Wall Street shouldn’t be telling Main Street when it’s safe to go back to work, says Ben White of Politico
Published: March 24, 2020 By Greg Robb
A fight broke out on CNBC.
Ordinarily, maybe not so notable. But this argument was about when the U.S. economy might be able to re-open if and when the coronavirus pandemic eases, a question on everyone’s mind, not least President Donald Trump.
CNBC reported Tuesday that leading Wall Street traders like Third Point’s Dan Loeb, Blackstone’s Stephen Schwarzman, Vista Equity’s Robert Smith, Intercontinental Exchange’s Jeffrey Sprecher and Paul Tudor Jones participated on the call that touched on the question of restarting the economy.
Shortly after the call, Trump said he wanted the re-open the economy by Easter.
Ben White of Politico, a guest on the CNBC program, said the idea of Wall Street executives telling Americans when to go back to work was off-putting.
“I can’t tell you how awful the politics are of the idea that President Trump is on the phone with these billionaire investors who are losing money in the stock market and want all the plebes and the blue-collar folks to go back to work,” White said.
“These are the richest Americans who can easily socially distance themselves, telling everyone else to put themselves at risk,” he added,
The CNBC host, Scott Wapner, defended the phone call, saying he was told by a source that the discussion was “about a thoughtful way to try to get the economy back at the appropriate time.”
But it doesn’t work to have a date certain, White replied.
“I don’t see any reason why the people who were on the call today shouldn’t have been on the call,” Wapner said. “To suggest they were making the pleas that you describe, I don’t think it’s fair.”
White said he might have misconstrued the report, but noted that there is a reason that hashtags like “#NotWillingToDieForWallStreet” are trending.
Besides, Trump doesn’t have that authority, aside from some industries, and states don’t have to comply.
Marc Short, the chief of staff to Vice President Mike Pence, said later on CNBC that Trump might set out different coronavirus guidelines for different parts of the country.
Rex Nutting
Opinion: Why Trump’s hint about resuming our normal lives and reopening businesses would be the wrong thing to do now
There’s no reason to think the economy would do much better under full-fledged plague conditions
Not everyone is serious about social distancing.
Getty Images
Published: March 24, 2020 By Rex Nutting
Should we just rip off the bandage?
President Donald Trump seems to think that we might be better off if we all resumed our normal lives in three weeks.
However, if we did, the scientists tell us, the coronavirus pandemic would certainly spread quickly throughout the population, with 100 million or more infected, and 2 million or so dying because they couldn’t get any health care. But then the crisis would be over within months.
Trump and some of his advisers suggest that the costs of social distancing are just too high, in economic as well as human terms. The cure might be worse than the disease, Trump said. Others are having the same conversation, even if they are coming to different conclusions.
Revving up the economy prematurely would be a very risky gamble in my view. It might not help the economy much at all. It’s quite possible that there is no trade-off between our lives and our livelihoods.
Read:Trump says he wants country ‘opened up’ by Easter
While resuming economic life before we flatten the curve would likely kill hundreds of thousands (if not millions), there is no guarantee that the economy could avoid a severe contraction even if we did it. It’s hard to see how the economy or the stock market SPX, +9.38% would fare much better in full-fledged plague conditions with millions of new cases every week and thousands of deaths a day.
There’s a better way, both economically and ethically. Many of the persistent economic costs of the recommended social-distancing measures could be avoided by underwriting systemic economic insurance to replace income that workers and businesses stand to lose while the economy is temporarily shut down to limit the spread.
Also read: We’ll need to keep the vital organs of the economy alive while we hunker down waiting for the pandemic to end
There’s no doubt that the pandemic creates all sorts of ethical issues about our individual and collective responsibility to others. For health-care workers, it presents the worst sort of dilemmas about who should live and who should die, given that we’re already running short of vital resources to treat everyone who needs care. Some will be saved, others will be left to die.
As a nation and as a species, we’re faced with ethical choices about how much we value human lives. The decision in this case is immeasurably more difficult because we don’t know with any certainty what the consequences of our actions might be. Unless we just recovered from COVID-19, we don’t even know with any certainty that we don’t have the deadly disease right this second. And we don’t know if those around us are infectious.
Here’s what we need to know: Will isolating ourselves to slow the spread of the disease make a big enough difference in terms of health to justify the cost? Are there effective ways to insure workers and businesses against insolvency so they can weather this storm and get back to work when it’s past? What would be the economic and health impact of telling people they are free to move around the country?
We have some guidance, even if this crisis seems unique. All the major religions and ethical systems impose an obligation on us individually and collectively to care for one another, even strangers.
Published: March 24, 2020 By Rex Nutting
Should we just rip off the bandage?
President Donald Trump seems to think that we might be better off if we all resumed our normal lives in three weeks.
However, if we did, the scientists tell us, the coronavirus pandemic would certainly spread quickly throughout the population, with 100 million or more infected, and 2 million or so dying because they couldn’t get any health care. But then the crisis would be over within months.
Trump and some of his advisers suggest that the costs of social distancing are just too high, in economic as well as human terms. The cure might be worse than the disease, Trump said. Others are having the same conversation, even if they are coming to different conclusions.
Revving up the economy prematurely would be a very risky gamble in my view. It might not help the economy much at all. It’s quite possible that there is no trade-off between our lives and our livelihoods.
Read:Trump says he wants country ‘opened up’ by Easter
While resuming economic life before we flatten the curve would likely kill hundreds of thousands (if not millions), there is no guarantee that the economy could avoid a severe contraction even if we did it. It’s hard to see how the economy or the stock market SPX, +9.38% would fare much better in full-fledged plague conditions with millions of new cases every week and thousands of deaths a day.
There’s a better way, both economically and ethically. Many of the persistent economic costs of the recommended social-distancing measures could be avoided by underwriting systemic economic insurance to replace income that workers and businesses stand to lose while the economy is temporarily shut down to limit the spread.
Also read: We’ll need to keep the vital organs of the economy alive while we hunker down waiting for the pandemic to end
There’s no doubt that the pandemic creates all sorts of ethical issues about our individual and collective responsibility to others. For health-care workers, it presents the worst sort of dilemmas about who should live and who should die, given that we’re already running short of vital resources to treat everyone who needs care. Some will be saved, others will be left to die.
As a nation and as a species, we’re faced with ethical choices about how much we value human lives. The decision in this case is immeasurably more difficult because we don’t know with any certainty what the consequences of our actions might be. Unless we just recovered from COVID-19, we don’t even know with any certainty that we don’t have the deadly disease right this second. And we don’t know if those around us are infectious.
Here’s what we need to know: Will isolating ourselves to slow the spread of the disease make a big enough difference in terms of health to justify the cost? Are there effective ways to insure workers and businesses against insolvency so they can weather this storm and get back to work when it’s past? What would be the economic and health impact of telling people they are free to move around the country?
We have some guidance, even if this crisis seems unique. All the major religions and ethical systems impose an obligation on us individually and collectively to care for one another, even strangers.
What’s the value of a human life?
It may seem crass to bring money into this, but we assign a monetary value to life all the time. Individually, we decide how fast to drive based on a complicated and unconscious cost-benefit calculus. Collectively, we decide how much pollution is OK, how much contamination is acceptable in our food, and how much health care we are willing to provide to people with chronic and expensive diseases.
It’s pretty clear that our culture puts a very low value on some human lives at some times, but a very high one on others. A life that could be improved by expanding access to health care and education is not valued very much, but a life that could be saved by shutting down the economy is precious. Our politics has been consumed for decades over the question of how much we should value the life of a 12-week-old fetus.
Whenever they have been faced with existential crises, human civilizations have put a high value on life (at least on the lives of the elites). Nations have gone to war to protect the lives of just a few citizens. In this crisis, even the most authoritarian nations have come down on the side of valuing life more than gross domestic product.
It would take a wise ruler to make such a choice, but unfortunately we are fresh out. We are being led by people who can’t even get the basics of this right. What kind of person orders us not to gather in groups of more than 10 but then conducts daily news conferences with dozens of people in close proximity? What kind of person goes to the gym while waiting for his coronavirus test to turn positive?
Trump has never been shown any empathy for others, and seems to base all of his personal and political decisions entirely on what is in his own best interest. Don’t forget that Trump’s hotel and resort businesses are losing money every day they are closed. Trump’s calculation of this cost-benefit analysis might be different than yours or mine.
With an election coming up, Trump can’t be trusted to do the right thing. Solomon he’s not.
About the Author
Rex Nutting
Rex Nutting is a columnist and MarketWatch's international commentary editor, based in Washington. Follow him on Twitter @RexNutting.
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