We’re likely to possess a “splinternet. ” It is only a matter associated with how much and exactly how quick. And some unemployed individuals may be making a lot more money than when these people were working. In either case, lots of people are heading to lose unemployment advantages in July. And in case they’re rehired, it isn’t really heading to be like prior to — formal employment, total benefits. I can employ you only with a per hour basis with no advantages and a low income. Meanwhile, many, many people today are going to become without jobs of any kind of kind.
But we survived this, because, while debt ratios were high, debt-servicing ratios were low, since we had zero percent policy rates and long rates close to zero — or, in Europe and Japan, negative. What I have argued this time around is the fact that in the short run, this is both a supply shock and a demand shock. And, of course , in the short run, if you want to avoid a depression, you need to do monetary and fiscal stimulus. For the last decade, prices have been constrained by two positive supply shocks — globalization and technology. Well, globalization is going to become deglobalization thanks to decoupling, protectionism, fragmentation, and so on. The 5G of Erickson and Nokia costs 30 percent more than the one of Huawei, and is 20 percent less productive.
So there is a fundamental conflict between Wall Street and Main Street. Even the foreign policy Establishment — Democrats and Republicans — that had been in favor of better relations with China has become skeptical in the last few years. They say, “You know, we thought that China was going to become more open if we let them into the WTO. We thought they’d become less authoritarian. ” Instead, under Xi Jinping, China has become more state capitalist, more authoritarian, and instead of biding its time and hiding its strength, like Deng Xiaoping wanted it to do, it’s flexing its geopolitical muscle.
The only debate is about whether there will be a cold war or a hot one. Historically, these things have led to a hot war in 12 out of 16 episodes in 2, 000 years of history. Now, we have a full-scale trade war, technology war, financial war, monetary war, technology, information, data, investment, pretty much anything across the board.
The move drew criticism from national security legal experts as an attempt to politicize a career position. You are putting them into cages — the bats and pangolins and all the other wildlife — and they interact and create viruses and then spread to humans. There are probably viruses that have been in there since the Stone Age. For the last decade, debt-to-GDP ratios in the U. S. and globally have been rising.
So to install non-Chinese 5G networks, we’re going to pay 50 percent more. So you have two major forces that had been exerting downward pressure on prices moving in the opposite direction, and you have a massive monetization of fiscal deficits. You had two negative supply shocks — ’73 and ’79, the Yom Kippur War and the Iranian Revolution. The small businesses are going to disappear in the post-coronavirus economy.
They just decided Huawei isn’t going to have any access in order to U. S. semiconductors plus technology. We’re imposing overall restrictions on the move of technology from the particular U. S. to The far east and China to the particular U. S. And in case the United States states that 5G or Huawei is really a backdoor to the particular Chinese government, the technology war will end up an industry war. Because tomorrow, each piece of electronics, actually your lowly coffee maker or even microwave or toaster, will be going to have the 5G chip. If the particular Chinese can pay attention to a person through your smartphone, they could listen to you via your toaster. Once all of us declare that 5G will be going to allow The far east to hear our communication, all of us will also need to ban almost all household electronics made inside China.