Americans hold the key to reopening the economy
The way the president tells it, the American economy is like a light switch that he can simply flip on. He floated a full “beautiful” reopening by Easter Sunday. And when that deadline passed, he teased a “big bang” reopening at his discretion. He (falsely) says he has “total authority” to reopen the economy.
Governors of some of the biggest states have a different idea.
New York Governor Andrew Cuomo said he will not reopen New York’s economy if it puts his citizens at risk. And he describes reopening more like a dial, not a switch, slowly moving from 1 to 10, in coordination with other states.
Welcome to the “reopening-speculation” phase of the coronavirus curve. A month into social distancing, work from home and mass layoffs, politicians, citizens and business leaders are searching for the way forward.
A dial is probably a better metaphor than a light switch, and Trump doesn’t hold either. He can ease CDC social distancing guidelines. He can mandate mask wearing. But it is the mayors and governors who can dial open schools, business, parks and recreation.
In fact, American citizens are the ultimate authority on reopening. Consumers make up 70% of the US economy and no amount of boasting in front of a camera or announcing America is back in business will turn the economy if Americans don’t believe it.
CNN polling last week found 60% of Americans said they are not comfortable returning to their regular routines if social distancing were lifted after April 30.
Economist Justin Wolfers warns of “private lockdown” taking hold, if the economy is re-opened without a credible plan.
He noted that the president’s new Council to Reopen America does not have a single economist or public health expert.
“Without credibility, proclamations that it is safe won’t work, and a private lockdown will replace the government-mandated one,” he tweeted. “If that happens, the recession will needlessly drag on. As the government throws away its credibility, it destroys its ability to prevent an ongoing downturn.”
A false start in the economy could be devastating for consumer confidence. If people don’t believe they are safe, they won’t spend.
If people are scared to go to the movies, they are not going to buy theater tickets. If workers remain fearful that they could get sick by going to work, that could force management to limit the number of workers — and customers — in stores, holding back sales.
Consumers hold the key, but leadership matters now more than ever. Citizens need to know that they there is a national plan for their health and their prosperity. That they are safe from the virus, that there is adequate testing to detect it, contact tracing, a vaccine in the works, ways to test for antibodies to send some people safely back to work and a safety net for workers on the frontlines.
Many economists say even as new cases and deaths from the virus are falling, US testing is still inadequate.
“The US is not doing enough testing,” says Ian Shepherdson, chief economist at Pantheon Macroeconomics. “The country can’t safely re-open as long as this persists.”
