When and how to reopen the American economy is not only plaguing Donald Trump, who tweeted all-caps in March that, “We cannot let the cure be worse than the problem itself.” Seven weeks later, with an unemployment rate at 14.7%, and counting, with manufacturing output down a record 13.7% in April, and retail spending collapsing a record 16.4%, Trump likely has concluded that his only chance for reelection is if the economy—somehow—starts to improve. As more than 86,000 people in the U.S. have died from COVID-19, the question of opening or not is also preoccupying governors of the 50 states; of the states, four are closed for the foreseeable future, while the other 46 are either open or in the process of reopening.
The question is also preoccupying Wall Street bankers, whose livelihoods, like hundreds of millions of other Americans, depend upon an economy that at least has a pulse. Since no one seems to be consulting Wall Street bankers and traders about when and how to reopen the economy, I convened an impromptu circle of Wall Streeters I know well to get their views. The consensus among them is: We can’t continue any longer in lockdown mode. Something has to give, because more than 36 million newly unemployed Americans are not going to be able to pay their monthly bills, feed their families, or maintain their mental health if the economy remains shut. And the problems are only going to get worse the longer so many Americans are out of work. They reference United Nations’ projections that 250 million people could be on the brink of starvation by the end of the year. They also cite a report by the Stop TB Partnership that if the COVID-19 lockdowns continue that an additional 1.4 million people will die from tuberculosis because they will be unable to get treatment. They note that roughly 37,000 Americans die every year in car accidents. But we haven’t outlawed cars; we have learned to live with the deaths.
Furthermore, the consensus among them also seems to be, there is a false equivalency in the debate being made—by politicians and in the media—between saving lives by keeping the economy closed and sacrificing lives by opening it up in order for people to once again make a living. “Saving lives versus saving jobs is the wrong debate,” says one senior Wall Street banker. “Isn’t there a middle ground?… How many lives are you willing to spend to bring the economy back to maintain people’s standard of living? How many lives are we willing to risk? How do you put a price on a life? Many lives were lost preserving American Democracy in the fight against Nazi Germany. There was no moral high ground then. And now they are remembered as the Greatest Generation.” He wonders, “How do you compromise between the pragmatic and the moral. There are shades of gray.” (Some hedge fund managers, according to my colleague Gabriel Sherman, aren’t waiting for the reopening of New York City, or of the Connecticut coastline; they are picking up stakes and moving to one of Texas, Colorado, or Florida.)
Kim Fennebresque, a longtime Wall Street investment banker, has had successful stints at First Boston, Lazard (where I met him), UBS, and as the former CEO of Cowen & Co., a small, independent investment bank. He’s had enough health issues lately to make him especially vulnerable to COVID-19, if he were to contract it. Nevertheless, Fennebresque believes the time has come to open up the economy, especially in those regions of the country where, so far anyway, it has had less of a devastating impact. He agrees the debate has been poorly framed. “In terms of money versus lives, it really reduces it to a silly trade-off, because that’s not what it is,” he says “People will die. People do die. People my age die. It happens, right? It can happen with a flu epidemic. People can die. People have to take care of themselves and wash their hands. People have to stay in and do lots of things, and 5,000 people can’t go running to a beach the day it opens. You do that and it has consequences. People have to take responsibility for their own lives. And people do die. That is kind of what happens.”