Sunday School Extra Credit 5/10/20

We heard from two of the president's men - SecTreasury Steve Mnuchin and economic advisor Larry Kudlow - in yesterday's Sunday School, so today, I'm interested in what some of the more unusual suspects have to say.

Sticking with the focus on the economy, let's look at the conversation George Stephanopoulos had with Minneapolis Fed president Neel Kashkari, and Charles Schwab chief investment strategist Liz Ann Sonders, who tried to explain the disconnect between the horrible unemployment numbers and a rebounding stock market. In part, here's her take on it: the speed with which the market has bounced back from the low point "reflects a couple of things. " First, she pointed to the stimulus, and second,

I think (it is) on the assumption that the market is looking through sort of the valley and that maybe April will be the worst month, the inflection point. I think there's some risks associated with that. You’ve got the potential second wave of the virus. You’ve got the second order effects associated with the economy. So I think the speed that the market has rebounded does now present some risks. But I think everything is happening in a much more condensed timeframe than anything we’ve seen in history.

So, my takeaway from that is, my head is spinning and that's OK because this stuff is kinda crazy - is that what you heard, too?

George asked Kashkari if he agreed with what Larry Kudlow said, that this year's going to be strong, and next year's going to be "roaring." Nope, he doesn't, which became more clear as the interview went on. He says it's more likely that we'll see a slow, gradual recovery.

Unfortunately, the virus continues to spread. People continue to get it. Unfortunately, people are tragically dying. And when we look around the world, there's evidence that when countries relax their economic controls, the virus tends to flare back up again. And the longer this goes on, unfortunately, the more gradual the recovery is likely to be.

A couple of things he says are indicators of a longer recovery? Small businesses going through bankruptcy, leading to empty malls until new businesses get up and running to replace them. And, there's this.

So, I would love to see a robust economy, but that would require a breakthrough in vaccines, a breakthrough in widespread testing, a breakthrough in therapies to give all of us confidence that it's safe to go back. I don't know when we're going to have that confidence. And ultimately, the American people are going to decide how long the shutdown is.

George wondered what Kashkari would recommend the Fed do now, and if we'd need another package from Congress. He said the Fed is "standing behind the financial system" and would put whatever they need to in order to make sure the system continues to function - but, as others noted, this is a healthcare crisis, so "anything Congress can do to support more investment in any of (the) technology breakthroughs would be money well spent."

... number two, if this goes on for a long period of time, I think it's going to go on in some phase for a year or two. I think Congress is going to need to continue to give assistance to workers who have lost their jobs. I mean, as you said, it's really around 23 percent, 24 percent of people right now who are out of work today. And if this is a gradual recovery the way I think it's going to be, those folks are going to need more help.

Sonders was asked what her firm is advising clients now; in addition to echoing her comments about how fast the market collapsed and how fast the rally has been since then, she talked about applying "logical thinking and discipline around investing" that a person should do anyway: have a plan, diversify across asset classes; have "some sort of anchors" (less risk investments) and then rebalance your accounts. 

And it's really those tried and true disciplines that are the closest thing to a free lunch. Too many investors think the only path to success requires top picking and bottom ticking, all in, all out. And that's just gambling on a moment in time. And investing should always be a process over time, even when what's happening is in a more condensed frame of time. And that's the best advice we can give in this environment.

Or, in my case, have a financial planner to all of that for me, and try not to look too often at what's happening.

Kashkari closed the segment out by saying "the worst is yet to come on the job front, unfortunately" and that reopening has to be done safely, we need to monitor and look for flare-ups, and we have to understand that

We may be in an environment of gradual relaxing and then having to clamp back down again around the country as the virus continues to spread. To solve the economy, we must solve the virus. Let's never lose sight of that fact.

Yes - let's not lose sight of that.

Next up? I wanted to hear from another of our country's mayors, after hearing from San Francisco's London Breed a couple of weeks back, and turned to CNN's State of the Union classroom for Jake Tapper's conversation with Atlanta's Keisha Lance Bottoms. Her city's in Gov. Brian Kemp's Georgia, which has allowed non-essential businesses to reopen and where the number of folks across the state staying at home has dropped by at least 30%.. At the same time, Atlanta continues to have stay-at-home orders in place. Tapper wondered whether residents were listening to her.

She said there's mixed information, and hard to tell what's really going on. If you watch TV, it looks like everyone is out, but "we know that's not the reality."

Many young people are out and about as if everything is normal. There -- our malls have opened. Restaurants are reopening. But, anecdotally, I have spoken with just as many people who have said that they will remain at home. 

She also said that many of the Fortune 500 companies in the area (Atlanta is home to 16 Fortune 500 companies) are not reopening yet, and she said that points to a big issue we have across the country, not just in her city.

You have Fortune 500 companies and people who have the ability to telework are able to remain at home, but our front-line workers, many who are most vulnerable in terms of having access to health insurance and to quality health care, are the people who are having to go back out to work. And so we will see over the next couple of weeks what this massive health experiment, what the results are in our state. 

The mayor's reference to the "most vulnerable" gave Tapper a chance to segue to a CDC study showing that 83% of  Georgia patients hospitalized with the virus are black, and he asked what she wanted from the federal or state government to address the racial disparities. Bottoms said there were many things "we can and should be doing" including making sure there's access to funding for small business owners and that they're able "to make decisions not based on economics, but what is based best -- what's best for their health and for their families and for their communities."

But, also, I think that we have to be responsible. We know that there will be a time that we have to reopen this country, because we're not at the point that there is a cure or even a vaccine for COVID-19. But I think we have to be very thoughtful.

I don't think the way to reopen up Georgia and stimulate the economy is to send the people out who can least afford to get sick. I think there are ways that we could have done it, whether it be opening up medical offices and dental offices and places that perhaps have access to PPE and doing a truly thoughtful, phased approach to reopening, not just in our state, but across our country. 

And she said it's tough to "have those decisions put forth when we are getting really what I call erratic leadership from the White House and no clear blueprint on how we move forward thoughtfully as a country."

Honestly, while I understand the concerns about reopening, and having to to it safely and in a way that protects small business owners, I was very disappointed in the mayor's response in that she never even touched the central issue Tapper asked her about.

I was equally disappointed with Tapper for not pressing her on it; instead, he moved to talk about Ahmaud Arbery, the young African-American man who was shot and killed in an altercation with two white men back in February. 

As has been widely discussed on the news, the two men have been charged with murder after a video of the altercation surfaced, and after the Georgia Bureau of Investigation took over from the locals.  He asked Bottoms if she thought the charges were only filed because of the video (which has been available to law enforcement from the very beginning). She thought it was "absolutely the reason" they were charged, and that absent the video, they probably wouldn't have been.  

And it's -- it's heartbreaking that it's 2020, and this was a lynching of an African-American man.. you know, my heart goes out to his family. But I think, again, it's a part of this bigger issue that we are having in this country. With the rhetoric we hear coming out of the White House in so many ways, I think that many who are prone to being racist are given permission to do it in an overt way that we otherwise would not see in 2020, because you have to remember, Jake, you know, in cities across this country, even if local leadership fails, there was always the backstop of our Justice Department to step in and make sure that people are appropriately prosecuted.

But we don't have that leadership at the top right now. It's disheartening. And I can tell you, I have four kids, three of whom are African-American boys. They are afraid. They are angry. And they are afraid. And I think that it speaks to the need to have leadership at the top that cares for all of our communities, and not just in words, but in deeds as well. 

The conversation took another turn; it appears the mayor's name has come up in the Biden VP conversations, with Tapper noting that South Carolina Congressman Jim Clyburn, said she'd be a "tremendous VP candidate," and he asked if she agreed with that. I think that's a hard way to get someone to answer the real question ("are you interested in being VP?"). She gave it a shot, though, saying that having Clyburn mentioning you in a positive light is "certainly an honor," before adding 

I think I'm a pretty great person. I don't know if my husband will agree with that. But I certainly think that Joe Biden has the right to pick whomever he thinks will help propel him to victory in November. So, it's an honor to have my name spoken in that light. But being mayor of Atlanta right now is a - more than a full-time job, continuing to lead our city, but also in the midst of COVID-19.

The last topic? Tara Reade. Tapper wondered what she thought about the allegations. Bottoms said that Biden's statement that Reade should be heard and taken seriously is "completely accurate" but that the allegations need to be vetted.

And there has not been anyone with any objectivity who has been able to confirm that her allegations are accurate. The Joe Biden that I know is a man who respects women, and, again, not just in his words, but in his deeds. He authored the Violence Against Women Act. He has been a very vocal proponent of making sure that women are protected across our college campuses. And that's not the Joe Biden that I know.

Tapper asked what she meant about "nobody with any objectivity" and said that "seems a standard that very few accusers would be able to meet." Bottoms explained she meant people who don't know her personally.

I'm referring to the media, who has had an opportunity to vet her allegations. Also, there has not been anyone who worked in the office at the time who could corroborate the allegations that she claims she made at the time, and also being mindful of the fact that her story has changed over time. 

And the last, and most unusual of the unusual suspects?  Lamar Alexander's dog, who made a very sleepy appearance on Meet the Press. 

So there you have it - a different take on the economy, a different take on reopening, and a darn cute dog. What more can you ask for? 

See you around the virtual campus - and please, keep doing the social distancing thing, OK?