Moneybeat – Reflections after a year of COVID

MARY REICHARD, HOST: Coming up next on The World and Everything in It: The Monday Moneybeat.

NICK EICHER, HOST: Joining us now is David Bahnsen, battling through a wicked sore throat—a case of strep—which will be immediately evident. David, how are you?

DAVID BAHNSEN, GUEST: Well, I’m doing great. And, Nick, I wanted to say, Happy Anniversary. I don’t know if you knew this or not, but it was one year ago today that we began doing these each and every week.

EICHER: Right, I do know that and back at you: You’re the one who does the heavy lifting each week.

I’ll say at the same time, I regret the circumstance that brought us to this regular get-together, I’m grateful we’ve been able to have it and continue to have it. I’ve learned a lot over the last year and have received many emails expressing the same kind of appreciation. So thank you, David.

You know, I’d planned to start with a conversation about the anniversary that prompted this anniversary, which is the day last week that we marked one year ago, when the awful Covid virus came to our shores and claimed so many lives and created circumstances that did so much economic harm to our people. Let’s just start there.

What are your reflections one year on?

BAHNSEN: Well, really it’s surreal to reflect back on it. One year ago today, you and I recorded the first of these interviews. I was in my New York office and shortly after recording with you, I began walking back to my apartment and midtown Manhattan was empty. And as I rounded Columbus Circle, getting close to my apartment, there was nobody there. The park looked pretty empty and I called my wife and I said, you know, our kids are going to be on spring break for a couple weeks from school. I said, let’s go back to California and let things settle for a couple weeks. 

And I think that was the mentality that a lot of people had, that everything was pretty bad but it was going to be maybe a couple weeks. 

The idea that so much of what happened lasted this full year is really just an unbelievable story in American history. Some of it tragic, some of it probably unnecessary, but all of it something to learn from. 

Interestingly, from my vantage point as a financial guy, the stock market story only lasted about a month. Less than that, even. The market ended up bottoming out on March the 23rd, and has been making new highs for the last several months. And we still have parts of our economy not reopened. We have a president this week talking about not even having large events by Fourth of July this year.  The way in which the medical component allowed for greater state intrusion into the economy that other environmental efforts have ever been able to than other economic interjections. The medicalization of certain things in the relationship between the state and citizenry has really been a sight to behold.

EICHER: So let’s talk about what we’ve learned. Start culturally—culture drives politics—and we can say drives political decision-making. I’ll turn us to economics, but let’s start with culture. What’s your biggest takeaway from the Covid year?

BAHNSEN: Well, one of the things that I learned and that I believe would be the case again is that this was yet another reflection. It didn’t cause this division, but it revealed this division that even in a matter of a global health pandemic, the country has an incredible tribalization at play:  where there was almost somewhat binary and even kind of simplistic breakdown as to how people responded. And I don’t think that’s healthy. 

If there was anything you would think would sort of break out of a kind of red state-blue state divide, a CNN-Fox News divide, it would be matters of public health. But actually this really kind of fed that divide. And I think that that was something that surprised me. 9/11 was not a particularly political event in the way the country responded. But for the most part it really was a pretty unifying event in terms of a kind of monolithic outrage at the act of terror that was perpetrated upon the United States. 

This didn’t have any kind of monolithic response. It became very cultural that there was this kind of difference in how people responded. Some of it understandable, most of it not. But I think that we live in difficult times as a country and I think that in a time of crisis it can either reveal and make those things worse, exacerbate those problems—as has been the case here—or sometimes it can be unifying. And, unfortunately, this was not one of those unifying moments.

EICHER: Let’s zoom in on economic policy, then. Do we have enough information to evaluate how we did with the policy response?

BAHNSEN: It’s too early to tell, Nick. History is going to have to give the policy makers some indication of what they end up believing they did well and believing they did poorly. The instinct to go use debt financing for fiscal solutions has been embedded in our policy response for many decades. This just happened to have more zeroes and commas than we really ever thought possible. 

I fear what history will do is view all of it as one pot together, instead of in the weeds of the differences. Meaning, the PPP provisions in the CARES Act should be taken on their own merits and looked at for the good and the bad that came out of that. And the direct payments to taxpayers a year after the pandemic right now with 6 percent unemployment should be taken on its own merits. The third stimulus bill and direct payments to people who have not lost jobs is a very different part of this $5 trillion of spending than the PPP provisions were for businesses that the government themselves shut down.

One of the things that’s going to be unfortunate is it’s all going to be dealt with as sort of one policy response instead of break out what the good and bad of the policy responses were.

EICHER: Before we go today, David, and I appreciate your soldiering through here. Tell me the good and the bad of President Biden’s big prime-time speech on the Covid anniversary.

BAHNSEN: You know, I don’t know how many of the listeners know me well enough to know that this is true about me, but I don’t have any problem giving credit where credit’s due, even to people on the other side of the political aisle. In this particular case, I was very disappointed with the speech and I’m not being a partisan hack to say that. There’s much of the tone of his speech that I can appreciate. But I don’t understand, for the life of me, why they can’t really, really sell the re-normalization aspect of what’s going on. There is just simply no reason to continue holding a sort of threat over future constrained activity in the aftermath of vaccination success. If they want to continue the vaccination momentum and get to the point of herd immunity where we get our lives back, there’s no reason to still say things like, “Oh, but you’re still going to have to wear a mask and you’re only going to be able to have 10 people at a cookout on Fourth of July.” It’s not just that I vehemently disagree with it and find it repugnant, I don’t understand why they’re doing it politically or ideologically. So, I was disappointed in that. I think what the American people want to hear is the truth, and the truth is we’re getting very, very close to the point of herd immunity and we can have our lives back. 

Look, I don’t get that into the whole thing about taking credit for stuff and not giving credit to the prior administration. Politicians generally aren’t really in the business of giving each other credit for things and turning down opportunities to take credit for things, so that is what it is. But the truth is that President Biden did broker the deal to get Merck to help distribute the Johnson & Johnson vaccine. I think that’s a coup. And most of the Operation Warp Speed logistics that helped get this vaccine here was from the prior administration. And everybody kind of knows that. So this isn’t really a partisan thing. We have tremendous success that came about because, by the way, the innovations and genius of the biotech industry. That’s why we have these vaccines. And I think we need to have a message that is centered around full blown economic normalization sooner than later.

EICHER: Financial analyst and advisor David Bahnsen. Great to talk with you. Be well. I hope you get better.

BAHNSEN: Thanks so much, Nick.

(AP Photo/Mark Lennihan) A man crosses the street in a nearly empty Times Square, which is usually very crowded on a weekday morning in New York, March 23, 2020. 

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