N ick Hannauer and David Goldstein have an interesting eoisone of Pitchfork Economics with the innocuous title AMA: COVID-19 and the Economy.

They have quite a discussion on stock buybacks as opposed to why companies don’t use their profits to set up a rainy day fund.

The pitchfork economists left out one very important factor in the discussion. If a company were to save for a rainy day, a corporate raider like Mitt Romney would take over the company and pocket the rainy day fund. That is exactly how Romney got rich. If we don’t change the rules to protect companies who want to do the right thing, then we will have our current situation. There are no companies left who are able to do the right thing and avoid getting raided.

Is anybody asking why it is that a government would create the laws for corporations to form? The laws protect the founders of the corporation (and the shareholders) from many legal liabilities. In exchange, you would think there must be something for the country to gain by protecting corporations. What should a country get for its efforts to give special shielding to corporations? We ought to ponder that question, and put these expectations into the laws that set the rules for people forming corporations. That way, the courts are not free to come up with their own justifications for corporations. Corporations are not people who have the special privilege of using their money to bribe the government.

Business Innsider has the article Bernie Sanders aims ‘to prevent the collapse of the economy’ with new coronavirus spending priorities.

“So to prevent the collapse of the economy is far more humane and cost effective than rebuilding the economy after it collapses,” Sanders said on MSNBC Friday afternoon.

Bernie was right about a lot of things before the pandemic. Ironically, some of his ideas that were good before the pandemic might have problems during the pandemic. What he seems to be failing to take into account is that the capacity of the economy to produce goods and services is severely limited when so many people are not allowed to go to work. Bernie is planning to give people enough money to spend like they used to, but the economy is not able to produce like it used to. He has to recognize and address this obvious problem.

Maybe he and his experts can come up with something better, but the only things I have come up with so far is rationing, price controls, and a steep profiteering tax. These ideas are going to be very hard to sell to the public, but somebody has to start getting people to face reality.

Naked Capitalism has the article The Coronavirus Pandemic Has Opened the Curtains on the World’s Next Economic Model.

This pandemic continues to unfold, but it will serve as the D-Day equivalent of a new predominating economic model for the world, and which in many ways was beginning to take shape before COVID-19. At its core, developed and mixed market economies will factor in the health risk and growing military cost of sustaining international supply chains against investing in high-tech production closer to their markets, and increasingly export their goods to the rest of the world.

The pandemic is the black swan event that shows us the flaw in the current implementation of globalization.