Pandemic economy creates winners and losers, economist tells Legislature

By Guy Page

The pandemic and its emergency measures have created winners and losers in Vermont and nationwide, state economist Tom Kavet reported to the Vermont Legislature Thursday.

“It’s not a picture of everything up, everything down,” Kavet said during his keynote address in an economic update for all legislators.  He noted that federal stimulus deficit spending exceeding the national spending on World War II (adjusted for inflation) is driving the economy – not underlying economic strength. This spending also has created “disparate winners and losers,” Kavet said.

Winners include the following:

Owners of stocks and bonds in the surging stock market – thanks in large part to stimulus from federal emergency spending, he said. Internet, tech and e-commerce companies also have fared well, as quarantine and emergency measures have altered longstanding shopping habits.

Legislative economist Tom Kavet

Non-urban residential construction and sales and short-term vacation rentals are up, Kavet said. Many observers credit the urban exodus facilitated by remote employment and dissatisfaction related to the pandemic and social unrest.

Federal stimulus funding recipients whose businesses experienced merely “uncertainty” but not drastic revenue loss. Businesses that moved seamlessly to remote work also benefited.

Kavet also noted that the savings rate is the highest since 1959. “A fair amount of money did land in pockets that didn’t immediately need the money,” Kavet said.

Losers include:

Airlines and the tourist/hospitality industry, due to consumer concerns and travel restrictions.

Transportation and fuel producers, as travel restrictions and consumer concerns keep people at home. “That whole sector has been hammered,” Kavet said.

Women with service jobs and dependent children at home. Childcare, always a challenge, has proven harder to access, even as children must spend more time at home in remote learning.

Students learning remotely. Almost all Vermont schools have a remote-learning component, with some using remote-learning only into the new year – at least. Vermont education officials have expressed concern about the quality of remote learning compared to in-person.

Non-residential (commercial and industrial) real estate, as more businesses sent workers home.

Anyone with a slow internet connection – students and remote workers especially.

Small businesses for whom federal stimulus funding was not available or made no sense. “There were many firms who were in great need for whom it did not make sense to do PPE (paycheck protection),” Kavet said. On the other hand some recipients did not have a great need. “It’s a waste when given to people who don’t need it.”

The distribution of the $1,200 checks to almost every citizen was “a very unfocused distribution of money,” Some people didn’t need it and either banked it or bought a new car, while some very needy people clearly benefited, Kavet said.

Read more of Guy Page’s reports. Vermont Daily is sponsored by True North Media.

Image courtesy of Wikimedia Commons/Alex Proimos

7 thoughts on “Pandemic economy creates winners and losers, economist tells Legislature

  1. It looks like this Virus, driving Enormous Socialism, has cost us more money, adjusted for inflation,
    than the entire money costs of WW2 !!

    A fact, but how the hang is that even possible, that we blew this much money, while at the same time
    Destroying jobs, businesses and home life and our entire economy ?!?!?!

    The costs of dead jobs, and dead or bankrupt businesses, may well double the” Gov’t’s” loss of Dollars.


  2. An economic foundation that is built on unsustainable debt only supports a house of cards. When a government enacts policy that destroys businesses only to step in to provide payroll or grants for minimal or non-existent production it commits economic suicide. And fewer people are left to pick up the cards that eventually come tumbling down on both the winners and losers alike.

  3. Hmmm. Some people lost, some people gained… and this is news?

    “Economics is extremely useful as a form of employment for economists.” John Kenneth Galbraith

    • I would have expected something this profound to have come from the world-reknowned economist (and former mediocre bartender) AOC.

      • There are economists with whom I agree. Two at the top of my list are Milton Freidman and Thomas Sowell.

        “When government – in pursuit of good intentions – tries to rearrange the economy, legislate morality, or help special interests, the cost comes in inefficiency, lack of motivation, and loss of freedom. Government should be a referee, not an active player.” M.F.

        “I have never understood why it is “greed” to want to keep the money you have earned but not greed to want to take somebody else’s money.” T.S.

        • Jay, is it surprising that most legislators in Congress are attorneys. Their main education learnings is how to make money and have no common sense. VT’s threesome are prime examples. But they learn / know how to make millions and where to get it. Private practice for them is a downer. BS the public and they are rewarded and the sheeple don’t have a clue nor care as long as they belong to a party they are brainwashed to.

  4. Guy,

    It looks like this winner-loser thing could be cured with lots of Socialistic government programs, paid for the “winners” of course

    After all, those winners have no right to be winners.

    We, Dem/Prog Socialists, will make them pay, for their Capitalist saving and investing.

Comments are closed.