March 2020 Facebook Comment

Note:  This was written in March long before the George Floyd chaos.

The next 6-9 months will be a test of resiliency of societies. It is going to test the social and economic cohesiveness of societies to depression level economic downturns.
Countries have different gods. In the US and UK now it is "Personal Freedom" and the stockmarket.
In the US they pumping billions into the financial world, including the stock market expecting the progression of the virus to be stopped. The "Personal Freedom" god makes people go to spring breaks at the beach (US) and huge concerts (UK).

Sri Lanka has just come out of 30 year civil war, with two insurgencies one within the majority community (71 and 87-89) and the other between a minority community and majority community (1977-2009). The initial underlying causes were economic disparity with metastasized into class and ethnic insurgencies.

In comparison to Sri Lanka the US is a deeply fractured society. The fractures are readily visible to those willing to travel out of their suburban comfort zone. Baltimore, Flint, Camden, the Mid West. To a great extent protests have been contained by drug addiction (9.4% of the population).

The less than socialist aspects of the US are also of concern. Say for example what happens when people cant pay their mortgage because of job losses. Will the govt programs be deferrals, i.e. it all becomes due in a bang or will it be forgiven thru some grant. In contrast Sri Lanka is a) 80% rural and b) almost impossible to evict from a house with mortgage or even rented.

The US does not nurture their own, specially those on the wrong side of the tracks. The US specializes in importing, those nurtured else where and with proven abilities and/or economic resources. The new immigrants, most successful are resented by the locals. Will these resentments boil over in to social disorder as resources and jobs disappear.

Other cracks are becoming visible. The volume of rhetoric and blame is being turned up against China, even by the US President. Will that turn into violence against East and South East Asians. Similar incidents were seen post 9-11, with even Indians being considered Arabs. However the US was more economically stable with the Clinton boom times not yet being over. When people loose their jobs, their health and future is in jeopardy then they go crazy as one might say.


What should be done immediately
a) Give direct aid to individuals
   This includes free testing and health care

b) Debt Jubilee, i.e. forgiveness of debt. 
   Rent, Mortgage forgiveness based on income/job.
   NOT a deferral with a huge amount coming due in the future

US and Finance specific
Stop derivatives being used for speculation/betting.
Can be used as hedge against asset on the books.
If the asset is sold, the derivative needs to be unwound.

Let companies go bust if they are not profitable , instead of propping them up with more and more loans. Let bad companies go bust. No company is too big to fail

3. Share buybacks be made illegal.

In the long run
More Autarky and less reliance on global supply chains.
This brings manufacturing and jobs locally

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