Coronavirus and Market Resilience

Chris EdwardsThe spread of COVID-19 is starting to clobber the U.S. economy as businesses close and unemployment rises. Just about every country is feeling the pain, including China which was hit first by the virus.AWall Street Journal news article by Lingling Wei plays up the supposed advantage the communist Chinese have in handling the crisis. “To deal with the country’s economic ills, state firms pared electricity bills and lowered rents. State banks initiated hundreds of billions of dollars of low‐​cost loans,” she notes. “State power saved China” one expert said, while another said that this is “the advantage of the Chi nese system.”However, a Wall Street Journal news article by Ruth Simon illustrates the advantages of the market system in responding to the crisis, as I ’ve excerpted below. Simon focuses on a restaurant in Georgia and its relationships with employees, suppliers, customers, and creditors.The story illustrates the entrepreneurialism, flexibility, and goodwill embedded in the American system. Business owners are trying to find new ways to generate revenues and retain workers if they can. Creditors and suppliers are renegotiating contracts with business owners. People know that we are all in this together and are trying to be accommodating in their market relationships with others.Allie and Chris Lyons, the owners of a popular farm ‐​to‐​table restaurant called Table 20 in Cartersville, Ga., have done the math....
Source: Cato-at-liberty - Category: American Health Authors: Source Type: blogs