The shuttering of the U.S. economy due to the coronavirus pandemic is a shock of historic proportions that likely will push the national unemployment rate to 16% or higher this month and require more stimulus to ensure a strong rebound, a White House economic adviser said on Sunday.
“It’s a really grave situation,” President Donald Trump’s adviser Kevin Hassett told the ABC program “This Week.”
“This is the biggest negative shock that our economy, I think, has ever seen. We’re going to be looking at an unemployment rate that approaches rates that we saw during the Great Depression” of the 1930s, Hassett added.
Lockdowns around the United States to curtail the spread of the novel coronavirus have hammered the economy, shuttering businesses and sending unemployment skyrocketing.
A record 26.5 million Americans have filed for jobless benefits since mid-March, and retail sales, home building and consumer confidence have all cratered.
The non-partisan Congressional Budget Office predicts U.S. GDP will contract at nearly a 40% annual rate in the second quarter, with unemployment cresting at 16% in the third quarter. But even next year, the CBO sees the jobless rate still averaging above 10 per cent.
“I think the unemployment rate is going to jump to a level probably around 16 per cent or even higher in the next jobs report” due on May 8 providing April employment statistics, Hassett told reporters at the White House.
Hassett added that the change in the nation’s GDP in the second quarter would be a negative “big number.”
“I think the next couple of months are going to look terrible. You’re going to see numbers as bad as anything we’ve ever seen before,” Hassett said, referring to U.S. economic data.
“We’re going to need really big thoughtful policies to put together to make it so that people are optimistic again,” Hassett added.
Trump’s advisers want to hone a list of five or six ideas to present to Congress to help clear the economic carnage, Hassett said.
“I’m sure that over the next three or four weeks, everybody’s going to pull together and come up with a plan to give us the best chance possible for a V-shaped recovery,” Hassett told ABC. “I … don’t think you get it if we don’t have another round of really solid legislation.”
A “V-shaped recovery” in one in which an economy bounces back sharply after a precipitous decline.
TENSIONS ON CAPITOL HILL
The U.S. Congress has already approved $3 trillion in coronavirus relief in a show of bipartisan support for laid off workers and an economy in free fall.
Now, lawmakers are poised for a battle over federal assistance to state and local governments whose budgets have been shattered by a plunge in tax revenue even as they have had to take extraordinary measures during a pandemic that has caused a U.S. death toll approaching 55,000.
New York City needs $7.4 billion in federal aid to offset economic losses from the coronavirus, its mayor said on Sunday.
“If New York City is not (made) whole, it will drag down the entire region, and it will hold up the entire national economic restart,” Mayor Bill de Blasio, a Democrat, said on the Fox program “Sunday Morning Futures.”
Like de Blasio, many of the nation’s governors – Democrats and Republicans alike – have pressed the Trump administration and Congress to come forward with a sizable relief package.
“We will have state and local (aid), and we will have it in a very significant way,” House of Representatives Speaker Nancy Pelosi, the top Democrat in Congress, said on CNN’s “State of the Union.”
“The governors are impatient,” Pelosi added. “Their impatience will help us get an even bigger number.”
Trump has shown a willingness to support aid for cities and states, but some fellow Republicans – including Senate Majority Leader Mitch McConnell – have voiced wariness, citing a mounting federal debt load.
McConnell, in remarks that have drawn sharp rebukes from various governors as well as Democratic lawmakers, has suggested that states should declare bankruptcy instead.
Asked whether Trump would support providing hundreds of billions of dollars to the states, Mnuchin said any further relief would have to receive support from both parties.
“This is a war. We’ll win this war. If we need to spend more money we will, and we’ll only do it with bipartisan support,” Mnuchin told “Fox News Sunday.”
Our Morning Update and Evening Update newsletters are written by Globe editors, giving you a concise summary of the day’s most important headlines. Sign up today.
Cuthand: First Nations must be included in the new economy – Saskatoon StarPhoenix
Article content continued
On the surface, it was ridiculous and condemned by Indigenous and environmental groups, but on the other hand, her comment reflects the misguided belief of the Kenney government and, to a lesser extent, Premier Scott Moe in Saskatchewan that things will just continue as before.
The world economy is in a state of flux. China will continue to retaliate against Canada for the arrest and possible deportation of Huawei executive Meng Wanzhou. Oil prices will remain low for the foreseeable future and Canada, like most western nations, has taken on record amounts of debt.
The oil industry is evolving due to environmental concerns, competition from OPEC and an economy that may take years to recover. For example, air travel, a major consumer of fuel, will be drastically changed. Smaller airliners, reduced fleets and fears of contagion will affect the usage of fuel. The petroleum industry will remain an important source of energy in the future, but the worldwide glut will continue to keep prices low.
Cuthand: First Nations must be included in the new economy – The Province
This is a time of crises. If we play our cards right, out of it will come greater equality and a more egalitarian society.
The post-COVID world will be much different than today’s economic and social structure. We have to start thinking about what our priorities are and what direction we want to go.
There is growing discussion about implementing a four-day work week to increase employment. There are also ideas being floated about guaranteed annual income, expanded medicare to include elder care and revamping the tax system to increase taxes on the rich.
While some are looking toward an exciting future, others are stuck in the past and think, like U.S. President Donald Trump, that the economy will rebound and everything will go back to the way it was.
But the COVID-19 pandemic revealed weaknesses in the social safety net, the need for better elder care and the gap between rich and poor in Canada.
In Alberta, Sonya Savage, the energy minister in the Kenney government, told a podcast of the Association of Canadian Oil Drilling contractors that it was a good time to build pipelines since COVID-19 makes it impossible for protesters to gather in groups larger than 15 people.
First Nations, Metis and Inuit peoples will have to be part of the new economy. As the source of employment in the oil patch is reduced, there will be a need for new industries to rise up and fill the vacuum. Saskatchewan will see a shift away from an emphasis on resource industries in favour of the tech sector and cultural industries, including the revival of the Saskatchewan film industry.
Agriculture is the bedrock of the Saskatchewan economy, and First Nations have recently acquired new land based on land claims and Treaty Land Entitlement. I see a future where we pay a major role in food production, including livestock and crop production.
We also need to rethink the agriculture industry. Older farmers are getting out of the business and moving away. The rural population is hollowing out as fewer and fewer farmers live on the land and small towns dry up. We joke that in the future the majority of rural residents will be Indians and Hutterites. In the future, as towns continue to shrink and reserve populations grow, the emphasis will shift to reserves. Post offices, grocery stores, schools and other public services may well become a part of the services offered by the First Nations.
In the short term, our communities have done a good job at self-isolating and preventing the spread of the disease. The only exceptions have been where the disease was introduced from the outside.
In the longer term, we are facing a new world with major changes in the social and economic fabric. We will have to rely less on imports and develop many of our own products in-house. We will have to grow more of our own food and be more self-sufficient. The large meat packing factories will become a thing of the past and more emphasis will be placed on local abattoirs.
Canada must come together and build more pipelines to lift economy out of COVID-19 hole – CBC.ca
Canada has the world’s third-greatest proven petroleum reserves, behind only Venezuela and Saudi Arabia.
Canada is currently both the fourth-largest producer and the fourth-largest exporter of petroleum in the world.
Ninety six per cent of Canada’s 168.5 billion barrels of oil is heavy oil.
Some experts believe Canada has heavy oil reserves in the trillions of barrels.
Canada, due to its political stability, has the world’s most secure source of heavy crude known as Western Canada Select.
What Canada currently requires are pipelines, which, in my opinion, will enable it to deliver its oil to market in the safest, most cost-effective manner.
Prior to pandemic
Prior to the onset of the COVID-19 pandemic, world oil production was slightly greater than the demand of 100 million barrels per day.
However, all of that changed with the onset of COVID-19, coupled with the flooding of the market by Saudi Arabia due to their conflict with Russia. We have now seen a dramatic drop in demand and it is unclear when demand will return to normal.
On April 20, 2020, the world experienced something that had never happened before. On that date the price of a barrel of West Texas Intermediate crude went from $17.73 to -$37.63 per barrel.
Futures Traders were caught off-guard and unable to trade out of their options for the May contract.
There were no buyers!
If you wanted to unload your contract, you had to pay someone to take your oil and as physical storage was scarce, in my opinion, the market had nowhere to go but down.
Efforts to get this valuable resource to market have been stymied …– Donald Benson
The carnage has impacted trading prices of our Canadian benchmark Western Canada Select.
However, fear not.
I believe that demand will rebound and Canada’s time will only continue to glow brighter as the century moves forward.
The world is evolving away from the internal combustion engine. It is light crude, notably Saudi Arabian Light and West Texas Intermediate, which will become out of favour, as the world shifts away from jet and internal combustion engines.
Light oil is the principal source of oil refined into gasoline and jet fuel. The market for light oil will continue to diminish as the increase of air and land vehicle traffic turns to electric.
But heavy oil, such as Western Canada Select, has a much wider market.
While it can be upgraded to allow for refinement into gasoline, due to the molecular makeup of heavy oil, with its greater numbers of long chain carbon molecules, it is the feedstock used for the manufacture of thousands of consumer products.
The following is a partial list of products that are derived from petroleum:
Ballpoint pens, ink, floor wax, upholstery, sweaters, boats, insecticides, bicycle tires, sports car bodies, nail polish, fishing lures, dresses, tires, golf bags, perfumes, dishwasher parts, tool boxes, shoe polish, shampoo, wheels, paint rollers, shower curtains, guitar strings, luggage, aspirin and safety glasses.
Because heavy oil is so utterly predictable and stable, and responds precisely the same way every time, companies are not looking to replace it as a feedstock.
What Canada needs now — and what will be required into the future — are pipelines.
Pipelines provide the ability for Canada to get its oil to market in a safe and sustainable manner. Canada is a unique country that has the capability of exporting its oil and gas to the north, south, east and west.
But efforts to get this valuable resource to market have been stymied — in my opinion — by political and environmental forces intent on keeping our country from being allowed to market its resources.
Quebeckers should embrace pipeline
Today, people have allowed the catastrophic 2013 train crash, which killed 47 people in the town of Lac-Mégantic, Que., to escape from their memory.
That terrible event would not have happened if we were shipping our oil to markets through the safe, dependable means of a pipeline.
Our eastern brothers and sisters in Quebec should be embracing the Energy East line of TransCanada Corp., now known as TC Energy Corp.
However, their application was withdrawn due to the impractical, unreasonable decision of Quebec’s leaders, who object to new pipelines in their province.
Instead the Quebec and New Brunswick refineries import their oil from Saudi Arabia, Venezuela and elsewhere.
In the West we are struggling to get pipelines built to tidewater.
What Canada must consider is a Manitoba pipeline …”– Donald Benson
The constant government interference, objections and (in my opinion) disobedience of others has to stop, if we Canadians are going to have the prosperity that our oil industry can provide.
The Trans Mountain and Coastal Gas pipelines must be built.
For far too long we have been held hostage by a minority of special interest groups, many of them from the U.S.A., which will go to whatever limits to destroy our country’s prosperity.
To the south, the never-ending interference from one group after another has again caused the Keystone XL Pipeline to be delayed.
On April 15, 2020, Montana Chief District Judge Brian Morris ruled more work needed to be done on permits required for two river crossings.
Now, news out of Washington that if elected in November, Democratic hopeful Joe Biden vows that he will cancel Keystone XL pipeline.
This $8-billion project has been needlessly held up for more than a decade.
Revenge for TC Energy will come, once the pipeline is completed and recourse from the provisions of the now-replaced NAFTA free trade agreement will be relied upon for the damages that TC Energy has endured.
What Canada must consider is a Manitoba pipeline to the northern Port of Churchill and a Northwest Passage route from Alberta, north to the Beaufort Sea.
Pipelines in the northern hemisphere are not new, neither is the task insurmountable. Russia has been transporting oil and gas through above-ground pipelines in the Arctic Circle for decades.
The Alaska pipeline, which is constructed above ground, was completed in 1977. Engineers faced a wide range of difficulties stemming mainly from extreme cold and difficult terrain. Special construction techniques had to be developed due to the difficulties caused by permafrost.
Today, the COVID-19 financial crisis is now unfolding and to what extent we can only imagine.
It will cause Canada to endure a deficit like never before.
How will we overcome that debt, which must be repaid?
It will take decades and Alberta oil once again will be one of the economic engines driving the recovery, and all of the have-not provinces, Quebec included, will be eagerly looking for Alberta’s continuation of transfer payments.
Canadians need to disregard the unfounded ranting from the likes of Elizabeth May, with all her negativity toward the oil industry.
Canadians need to come together and bend a little where necessary to see the common good achieved, through the construction of pipelines north, south, east and west.
Be a proud Canadian!
Sony CEO Opens Up on PlayStation 5 Pricing Strategy – Essentially Sports
2 astronauts head for launch pad for historic SpaceX flight – Yahoo Canada Finance
Cuthand: First Nations must be included in the new economy – Saskatoon StarPhoenix
- Media19 hours ago
Denmark and Norway create travel bubble
- News21 hours ago
Ford considering regional reopening of Ontario
- Science15 hours ago
What Time Is the SpaceX Launch? How to Watch – The New York Times
- Sports13 hours ago
Roger Federer tops Forbes' highest-earning athlete list at $106.3M US – CBC.ca
- Tech18 hours ago
- Politics22 hours ago
Age Versus Politics in Determining Virus-Related Attitudes
- Sports22 hours ago
NHL teams eliminated from 2020 Stanley Cup Playoffs free to make trades – Fear the Fin
- Politics18 hours ago
Julie Van Dusen reflects on a career covering politics