There was terrific news and terrible news this week. The first coronavirus vaccines went into American arms, the start of a long inoculation process that could end the pandemic in 2021. But the economy is weakening and the vaccine won’t save some businesses that seem certain to die before the war against the virus is over.
Thousands of health care workers and nursing-home residents got the first dose of a coronavirus vaccine this week, with nearly 3 million Americans expected to be inoculated in the first wave of vaccinations. But it could be 6 months, at least, before enough Americans get vaccinated to steer the economy back to normal. And those interim months are likely to be grim.
Coronavirus infections and deaths are hitting ghastly new highs, and as experts have been saying for weeks, the pandemic is likely to get worse before it gets better. The United States hit a new daily death record on Dec. 16, when more than 3,500 died of the disease. Some of this may be due to Thanksgiving gatherings where the disease spread, and a similar spike could follow the Christmas holiday.
The business sectors hurt most by the pandemic—travel, dining, retail, in-person services—simply can’t operate. New York City recently paused indoor dining, which will finish off some restaurants that have been hanging on day by day. One industry analyst told Yahoo Finance 80% of the city’s neighborhood restaurants could close. Most other cold-weather states face a similar wave of busts, according to Open Table data.
Job numbers reflect the wipeout. Weekly claims for unemployment insurance fell from summer into fall, but they’re spiking again. This week’s new jobless claims, 885,000, were 25% higher than in early November. Nearly 11 million Americans are unemployed—more than twice the number before the pandemic—and that now seems like it will probably rise during the next few months. “Regional labor markets are losing momentum,” Oxford Economics reported on Dec. 18. “Controlling the pandemic remains the key priority to ensuring a full labor market recovery.”
President Trump has nothing to say about the deteriorating economy, or anything except—well, you know, the election he can’t admit he lost to Joe Biden. Presidents normally accomplish little in the “’lame-duck” period between Election Day and the inauguration of the next president, but Trump is unusually neglectful. He doesn’t seem to be participating in negotiations over a new stimulus deal that can’t seem to cross the finish line, and his Treasury Department has actually surrendered some authority to aid the Federal Reserve with monetary stimulus.
It’s a maddening crisis in which the exit is visible, but getting there requires a forced march over shattered glass. This week’s Trump-o-meter reads WEAK, the third-lowest rating, which is generous, on account of the vaccine rollout.
Most economists agree the sputtering economy requires more stimulus spending by Congress, which appears to be on the way. But six months of negotiations still haven’t produced an outcome, and last-minute snags seem to be eternal. The vaccine itself may be a deterrent to a new stimulus package, with some Republicans pressing for a minimal amount of aid now that a medicinal remedy is en route.
Republicans also want to limit the Federal Reserve’s ability to tap a range of tools Congress approved earlier this year to clear financial markets if they get clogged. Democrats argue it’s an attempt to handicap the incoming Biden administration. Never mind that working Americans are the ones who would suffer. These never-ending standoffs on stimulus reflect the dysfunction gripping the entire country and help explain why the United States accounts for just 4% of the world’s population but 19% of global coronavirus deaths. Deaths are inconvenient, but not necessarily a cause for action.
Rick Newman is the author of four books, including “Rebounders: How Winners Pivot from Setback to Success.” Follow him on Twitter: @rickjnewman. Confidential tip line: [email protected]. Click here to get Rick’s stories by email.
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