He is torn between the damage that the coronavirus is causing to the economy and the fact that as of writing, over 50 thousand people in the US already tested positive for a disease with no vaccine.
WASHINGTON – Since the day he won the election, US President Donald Trump has given a lot of weight to the Dow Jones Industrial Average.
In many ways, it was the barometer for his presidency.In the past few weeks, the US economy, which under Trump has had a historic decrease in unemployment rates and the longest-ever bull market in US history, came virtually to a stop.
The Dow, like Nasdaq and the S&P 500, is now down 30% from its record high, giving up nearly all the Trump-era gains. Millions of people are losing their jobs. No one wants to sit in a restaurant, shop in a mall or fly overseas.
Trump is looking at the rapid decline of the stock market and trying to balance between stopping a fast-spreading pandemic and a slowing economy. He is torn between the damage to the economy and that more than 50,000 people in the US already tested positive for a disease with no vaccine or treatment.
While it is hard to think about it right now, the presidential elections are just around the corner in seven months. Up until February, the strong economy was his greatest achievement.
Last week, in a push to stop the pandemic from spreading and to flatten the curve, the administration issued new guidelines called “15 days of social distancing,” recommending gatherings in groups of no more than 10 people.
It was a relatively moderate step, when all over the world, including Spain, Israel and India, people are being ordered to stay home.US Surgeon General Jerome Adams last week said 15 days of social distancing are “likely not going to be enough” to stop the pandemic.
On Monday, Trump said in his daily press conference he was considering scaling back these guidelines soon after the end of the 15 days. “Our country wasn’t built to be shut down,” he said.“America will again and soon be open to business, a lot sooner than three or four months as somebody was suggesting,” Trump said. “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; the timing of the opening of our country.”Asked about the opinion of health experts regarding such a move, he said: “If it were up to the doctors, they may say, ‘Let’s keep it shut down. Let’s shut down the entire world because you’re up to 150 countries [with coronavirus].
So, let’s shut down the entire world, and when we shut it down, that’d be wonderful, and let’s keep it shut for a couple of years.’ We can’t do that.”“I’m not looking at months, I’ll tell you right now,” Trump said. “We’re going to open up our country.”Dr. Anthony Fauci, a member of the White House Coronavirus Task Force, did not attend Monday’s presser.“
He doesn’t not agree,” Trump said when asked what the doctor thought about a possible move to open the economy. “He understands there is a tremendous cost to our country both in terms of lives and economics and many, many years of rebuilding something that was a fine-tuned machine.”
The question is if it is possible to balance between a rapidly spreading disease that requires people to stay home and the need to move the economy. Trump surrogates emphasize in interviews that there is a link between the economy and public health.
A slowing economy, they say, could mean that people could lose their houses and live in the streets, which could bring the economy to collapse – something that would be disastrous.But is it possible to choose between public health and keeping the economy running? The virus is still spreading.
If people are dying and hospitals could reach capacity in a matter of days, it would affect the economy. If tourists are afraid to take a flight to the US because of a pandemic, it will have a significant impact as well.The biggest question of all is how exactly can you open the economy?
If people in New York and California are ordered to stay home, and the federal government is recommending otherwise, who will triumph?The hit for the airline, hotel and restaurant industries is impacting the entire US economy, and a recession seems inevitable.
Even if coronavirus were to disappear tomorrow (unfortunately it won’t), it would take time to restore consumers’ confidence in things that seemed natural just three weeks ago, such as going to a movie theater, attending a conference or taking a cruise.
Therefore, the real dilemma is not whether to take a public health risk or to take an economic risk. The only dilemma is whether to take an economic risk or to take a public health risk on top of that, as well.
Trump is facing some tough choices, for sure, but as the curve keeps climbing, it doesn’t seem like the time to scale back social distancing.