The Trump administration considers ways to help the travel industry
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There are lots of options being batted back and forth in Washington for the next stage in responding to the spread of COVID-19, including the extension of support to some of the industries most affected by the pandemic.
Wednesday, Treasury Secretary Steven Mnuchin took great pains to emphasize that the administration’s plans to provide emergency assistance to airline, hotel and cruise industries do not amount to a “bailout”. Which makes sense, because bailout brings to mind what these market conditions already have everyone talking about — the 2008 financial crisis.
When the financial system was in turmoil in 2008, it was pretty easy to see which industries caused the problems and which were suffering.
“And this, of course, was concentrated last time to the financial industry, the housing industry, ultimately, the automakers were also involved,” said Maya MacGuineas, president of the Committee for a Responsible Federal Budget.
And so they got federal government bailouts, or loans, regulatory relief — whatever you want to call it.
“The assistance that was given to the banking and automobile industries during the 2008 financial crisis came under the heading of the Troubled Asset Relief Program,” said Erin Lockwood, assistant professor of political science at the University of California, Irvine.
How well that infamous TARP bailout worked is still being debated, and lawmakers are now trying to decide if industry bailouts will help this time around. Joshua Sewell, senior policy analyst at Taxpayers for Common Sense, thinks it’s too early to know.
“You need to stop the disease before you try to recover from the effects,” he said.
Right now, health officials are scrambling to contain the spread of COVID-19 and to prepare for an anticipated spike in patients and deaths.
“If this moves beyond a stock market crisis into affecting people’s take-home pay, their inability to have the kids go to school, then you should consider ways of easing the pain for people in what we know is the real economy,” Sewell said.
COVID-19 Economy FAQs
How many people are flying? Has traveled picked up?
Flying is starting to recover to levels the airline industry hasn’t seen in months. The Transportation Security Administration announced on Oct. 19 that it’s screened more than 1 million passengers on a single day — its highest number since March 17. The TSA also screened more than 6 million passengers last week, its highest weekly volume since the start of the COVID-19 pandemic. While travel is improving, the TSA announcement comes amid warnings that the U.S. is in the third wave of the coronavirus. There are now more than 8 million cases in the country, with more than 219,000 deaths.
How are Americans feeling about their finances?
Nearly half of all Americans would have trouble paying for an unexpected $250 bill and a third of Americans have less income than before the pandemic, according to the latest results of our Marketplace-Edison Poll. Also, 6 in 10 Americans think that race has at least some impact on an individual’s long-term financial situation, but Black respondents are much more likely to think that race has a big impact on a person’s long-term financial situation than white or Hispanic/Latinx respondents.
Find the rest of the poll results here, which cover how Americans have been faring financially about six months into the pandemic, race and equity within the workplace and some of the key issues Trump and Biden supporters are concerned about.
What’s going to happen to retailers, especially with the holiday shopping season approaching?
A report out recently from the accounting consultancy BDO USA said 29 big retailers filed for bankruptcy protection through August. And if bankruptcies continue at that pace, the number could rival the bankruptcies of 2010, after the Great Recession. For retailers, the last three months of this year will be even more critical than usual for their survival as they look for some hope around the holidays.
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