By
Michael R. Strain
bloomberg.com
March 25, 2020
3 min
President Donald Trump seems to think he can restart the
U.S. economy by scaling back some of the restrictions on work, commerce
and social interaction that have been put in place to slow the spread
of the coronavirus.
“America will again — and soon — be open for business,” the president said on Monday. “Very soon, a lot sooner than three or four months that somebody was suggesting. A lot sooner. We cannot let the cure be worse than the problem itself.”
He’s wrong. Trump is deluding himself if he thinks that he can step behind a podium and reopen the economy.
First, there is the practical problem that the economic
shutdowns have been ordered by governors and mayors. Stay-at-home
directives in California, New York, Chicago and Washington, D.C. have
captured much of the media attention. But my hometown of Kansas City,
Missouri, told
its residents to stay home and non-essential businesses to close last
Saturday. Now I live in northern Virginia, just south of Washington,
D.C., and received an email from my barbershop Tuesday morning
announcing expanded hours during the day as a response to the governor’s
decision to close recreational and entertainment businesses for 30 days, effective at midnight.
As of Tuesday morning, at least 163 million people in 17 states, 14 counties and eight cities are being told to shelter in place. That’s roughly half the U.S. population, and growing.
Less than two weeks ago, governors and mayors began taking
matters into their own hands and issuing shutdown orders, frustrated by
the lack of a reasonable, coordinated plan from Washington to ensure
public health. The president does not have the necessary credibility
with many of these state and local officials to convince them to rescind
their guidance to businesses, households and schools.
But even if he did, he still couldn’t restart economic activity at the levels the U.S. enjoyed just two weeks ago. Many people are frightened about the virus, and Trump won’t be able to assuage those concerns. Because we are worried about catching the coronavirus, my family wouldn’t go to a crowded restaurant for dinner tonight regardless of what the president might say. Would Trump be able to convince you to go to a movie theater or a concert?
Two weeks ago, my spring calendar was filled with conferences and speaking engagements. Those have all been canceled, and along with them the airline tickets and hotel reservations I had made. Even if Trump calls off the shutdown once his “15 days to slow the spread” campaign expires, those tickets and reservations will not be rebooked and those conferences will not resume as planned. Trump can’t just restart economic activity in these sectors with a wave of his hand.
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.
Many people would ignore Trump’s directive to restart economic life, but not all would. And if the premature resumption of economic activity resulted in significant public health consequences — more cases, more deaths, hospitals more overwhelmed — by allowing the coronavirus to spread further and faster, the president will have lost control.
An even more dire public health crisis would bring a much more severe and lengthy economic downturn. And a more dire public health crisis brought on in part by the president’s decision to reopen the economy too early would have even worse economic consequences because the government would have lost the credibility to inform Americans about the virus.
Many people would be afraid for longer to resume normal economic life regardless of what the government tells them. People would avoid dining out, shopping, taking public transportation, traveling and working from their offices for longer than would be necessary, because there would be no federal authority that could credibly give them the all-clear.
More and better information on the virus is desperately needed. People will feel comfortable resuming economic activity when the facts — importantly, from more and better testing — suggest that it is reasonable to do so. Trump can’t substitute his pronouncements for those facts, because many people, not to mention state and local officials, simply wouldn’t respond to his message.
But the president should be careful. The more people who
would take his word for it, the worse the economic downturn could
become.
To contact the author of this story:
Michael R. Strain at mstrain4@bloomberg.net
To contact the editor responsible for this story:
Jonathan Landman at jlandman4@bloomberg.net
“America will again — and soon — be open for business,” the president said on Monday. “Very soon, a lot sooner than three or four months that somebody was suggesting. A lot sooner. We cannot let the cure be worse than the problem itself.”
As of Tuesday morning, at least 163 million people in 17 states, 14 counties and eight cities are being told to shelter in place. That’s roughly half the U.S. population, and growing.
But even if he did, he still couldn’t restart economic activity at the levels the U.S. enjoyed just two weeks ago. Many people are frightened about the virus, and Trump won’t be able to assuage those concerns. Because we are worried about catching the coronavirus, my family wouldn’t go to a crowded restaurant for dinner tonight regardless of what the president might say. Would Trump be able to convince you to go to a movie theater or a concert?
Two weeks ago, my spring calendar was filled with conferences and speaking engagements. Those have all been canceled, and along with them the airline tickets and hotel reservations I had made. Even if Trump calls off the shutdown once his “15 days to slow the spread” campaign expires, those tickets and reservations will not be rebooked and those conferences will not resume as planned. Trump can’t just restart economic activity in these sectors with a wave of his hand.
Many people would ignore Trump’s directive to restart economic life, but not all would. And if the premature resumption of economic activity resulted in significant public health consequences — more cases, more deaths, hospitals more overwhelmed — by allowing the coronavirus to spread further and faster, the president will have lost control.
An even more dire public health crisis would bring a much more severe and lengthy economic downturn. And a more dire public health crisis brought on in part by the president’s decision to reopen the economy too early would have even worse economic consequences because the government would have lost the credibility to inform Americans about the virus.
Many people would be afraid for longer to resume normal economic life regardless of what the government tells them. People would avoid dining out, shopping, taking public transportation, traveling and working from their offices for longer than would be necessary, because there would be no federal authority that could credibly give them the all-clear.
More and better information on the virus is desperately needed. People will feel comfortable resuming economic activity when the facts — importantly, from more and better testing — suggest that it is reasonable to do so. Trump can’t substitute his pronouncements for those facts, because many people, not to mention state and local officials, simply wouldn’t respond to his message.
This column does not necessarily reflect the opinion of Bloomberg LP and its owners.
Michael R. Strain at mstrain4@bloomberg.net
To contact the editor responsible for this story:
Jonathan Landman at jlandman4@bloomberg.net
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