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In weighing safety against the economy, Trump offers a false choice, experts say – The Boston Globe

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At the root of the president’s rhetoric on the issue, economists across the political spectrum say, is a false choice between economic growth and protecting public health.

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“The loss of life we’re talking about exceeds wars we’ve been in,” said Diane Swonk, chief economist at the accounting firm Grant Thornton in Chicago, projecting the potential death toll if the virus were allowed to spread unchecked. The permanent damage that could inflict on the US economy “would be hard to ever recover from. As hard as all of this is, the cost-benefit is pretty easy,” she said of the current restrictions on American life.

Medical experts, many of whom are coordinating the response at Boston’s top hospitals, agreed.

“We have to get this under control before we can start thinking about saving our economy,” said Rick Malley, an infectious disease doctor at Boston Children’s Hospital.

Malley and others said one of the trickiest aspects of fighting this virus is the delayed onset of symptoms. Many people have no idea they are carrying COVID-19 until days after they have already infected others.

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“That is why one has to be very careful about relaxing these restrictions too soon, because this virus will come back,” Malley said. “Many scientists and physicians and people like myself are really quite concerned that this idea that maybe we should loosen these restrictions is really massively premature.”

But the president appears increasingly impatient with those restrictions and their ripple effects in the economy.

“We can’t let the cure be worse than the problem,” Trump said at the daily White House coronavirus briefing on Monday. He doubled down on that sentiment Tuesday on Twitter and in a Fox News virtual town hall, saying, “We have to open this country up, we can social distance ourselves and go back to work.”

Former vice president Joe Biden, the leading contender for the Democratic nomination to take on Trump in the November election, poked fun at Trump’s notion of bringing the economy back from the grave by Easter.

“That would be a real resurrection if that could happen,” Biden said in an interview on MSNBC.

With the virus having claimed some 700 lives in the United States, and some hospitals becoming dangerously close to reaching capacity, the president has become increasingly at odds with New York Governor Andrew Cuomo, who is managing the state with the largest caseload thus far and has sharply criticized the federal government for its response.

In his daily press conference on Tuesday, the governor of Trump’s home state shot back at the president on the notion that the economy is more important than human lives.

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“If you ask the American people to choose between public health and the economy, then it’s no contest. No American is going to say accelerate the economy at the cost of human life,” Cuomo said.

Cuomo said on Tuesday that the crisis in New York is escalating at a pace once unimaginable, and he warned it is a preview of what will happen soon in other parts of the country. The number of positive cases in the state, now around 25,000, triples every three days, and the state is running dangerously low on medical equipment and protective gear that can save lives and protect health care workers.

Cuomo said there is room for a more refined public health strategy that is also a good economic strategy.

“Don’t make us choose between a smart health strategy and a smart economic strategy. We can do both and we must do both,” he said.

Medical experts agreed. Malley said it is also probably not correct, as some have suggested, that a massive two-week national lockdown would end the epidemic. He said it would likely take longer than two weeks and would be impractical because so many essential services would need to continue.

“We have to figure out a way to … make this period of social distancing and of staying at home less damaging to society in general, but without, at the same time, making the virus come back or continue unimpeded,” he said.

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The shuttered economy is particularly disastrous for low-income, working-class people who cannot work from home and often do not have paid sick days so can’t afford to stay home.

Lorena Garcia, an epidemiology professor at the UC Davis School of Medicine who studies health disparities, said social distancing can help slow the virus as quickly as possible so those people can return to work safely.

“COVID-19 doesn’t pick, regardless of social class or social standing, however it does impact working Americans in a much, much harder way,” she said.

Economists said an attempt to return to normalcy would unleash an economic devastation that would be much worse than the damage the virus has already caused.

Even with eased restrictions, the pandemic would continue to roil our daily economy. Some businesses would struggle to operate as their employees got sick en masse, with some dying. Other countries, still committed to the measures public health experts recommend, might bar Americans from entry, hampering international business and trade. Many Americans would remain afraid of the virulent virus, and those with financial means would likely continue to self-isolate. Many consumers would continue to avoid crowded restaurants, stores, and theaters.

“A warning to the president: Trying and failing to reopen the economy before economic activity is organically ready to resume could have dire economic consequences,” Michael R. Strain, the director of economic policy studies at the American Enterprise Institute, a leading conservative think tank, wrote in an opinion piece for Bloomberg Tuesday.

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“We can’t just go back to normal tomorrow,” said Betsey Stevenson, an economist at the University of Michigan who advised former president Barack Obama.

Stevenson said the White House narrative is misleading by making people think that somehow they have to choose between a high standard of living or their health.

“There is no such thing as ‘the economy.’ We are a group of people who get together and trade in order to improve our own well-being and welfare,” she said.


Laura Krantz can be reached at laura.krantz@globe.com. Follow her on Twitter @laurakrantz. Victoria McGrane can be reached at victoria.mcgrane@globe.com. Follow her on Twitter @vgmac.

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Economy

China Wants Everyone to Trade In Their Old Cars, Fridges to Help Save Its Economy

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China’s world-beating electric vehicle industry, at the heart of growing trade tensions with the US and Europe, is set to receive a big boost from the government’s latest effort to accelerate growth.

That’s one takeaway from what Beijing has revealed about its plan for incentives that will encourage Chinese businesses and households to adopt cleaner technologies. It’s widely expected to be one of this year’s main stimulus programs, though question-marks remain — including how much the government will spend.

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German Business Outlook Hits One-Year High as Economy Heals

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German business sentiment improved to its highest level in a year — reinforcing recent signs that Europe’s largest economy is exiting two years of struggles.

An expectations gauge by the Ifo institute rose to 89.9. in April from a revised 87.7 the previous month. That exceeds the 88.9 median forecast in a Bloomberg survey. A measure of current conditions also advanced.

“Sentiment has improved at companies in Germany,” Ifo President Clemens Fuest said. “Companies were more satisfied with their current business. Their expectations also brightened. The economy is stabilizing, especially thanks to service providers.”

A stronger global economy and the prospect of looser monetary policy in the euro zone are helping drag Germany out of the malaise that set in following Russia’s attack on Ukraine. European Central Bank President Christine Lagarde said last week that the country may have “turned the corner,” while Chancellor Olaf Scholz has also expressed optimism, citing record employment and retreating inflation.

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There’s been a particular shift in the data in recent weeks, with the Bundesbank now estimating that output rose in the first quarter, having only a month ago foreseen a contraction that would have ushered in a first recession since the pandemic.

Even so, the start of the year “didn’t go great,” according to Fuest.

“What we’re seeing at the moment confirms the forecasts, which are saying that growth will be weak in Germany, but at least it won’t be negative,” he told Bloomberg Television. “So this is the stabilization we expected. It’s not a complete recovery. But at least it’s a start.”

Monthly purchasing managers’ surveys for April brought more cheer this week as Germany returned to expansion for the first time since June 2023. Weak spots remain, however — notably in industry, which is still mired in a slump that’s being offset by a surge in services activity.

“We see an improving worldwide economy,” Fuest said. “But this doesn’t seem to reach German manufacturing, which is puzzling in a way.”

Germany, which was the only Group of Seven economy to shrink last year and has been weighing on the wider region, helped private-sector output in the 20-nation euro area strengthen this month, S&P Global said.

–With assistance from Joel Rinneby, Kristian Siedenburg and Francine Lacqua.

(Updates with more comments from Fuest starting in sixth paragraph.)

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Parallel economy: How Russia is defying the West’s boycott

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When Moscow resident Zoya, 62, was planning a trip to Italy to visit her daughter last August, she saw the perfect opportunity to buy the Apple Watch she had long dreamed of owning.

Officially, Apple does not sell its products in Russia.

The California-based tech giant was one of the first companies to announce it would exit the country in response to Russian President Vladimir Putin’s full-scale invasion of Ukraine on February 24, 2022.

But the week before her trip, Zoya made a surprise discovery while browsing Yandex.Market, one of several Russian answers to Amazon, where she regularly shops.

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Not only was the Apple Watch available for sale on the website, it was cheaper than in Italy.

Zoya bought the watch without a moment’s delay.

The serial code on the watch that was delivered to her home confirmed that it was manufactured by Apple in 2022 and intended for sale in the United States.

“In the store, they explained to me that these are genuine Apple products entering Russia through parallel imports,” Zoya, who asked to be only referred to by her first name, told Al Jazeera.

“I thought it was much easier to buy online than searching for a store in an unfamiliar country.”

Nearly 1,400 companies, including many of the most internationally recognisable brands, have since February 2022 announced that they would cease or dial back their operations in Russia in protest of Moscow’s military aggression against Ukraine.

But two years after the invasion, many of these companies’ products are still widely sold in Russia, in many cases in violation of Western-led sanctions, a months-long investigation by Al Jazeera has found.

Aided by the Russian government’s legalisation of parallel imports, Russian businesses have established a network of alternative supply chains to import restricted goods through third countries.

The companies that make the products have been either unwilling or unable to clamp down on these unofficial distribution networks.

 

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