March 24, 2020
After yesterday's news avalanche, today was a remarkably straight forward news day. Cases of coronavirus infection and the Covid-19 disease continued to mount in America, the Senate came close to finalizing its coronavirus relief and economic stimulus package, sparking a huge rally in the stock market, and, to the dismay of health care officials, Trump suggested we could stop isolating by Easter (April 12 this year).
A little more detail:
Coronavirus infections are increasing dramatically, along with the related disease Covid-19. The US now has more than 53,000 confirmed cases and more than 700 deaths. In New Orleans, over half of EMS personnel are under quarantine and in New York City, about 10% of the force is home sick.
While the Senate did not finalize its massive coronavirus relief and stimulus bill today, negotiators came close enough to a deal that the bill seems likely to pass. Treasury Secretary Steven Mnuchin is negotiating for the White House with Senate Majority Leader Mitch McConnell (R-KY) and Senate Minority Leader Charles Schumer (D-NY). Today the White House made a significant concession to the Democrats, abandoning the dispersal of funds without oversight. Now, rather than permitting the Treasury Secretary to offer $500 billion of loans to troubled businesses secretly, there will be an independent inspector general and an oversight board to keep tabs on the program.
The bill will provide direct payments to American households and offer $367 billion to small companies. It will also increase unemployment insurance, provide $130 billion for hospitals and $150 billion for state and local stimulus, both Democratic priorities.
As expected, the bill the House Democrats offered yesterday, a bill that was essentially a Democratic wish list to contrast with McConnell’s original Republican bill in the Senate, will be abandoned. The House will press forward with the now revised Senate bill as soon as it passes.
With the news of the impending passage of the bill, along with the massive debt buyback launched by the Federal Reserve yesterday, the stock market rallied today. The Dow Jones Industrial Average posted its biggest point gain on record. It rose 2,113 points, or by about 11.4%.
Trump’s indication that he wants the country back at work by Easter to revive the economy has attracted a number of prominent Republican supporters, but it flies in the face of advice from heath care professionals. Many people are appalled at the idea, not least because while it is widely conceded that such a move would dramatically increase the numbers of victims of Covid-19, there is no guarantee that such a move would, in fact, benefit the economy. Just because restaurants and shops reopen, it is not clear that people would emerge from isolation to visit them until they know they will not be endangering their health.
As Microsoft founder Bill Gates, who now leads a global health foundation, put it today: “There really is no middle ground, and it’s very tough to say to people: ‘Hey, keep going to restaurants, go buy new houses, ignore that pile of bodies in the corner. We want you to keep spending because there’s maybe a politician who thinks GDP growth is all that counts.”