Here’s your weekly update with a handful of in-depth articles we think are worth a bit of your time.
The only way to end the coronavirus financial crisis
It may take a while to find a solution to the pandemic crisis, but we might be able to solve the financial crisis right now.
The government could offer every business, large and small, a no-interest “bridge loan” guaranteed for the duration of the crisis. The loan would have to be paid back over a five-year period. The only condition of the loan would be that companies continue to employ at least 90 percent of their work force at the same wage that they did before the crisis. This would keep almost everyone employed and would create a sense of relief during these tumultuous times. It would also encourage people to stay home and practice social distancing without feeling that they would risk losing their job — which would help in slowing this disease.
Of course, this would come at a cost. Many trillions of dollars would go out in loans. If this crisis lasted three months, the loans would possibly be as much as $10 trillion (about half the size of America’s GDP). And assuming some of it is never repaid, it could cost taxpayers hundreds of billions if not several trillions. But we might be able to prevent years of economic damage, which would ultimately be far, far costlier.
You don’t need a degree to become a must-read on the economy
Nathan Tankus, a 28-year-old with no degree, has mastered enough knowledge of economics and finance to become a widely followed commentator on the Federal Reserve. His newsletter has become a must-read on the economy and has followers at the Fed, the SEC, the Office of the Comptroller of the Currency, and the Department of the Treasury, in addition to journalists and economists.
You don’t have to be stupid to work here, but it helps
While functional outcomes dominate in the short term, collective stupidity can create disfunction in the longer term, including a lack of learning and an imperviousness to mistakes. Perhaps management thinkers need to stop clinging to knowledge-based theories of organisations and start developing a stupidity-based theory of how organisations are run.