The economic fallout of coronavirus
Summary
TLDRThe video script discusses the impact of the COVID-19 pandemic on businesses like Katz's Delicatessen and the magnet theater in New York City, highlighting the challenges of keeping workers employed and businesses afloat. It features interviews with owners, employees, and economist Joseph Stiglitz, who emphasizes the need for government support and the pre-existing vulnerabilities in the economy. The script also touches on the emotional responses of investors and the importance of financial planning during such uncertain times.
Takeaways
- 🏠 Katz's Delicatessen, a New York institution for 132 years, is facing unprecedented challenges with its current shutdown due to the pandemic.
- 🍽️ Restaurants across the country are prohibited from seating diners, leading to a shift to takeout and delivery services.
- 👷♂️ Third-generation owner Jake Dell is trying to keep his 200 workers employed through various means, such as delivery and crowd control.
- 🔪 Long-time employee Alfredo Fernandez highlights the resilience of Katz's, which has weathered many crises but now faces a shutdown.
- 🎭 The closure of theaters like the Magnet Theater in Manhattan has a ripple effect on the many businesses and workers that support them.
- 🤹♂️ Actor Edy Herbst co-founded the Magnet Theater, emphasizing the importance of improvisation in dealing with uncertainty and change.
- 🏆 Nobel Prize-winning economist Joseph Stiglitz points out the vulnerability of the pre-pandemic economy, where many households and businesses were living on the edge.
- 💡 Stiglitz criticizes the pre-pandemic economy for its lack of resilience and the overemphasis on narrow-minded efficiency, leading to widespread vulnerability.
- 💸 The U.S. government is taking measures to provide financial support to both large corporations and small businesses, as well as to households.
- 📈 Financial advisor Michael Goodman advises against panic selling in the stock market, even for those nearing retirement, emphasizing the need for a long-term perspective.
- 🔍 Goodman suggests that now is an important time for individuals to assess their financial situation and obligations to ensure they can weather the crisis.
Q & A
How long has Katz's Delicatessen been in operation?
-Katz's Delicatessen has been in operation for 132 years.
What is the current situation at Katz's Delicatessen due to the pandemic?
-Katz's Delicatessen is prohibited from seating diners, and they are offering bagels and blintzes only to go.
How is Jake Dell, the third-generation owner of Katz's, trying to keep his workers employed during the crisis?
-Jake Dell is having his workers do deliveries, crowd control, and prep work to keep them busy and paid.
What is the impact of the theater closures on the surrounding businesses and workers?
-The theater closures affect not only the employees of the theaters but also the companies and workers that supply utilities, t-shirts, and beer, as they all feel the impact of the closures.
How does Edy Herbst, co-founder of the Magnet Theater, describe the current situation compared to the past?
-Edy Herbst describes the current situation as nerve-wracking and different from any other economic period he has experienced.
What does Joseph Stiglitz, a Nobel Prize-winning economist, believe about the pre-virus economy?
-Joseph Stiglitz believes that the pre-virus economy left many families and businesses exposed and at risk, with households living at the edge and businesses taking on too much debt.
What measures is the U.S. government taking to support large corporations and small businesses during the crisis?
-The U.S. government is nearing an agreement to make half a trillion dollars available to help large corporations and small businesses.
What is the proposed financial assistance for households during the crisis?
-There is another half a trillion dollars for households, amounting to one to three thousand dollars depending on the family size and income level.
What is Stiglitz's suggestion for financial assistance to people during the crisis?
-Stiglitz suggests that the government should provide recurring checks to people for as long as the crisis lasts, rather than a one-time event.
What advice does Michael Goodman, president of Wealth Stream Advisors, give to investors nearing retirement during the market turmoil?
-Michael Goodman advises that even for those nearing retirement, now is not the time to panic and get out of the market, as the average recovery is typically around 24 months.
How is the Magnet Theater adapting to the current situation?
-The Magnet Theater is experimenting with putting performances online, using improvisation to deal with the uncertainty of the situation.
Outlines
🍽️ The Impact of Closures on Businesses
The first paragraph discusses the challenges faced by businesses, particularly restaurants like Katz's Delicatessen in New York, due to the COVID-19 pandemic. Katz's, a 132-year-old establishment, is struggling with the prohibition of seating diners and has had to adapt by offering only take-out options. The owner, Jake Dell, is trying to keep his 200 workers employed by reassigning roles such as having busboys do prep work. The paragraph also touches on the broader economic impact, with sports events canceled, factories and shopping malls closed, and theaters like the Magnet Theater shutting down, affecting not only the employees but also the network of businesses that support them.
📉 Economic Uncertainty and Responses
The second paragraph delves into the economic implications of the pandemic and the measures being taken to address them. It features insights from Nobel laureate Joseph Stiglitz, who highlights the unprecedented nature of the current crisis and criticizes the pre-pandemic economy for lacking resilience. The average American's financial vulnerability is underscored by the fact that many have savings insufficient to cover emergencies. The U.S. government's response includes lowering interest rates and proposing financial aid packages for corporations and households. Stiglitz suggests that the government should provide ongoing financial support to citizens as long as the crisis lasts. The paragraph also includes perspectives from financial advisor Michael Goodman, who advises against panic selling in the stock market and emphasizes the importance of understanding personal financial obligations during this time. The Magnet Theater's efforts to adapt by moving performances online are also mentioned as an example of improvisation in the face of uncertainty.
Mindmap
Keywords
💡Delicatessen
💡Shutdown
💡Economic Pandemic
💡Resilience
💡Interest Rates
💡Financial Plumbing
💡Crowd Control
💡Bull Market
💡Wealth Stream Advisors
💡Improv
💡Uncertainty
Highlights
Katz's Delicatessen, a 132-year-old institution, adapts to unprecedented shutdowns by keeping operations going with limited services.
Jill Schlesinger reports on the impact of the pandemic on businesses like Katz's, which are facing challenges unlike any in their history.
Restaurants across the country are prohibited from seating diners, leading to a shift to take-out and delivery services.
Jake Dell, third-generation owner of Katz's, discusses the efforts to keep 200 workers employed and paid during the crisis.
Workers at Katz's are reassigned to different tasks to maintain operations and morale during the shutdown.
The closure of major sports, factories, shopping malls, and theaters signifies a global economic shutdown.
The Magnet Theater in Manhattan, dedicated to improv, is forced to shut down, impacting not just employees but also related businesses.
Actor Edy Herbst, co-founder of the Magnet Theater, expresses concern for the future of the theater and the city.
Joseph Stiglitz, Nobel laureate in Economics, describes the current economic situation as uniquely nerve-wracking compared to past crises.
Stiglitz criticizes the pre-virus economy for leaving many households and businesses vulnerable due to living at the edge financially.
The economic shutdown is a necessary measure to protect health, according to Stiglitz, despite its unprecedented nature.
The U.S. federal government's response includes cutting interest rates and making funds available to support corporations and households.
Stiglitz advocates for recurring financial support to households as long as the crisis lasts, rather than a one-time check.
Michael Goodman, president of Wealth Stream Advisors, advises against panic selling in the stock market despite the downturn.
Goodman emphasizes the importance of understanding personal financial obligations to ensure stability during the crisis.
The Magnet Theater experiments with online performances as a way to adapt to the new reality of social distancing.
The transcript highlights the importance of improvisation and adaptability in both business and personal life during a crisis.
Transcripts
Anne Shiell Welby I see well no that's
yet another scary reality for many of us
in recent weeks we've asked our Jill
Schlesinger to calm the waters or Triton
at Katz's delicatessen on New York's
Lower East Side
they've been slicing the corned beef and
pastrami for 132 years listen we've gone
through everything right we've we've
seen depressions and hurricanes and
blackouts and terrorist attacks and and
we've been here through all that we've
we've never closed but now the chairs
are stacked on the tables
Katz's like most restaurants across the
country is prohibited from seating
diners
so the bagels and blintzes are only
available to go Jake Dell is the third
generation owner of Katz's he's
desperately trying to keep his 200
workers busy and more importantly to
keep paying them waiters for example are
doing deliveries or working on crowd
control
you know I have Busboys that I obviously
don't need to clean tables right now so
I'm having them do prep work basically
everyone is an all-hands-on-deck and we
take it one day at a time
Alfredo Fernandez has put his knife to
work at Katz's for 14 years at least
Katz's is still open as the global
economy enters an unprecedented shutdown
just look around major league sports
have left the field factories and
shopping malls are shuttered the lights
have gone dark on Broadway and the
curtain has come down for Manhattan's
independent theaters like the magnet
theater I'm sitting here in an empty
theater and it's empty every night we're
shut down New York City has shut down
actor edy herbs been co-founded the
magnet which is dedicated to improv he
remembers the good old days like a week
and a half ago
we were booming 35 to 40 shows a week
back-to-back each night the magnet has
50 employees but the damage goes beyond
those 50 there's a web of companies and
workers that supply everything from
utilities to t-shirts to beer they'll
all feel the impact of the theaters
closing I'm worried about the future of
this place well I'm worried about the
future of the city if you look back on
your life you've lived through a lot of
different shaky economic periods can you
tell me how this period feels to you
today versus what you've seen in the
past Oh
to me I think this is the most
nerve-wracking joseph stiglitz won the
nobel prize for economics in 2001 and is
a professor at columbia university this
is totally different we're we're
shutting down the economy to protect our
health
Stiglitz believes that the pre virus
economy was one where too many were left
exposed
we're both families and businesses alike
were at risk if conditions soured before
the the event many of our households
were living at the edge the average
amount in the bank you know 50% 70% of
Americans have is $500,000 on the other
side businesses have been really foolish
taking on debt as if no storms ever
going ahead and we always know that
there's going to be some storms they've
been really really foolish we pushed the
idea of efficiency in a narrow-minded
sense too far we've run our whole
economy that way no extra hospital bags
fine as long as you don't have a crisis
like the current one we developed a
system without resilience in which we
left large numbers of Americans
extraordinary vulnerable as the health
pandemic becomes an economic pandemic
the world is waiting for governments to
respond here in the US the federal
has cut interest rates to near zero to
help consumers and businesses access
cheaper loans and it's also taking
actions to keep the nation's financial
plumbing unclogged at the same time the
Trump administration and Congress are
nearing an agreement to make half a
trillion dollars available to help large
corporations and small businesses and
there's another half a trillion dollars
for households amounting to one to three
thousand dollars depending on the size
of the family and income level Stiglitz
says it's a start the idea of sending
checks to people not a one-time event
you are advocating something different
can you explain well if we knew this was
going to be a three week event a
one-time check would be fine it gets us
over the hump and we're on but the PT
biologists are not sure how long it's
going to take the best estimate is
months and that means a lot of people
really are anxious and and knowing that
if this crisis lasts for three months
there'll be another check a thousand
dollars for three months come on so we
really need to give them the assurance
that as long as this lasts they'll be a
check coming should we be concerned at
all about spending this money now
the answer is no I mean when we went to
World War two we didn't ask could we
afford that we had to do it we need to
do it can we afford it yes we have
enormous resources so are your clients
freaking out right now Michael well some
of our clients are definitely on edge
Michael Goodman is the president of
wealth stream advisors of financial
planning and investment management firm
doing this is a pretty scary time of
course and you would never want to
discount that there are clients however
I surprised to see that our anxious to
put some money into the market
Street has lost its been a frightening
ride for investors stocks have plunged
more than 30 percent over the past five
weeks ending the longest bull market on
record
but despite the market turmoil Goodman
says that even for a person nearing
retirement now is not the time to panic
and get out if I'm 60 years old and I
plan on retiring when I'm 70
should I make any changes in the account
right now if you're 60 and you're not
going to be retiring for another ten
years in these times there's this
temptation to make adjustments as scary
as this is as much as we don't know the
bottom to this market average recovery
is typically somewhere around 24 months
whether you're an investor or not
Goodman says now is an important moment
to take stock of your financial
situation I think the thing that people
should be focusing on right now is
making sure that they understand what
their personal obligations are over the
next several months so that they feel
that they can get through that this will
pass there will be damage because of it
and we will rebuild and grow back we've
done this before I don't fully fit under
the bed I do
back at the magnet theater they're
trying to get through it all by
experimenting like some of their big
league colleagues with putting
performances online the theater
dedicated to improv is well improvising
as we all are what we do is we train
people to deal with the fact that
everything is uncertain
it's improvising we're constantly saying
calm down take a breath
don't try to plan try to react and now
we're doing that for real in real life
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