Racial riots in the US weighs on the country’s economic revival
The racial riot in multiple cities in the United States after the death of the African American George Floyd, at the hands of the Minneapolis, Minnesota Police, adds an important social factor to the complicated economic reactivation that the country is facing as a consequence of the Covid-19 pandemic. .
US President Donald Trump again criticized the governors of some states for being “weak” and insisted on the need to “arrest people”, according to different national media outlets.
“You have to dominate. If you do not dominate, you are wasting time,” Trump said in a Wall Street Journal report. “You will look like a bunch of idiots. You have to arrest people. And you have to judge people and they have to go to jail for long periods of time,” he added.
The president, who plans to designate the anti-fascist movement Antifa as a terrorist organization by accusing it of being behind the riots, was accompanied by the attorney general, William Barr, who also stressed the need for a strong police presence, and the President of the State. Major Joint, General Mark Milley.
Protests over the past few days, where at least three fatalities were reported, have led to the arrest of at least 4,400 people, according to the Associated Press, as the initially peaceful protests have seen multiple episodes of violence and looting affecting also to the operations of multiple companies and small businesses.
Thus, Amazon has reduced its deliveries and closed its delivery centers in Chicago, Los Angeles and Portland. For its part, the retail chain Target, which had already closed 32 stores around its Minneapolis headquarters, extended this decision to dozens of stores across the country. Apple has also made the decision to keep some of its stores closed with “the health and safety of its equipment” in mind.
From Moody’s Analytics, its chief economist, Mark Zandi, assured Bloomberg that “racial tensions can completely overwhelm the situation” at a time when many Americans still do not know if they will regain their jobs as the economy reopens. “This highlights deep despair in the US,” he added, citing 20% unemployment and 50 million workers who have either lost their jobs or faced cut wages.
New York Governor Andrew Cuomo said Monday that he was considering imposing a curfew on the city as National Guard troops were deployed over the weekend in 15 states and Washington D.C. in an attempt to quell a sixth night of violence in Floyd’s death.
“The social riots really derails the economic recovery for small businesses to try to reopen,” Deutsche Bank Wealth Management chief investment officer Deepak Puri said in Yahoo Finance, who does not see this as something that will permanently hamper economic output. , “but it really worries”.
It is important to keep in mind that the world’s largest economy currently has 1.79 million coronavirus infections that have caused 104,484 deaths. Still, all states have partially reopened, and some of the cities affected by the riots, such as Los Angeles and Washington DC, had already begun to reduce restrictions on non-essential services. New York City, the center of the pandemic in the United States, plans to restart construction, factories, and retail trade starting June 8.
Precisely, the municipal governments and their budgets have been affected by the measures of confinement and the brake of the economic activity and they can hardly pay now to add the additional costs derived from the police overtime to the thread of the protests. Even before these, Democrats in Congress have already passed a bill to commit up to nearly a trillion dollars in funding to state and local governments.