All new anti-crisis aid to Trump’s study

All new anti-crisis aid to Trump's study

What the White House is considering to help sectors in crisis due to the pandemic.

A new wave of Covid-19 cases in America raises the fear of the need for new draconian measures and immediately drops the stock market.

After the news from Texas , which for three days hospitalized a record number of patients, and those from California where there was a significant increase in cases of Coronavirus, fear has spread among US economic operators that the government or States again impose the lockdown.

The discontent quickly spread to Wall Street, where the Dow Jones index lost 800 points and the S&P 500 lost 2.6%. The most significant drops affected the stocks that would have benefited most from a complete reopening such as United Airlines (-10%), Carnival (-8.8%) and Gap (-6.6%).

Faced with these signals, Treasury Secretary Steven Mnuchin did not wait time to declare to the press that a second lockdown is not an option to consider in light of the damage that the first has caused to the American economy and workers.

"We can't shut down the economy again," were the Secretary's words during CNBC's "Squawk on the Street" broadcast. "I think we've learned that if you close the economy, you will create even more damage."

“And it is not about – added Mnuchin – only economic damage: there are other areas (which would be affected). (…) I think what the president has done has been very cautious, but I also think we have learned our lesson. "

So if we don't talk about new closures, the matter is different with regards to supporting the economy.

Here, in fact, Mnuchin distinguishes himself from the republican camp, and follows the positions of his rivals Dem more, for repeatedly asking, and he did yesterday, a new intervention of the state in deficit.

After praising the programs already voted in the previous stimulus package, the Secretary again explained to the MNBC microphones that he was "ready to return to Congress to ask for more money to support the American economy":

This is a point on which he returned to insist a few hours later with the reporters of the Wall Street Journal , to whom he confided that he had discussed new stimulus measures with President Trump even if no decision has yet been taken whether to take them or not. to the votes and when.

But Mnuchin has been tapping on this button for days. Already on Wednesday, speaking to a commission in the Senate, he said he was convinced that the country "definitively" needed a new stimulus package.

"Whatever we do from here to now will have to be more targeted to industries and small businesses that have more difficulty reopening" after the emergency.

With this in mind, the Secretary mentioned the names of the sectors – retail, transportation and entertainment – that will need financial assistance most.

He highlighted the situation in the retail sector with particular emphasis, which lost 2 million jobs in April, of which only 16% returned to work in May.

"I think the economy, Mnuchin concluded," will have a significant rebound, but there is still significant damage in part (of it). We must use all the fiscal instruments available to us to work with the Congress ".

If these are Mnuchin's intentions, the road to convincing party colleagues is all uphill. In the Republican house, a certain resistance still prevails to further dent the deficit after the mega outlay of two months ago to help the economy from Covid, but the number of those who consider a new intervention to be appropriate even if of a lesser extent is also increasing the previous one and above all much less expensive than the one voted last month by democratic deputies only.

Axios sources report, for example, a meeting in the White House on Wednesday in which the president would have listened to the thesis of his close ally, Senator Mitch McConnell, convinced that the next package not only should not exceed the billion dollar ceiling, but it must be made up of measures aimed solely at pouring liquidity into people's pockets.

Axios herself managed to learn from Senator Chuck Grassley that the party has no intention of starting negotiations with the other party until the end of the month, and from colleague Roy Blunt the prediction that the package will not be approved until just before closing of parliament in August.

This is a machine translation from Italian language of a post published on Start Magazine at the URL on Fri, 12 Jun 2020 13:50:18 +0000.