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| Sec'y Mnuchin |
Politics plays a role in the decisions made in the upcoming presidential election, and one where the bully pulpit of the White House reigns supreme, with the once robust economy a strong plank in Trump’s reelection platform, now only a distant memory.
Tagging along are Republican governors in some southern states where who are opening selected businesses, beginning this past Wednesday. Brian Kemp in Georgia has led the herd, but the president, in a somewhat disingenuous statement, said that he was against that move as unsafe.
Amazingly enough he also stated that self-injections with Lysol might rid someone of the virus, only to backtrack on Thursday, saying that he was being sarcastic, which quickly brought him condemnation from leading scientists.
Meanwhile doctors and epidemiologists have urged caution in making any hasty decisions for even a wholesale opening that might later result in a second wave of the virus, this fall; and, combined with the annual flu season would prove doubly dangerous to the public..And by some accounts, that could be 150 deaths per day.
No one is arguing that America is not in a recession, but the junction of politics and public health is creating a dangerous mix that might further endanger the nation’s financial welfare, which in turn that might, in the future, create economic damage in the trillions of dollars.,
Six weeks of lockdowns are making many Americans restless, and while some miss shopping, and going to restaurants, others are worried about how to pay bills; and despite the arrival of the first deposits from the CARES bill recently passed by Congress, many business owners ,especially small business owners, are also worried about remaining open, but last Tuesday, Congress made strides to add another $400 billion, or so, to the Paycheck Protection Program that will fund them, after the first $380 billion was drained almost as soon as it was issued..
This is all against a backdrop of noisy demonstrations in Chicago, Miami, and other states, accompanied by honking automobile horns outside their state government offices, with demonstrators arguing that they don’t have the virus and want to get back to work, while still others say that the coronavirus pandemic as a hoax, stating uncategorically, “This is just the flu,” while still more say that the government’s efforts to prevent illness, and death, is only a ruse by a godless group of bureaucrats.
In Illinois, Gov, JB Pritzker demurred about making any changes beyond the deadline of May 1, but on Wednesday announced that his state’s lockdown would continue till the end of May, with only a few exceptions.
Pritzker said that some retail business would open with curbside deliveries, and also opened some golf courses, but most importantly hospitals would be allowed to perform some elected surgeries, adding much needed revenue to their balance sheets.
Financial Times columnist Edward Luce wrote recently, that for the US, the “learning curve remains flatter than its infection rate. It should be the other way round.”
Overall many questions remain: how many peoplpe are infected, and as he noted, only 1 percent, 3.2 million, have been tested, despite Vice-President Pence’s earlier statements that 4 million, or more, would be.
The country is well below the level of testing needed by scientists to track the trajectory of “the pandemics reach,” in fact ten times the above amount is recommended.
Luce also pointed out that had the shutdowns occur two weeks earlier than they did, 90 percent of US deaths might have been prevented.
Of course, all of this leads to the development of a vaccine, and without it Americans could see their economy free fall into a tailspin, with a “hit to US wealth . .. of $5 trillion over 30 years, it strignent measures are not taken,” he added.
With the nation’s public health consigned to the states, and the lack of a federally managed program, economists and academics are worried that the economy would indeed meet Luce’s predictions.
Speaker of the House Nancy Pelosi managed to add more than $100 billion for America’s hospitals to the recent negotiations, and an increase for the food stamp program, known as SNAP, to further limit the damage on families and individuals, giving a lifeline, should states extend their shelter-in-place orders; plus $150 billion for state and local governments to continue their fight against the pandemic.
Additionally, unemployment benefits have increased roughly to $985 per week, and together with the $1,200 stimulus checks, can help, even temporarily, keep many Americans afloat, while scientists and doctors labor for a vaccine.
Unfortunately the Pandemic Unemployment Assistance Act which adds extended benefits has created a series of massive delays said The New York Times on Thursday, and that only 17 percent of eligible people have received them, amidst the state benefits websites crashing.
Many people are worried about paying rent, mortgages, credit card bills, and groceries, and the concerns are mounting, with the latest figures showing that one in six Americans have lost jobs due to the pandemic.
Stepping into the fray the Federal Reserve has taken an active role in buying up municipal and corporate bonds, as a shelter against a stock market meltdown.
Stabilizing Treasuries to prevent an even deeper recession is also goal that Fed Chair Jerome Powell, and Treasury Secretary Steven Mnuchin are coordinating, giving fresh input to some in Washington who initially that that the former, when first appointed, might have been a milquetoast.
For major companies, such as Southwest Airlines, the moves are even further precarious and its president noted that he wants to avoid furloughs and layoffs, a feat that some economists might be tricky, if not impossible.
Finally, a nearly half trillion bill was passed by both houses of Congress on Thursday to give not only $500 billion to refill the Paycheck Protection Program, but also as Pelosi pointed out, the added $100 billion to hospitals across the country to aid in its fight against the virus is desperately needed.
There was controversy with the first payouts with many business - especially small ones - saying that the application process was onerous, and that some larger corporations,even colleges, were unfairly afforded funds such as Steak n’ Shake, Harvard University and Ruth Chris’s Steakhouse; all of which have now given back the money awarded to them.
As a safeguard against future problems, the Government Accounting Office is now tasked with oversight to prevent abuses, and to provide greater efficiency.
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