Op-Ed: Don’t ruin the Fed’s great work by rushing economy back before it’s safe

With the stunning details released today of the Federal Reserve’s historic addition of liquidity to support the economy, there are still policy mistakes we must avoid to ensure a durable and strong recovery for the U.S. economy.

The Fed’s effective backstopping of the entire U.S. economy, loaning money to Main Street, large and small businesses and state and municipal governments, will help provide and, even replenish, capital to a cash-starved business community recently threatened with broad insolvency.

The Fed’s announcement came this morning as the three-week total of initial jobless claims topped 16 million.

That means the current unemployment rate is above 10%. With the inability of many displaced, furloughed or laid-off workers to access state unemployment sites, the real unemployment rate is probably closer to 15%.

Immediately upon hearing the news, some members of the administration and some financial pundits have suggested the U.S. could return to business “as usual,” for lack of a better description, as early as May.

That would be the very policy mistake that takes the excellent work of the U.S. Treasury, the Fed and Congress and throws it out the window.

We have seen reinfection rates of the coronavirus on the rise in China.

While true that Italy and Spain are seeing a slight reprieve in the number of infections and deaths, and New York is following a similar pattern, the respite may only be temporary.

The U.S. population has not, and is not likely, to achieve “herd immunity” any time soon.

A rush back to work and play could, at least at this juncture, cause a second wave of infections, even as the Corona curve is flattening and possibly rolling over … for now.

Unless or until a therapeutic is developed in very short order, and there are promising drugs on the horizon, there is no need to rush the economy back into action, especially given the dramatic and historic actions taken by policymakers

In an excellent interview with my friend and colleague, Becky Quick, Bill Gates, said we should not rush back to work without a viable plan to ensure that reinfection risk is less than 5%.

Having discussed infectious diseases with Gates, over the course of my career, his is the voice I trust the most, even above those whose jobs in government are to track and treat diseases of all stripes.

In his post-Microsoft life, Gates has dedicated his life to eradicating all manner of illnesses, especially in developing countries where he has shown great success.

Having announced $2.3 trillion in rescue funds this morning, the Fed has tapped only half of the monies available to it to sustain the economy until this pandemic runs its course.

I am not an epidemiologist, nor am I an infectious disease expert, however, the Fed is offering us, almost quite literally for free, the ability to weather this biologic storm without having to risk our health, or our lives, in a drive to return to normal.

We have more time than we think. Americans love a quick cure and swift solutions to vexing problems.

While it’s tempting to pretend that all is normal, it remains too risky to return to a life we knew weeks ago.

We can telecommute and telemedicine is quickly coming on line. We have the technology, the will and the money to wait this out.

My cousin, Jimmy, who my older brother knew, but I did not, was among the last American children to die of polio for lack of immediate access to a new vaccine. But he was in the general population before getting immunity.

It was a scar in my family that lasted for a generation. We need not make mistakes like that based on faulty assumptions that the worst may be behind us.

We can wait a little while longer.

As the old saying goes: “Don’t just do something, stand there!”

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