Disunited Economies of the US

At the moment, the drum beating of the US Presidental election captures most of the attention. Despite this pivot of focus, the damage from Covid19 and lockdown remains. Yet with the very nature of a virus outbreak, the impact is not spread evenly. Communities that were geared more for the online marketplace have done better than those focused on physical services. Yet there is an unnatural element to results. Communities are feeling policy choices or the lack of policies. The different States have taken remarkably different paths from each other. Without weighing in on with approach is better, it is unusual that one nation is heading in so many different directions.

Different Lockdown:

Within the national borders of the United States, the lockdowns are the easiest sign of the differences from one community to another. These changes and even the lack of one national approach is impacting transactions at all levels. Harsh lockdowns have devasted the service sector with the hope of bringing the virus under control to prevent medical harm. Other areas tried non existent or light lockdown that allowed businesses to continue to operate. Pain occurred no matter which approach got used. Early data does not show which approach was better with other factors able to explain differences.

Spending behaviour is a crucial element of the economy. A fully opened area will not matter if people are unwilling to go outside. For some services such as movies and theme parks, it seems that even in the most open States, people are reluctant to consume. This consumption gap if enduring will make the lockdown economic gains or losses pale with the protracted turn slowdown of demand. At the moment, it appears that demand is down, but the true extent for nations around the world is uncertain due to much of the data not being published and substantial government intervention.

Stockmarket, Reality Unto Itself:

In America, the stock market has roared back to life that has surprised many. Even some of the experts were surprised by how quickly it came back. One of the primary reasons that have been provided for this is the extensive action that has occurred from the Federal Government and the Federal Reserve. These actions, however, cannot explain why the market has stayed green. That is because the results are only a surface level. Looking at the conditions within the deeper market, and remembering a lot of results are still pending leads to the realisation things are not okay.

Firstly the gains with technology companies that have seen a growth in demand are hiding losses in other sectors. Tech stocks have soared during the crisis as more people have become dependent on technology to be able to do their work. This has hidden the damage in retail and holiday based sectors. Overall measurements look fine or great, but this does not mean that the wider economy is fine. The increase in the gold price and concerning reports from companies is a testament to some of the problems growing in the background.

Logistical Problems:

Initially, panic buying was a severe problem across the world. Limits had to be put in place to try and allow a more even distribution of the goods. Yet the reason that shelves went bare was due to the surge in demand. Every complicated system can be overwhelmed by unexpected demand, especially if this is over a set point of time. This is the problems that were witnesses, but they are not the only problems that can occur. Those are possibly on the horizon, and already concern is growing.

Non surge related logistical problems are starting. A crucial concern about the food supply is reaching the media. Oversupply is also another concern with the decrease in the services industry. Both of these are combining to make the complicated logistical systems make mistakes. Where specific goods need to reach is more complicated than ever before in modern society and change rapidly depending on policies that change on a whim. These mistakes could lead to changes in production, leading to actual scarcity on the shelves.

Changes That Cannot Go Back:

New York is perhaps the best example of this change that has occurred since the lockdowns. A large number of firms have realised that they do not need to go to the office. With rents being a high cost and travel time being wasted time for employees, questions remain if firms will come back to the city. Even if the city wanted to bring them back, raising taxes seems out of the question now that firms have tasted being liberated from those costs. If employees will even want to return to the office also remains uncertain. In the recovery, we will have to see how traditional business function comes back and what is left in the past.

Another change is going to be on the governmental. Existing diplomatic deals already were coming under more pressure before Covid19. Different parts of the United States will be impacted differently. For the rustbelt, perhaps some jobs can return while the farming midwest finds it harder to get in foreign markets. How the country deals with differences in fortune remains unknown. The US has not dealt with differences in fortune very well, but perhaps a change in the locations impacted may see different results.

Time is always moving forward, and new challenges can be expected. How the nations deals with these changes in different environments remains an unanswered question.

Be the first to comment

Leave a Reply

Your email address will not be published.