Ask Ourselves

The highest collective material priority for our species right now is to fight the virus. Is this correct?

To this end, the entire global population has ceased normal activity. Is sheltering in place as our species develops immunity and antidotes. So we protect our most vulnerable and, in fact, all of us. In addressing our highest collective material priority, is this a proper focus for our energy?

To this same end, the entire global healthcare system has ceased normal activity. Is rededicating itself to protect our most vulnerable and, in fact, all of us. In addressing our highest collective material priority, is this a proper focus for our energy?

To some end, the entire global "GDP" system has continued normal activity. Is dedicating itself to measure our economic output. Accruing bills, rents, taxes and interest. Counting. And this system has broken down. Some are told to not pay certain bills, for now. Others must pay, perhaps. Or just figure it out themselves.. Fight it out. In addressing our highest collective material priority, is this a proper focus for our energy?

To what end, the entire global financial "Markets" system has continued normal activity. In terms of pipes and plumbing. Normal market hours. Buying versus selling. Accruing and paying interest. Counting. Calling margin. And now this system is breaking down. Some instruments may stop accruing. May stop redeeming. May default. Some are told to not pay certain bills. Others must pay, perhaps. Or just figure it out themselves. Fight it out. In addressing our highest collective material priority, is this a proper focus for our energy?

Does it make sense, within"GDP" and "Markets," to fight right now? Or would it be better to put the whole "GDP" and "Markets" apparatus off to one side for now? Maybe a month? Two? Three? And when our species is healthy, we then pick up the boxing gloves and get back in the ring?

How could we accomplish this? Flawed ideas you've read before here.

Could we try a "GDP Production Board"? Modeled after the US WWII "War Production Board"? A group that understands all the important "dollars out" then "dollars in" flows throughout the economy? A group that can systematically and temporarily halt bills, rents, taxes and interest in a balanced manner? So that neither payer nor receiver has to fight? Or lose? Or win? Could we, as a species, choose to just halt economic time? So that we're not distracted from our highest collective material priority?

Could we try a "New Brady Commission"? Modeled after the 1980s Plan of US Treasury Secretary Nicholas Brady, which systematically restructured society-wide defaulted debts? A group that balances the most important issues facing debtors and creditors? That can sniff out and work to prevent moral hazard? Could we, as a species, choose to just buy time? Create a facility to flatten the curve of unnecessary defaults hitting the global economy all at once? So that we're not distracted from our highest collective material priority?

As we write, non-systematic piecemeal programs are flying around in the US, using models from the past, attempting to to wrangle "GDP" and "Markets" someplace:

• a $2T traditional 1930s-style Keynesian fiscal package from the federal government. Versus a $5T current budget (and a $1T current pre-crisis deficit). Looks expensive.
• "Unlimited" 2008-style Quantitative Easing (Overtime Session) from the Federal Reserve for "investment grade" credits. "Unlimited." Remember, the global stock of debt is > $250T. US Treasuries, $25T. US Corporates, $10T. US Munis, $4T. Global corporates, $75T. In round numbers. And this is pre-repo, pre-derivatives and other forms of leverage-upon-leverage? And this is pre-off balance sheet liabilities? How big will "Unlimited" be if GDP remains shut? $5T? $10T? $20T? $50T? Looks expensive.
• a $4T federal backstop for small-business lending. Versus $6T in currently outstanding SMB debt. Looks expensive.

Not trying to be negative. Want to remain constructive and helpful, because these piecemeal efforts will, at least temporarily, boost asset prices and will perhaps buy time. At full offered side.

But I can't stop wondering. If we had stopped "GDP" and "Markets" for a while, could we have used our time address the highest collective material priority for our species? And beyond; ask ourselves: Are our highest collective material priorities the proper focus for our energy? Is there something higher?