Question: Please compare the following 2 articles, contrastand compare the two approaches.Whatdo you feel are the strengths and weaknesses of each andwhy? Article 1: France Tries
Please compare the following 2 articles, contrastand compare the two approaches.Whatdo you feel are the strengths and weaknesses of each andwhy?
Article 1: France Tries Limiting Joblessness to Confront Coronavirus Recession
As the coronavirus wallops the world's economies, France is rapidly emerging as a test case of whether a country can hasten the recovery from a recession by protecting businesses from going under in the first place, and avoiding mass joblessness. In the United States, the coronavirus has already provokedmillions of layoffs. While the$2 trillion rescue packagesigned by President Trump sends extensive relief to American workers and businesses, France and other European Union countries are deploying a more encompassing state-led approach in the event that the epidemic takes months, rather than weeks, to contain.
"There's a very different strategy in Europe than in the United States about how to manage this recession," said Patrick Artus, chief economist of Paris-based Natixis Bank. "The idea is to have no layoffs or company closures, so that when the coronavirus is finally under control the economy can start right back up."
France is hoping to learn a lesson from the 2008 financial crisis, when it didn't take aggressive steps to support workers and businesses. Unemployment soonjumpedto around 10 percent and stayed high for half a decade. By contrast, the rise in joblessness in Germany which kept companies from collapsing by subsidizing furloughs in a system known asKurzarbeitergeld, or short-time work lasted less than a year before falling steadily.
"France has decided it's not going to make the same mistake with the coronavirus," said Simon Tilford, director of the Forum New Economy, a research institution in Berlin. "That approach is going to be much less devastating."
Article 2: Why Is America Choosing Mass Unemployment?
Thursday's news thatmore than three million Americans filed for unemployment benefitslast week, a total far higher than in any previous week in the modern history of the United States, has been greeted with surprising equanimity by the nation's political leaders.
They appear to regard mass unemployment as an unfortunate but unavoidable symptom of the coronavirus. "It's nobody's fault, certainly not in this country," President Trump said Thursday. The federal government's primary response is a billthat passed the Senate late Wednesday nightthat would provide larger cash payments to those who have lost their jobs.
But the sudden collapse of employment was not inevitable. It is instead a disastrous failure of public policy that has caused immediate harm to the lives of millions of Americans, and that is likely to leave a lasting mark on their future, on the economy and on our society.
The pain will be felt most acutely in the least affluent parts of the nation, struggling even before the coronavirus crisis and even after a decade of steady though unequal economic growth. The federal government's first and best chance to prevent mass unemployment was to keep the new coronavirus under control through a system of testing and targeted quarantines like those implemented by a number of Asian nations. But even after it became clear that the Trump administration had failed to prepare for the pandemic, policymakers still could have chosen to prioritize employment by paying companies to keep workers on the job during the period of lockdown.
American companies have long fought to maximize their freedom to shed workers during economic downturns, and American economists have tended to agree, arguing that easy separation facilitates adjustments in the allocation of resources, allowing weaker businesses to shrink and stronger businesses to grow. This is a dubious argument even in normal times. The American economy has outpaced Europe, and the freedom to fire workers may well be a factor. But the benefits have accrued primarily to shareholders. The European model has been better for workers, who have experienced faster income growth than in the United States.
And this downturn is not an example of the kind of periodic free-market "creative destruction" that those who embrace this theory tend to celebrate it's a public-health crisis. The nation has taken ill, and it needs to go to bed for a while. But there's no obvious reason to think the economy would benefit from the kinds of big economic shifts facilitated by mass unemployment. This economic contraction was not caused by too much housing construction or too much gambling on Wall Street. It was caused by the arrival of a virus, and preserving ties between companies and workers could help to accelerate the eventual economic recovery once the pandemic passes. Companies could keep trained and experienced employees, averting the need for people to look for jobs and for companies to look for workers.
The United States has made some efforts to preserve jobs, particularly at small businesses. The bailout bill includes $367 billion for loans to small businesses that would be forgiven if recipients avoid job and wage cuts. But that is less than a third of the amount that experts estimate would be required to provide comprehensive support for small businesses.
And the bill does not require big companies that get bailouts to make similar efforts.
Instead, the government agreed to give workers who lose their jobs an extra $600 a week.
We'd all be better off if the government had helped those workers keep their jobs instead.
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