Add Attorney General William Barr to voices in the Trump administration, including President Donald Trump, pushing to “re-open” the U.S. economy sooner rather than later. The Attorney General, in an interview with Fox News’ Laura Ingraham, said some of the government-imposed restrictions meant to control the spread of covid-19 were “draconian” and suggested that they should be eased next month. The government, Barr noted, and particularly state officials had broad authority to impose restrictions on people in cases of emergency. But, he said, the federal government would be “keeping a careful eye on” the situation, and stressed that officials should be “very careful to make sure that the draconian measures that are being adopted are fully justified.”
“When this period of time, at the end of April, expires, I think we have to allow people to adapt more than we have, and not just tell people to go home and hide under their bed, but allow them to use other ways—social distancing and other means—to protect themselves,” Barr said.
And Barr repeated what has become a Trump administration meme lately: “So just measured in lives, the cure cannot be worse than the disease.”
This comes after Treasury Secretary Steven Mnuchin told CNBD’s Jim Cramer that he believes it is possible that the U.S. could open back up for business in May. “I think as soon as the president feels comfortable with the medical issues,” Mnuchin added.
And it also comes as President Trump has named another government coronavirus task force, this one aimed to focus on the response to the economic devastation that COVID-19 has wrought, a senior administration official told NBC News.
So I think it’s clear to say that the administration wants to open the economy. (And so do a number of voices in the corporate world. Walt Disney Co., for example, has floated the idea of re-opening its parks but requiring all visitors to be scanned for a fever before they are allowed to enter the park. Which doesn’t seem to pay any attention to the problem of people who have the virus and who can spread the disease even though they don’t show any symptoms, such as a fever.)
Whatever “opening” would mean in this context. The White House guidance to people to limit the size of social gatherings and practice other social distancing measures extends through April, but the more aggressive measures, including those stay at home social distancing measures that have effectively shut large parts of the economy, have come from states and cities. Would the Federal government attempt to pre-empt those state and city orders? Would the White House release a plan that effectively gave an all clear to some parts of the country with, to date, low rates of infection? That would encourage governors who were reluctant to impose state stay at home orders to lift them, but it’s not clear how it would affect states with high levels of reported cases or strict social distancing orders.
Public health experts say that before we relax the social distancing measures that on the evidence so far look to be effective in reducing the speed with which the virus spreads we need a robust program of national testing (including both quick-turn-around tests for the virus and then antibody testing to see who might now have developed resistance to the coronavirus) plus a wide scale and rigorous program to track contacts with infected people. (That’s especially important since people infected with the virus can be asymptomatic, showing no signs of the disease such as a fever, for somewhere up to 10 to 14 days but still spread the virus.)
None of that is in place now and could not be put in place in time to “re-open” the economy in May.
Which doesn’t mean that the Trump administration won’t go ahead with some plan to “re-open” the economy in May against the recommendations of public health experts and even with evidence that the coronavirus, while showing a drop in growth of new cases in New York and California, continues to spread to new parts of the country.
For investors, the issue of timing is key since it certainly looks like the financial markets are showing signs of focusing on an optimistic scenario of a May “re-opening” of the economy to look past everything from horrendous unemployment numbers, signs of rapidly slowing growth in the economy, and a significant drop in first quarter earnings due to be reported starting next week.
In general I’d say, the greater the belief in a May “re-opening” the less the financial markets will pay attention to any bad news.