A Dramatic Attitude Shift on the Virus Sweeps Through Washington
Author: Greg Valliere
March 24, 2020
IN DECADES OF COVERING WASHINGTON, we have never seen an attitude shift as dramatic as the one that has swept through this city: America cannot be kept on lockdown for weeks or months to come; this could rip apart the social and economic fabric of the country. So the mantra has become “the cure can’t be worse than the disease.”
THIS OBVIOUSLY APPEALS TO DONALD TRUMP, who is desperate to jump-start the economy ahead of the November elections. So the war-time commander who just a week ago said the lockdown might last until July or August is now considering a loosening of restrictions within weeks (the “social distancing” decree expires next Tuesday).
A FIERCE PUSH-BACK is coming from scientists; Dr. Anthony Fauci, hailed as a saint last week, may be on thin ice this week. He and other virologists want an even more aggressive lockdown, and they’re dubious at best that there are drugs that would offer a quick fix.
THIS STUNNING ATTITUDE SHIFT comes at a most inopportune time, as new infections and deaths spike and hospitals are overwhelmed. The news this week will be horrible, but the focus already is on April and May.
WE’RE HEARING THAT WITHIN THE WHITE HOUSE there’s growing support for allowing healthy young people — especially in areas that haven’t been hit badly by the virus — to re-enter the work force within two or three weeks, then gradually loosening restraints on older Americans. There will be casualties in this scenario, but there will be casualties in the lockdown scenario.
IN THE MEANTIME, there’s a growing chance that the dysfunctional Congress will approve its $2 trillion stimulus plan, which was shorn last night of several extraneous provisions that had nothing to do with the virus. We reiterate our comment yesterday that many on the left view this crisis as an opportunity to advance their activist agenda.
WHILE WE EXPECT PASSAGE LATER TODAY or tomorrow at the latest, there’s one potential complication: the spread of the disease in the halls of Congress will reduce the number of lawmakers needed to pass the measure before the ranks are further depleted.
OUR BOTTOM LINE: A passionate debate will intensify over allowing some people to venture out in April. Some people will excoriate Trump for cynical political expediency. Others will argue that it’s un-thinkable to lock down the country for months.
THERE’S A MIDDLE GROUND that may emerge soon, as restrictions are gradually lifted, especially in areas that have not been devastated, mostly in the South.
IN THE MEANTIME, THERE’S ONE KEY PLAYER: Federal Reserve Chairman Jerome Powell, who has thrown everything but the kitchen sink at the economic and market crisis. He will do whatever it takes to avoid another Great Depression, acting so boldly that Trump himself called Powell yesterday to offer congratulations to his one-time whipping boy.
The views expressed in this blog are provided as a general source of information based on information available as of the date of publication and should not be considered as personal investment advice or an offer or solicitation to buy and/or sell securities. Speculation or stated believes about future events, such as market or economic conditions, company or security performance, or other projections represent the beliefs of the author and do not necessarily represent the view of AGF, its subsidiaries or any of its affiliated companies, funds or investment strategies. Every effort has been made to ensure accuracy in these commentaries at the time of publication; however, accuracy cannot be guaranteed. Market conditions may change and AGF accepts no responsibility for individual investment decisions arising from the use of or reliance on the information contained herein. Any financial projections are based on the opinions of the author and should not be considered as a forecast. The forward looking statements and opinions may be affected by changing economic circumstances and are subject to a number of uncertainties that may cause actual results to differ materially from those contemplated in the forward looking statements. The information contained in this commentary is designed to provide you with general information related to the political and economic environment in the United States. It is not intended to be comprehensive investment advice applicable to the circumstances of the individual.
AGF Investments is a group of wholly owned subsidiaries of AGF Management Limited, a Canadian reporting issuer. The subsidiaries included in AGF Investments are AGF Investments Inc. (AGFI), AGF Investments America Inc. (AGFA), AGF Asset Management (Asia) Limited (AGF AM Asia) and AGF International Advisors Company Limited (AGFIA). AGFA is a registered advisor in the U.S. AGFI is registered as a portfolio managers across Canadian securities commissions. AGFIA is regulated by the Central Bank of Ireland and registered with the Australian Securities & Investments Commission. AGF AM Asia is registered as a portfolio manager in Singapore. The subsidiaries that form AGF Investments manage a variety of mandates comprised of equity, fixed income and balanced assets.
About AGF Management Limited
Founded in 1957, AGF Management Limited (AGF) is an independent and globally diverse asset management firm. AGF brings a disciplined approach to delivering excellence in investment management through its fundamental, quantitative, alternative and high-net-worth businesses focused on providing an exceptional client experience. AGF’s suite of investment solutions extends globally to a wide range of clients, from financial advisors and individual investors to institutional investors including pension plans, corporate plans, sovereign wealth funds and endowments and foundations.
For further information, please visit AGF.com.
© 2020 AGF Management Limited. All rights reserved.