What is U.S. President Donald Trump and his administration thinking when it comes to the country’s response to the COVID-19 pandemic?
It sounds like it may be getting ready to throw in the towel on its strategy of severely limiting people’s activities in a bid to slow the progress of the disease.
At least that’s how many are interpreting the all-caps note Mr. Trump sent out on Twitter late Sunday night: “WE CANNOT LET THE CURE BE WORSE THAN THE PROBLEM ITSELF,” the President said. “AT THE END OF THE 15 DAY PERIOD [of nation-wide social distancing], WE WILL MAKE A DECISION AS TO WHICH WAY WE WANT TO GO!”
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WE CANNOT LET THE CURE BE WORSE THAN THE PROBLEM ITSELF. AT THE END OF THE 15 DAY PERIOD, WE WILL MAKE A DECISION AS TO WHICH WAY WE WANT TO GO!
Many have read this as the President putting the nation on notice: He won’t let the juggernaut American economy be destroyed by the country’s response to the virus.
Indeed, the early steps to limit the virus’s march have come at a massive economic cost. Millions of jobs have been lost. The stock market, which only weeks ago was boasting record highs, has crashed to unthinkable levels. Trillions of dollars have been lost in economic output. People’s pension plans have suffered losses of similar overall value. And for a President whose signature achievement during his three-plus years in office was a roaring economy, this is devastating.
So it’s little surprise that Mr. Trump is pondering the trade-off between the state of the economy and the toll that COVID-19 would take on American lives if people were allowed to return to work.
White House economic adviser Larry Kudlow put the decision in stark perspective: “… We’re going to have to make some difficult trade-offs.”
President Donald Trump is considering measures to reopen the U.S. economy, even as the highly contagious coronavirus is spreading rapidly and hospitals are bracing for a wave of virus-related deaths.Reuters
According to a recent story in the Wall Street Journal, private-sector economists have warned that the crisis could cost the economy five million jobs and US$1.5-trillion in economic output. The U.S. stock market has already lost $12-trillion in value since the middle of February. And all those numbers may only get worse.
Meanwhile, the most cited study on the virus, done by Imperial College London, has estimated the United States faces a death toll of more than 2 million people if little to nothing is done to stop the spread of the disease.
That is the trade-off of which Mr. Kudlow speaks: The lives of mostly older Americans versus the economy, which, if allowed to shrivel further in a bid to beat back the virus, could affect far more Americans in other ways. At least, that’s how the argument goes. It is premised on the fact that despite a lockdown order from the state’s governor, California’s beaches were packed this weekend; it’s based on how difficult it is to imagine nearly 300 million people practicing social distancing to the degree necessary to halt the disease’s advancement. The United States, after all, is so far behind in its testing for the virus it would likely take a year to implement the kind of program necessary to combat the spread of the disease in the same way Singapore and South Korea did while while keeping their economies running. So why shouldn’t it just accept nature’s cruel verdict and return to work as best as people can?
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If that’s the route the U.S. government takes – and I’m betting that in an election year with Mr. Trump in charge, it will be – then it could have a profound effect on this country.
The impact that the virus is having on Canada’s economy is no less severe, at least by scale. And Prime Minister Justin Trudeau has been upfront about the likely length of this period of social distancing, with its attendant impact on business: months. If the United States decides to put jobs ahead of the lives of the most vulnerable, it will be noted in this country too, and undoubtedly, some Canadians will believe that we should follow suit.
That is, until we start seeing and hearing about the horror stories that an economy-first approach in the United States will spawn. If the Americans back off the only known strategy for slowing the disease’s progress (along with testing), then we are likely in for some scenarios that will make what we’ve seen in Italy and Spain look tame by comparison.
Bodies will quickly pile up, with nowhere to put them. Hospitals will be overrun. There simply will not be the capacity to assist all those who will need it. It will be like something we’ve never seen before.
At least four state pharmacy boards have taken steps to limit prescriptions of potential coronavirus treatments touted by U.S. President Donald Trump that are in short supply as demand has surged with the rapid spread of the outbreak. Zachary Goelman reports.Reuters
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OTTAWA – The Canadian economy was flat in August as high interest rates continued to weigh on consumers and businesses, while a preliminary estimate suggests it grew at an annualized rate of one per cent in the third quarter.
Statistics Canada’s gross domestic product report Thursday says growth in services-producing industries in August were offset by declines in goods-producing industries.
The manufacturing sector was the largest drag on the economy, followed by utilities, wholesale and trade and transportation and warehousing.
The report noted shutdowns at Canada’s two largest railways contributed to a decline in transportation and warehousing.
A preliminary estimate for September suggests real gross domestic product grew by 0.3 per cent.
Statistics Canada’s estimate for the third quarter is weaker than the Bank of Canada’s projection of 1.5 per cent annualized growth.
The latest economic figures suggest ongoing weakness in the Canadian economy, giving the central bank room to continue cutting interest rates.
But the size of that cut is still uncertain, with lots more data to come on inflation and the economy before the Bank of Canada’s next rate decision on Dec. 11.
“We don’t think this will ring any alarm bells for the (Bank of Canada) but it puts more emphasis on their fears around a weakening economy,” TD economist Marc Ercolao wrote.
The central bank has acknowledged repeatedly the economy is weak and that growth needs to pick back up.
Last week, the Bank of Canada delivered a half-percentage point interest rate cut in response to inflation returning to its two per cent target.
Governor Tiff Macklem wouldn’t say whether the central bank will follow up with another jumbo cut in December and instead said the central bank will take interest rate decisions one a time based on incoming economic data.
The central bank is expecting economic growth to rebound next year as rate cuts filter through the economy.
This report by The Canadian Press was first published Oct. 31, 2024
