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Trump Considers Easing Social-Distancing Guidelines to Boost Economy – The Wall Street Journal

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President Trump has told people that he wants to open the economy as soon as possible.



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WASHINGTON—The White House is discussing easing social-distancing guidelines as early as next week as advisers and business leaders push President Trump to boost an economy beset by deepening job losses nationwide, people familiar with the discussions said.

The president has told people that he wants to open the economy as soon as possible. The talks have centered on relaxing or restructuring the 15-day guidelines the administration issued last week to stem the spread of coronavirus, one of the people said. Other advisers have cautioned Mr. Trump against easing the guidelines, warning the measures remain necessary.

An administration official said the White House is discussing targeting guidelines for social distancing at vulnerable groups, such as requiring the elderly and those with underlying medical conditions to take greater precautions than younger, healthy people. Such a shift may not happen immediately after the 15-day period ends, the official said, adding that the White House is operating with a “high degree of caution.”

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President Trump said Sunday he is deploying the National Guard to New York, California and Washington, three states hit hard by the novel-coronavirus outbreak. Photo: Patrick Semansky/Associated Press

The social-distancing guidelines instructed all Americans to avoid nonessential travel, sit-down restaurants and gatherings of more than 10 people, among other steps. Meanwhile, governors and mayors nationwide have rolled out their own restrictions, shutting schools and many retail businesses.

Easing the guidelines would run counter to public-health experts who have said sustained social distancing is needed until the U.S. develops a vigorous testing regime to identify and isolate cases. Widespread testing is still a long way off and labs now are struggling with supply issues that are further hampering the ability to identify cases. The virus can be spread when people are asymptomatic.

New guidelines are expected later Monday for law enforcement, medical and health-care providers and other workers in critical infrastructure professions for how workers exposed to the virus could return to work more quickly by wearing a medical mask for a certain period of time, Vice President Mike Pence said Sunday. The new guidelines are being developed by the Centers for Disease Control and Prevention and the Department of Homeland Security, Mr. Pence said.

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In a series of social-media posts late Sunday and early Monday, Mr. Trump expressed concern about the economic drag of the health precautions aimed at the coronavirus crisis. Financial markets have been rattled by the rapid spread of the virus and Congress’s delay in finalizing an economic rescue package, and U.S. job losses are estimated in the millions.

In a Twitter post at 11:50 p.m. in all capital letters, Mr. Trump anticipated the end of the 15-day period in which he has asked the country to follow a set of guidelines—essentially to remain at home as much as possible—to slow the spread of the virus. That 15-day period ends in about a week.

“WE CANNOT LET THE CURE BE WORSE THAN THE PROBLEM ITSELF,” Mr. Trump tweeted. “AT THE END OF THE 15 DAY PERIOD, WE WILL MAKE A DECISION AS TO WHICH WAY WE WANT TO GO!”

Mr. Trump also highlighted Twitter posts from supporters lamenting the economic hit from coronavirus, including a tweet from a woman with a few hundred Twitter followers who suggested isolating high-risk groups after the 15-day period “and the rest of us get back to work before it’s all over for everyone.”

There has been tension inside the federal government’s coronavirus team for months between the health experts seeking strict measures aimed at limiting the contact between humans and the economic advisers looking to shield the economy as much as possible.

Dr. Jerome Adams, the U.S. surgeon general, said Monday the federal guidelines were working, but that “the problem is that we really need more people to take this seriously.” He said on Fox News: “People, stay at home.”

Larry Kudlow, the top White House economic adviser, expressed concern about the economic effects of ordering Americans to stay inside. “At some point you have to ask yourself whether the shutdown is doing more harm than good,” he told CNBC. In a Fox News interview earlier in the day, he said, “We’re going to have to make some difficult trade-offs,” adding that he had spoken to the president about the matter.

Treasury Secretary Steven Mnuchin said Monday that he spoke to Mr. Trump on Sunday, and that the president “is very pleased with the medical professionals,” particularly attempts to find new drugs to confront the disease.

“The president is hopeful that the policies and procedures that have been put in place will kill this virus quickly,” Mr. Mnuchin said.

At a news conference on Sunday at the White House, Mr. Trump was asked whether he was considering extending the guidelines beyond 15 days after Sen. Rand Paul (R., Ky.) was diagnosed with coronavirus despite not showing any symptoms.

“Well, I hope we won’t have to—it’s possible, but we’ll have to see how that works,” Mr. Trump said.

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We're at war and need wartime institutions to keep our economy producing what's necessary | TheHill – The Hill

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There can be no question about the nation’s current predicament. We are at war. We are faced with a public health crisis, yes, but the virus now ravaging our communities is a lethal invader taking American lives, threatening our way of life and destroying our productive capacity and economic health. 

We’re waging battle on the public health front with thousands of the most heroic and able health professionals on the planet, yet at the same time, it appears that despite Congress’ record $2 trillion relief bill we have no wartime strategy to get needed equipment where it is needed or to save our economy. We have no coordinated plan to mobilize workers, produce needed medical supplies, and distribute these to the facilities that need them.

We’ve faced down war on our people on our own shores before, so why not look to those occasions for clues as to how it is done? Many of the answers we’re looking for to respond to our current crisis and associated production shortfalls can be found in the measures taken by wartime presidents Franklin Roosevelt and, before him, Woodrow Wilson.

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The key to keeping wartime production humming has always been public collaboration, with the public firmly in the driver’s seat, with private producers.

The U.S. took such measures when Pearl Harbor was bombed. President Roosevelt established a War Production Board (WPB) to coordinate the repurposing and expansion of factories; the re-routing of existing and opening of new distribution channels, and countless other tasks entailed by the productive and distributive ramp-up necessitated by the war. Before that, President Wilson established a War Industries Board (WIB) to achieve the same ends during the First World War mobilization. 

Roosevelt’s WPB worked in tandem with Herbert Hoover’s and his Reconstruction Finance Corporation (RFC), the already-existent financing arm of the New Deal. The RFC had been patterned after Wilson’s War Finance Corporation (WFC) of the preceding era, established to work with the WIB in overseeing and funding U.S. mobilization for the First World War. 

The WFC and the RFC directly financed mobilization, using a broad array of financing tools. They made direct grants, provided inexpensive credit or loan guarantees, and in many cases took equity stakes in individual businesses, thereby both recapitalizing them and taking internal governance rights to help guide production flexibly from the inside. 

Given the success of this model in our most “existentially” threatening earlier wars, why not update it now as we grapple with another lethal invader? 

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I have been advocating, in some cases on my own and in some cases with others, a number of possible models for a contemporary RFC for some years now. The idea must be not just to address crises ad hoc after they have emerged, but to treat healthy and ongoing ‘reconstruction’ and national development proactively as an always-necessary, continuous process in need of an effective and democratically accountable coordinator. Think of it as a smart industrial policy tool for managing a permanent policy need in any world, such as ours, in which technical needs and technologies themselves constantly evolving. 

A National Investment Authority (NIA), for example, which I first floated with my colleague Professor Omarova early in 2015, would develop, coordinate, and oversee the financing and execution of a coherent strategy of perpetual, across-the-board national development, in collaboration with private sector agents whose industries are implicated by particular projects. 

My National Investment Council (NIC), introduced more recently, would collaborate more with already-existing federal agencies whose mandates are implicated by specific industrial and infrastructural projects, bringing them together as the Financial Stability Oversight Council (FSOC) does our multiple financial regulators. It would accordingly resemble not only the RFC but also the Board for National Investments (BNI) advocated by J.M. Keynes in the 1920s. 

Either model would include a direct investment arm, which would act both in primary and in secondary to ensure both public and private sector provision of critical public goods. What makes these models especially relevant today is that they are designed to be platforms of precisely the kind that we need to survive our pandemic. 

Right now, they would mobilize a coherent productive response to the COVID crisis. They would inject capital into businesses that need it, take direct equity stakes in them as necessary, and direct resources coherently toward the production of what must be produced both to keep our people healthy and our economy humming. 

In recent weeks, my friends James Galbraith and Michael Lind have proposed an ad hoc Health Finance Corporation (HFC) to address the COVID crisis. Like the NIA and NIC, it is inspired by and patterned in part after the RFC. I find much to admire in this proposal, as does presidential candidate Bernie SandersBernie SandersOvernight Energy: Oil giants meet with Trump at White House | Interior extends tenure of controversial land management chief | Oil prices tick up on hopes of Russia-Saudi deal Oil giants meet at White House amid talk of buying strategic reserves The Hill’s Campaign Report: Biden struggles to stay in the spotlight MORE (I-Vt.), who has proposed his own variant of it. I think we’ll do even better, however, to institute something more permanent.

Unless we’re all killed by the present pandemic, there will be others. And just as importantly, reconstruction and development — national self-renewal — are forever. 

Robert Hockett is the Edward Cornell professor of law at Cornell University, Visiting Professor of finance at Georgetown’s McDonough School of Business, and consulting counsel at Westwood Capital in New York City. Formerly with the Federal Reserve Bank of New York and the International Monetary Fund, he is a frequent advisor to legislators and regulators in Washington and New York.

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Opinion: Reality check: The economic crash is significant but it's not the apocalypse – Calgary Herald

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Stock markets have entered bear market territory meaning that they have lost 20 per cent of their value and in short order. Is the stock market’s reaction overstated? From an economic perspective, coronavirus is big. It started with an interruption in China’s output and if that wasn’t mainstream enough, now global travel is being interrupted, events are being cancelled and large social events are being prohibited. Meetings are being moved to virtual ones and extended breaks are being imposed on schools. This is disrupting our lives.

When the sub-prime mortgage fiasco resulted in the global financial crisis, the U.S. stock market collapsed as the Dow Jones Industrial Average index fell from a high of over 14,000 to a low of around 7,000 over a period of 18 months. There was a fear that the globe was entering a period of a global depression much like what had happened in the 1930s. That fear proved unwarranted as the global economy rebounded and the stock market resumed its upward trend. There are many reasons that the global economy was more resilient this century versus in the 1930s and the banking rules have been largely pointed to. I would posit that the degree of globalization, trade, availability of food, preservatives and energy, along with the portion of the population that is not living in abject poverty are all in the mix as to why the 2008 recession did not become a depression.

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"Sledgehammer" policies will destroy us; we need open economy says Johns Hopkins professor | – Kitco NEWS

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Government-mandated policies of self-isolation will cripple the American economy, and the draconian measures taken to contain the pandemic are not necessary, this according to Steve Hanke, professor of applied economics at Johns Hopkins University.

“With the economy shutting down, the cost is going to be absolutely phenomenal,” Hanke told Kitco News.

Hanke likened the response to the virus from the U.S. and many Western European nations to a “sledgehammer.”

“The sledgehammer approach being used in most European countries and the United States is turning out into a very costly mistake. And what I mean by sledgehammer is they haven’t planned anything, they just have a blanket program where we’re all locked in our condos or houses and can’t move, and the economy shuts down,” he said.

Instead, governments should take the model that Sweden has set, Hanke said.

“If you look at some place like Sweden, Sweden has a very laissez-faire, very targeted approach, and they’re doing very well. The kindergartens are still open, the grade schools are still open, most factories are still open in Sweden. They are not imposing this sledgehammer and essentially wiping out the economy,” he said.

“The places that have done well in controlling and counting properly the victims of this pandemic are countries that have small, efficient governments, and free market economies. You look at Singapore, Hong Kong, they’re right up there,” he said.

Additionally, these nations have all practiced the “five P’s”: prior preparation prevents poor performance, Hanke said.

The U.S. is now the country with the highest number of COVID-19 cases in the world, and the majority of the country has not yet been tested.

“Wherever the five P’s have not been applied, you have a disaster,” he said.

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