First the good. There’s an outpouring of spontaneous actions, large and small, to feed the hungry, help the desperate, aid seniors, the economically afflicted. There is public art and and an endless steam of performances, gatherings and flash mobs on line.
Mask Oakland distributes N95 Masks to the homeless. In Aurora Colorado, librarians assemble kits of essentials for seniors and children who will not get meals at school. Bed-Stuy strong works on areas where government fails in Brooklyn. Neighborhood scale “pods” of affinity groups of five to twenty are growing like wildfire to deal with local realities. This is helped by an Ocassio-Cortez online guide #We gotOurBlock.
There are creative and effective policy ideas that can be the basis for both local action and a guide for major changes to come. These range from a Basic Monthly income for all, to a progressive real estate tax where business based taxation has collapsed along with the economy, to many proposals for 2020 versions of the New Deal and its plethora of institutions like the CCC and WPA to deal with covid-19 and its social and economic aftermaths. Fortune Magazine, not the government, offers businesses detailed plans for safe reopening in stages
In Newton, our popular independent local movie theater quickly received, before the Care Act, an outpouring of public support. The local senior center called to ask what kind of help, if any, did we need despite having had zero contact with them. Our landlord’s daughter and our upstairs neighbor, who is a front line medical worker, did some shopping for us before home delivery become a reliable option. And we shared our small supply of N-95 masks. There are painted art rocks appearing next to the trees on our street conveying the theme,“Don’t Worry it’s Only Chaos”.
My wife’s writing group maintains an active and collaborative on line zoom existence while see continues her practice as a psychiatric clinician from home apparently magically even able to effectively treat autistic children on line.
My solar business is working on new bi-facial solar fence and solar field technology oriented east-west to more closely track the utility load without storage. The potential is many megawatts of vertical arrays thirty feet apart in farm fields for easy mowing and harvesting that can also be used to power electrolyzers to turn water into green hydrogen and oxygen to fuel combustion turbines whose exhaust is hot water vapor. The electicity generated used to support the electric grid for fast EV charging and other peak loads when storage is inadequate to maintain grid voltage and frequency.
The broad context is that in covid-19 times renewable energy already produces more electricity then coal, and that the long term trend is continuing rapid decline in price of solar. Analysis by Ramez Naam shows utility scale solar costs have dropped between five and eight fold between 2010 and 2020. With each rapid doubling of solar production, the historical trend is an 18% decline in costs that will drive utility scale solar quickly down to 1 to 2 cents a kilowatt hour. This is in accord with Wright’s Law for a steady decrease in price from the lessons from each doubling of production. Already, coal cannot compete with zero fuel cost solar with ever shrinking capital costs.
The Bad and the Ugly
The economic consequences of global covid-19 epidemic are dire.
Eurostat reports that the European Union economy contracted a record 3.5% in the first quarter even though covid-19 lockdowns did not begin until mid March.
China’s economy, after four decades of unbroken economic growth, declined 6.8% in the first quarter according to China’s National Bureau of Economic Statistics. This is reflected in decline in both consumer speeding and factory output.
In the United States, unemployment has swiftly risen to great depression levels in the context of a shredded social safety net where tens of millions of unemployed have also lost their health insurance as well as their jobs. According to the U.S. BEA (Bureau of Economic Analysis) in the first quarter the economy contracted 4.8%.
In our increasingly service and consumer driven economy, where factory work has become the exception and not the rule, the covid-19 lock downs have devastated the service and consumer sector. This has had a devastating knock on effect on agriculture, not by a lack of demand, but by disruption of supply chains as schools and restaurants closed.
The economic pain has fallen most heavily not on the bankers and wall street billionaires but on small business owners and service workers throughout the economy. The problem is, by far ,the most severe for workers with the lowest income levels. A study by McKinsey finds forty four to fifty-seven million jobs are vulnerable to short term loss overset by 2 to three million new jobs. Millions most vulnerable are in accommodation and food service, retail trade,and healthcare and social assistance.
Only some of these jobs will return anytime soon as chaotic reopening proceeds in the absence of effective national planning for appropriate testing,contract tracing and sequestration.
Once again, trillions have flowed from the U.S. government to bailout Wall street, the bankers and biggest corporations. The stock market has, for the moment stabilized, still fat and happy despite the enormous pain of most Americans. The bond market is propped up by Fed purchases is, in effect, controlling long term bond prices in a manner similar to that the Japan where zombie banks and corporations are propped up.
The enormous corporate and personal debt load in a time of economic contraction means that debtors large and small suddenly with no job or shuttered business with car loans, home mortgages, college debt, credit card debt will fall behind on payments and may risk loosing their homes, cars and purchasing power and be pushed into bankruptcy.
Many corporations with junk bond credit ratings have been able to roll over their debt and sell more junk bonds despite still anemic case flows during the long tax cut and quantitative easing fueled economic expansion. That time is past. Absent more bailouts or debt relief jubilee, a national and global wave of bankrupcy beckons causing further economic misery.
The commercial estate market and corporations owning malls and high priced city office buildings are under enormous stress. Working from home makes it increasingly likely that there will be long term decline in rental demand. Of course, many of the already stressed retail brick and mortar chains will by forced to close. J.P. Penny has just declared bankrupcy and many or most or all its stores will not reopen. A very bad time for shopping malls, down town stores, and retail that’s not online.
President Trump’s happy talk now speaks of economic recovery sure to come in 2021 after his reelection to be accompanied by an effective vaccine.
Unfortunately, the consequences of the spectacular failures of the Trump administration to respond in time, or at all, to the warning of pandemic to come has resulted in an intractable continuing spread of the virus and an ever rising death toll. A slow and uneven economic recovery that may take years is likely what the future portends.
The current pain also has opened the door for desperately needed economic, social , and political change. 2021 may be the time remembered as the start of a Green New Deal and the embrace of social, economic and ecological justice for all. What happens is in many ways up to all of us.
As labor organizer Joe Hill advised, “The best way to get even with anyone is to put them in the rearview mirror on your way to something better.”
Roy Morrison builds solar farms www.RenewableSunPartners.com His next book is EEG (EcologicalEconomic Growth).
Fact Check
solar price decline:
https://rameznaam.com/2020/05/14/solars-future-is-insanely-cheap-2020/
Eurozone GDP drop:
China GDP drop
https://www.nbcnews.com/news/world/china-three-decades-economic-growth-screeches-halt-n1205326
US Economic decline
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