New staffer Rania attended From the Local to the Global: Business, Debt, Coronavirus, a panel on COVID-19, and the continuous cycle of debt. The panel featured five speakers in different areas of expertise.
The COVID-19 pandemic has exacerbated many underlying issues in the United States, especially the threat of bankruptcy. On Wednesday, I attended a panel hosted by the Undergraduate Committee on Global Thought (CGT) in conjunction with the Alexander Hamilton Society and the Columbia University Journal for Politics & Society that discussed the effects of the pandemic on small businesses. The panel consisted of five experts in different fields, each bringing a unique perspective to the ongoing situation.
The event, formatted as a webinar, began with Professor Perry G. Mehrling, a CGT Senior Research Scholar and Professor of International Political Economy at Boston University, giving a strong analogy in contagion. He argued that both the pandemic and debt are about closeness since someone’s debt is another’s asset and both debt and illness are susceptible to global spread. Professor Mehrling outlined three phases to engage with the issue of “spread” in relation to debt and COVID-19.
The first step Professor Mehrlig mentioned was “stopping the bleeding.” Here, the problem of bleeding is analogous to the problem of continued debt build-up. In March, the Federal Reserve issued measures, allowing more of society to postpone their debt, leading to an increase in public debt. Professor Mehrlig indicated that phase two was “winning the war.” This step sorts out which businesses succeed and which businesses fail. Professor Mehrlig also argued that since the Federal Reserve is the central bank of the world, in effect, the continuous weakening of the dollar will negatively affect other global economies, given their many transactions in US currency. It is imperative that these uncertainties get sorted out before moving on to phase three which is “winning the peace”, something we are far from achieving.
Soon after, CGT member and Robert S. Lynd Professor of Sociology at Columbia University, Saskia Sassen, went on to expand on this idea of global engagement. She explained how the concept of internationalism has intersected many sectors such as economics, culture, and universities. She also added that we are moving into this new epoch in which local (cities, for example) and international actors are dominating the role of the national government. She declared that the national government, albeit “in the most dramatic sense”, is the weakest in a whole variety of complex systems especially in conjunction with research and expertise. Instead of delegating high-level expertise, we must create spaces for various modes of knowledge that can take off.
One concrete example that Professor Sassen gave of this tension between knowledge and government was the consistent downplaying of medical experts’ knowledge by the Trump administration, demonstrating the absence of necessary knowledge in government structure, which subsequently leads to unnecessary ignorance.
Antonia Menezes, Senior Financial Sector Specialist with the Insolvency & Debt Resolution Team of the World Bank Group, expanded on the presence of local actors and national government when speaking about the lockdown’s impacts on small businesses. Menezes explained that creditors are already unlikely to lend to small businesses because they don’t believe the businesses will recover their loans. The pandemic has only exacerbated these issues of funding. However, she did reveal that the World Bank is working hard to promote entrepreneurship.
Speaking more broadly, Menezes detailed that one way countries are responding to the financial crisis is through legal and financial regulatory measures, such as stimulus packages, and by making it harder to push viable businesses into insolvency. In a sense, Menezes explained, countries are trying to “flatten the bankruptcy curve.” An example of this “flattening” includes reducing the duration of bankruptcy proceedings since bankruptcy courts in the US are going to receive an intense flood of cases. This influx creates an incentive to look into new technology that would assist the court with case management and reach new businesses to help them avoid the insolvency tipping point.
On the topic of bankruptcy courts, the Honorable Elizabeth S. Strong, a US Bankruptcy Judge for the Eastern District of New York, expressed one main idea to those in attendance: US Bankruptcy Courts are problem-solving courts. Judge Strong detailed how the purpose of bankruptcy courts is to decide who gives parties a second chance. Judge Strong also stated that both companies and ordinary households find themselves in the bankruptcy system of the US. Despite the forthcoming increase in cases, Judge Strong believes the courts have the capacity to deal with them. She left us with the hopeful idea that “the energy and optimism of people even in the worst times continues to inspire and impress [her] and it can be tempting to lose sight of that.”
Excluding Judge Strong’s last statement, most of the panel was objective and gave little reassurance to the future. They detailed what might happen but did not often comment on possibilities for hope. I particularly liked this aspect of steering away from sugar-coating happenings in the world and focusing on the academic aspects of COVID-19 and the ensuing debt. I found much of the discussion to be objective and thought the talk contained a nice amount of concrete ideas mixed with conceptual theories. However, I did find the panel to be a bit fast-paced and hard to immediately digest.
I enjoyed how the panelists built on each other’s arguments, and although there were many different ideas thrown around, the discussion seemed to have a progressive flow and cohesion to it. Additionally, I appreciated the diverse perspectives. I liked hearing about the expertise from different career branches and areas of study. I think the whole idea of this panel even relates to what Professor Sassen said on creating a space for various modes of knowledge rather than delegating it (although this article itself is perhaps an attempt at delegation of knowledge). I encourage all who are interested in anything these extraordinary panelists brought up to hear the discussion in its entirety here. This event was part of a larger series entitled Rethinking the World, sponsored by the Committee on Global Thought. The next event available to undergraduates is Tech for Social Good on December 1st.
Debt Consolidation via Picpedia