How does the ongoing unrest across America impact an already damaged economy?
Whilst the world battles a pandemic and the consequent economic instability, the United States find itself struggling against the further threat of significant civil unrest and the growing polarisation of the nation.
The effects of the coronavirus pandemic on the United States have been substantial. As the disease began to take hold of the nation in late March, lockdown restrictions impacting consumer spending and considerable market volatility saw the economy come to a standstill.
Supply chains were radically disrupted which generated food shortages as well as a delay in medical supplies. Businesses within the travel, tourism and hospitality industries almost collapsed overnight and by the end of April, the unemployment rate had skyrocketed to 14.7% with over 23 million unemployed.
Around mid-May however, as the number of reported cases plateaued, many states across America began to reopen and businesses that had closed their doors in the face of COVID-19 looked at how they could begin their recovery and help restart the nation’s economy. Analysis by Goldman Sachs using real-time data from Twitter also showed that consumer sentiment had started to stabilise after being significantly derailed in March.
Just weeks later the world witnessed the killing of George Floyd by Minnesota police officers whilst in police custody. His death ignited an international discussion on systemic racism, police brutality and criminal justice reform that consequently resulted in protests in almost 4,500 cities across the globe, including every American state and territory.
The level of social unrest had not been seen in the country since the 1960s, with many protests turning violent and leading to thousands of businesses and properties across major US cities being looted, torched or vandalised. Hundreds have been injured and dozens killed.
Research conducted by Axios in September calculated the total damage caused to be worth between $1 and $2 billion, further complicating the United States’ economic recovery from the pandemic.
This number could also continue to increase given that the unrest across the country shows no sign of slowing down and especially taking into account that the Axios report only considers the insured losses of damage associated with the protests.
What’s more is that the unrest will likely be intensified by the upcoming Presidential Election in November, described as the most emotive US domestic election in decades. Both sides of the political spectrum are stating that the election has gone beyond voting for two different parties and is a fight over the future of the country. Trump’s stance on many different subjects over the last four years of his presidency has often been the catalyst that had led to an increasingly polarised political climate and has shown little attempts at compromise or reconciliation between the left and the right.
The unrest we’ve seen so far from far-left extremists such as Antifa and the protests by Black Lives Matter activists would suggest that if Trump is re-elected their activity will continue and likely escalate.
Any further high-profile police shootings, especially if fatal, will almost certainly see heightened violence. In instances such as the death of Rayshard Brooks, the shooting of Jacob Blake and the grand jury decision surrounding the death of Breonna Taylor, extremist elements within the BLM movement have been quick to inflame tensions in order to create riots and excuse looting.
There is the possibility of a reoccurrence of what we saw in Compton when two sheriffs were ambushed whilst sitting in their police vehicle. An armed male approached the officers and shot them multiple times, meaning that any officer involved in a shooting could become a target for violence in addition to the riots and looting.
On the same note, the increase of right-wing militia membership and continued rallies by groups such as the Proud Boys and Patriot Prayer have demonstrated the potential for conservative and right-wing groups to contest any election results that elect Democratic nominee, Joe Biden.
If unrest continues even in the run up to the election and local or federal police are unable to provide protection to private property, it’s likely that militia groups will start to increasingly take up vigilante roles in response with the potential for an escalation in violence. A scenario that we witnessed in August when Kyle Rittenhouse fatally shot two protesters in Kenosha, Wisconsin.
The unrest is likely to most disrupt urban areas and increase the threat of looting, robbery and arson directed at commercial businesses as well disrupting supply chains. Businesses will need to ensure that they are adequately protected and prepared for a reignition of impassioned protests and demonstrations.
A presidential election always stipulates uncertainty for the US financial market but once the results are in, analysts tend to observe a boost in the US economy. In 2020 however, the increasingly partisan politics combined with the racial unrest and mounting job losses following a weak pandemic response means that further instability is inevitable. Both consumer and investor confidence, which is already scarce, will plummet once more and potentially for the long-term.
The aftermath of the rioting and violence across American cities in the 1960s continued to impact the economy for at least ten years. The most affected areas endured high insurance rates, low property values, lower tax revenue and reduced economic opportunity throughout this period.
The security situation within the United States remains shaky and with the presidential election just weeks away, we’re closely monitoring the threat landscape in order to provide consistent reporting on the impact the results will have both domestically as well as any potential consequences on the international stage.
Intelligence Fusion will be providing regular societal, political and economic updates in the run up to the election and beyond. You can keep up to date by subscribing to our threat intelligence podcast, The Insight, on YouTube, follow us on Twitter or connect with the team on LinkedIn.
If you and your organisation require timely, actionable alerts as well as wealth of historic data to better prepare for the upcoming disorder and unrest, one of our custom intelligence solutions may be able to help. To discuss your options, speak to a member of the team today.
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