Larry Fink, Brian Kemp, And The Mask Question

Speaking at a Chamber of Commerce event on Friday, Anthony Fauci described himself as optimistic.

I’m sure that’s not easy in the current circumstances, considering the nation’s top infectious disease expert has come under fire both publicly and privately from administration officials. While the White House sought to distance itself from Peter Navarro’s abrasive Op-Ed deriding Fauci this week, numerous reports suggest he’s on the outs for failing to countenance an aggressive approach to reopening the economy.

There’s a delicate balance as the nation moves towards re-opening, Fauci said Friday, but expressed confidence that “science will come to our rescue”.

For what it’s worth, Goldman generally agrees. In a new note, the bank says Moderna may file interim results from a late-stage trial of its vaccine candidate (set to begin later this month) earlier than the market believes. In addition to Moderna’s efforts, four other programs poised for testing this summer materially increase the odds of a successful vaccine becoming a reality by the end of the year, the bank reckons.

Hooray for science. But, in the meantime, virtue signaler extraordinaire Larry Fink thinks this nightmare would be over a lot faster if everyone would just wear a mask.

“We are witnessing many, many states reopening, but reopening without wearing masks. We need a world of compassion”, Fink told CNBC Friday, after BlackRock reported second quarter earnings.

“If we all wore masks, if we all cared about our fellow citizens a little more, we will be resolving this crisis much sooner”, he chided.

Fink’s comments came at the close of a week during which Georgia governor Brian Kemp came under intense political pressure for doing something extremely silly — namely, issuing an executive order barring municipalities from enacting ordinances mandating face coverings.

Kemp went so far as to sue Atlanta Mayor Keisha Lance Bottoms over the issue.

On Friday, he doubled down, suggesting that no mandate is necessary because Georgians are a benevolent, trustworthy people, who will wear masks not because the government tells them to, but because they recognize how important face coverings are when it comes to protecting their neighbors.

“It’s the community that defeats this virus, not the government”, Kemp said at a press conference, before claiming that the real danger is citizens relying on the government to fix all their problems — problems like deadly, viral pneumonia.

“I have grave concern about our young people… getting so reliant on the government that we lose the basis of what this country was founded on, and that’s freedom and liberty”, Kemp explained, before insisting that “what people should be thinking about are the livelihoods of the businesses”.

With apologies to the libertarians among you, Kemp is clearly flailing. It’s one thing to unapologetically refuse to issue a statewide mandate. That’s just being obstinate, and it’s expected from some governors. It’s another thing entirely to issue what amounts to a half-hearted apology for wittingly putting the public at risk while pretending the decision is rooted in the history of political theory and a deeply held belief that mandating masks would do psychological damage to Georgia’s youth and undermine the vision of the nation’s founders.

In any event, BlackRock’s Fink thinks this is all counterproductive at best, and insane at worst.

“If the disease continues to grow, if mortality rates grow from where they are today, then we’re going to have to see another shutdown of parts of our economy”, he went on to tell CNBC, stating the obvious. “And then the small and medium business [are] going to have a harder time”.

And that’s really the crux of the issue. Anecdotal accounts in the media suggest that while being forced to close shop for months is obviously catastrophic financially for the country’s small businesses, the psychological impact of being told you can re-open only to be forced to close again three weeks later, is enough to compel some restaurateurs to shut the doors for good.

That’s already happening in Texas, where local officials are stocking up on body bags and ordering morgue trucks in anticipation of a spike in virus-related deaths.

Once businesses close their doors forever, their employees are (by definition) laid off permanently, and the community has lost that business for all eternity. Permanent job losses spiked by the most since the financial crisis last month, even as the headline numbers from the June jobs report were touted as heralding a comeback for the US labor market.

Obviously, there are no easy answers, but if you’re like me, your life experiences cast considerable doubt on the notion that one can depend on others to be constantly vigilant when it comes to the welfare of their fellow citizens.

On the economy, I’ve said it three dozen times if I’ve said it once: the worst possible scenario is another nationwide lockdown. Consumer sentiment is already suffering from the surge in virus cases, the latest University of Michigan sentiment survey shows. It will crater entirely if the situation spirals so far out of control that most states are compelled to reinstate stay-at-home orders.

Speaking of sentiment, the experience in China — where retail sales stubbornly refuse to rebound at the same rate as production — demonstrates that you cannot force people who are scared to consume.

Of course, Americans will be inclined to spend no matter what, but we’re staring down a situation where the details of the next round of virus relief remain nebulous, while jobless claims are just as stubborn as COVID-19. That is not a recipe for consumption, and without consumption, the US economy fails.

“This is much more psychology too because of the fear of the virus, the fear of health. This is an existential problem”, BlackRock’s Fink went on to say Friday. “It’s way beyond a financial crisis [and] that’s why I believe it’s going to take longer for us to find stability”.