unwind of the gold trade has run its course” and we are likely to see more efforts from the U.S. Congress to support the economy.
Making gold more attractive to investors holding other currencies, the dollar fell on expectations of more U.S. stimulus.
In remarks released on Monday, Federal Reserve Chair Jerome Powell highlighted challenges of production and mass distribution before the economic impact of a vaccine becomes clear.
The Fed is going to remain fairly accommodative, OANDA’s Moya said.
Gold, considered a hedge against inflation and currency debasement, has risen 19% this year, helped by unprecedented stimulus to help coronavirus-hit economies.
With no $1,200 stimulus checks, latest proposal, rejected by McConnell, may not be enough to help hurting Americans, experts say
Washington lawmakers introduced a new $908 billion coronavirus stimulus package on Tuesday that aimed to appease both Democrats and Republicans.
However, Senate Majority Leader Mitch McConnell, R-Ky., quickly rejected the bipartisan stimulus proposal hours after lawmakers introduced it. McConnell said he does hope to pass a “targeted relief bill” this year. The Republican Senator has maintained throughout the stimulus negotiations that he would prefer that the cost of a new aid package be limited to around $500 billion.
But experts say that the plan might not include enough financial aid for struggling individuals and families.
One key way of getting more money into their hands — a second round of $1,200 stimulus checks — is absent from the proposal.
The stimulus package introduced on Tuesday may not be enough of a compromise to break Congress’ deadlock on the issue, particularly without McConnell’s support.
Washington lawmakers do need to keep the government funded after Dec. 11 in order to avoid a shutdown. That could come through either a continuing resolution or omnibus appropriations bill.
Nine months after the health and economic crisis began, unemployment claims near record high
The number of Americans collecting and applying for unemployment benefits is hovering near pre-pandemic records. By some measures, the figure still exceeds any historical precedent.
The volume reflects deep and sustained pain for workers, nearly nine months after the health and economic crisis began.
“The numbers we’re looking at now are [far higher than] anything we’ve seen before,” said Erica Groshen, a labor economist at Cornell University and former commissioner of the federal Bureau of Labor Statistics. “We’ve never seen a shock like this.”
Around 5.9 million filed a “continued claim” for state unemployment insurance the week of Nov. 14, according to the Labor Department. Continued claims are a rough proxy for the number of people receiving benefits.
Those figures are close to the prior peak — 6.5 million continued claims — set in March 2009 during the Great Recession.