America is at War President Trump is commanding and the nation’s governors, mayors and industry leaders are acting in concert to mobilization efforts for the major conflict.
As with all major Wars, this will change how Americans think, engage with the world, and behave.
Since WWII, Western leaders have embraced globalization, governed by rules for equitable competition, as an enlightened policy to raise living standards.
Economics brought about increased commercial ties deepened specialization, spreads R&D costs and distributed technology to poorer nations to boost growth and lower prices for many goods and services.
Much like the Ys 1973-74 Arab Crude Oil embargo, disruption in the supply chains for automobiles, electronics, pharmaceuticals and other industries threatens a “supply-side recession.” And this contagion requires people to shelter in place policies and mandatory businesses shutdowns to wipe out pathogens.
Remedies like direct payments to individuals, low-interest rate loans to business, and enhanced unemployment benefits, alone, cannot get the economy up and running.
Revelations about dependence on China for essential ingredients in life-saving drugs showed us all the folly of intense integration with the communist country that suppressed warnings from doctors who 1st detected COVID-19 and enabled the disease to spread through weeks of denial.
More self-sufficiency should be a national security 1st. The reverence of globalism and multilateral institutions among academics and other thought leaders that influence American foreign policy may now be tempered by Real realism.
WWII accelerated the development of aerospace, communications and lots other technologies with broad peacetime benefits this War will too.
Now new techniques-aided by AI are engaged in the race for drugs and vaccines to battle the COVID-19 coronavirus. Success in that battle will make such approaches for applied pharmaceutical research permanent.
Also, work at home and school closures may accelerate the development of off-site collaboration, networking and distant learning technologies-and business, employee and student acceptance of their efficacy.
Macro-economic policy making has become decadent. An aging global population saves more and abundant capital pushed down interest rates during the recent expansion.
Traditional Fed tools-lowering the overnight bank borrowing rate, flooding the banking system with liquidity and in a crisis, backstopping money market funds, corporate and municipal bonds and directly underwriting business and consumer loans-have become less powerful tools.
The Fed has resisted issuing digital dollars-letting every business and individual have electronic checking accounts at its regional branches as banks do.
If that process was implemented it would permit direct, quick injection of aid to the adversely impacted companies such as airlines and small businesses and stimulus payments directly to individuals much more rapidly than the Treasury, Small Business Administration and Internal Revenue Service can accomplish. That is a huge undertaking in itself mechanically.
This crisis with its experiments with digital currencies in China and Western nations could result in radical innovation at the Fed.
Nearly 25% of all US workers, 34-M, do not receive paid sick leave. Some states and localities provide benefits financed by payroll taxes but those raise labor costs and reduce employment.
Now the fact that we have public-facing employees with COVID-19 showing up at work and perhaps spreading the contagion may make a national mandatory sick leave program a public-health imperative.
Coronavirus is spread by respiratory droplets and simple touching, and bumping and smiles are replacing hugs and handshakes. The ordinary flu-which also kills many people-is transmitted the same way. Add this virus and we may see a permanent change how we greet each other during cold-weather months.
Tuesday, the major US stock market indexes finished at: DJIA -410.32 at 21917.22, NAS Comp -74.05 at 7699.45, S&P 500 -42.06 at 2584.59
Volume: Trade on the NYSE came in at 1.7-B/shares exchanged
- NAS Comp YTD: -14.2%
- S&P 500 YTD: -20.0%
- DJIA YTD: -23.2%
- Russell 2000 YTD: -30.9%
HeffX-LTN’s overall technical outlook for the major US stock market indexes is Bearish.
Looking Ahead: Investors will receive the ISM Manufacturing Index for March, the ADP Employment Change Report for March, Construction Spending for February, the weekly MBA Mortgage Applications Index, and auto and truck sales for March Wednesday.
Have a healthy day, stay home!