President Trump wants the country to be open for business in mid-April, but some experts warn it’s not as easy as flipping a switch: Economies are running on confidence, and there will likely be a shortage of as long as the coronavirus fallout in The United States is still rising.
Trump this week said he wants companies to “open and just scare to go at Easter,” which falls on April 12. It runs counter to many public health experts, who warn that restrictions should only be lifted gradually and when additional data on infection rates are available. They expect efforts to curb the disease will continue for several months at least.
Despite wild fluctuations in the financial markets and signs of rising unemployment – both of which could hurt Trump during an election year – many companies say it’s not clear that reopening will even be an option in a few weeks: They have to follow orders in every state, and many of these are open or expandable at any time. They are worried that opening too early can be seen as irresponsible. And even if they opened again, would customers come if the virus is not under control?
“He’s not realistic. How can you open if the cases climb day after day? “Asked Paul Boutros, who owns East Side Pockets, a small restaurant that has lost most of its business since nearby Brown University sent students home two weeks ago.
Business groups, including the US Chamber of Commerce and the National Federation of Independent Business, are cautious. They say that reopening is a call health experts will need to make; meanwhile, they are focused on getting financial help for businesses.
Some business leaders and workers naturally support the idea of a shorter shutdown. In a weekend post on Twitter, former Goldman Sachs CEO Lloyd Blankfein said that those with lower risk should return to work in a few weeks.
“Extreme measures to flatten the virus” curve “make sense – for a time – to stretch the burden on health infrastructure. But crushing the economy, jobs and morals is also a health problem – and beyond that, ”he said.
Taggart Barron, who is in finance and works from home in Bentonville, Ark., During the outbreak, said he would go into the office more if he got permission – and that would mean he would spend more too, like at lunches outside.
“I worry about the human and economic impact of a forced closure with no defined end in sight,” Barron said. “We’ll kill a fly with a missile.”
New York Governor Andrew Cuomo – whose harsh warnings and sometimes scathing tone in his daily briefings have often made him the foil to Trump during the outbreak – has suggested a staged opening eventually. He said that perhaps younger people who seem to be less affected or people who had recovered from the virus – if researchers can confirm that it means they have immunity – can start going back to work.
Cuomo said there was no need to “choose between a smart health strategy and a smart economic strategy. We can do both and we must do both. “
For most people, the new coronavirus causes mild or moderate symptoms that are cleared up in two to three weeks. For some, especially older adults and people with pre-existing health problems, it can cause more serious illness and death.
In Europe, the government and industry leaders are discussing the extent of the shutdown and which sectors are “important”. In Italy, leading the world in death due to the virus, the government is further tightening its lockdown, while French President Emmanuel Macron recently urged key industry employees to continue to show up for work. Three months after the outbreak in China, business has not yet returned to normal.
But as difficult as it was to shut down large sections of the US economy, it may be even more difficult to restart them, especially if it happens while there is still uncertainty about the path of the outbreak. If a reboot comes too soon, it could also fuel the pandemic, where more than 20,000 people have already died globally.
Economic research on past pandemics that were not as difficult has found that people voluntarily retreated to shopping, travel and other activity to avoid exposure from the crowds, according to Constance Hunter, chief economist at KPMG. So consumer spending would probably remain weak even if companies are largely reopening.
“It’s very difficult to say to people:” Hey, go to restaurants, go and buy new houses, ignore that pile of bodies in the corner. We want you to continue spending because there are some politicians who believe that GDP growth is what really counts, said Bill Gates, a major philanthropist for global public health efforts, in an interview that was part of a series organized by TED.
The travel industry, for one, expects that even if serious restrictions are lifted after three months, demand for air travel will be weakened by job loss and consumer confidence, according to an analysis released Tuesday by the International Air Transport Association, an industry trade group. The association expects global passenger demand to decrease by 65 percent during the period April-June. By the fourth quarter, it could be down to a 10 percent decline, the group said.
It is also placed on the burdens today that can make a partial opening difficult. Many in the workforce have family members at home who may need care or who are vulnerable to the virus or the workers themselves may be quarantined, noted Laurie White, chair of the Greater Providence Chamber of Commerce. In many places, schools are closed for the foreseeable future, so taking care of their children can prevent some from returning to work.
The cost of the virus has to be paid in one way or another, says Gabriel Ehrlich, director of the quantitative economics research seminar at the University of Michigan. We can pay for it now by using shutdowns to slow the spread of the virus while increasing our ability to manage it, or later, in the form of increased public health costs if infections grow.
“I don’t want to reduce or minimize the fact that there are really big financial costs,” Ehrlich said. “But the reality of getting the disease under control is also beneficial to the economy.”
James Mark, who owns the North and Big King restaurants in Providence, said that if he pushed to restart the economy before the health crisis is over, companies like his would be in a terrible position. As it is now, there is a small lever for small businesses to negotiate with landlords or banks about rents, mortgages and debt payments. If things opened up while the coronavirus was still spreading, he would be under pressure to put his staff and customers at risk of paying those bills.
“I don’t think there is any financial solution until the health side of it has been resolved,” Mark said. “We can’t rush this.”