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What Will Be the Economic Toll from COVID-19?

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Listen to “What Will Be the Economic Toll from COVID-19?” on Spreaker.

On Thursday, the Department of Labor reported more than 4.4 million jobs lost in the past week.  Over the past five weeks, 26.4 million people have filed first-time jobless claims.

What are the short-term and long-term economic impacts of this hemorrhaging of jobs, productivity, and revenue?  How much has the Paycheck Protection Program helped? And how aggressively can our economy re-engage when we’re already hearing some schools may not be opening in the fall and the Centers for Disease Control believes the coronavirus could be worse in the coming winter than it is now?

Brian Wesbury is chief economist at First Trust Advisors in Wheaton, Illinois, and formerly served as chief economist for the Joint Economic Committee of Congress.  He walks us through these difficult questions, explains the indicators for and against a rise in inflation, and sizes up the recent volatility in the oil markets.

Don’t miss this critical conversation on the state of our economy.

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AOC’s Awful Oil Response, Kim Dead & Not Dead, Media Cheerleading for Abrams

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Listen to “AOC’s Awful Oil Response, Kim Dead & Not Dead, Media Cheerleading for Abrams” on Spreaker.

Join Jim and Greg as they slam AOC’s economic lunacy and callously partisan response to Monday’s plummeting oil futures. They also shake their heads as CNN says Kim Jong Un is in grave condition and NBC has him brain dead, while Reuters has him fine just hours later. And they gag as Gayle King of CBS gushes that “everyone know” Stacey Abrams is “extremely qualified” to be Joe Biden’s running mate.

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Oil Market Free Fall, Vaccine Doubts, De Blasio’s Disturbing Order

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Listen to “Oil Market Free Fall, Vaccine Doubts, De Blasio’s Disturbing Order” on Spreaker.

Join Jim and Greg for three crazy martinis that could easily be all bad.  First, they comment on oil prices plummeting faster than we can keep up with them and discuss why our economy suffers if prices are too low for too long. They also recoil as one vaccine expert says the public should brace for the possibility that it may be very difficult or impossible to develop a coronavirus vaccine – although he is from the WHO. And they hammer New York City Mayor Bill de Blasio for urging New Yorkers to rat on their neighbors for not properly social distancing.

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Jobs Nightmare Worsens, End of the Handshake? China’s Gutter Oil

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Listen to “Jobs Nightmare Worsens, End of the Handshake? China’s Gutter Oil” on Spreaker.

Join Jim and Greg as they discuss the gut-wrenching loss of another 6.6 million jobs over the past week but also note an economic silver lining. They also react to Dr. Fauci suggesting people permanently stop shaking hands and then muse about what should replace it.  And they lose their appetites as they discuss another way China is a breeding ground for illnesses.

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What’s Next for the Energy Industry?

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Listen to “What’s Next for the Energy Industry?” on Spreaker.

Coronavirus fears are driving the massive Wall Street sell-off, but turmoil in the oil market is also contributing to the instability. Even with demand falling due to the virus, Saudi Arabia is increasing production in order to drive prices down. Their goal is to drive American energy producers – particularly fracking shale producers out of business.

So how dire is the financial condition for U.S. energy producers and what is the Trump administration considering to help these companies?

American Petroleum Institute President Mike Sommers details what’s on the table and why he doesn’t want any federal interference in the energy market. He also explains what government action would do some good and why the energy industry is built for the long haul.

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‘The Markets Have Panicked’

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Listen to “‘The Markets Have Panicked'” on Spreaker.

For the past couple of weeks, Wall Street has looked like a roller coaster. And while there have been days of big gains, the Dow Jones has dropped more than 4,000 points as of Tuesday’s close. Monday witnessed the worst losses since the 2008 financial crisis.

Concerns over coronavirus are attracting the most attention but upheaval in the oil market and record-low yields in the bond market also have investors jittery.

Wall Street hates uncertainty but a top economist says the wild fluctuations we’ve seen recently are a major overreaction.

“I just believe that the markets have panicked,” said Brian Wesbury, chief economist at First Trust Advisors in Wheaton, Illinois. He is also a former chief economist for the Joint Economic Committee of Congress.

“Our models suggest right now that investors…are pricing in a 50-80 percent drop in corporate profits in America. I think that’s a panic. That’s too much.

“That doesn’t mean we can’t go down from here, but it does mean that once this passes, we will snap back, I think, very quickly,” said Wesbury, noting that all previous outbreaks ran out of steam when the weather turned warmer.

Wesbury does think the volatility could last until May or perhaps longer and that oil prices and the bond market add to the uncertainty.

But while acknowledging that plummeting oil prices are a nightmare for debt-ridden fracking companies, Wesbury explains why he thinks this could lead to a much more stable industry in the long run.

Finally, Wesbury tells Greg Corombos whether the government ought to intervene to ease the economic pain of the coronavirus or whether the markets should sort themselves out.

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Monday Market Plunge, Montana Senate Showdown, CPAC’s Coronavirus Caper

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Listen to “Monday Market Plunge, Montana Senate Showdown, CPAC’s Coronavirus Caper” on Spreaker.

There’s not a lot of good news Monday, so let’s just tackle the bad stuff on Three Martini Lunch.  Join Jim and Greg as they react to the massive Wall Street sell-off as investors are spooked by coronavirus, oil prices, and the bond market, and once again they call out irresponsible figures either whipping up panic or openly cheering for the virus to spell Donald Trump’s political doom.  They also wince a bit as Montana Democratic Gov. Steve Bullock launches a challenge to GOP Sen. Steve Daines, adding another race where Republicans will have to work hard to keep a seat.  And they react to the news that a CPAC attendee has tested positive for coronavirus, prompting Sen. Ted Cruz and Rep. Paul Gosar to self-quarantine themselves after interacting with that person.

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Energy Boom vs. Green New Deal

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Listen to “Energy Boom vs. Green New Deal” on Spreaker.

American energy is booming at levels virtually unthinkable a decade ago, but will the good times continue or get derailed by the Green New Deal?

American Petroleum Institute President Mike Sommers explains how the U.S. grew from energy dependence to a net exporter of energy in recent years and who deserves the credit.

He also tells us why the new trade deal with Canada and Mexico could help the energy sector even more and why he believes the Green New Deal is not grounded in reality.

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Obama Trying to Handcuff Trump on Energy

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President Obama is taking multiple actions that could hamstring President-Elect Donald Trump’s plans to unleash domestic energy production, which is a major component of the Trump economic agenda.

On Tuesday, Obama banned offshore energy exploration in massive portions of the Arctic and Atlantic oceans.

“The law allows a president to withdraw any currently unleased lands in the Outer Continental Shelf from future lease sales. There is no provision in the law that allows the executive’s successor to repeal the decision, so President-elect Donald Trump would not be able to easily brush aside the action,” reported CNBC.

The law in question is legislation from 1953 that deal with offshore leases.  Advocates of American energy exploration contend this is simply Obama’s gift to the environmental lobby.

“There have been a lot of environmental groups, especially over the past few months, who have been urging the administration to take some sort of action,” said Chris Warren, vice president for communications at the Institute for Energy Research.

“This is pretty much the Obama administration giving an early Christmas gift to the ‘keep it in the ground’ activists, these folks who want to keep all our oil, gas, and coal resources in the ground,” he added.

Warren suspects the waters in question could yield trillions of barrels of oil, but he says greater energy independence isn’t even the most important result if those areas were to be opened up

“We produced a study a few years back at what would happen if we were to produce our oil and gas resources offshore in the Atlantic, the Arctic and the Gulf (of Mexico).  These numbers are staggering.  You’re talking about hundreds of thousands of jobs a year, hundreds of billions of dollars in GDP output per year, higher wages for folks, more revenue for government,” said Warren.

Warren says the method by which Obama is locking the offshore areas seems suspect.

“This is a pretty obscure provision in an old law.  It’s never been used in this manner so we’re not quite sure how the next administration can take care of it but they certainly will be working hard to do so,” said Warren.

He sees two possible remedies.

“One way they can do this is by undesignating this area.  Of course, they’ll be sued after that but they’ll take it to the court system and we’ll see how it shakes out from there.  Congress could also pass legislation to reverse this,” said Warren.

Obama’s efforts are not limited to offshore exploration.  Earlier this month, the administration blocked the controversial path of the Dakota Access Pipeline.  This week, it also finalized the Stream Protection Rule, which mandates distances that coal mining operations must keep away from waterways.

Warren says the latter policy continues Obama’s strangling of the coal industry.

“This is really just another way that the Obama administration is trying to take coal off the table.  They want to prevent it from being mined.  They want to prevent it from being used in our electricity system with the clean power plant regulation, which was the hallmark of this administration’s climate agenda.  This is just one more regulation that the Obama administration is trying to push out the door,” said Warren.

So is Obama succeeding at putting roadblocks in the way of the Trump energy agenda?  Warren says there are new hurdles to clear but that Trump still has other good options.

“Our federal lands have tons of oil, gas, and coal resources that have been held under lock and key by this current administration.  It hasn’t been through regulation.  It’s been by slow-walking permits, offering very few leases to companies to produce these resources.  That’s something the Trump administration can come in and do fairly quickly,” said Warren.

Warren says the Obama and Trump approaches to energy could not be more different.

“We’re not talking about favoring one source over another, whether it’s coal or natural gas or wind or solar or whatever.  It’s about allowing Americans to make those choices for themselves,” said Warren.

“Under this current administration, that hasn’t been the case.  It’s been throwing money and mandating the sources that President Obama prefers.  Under the Trump administration, I think we’ll see an end to that,” said Warren.

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