Virtual conversation

EconTalk with Anirban Basu: a 30-minute economic fireside chat

Watch our complimentary on-demand webinar for a discussion and Q&A with special guest Anirban Basu, chairman and CEO of Sage Policy Group, Inc. and Monica Modi Dalwadi, Baker Tilly’s managing partner of the D.C. metro region.

In this entertaining and informative webinar, these two leaders discussed the current economic circumstances and the post-recovery outlook. Anirban answered pressing questions and gave his thoughts on economic hot topics.

Questions discussed:

  • What does it take for the economy to recover to January 2020 levels, by when will that occur, and what shaped recovery do you predict?
  • What do you see as the single-most-important thing that businesses can/should do to help get the economy restarted? What are some things we shouldn’t be doing for the next 12-24 months?
  • Why do you think the stock market doing better than might be expected at this time? Where is the inflation?
  • Can you comment on the intersection of the timing of economic reopening and political climate of an election year? If there is a change in the White House how do you see it affecting the markets?
  • What is the economic impact of the dramatic decline in live sports?
  • How do you see the US economy handling the backtracking of the easing of COVID-19 restrictions? Do you think the downward unemployment trend will reverse as cases spike?
  • Do you foresee a complete change in the landscape for cities with the potential emptying of office space and possible flow of people to suburbs? What potential repurposing can be done for high rises that are emptying?


Economist reflects on the pandemic’s impact and getting back on track

Companies that manage both their cash and their talent well are in the best position to bounce back strongly from the pandemic-affected economy, according to Anirban Basu, chairman and CEO of Sage Policy Group.

Stock market

The pandemic has driven some big winners on the stock market – Amazon, Apple, Walmart and Zoom – which in turn has driven the stock market higher. With interest rates so low, where else can investors put their money? With most professional and college sports closed, some think that the stock market has done so well because people can’t bet on sports. Plus, no one wants to miss out on the rally when the vaccine is announced.

Economic reopening and politics

Since the initial pandemic outbreak was generally in cities in the North, generally controlled by Democrats, many states in the South saw this as a northern problem. When the first COVID related stimulus packages were being debated in March, there was some discussion along the lines of “Do we really want to bail out Illinois and New Jersey?” The Northern states then flattened their infection curve successfully and now cities in the South and Southwest have outbreaks. As some of these states consider rolling back their reopenings, the politics of the next stimulus package has changed.


The labor participation rate has slumped in the last few months after being stable for several years even as baby boomers have started to retire. The economy had been so strong it was drawing people into the workforce. The recently employed who have become unemployed die to the pandemic may drop out the labor market altogether. Shifting immigration policy and a lower birth rate indicates not much labor growth in the future. In addition, productivity growth has dropped. This combination of lower labor force participation and lower productivity leads to a slower growing economy.


The chances of a double-dip recession are very high. Prior to the pandemic, there were vulnerabilities in the economy. Not all parts of the economy, such as agriculture, had participated in the expansion. Manufacturing had several months of recession in 2019, and the auto industry peaked in 2016. Add to that the ongoing trade wars. The biggest vulnerability, however, is preexisting indebtedness by corporations, households and the U.S. government. As the existing stimulus (such as one-time stimulus checks and extra unemployment benefits) run out, the preexisting vulnerabilities will rise up and cause a double-dip recession.


Mortgage delinquencies are high because people lost jobs and people are conserving cash. On the other hand, mortgage applications are quite strong, which can be attributed to the combination of people wanting to social distance, millennials coming of age, low mortgage rates and the need for a home office.

Commercial real estate

There is a commercial real estate crisis in the U.S.: empty office suites, abandoned storefronts, shuttered restaurants and the increasing awareness by many workers that they can work remotely and be productive. During the expansion, many businesses moved from Class B to Class A and A+ office space. This was partially to stroke the ego of the CEO showing off a nicer space, but also because businesses could afford the space and it was an effective recruitment tool for new talent. Now, with unemployment high and the economy uncertain, many companies may consider a move back to a Class B, suburban setting.

National debt

The national debt isn’t a crisis until the bond market says it is, and it isn’t saying that yet. Maybe the debt won’t be a crisis until 2026, when the Medicare trust fund is estimated to become insolvent. At that point, Congress may have to pass legislation to push closer to a balanced budget.

Getting back on track

It will take a vaccine – or some type of efficacious treatment – to get the economy back on track. Behavior change, like mask wearing and social distancing, will not be enough. Even without a vaccine, the U.S. was on track for a V-shaped recovery, with May and June job growth accounting for about a third of the jobs lost in March and April. The recovery plateaued, however, as local economies opened up. 

In the meantime, businesses have to conserve cash and hold onto their top talent. Economies grow when companies deploy cash aggressively and hire people aggressively. Because when the recovery starts, you will need that top talent to leverage fully the expansion to come.

Good performance comes from great leadership, and great leaders working together. The hope is that the radical center can emerge and people can talk across the aisles, start to make some good policy and think of the role of the U.S. in the global economy and figure out how to train a 21st century workforce.

For more information on this topic, or to learn how Baker Tilly specialists can help, contact our team. 

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