Tag: Family Financial Facility

Bad Things about the Good Place and How to Pretty It Back Up

~ Karen Petrou ~ 2 Comments

By Karen Petrou

  • Pre-COVID inequality evidenced itself instantly in post-COVID consumer-finance extremis.
  • A unique construct of ground-up recovery policies is an essential, urgent response.
  • Regulatory revisions would help and long-overdue equitable liquidity facilities would do still more.
  • New public guarantees are critical.

Ever since the U.S. economy crept out of recession, the Fed has represented its slow, inequitable recovery as a “good place.”  Its own 2018 economic well-being survey contradicted this and the latest data released on May 14 are no better before COVID came and a lot worse thereafter.  These data make it still more clear that the Fed must quickly reorient its trickle-down rescues to move money starting at ground level, but even that won’t be sufficient given the magnitude of COVID’s economic impact.  The combination of macroeconomic harm and financial-system hurt also requires a reset in which new public guarantees for prudent private financing fully recognized by new rules play a major part. Continue reading “Bad Things about the Good Place and How to Pretty It Back Up” →

The Family Financial Facility: Urgent, Overdue, Equitable Fed Support for Those Most in Need

~ Karen Petrou ~ Leave a comment

By Karen Petrou

As I write this, thousands of small businesses are clamoring for urgent SBA loans and so many Americans are filing for unemployment insurance that systems have crumpled across the country.  At the same time, the S&P rose over three percent since Monday’s open.  The reason for this dissonance lies in the fact that key parts of the financial market have been bailed out while ordinary borrowers are stuck and then some.  Saving markets won’t salvage the economy – at its root, the U.S. is a consumption-driven economy.  If consumers can’t survive, neither will the economy.  The Fed must add a Family Financial Facility to all those it has crafted for the financial market and it should open one fast.  In this crisis, time is truly money and money is what most families don’t have.

Continue reading “The Family Financial Facility: Urgent, Overdue, Equitable Fed Support for Those Most in Need” →