The response from Americans to the coronavirus crisis has resulted in a lose-lose-situation. Trump’s administration and governors, like Florida’s Ron DeSantis, insisted that there is no trade-off between controlling the disease and economic growth. It appears that they are right. Nevertheless, this is not in the way they forecasted. The economy of the United States is still suffering.
The premature reopening led to a surge in infections. Americans are currently dying from Covid-19 at around 15 times the rate in Canada or the European Union, adjusted for population size. The ‘rocket ship’ recovery Donald Trump promised has burned and crushed. Job growth has reversed or stalled. This is especially so in states that were the most aggressive concerning lifting social distancing mandates. Moreover, early indications are that the United States economy now lags behind the economies of major European nations.
Trump and his allies were so eager to see substantial job numbers that they ignored both the way and the risks a resurgent pandemic would undermine the economy. They thus failed the marshmallow test. So, they sacrificed the future because they were not willing to show a little patience.
Surely, there is a lot to that explanation. Nevertheless, it is not the whole story.
People truly focused on restarting the economy should have been significant supporters of measures to limit infections without hurting business. Above all, they should have been big supporters of wearing face masks. Nevertheless, Trump ridiculed those in masks as ‘politically correct’.
Meanwhile, Republican governors refused to mandate mask-wearing. Moreover, they also prevented mayors from imposing local mask rules.
Politicians that are eager to see the economy bounce back should have wanted to sustain consumer purchasing power until wages recovered. Republicans in the Senate ignored the looming July 31 expiration for unique unemployment benefits. Thus, this means that tens of millions of workers will see a massive hit to their incomes. Of course, this will damage the economy as a whole.
- Trading Instrument