The billionaire Tom Golisano was smoking a Padron cigar on his patio in Florida on Tuesday afternoon. He was worried.
“The damages of keeping the economy closed as it is could be worse than losing a few more people,” said Golisano, founder and chairman of the payroll processor Paychex Inc. “I have a very large concern that if businesses keep going along the way they’re going then so many of them will have to fold.”
Tom Golisano
Photographer: Robert Rosamilio/NY Daily News Archive via Getty Images
President Donald Trump says he doesn’t want the cure for the Covid-19 pandemic “to be worse than the problem,” and some of America’s wealthiest people and executives are echoing his rallying cry. They want to revive an economy that could face its worst quarterly drop ever — even if it means pulling back on social distancing measures that public health officials say can help stop coronavirus. These investors aren’t prizing profits over lives, they say, they’re just willing to risk some horrors to avoid others.
“You’re picking the better of two evils,” said Golisano, who wants people to go back to their offices in states that have been relatively spared by the coronavirus, but remain at home in hot spots. “You have to weigh the pros and cons.”
In New York, where hospitals are at a tipping point and getting pummeled by patients, Governor Andrew Cuomo says the economy shouldn’t be restarted “at the cost of human life” and that he’s developing a plan that “lets younger people get back to work.”
The question is when they should do it.
Trump, guided by a group of hedge fund and private equity titans, wants the country up and running again by Easter, though public health officials warn that’s too soon for a virus that’s killed more than 18,400 and infected at least 400,000 worldwide. Only companies with less than 500 employees are required to provide paid sick leave for workers out with Covid-19. Economists from Northwestern University calculated that keeping social distancing practices in place until cases decline could save 600,000 lives nationwide.
Lloyd Blankfein, who ran Goldman Sachs Group Inc. until 2018, helped kickstart the calls to get back to work on Sunday when he tweeted that “extreme measures to flatten the virus ‘curve’” were sensible “for a time” but could crush the economy: “Within a very few weeks let those with a lower risk to the disease return to work.”
His longtime deputy, Gary Cohn, who left the bank to become Trump’s top economic adviser, asked if it was time “to start discussing the need for a date when the economy can turn back on.” Without clarity, businesses “will assume the worst,” he said.
Tilman Fertitta, owner of Golden Nugget casinos and Bubba Gump Shrimp, is calling on authorities to let businesses reopen at limited capacity in a couple of weeks to avoid a long economic disaster. Fertitta, who also owns the Houston Rockets and is worth $3.2 billion, said his company is “doing basically no business.” His demand goes against a school of thought that says prematurely reopening the economy could kill more people and eventually cause more economic harm.
Billionaires and other members of the elite have the luxury of social distancing while making money. The ones who want workers back in their jobs say they’re aiming to stop millions from suffering for years and falling further into debt. Officials are trying to accomplish that by restricting foreclosures and allowing Americans to defer mortgage payments.
“It’s outrageous,” said Robert Reich, who was labor secretary for President Bill Clinton and now studies public policy at the University of California, Berkeley. “It is absolutely necessary to shut down the economy so that millions of people don’t die. For the privileged among us to fail to see that and to give the economy precedence over this public health emergency is morally reprehensible.”
The push to restart the economy makes a certain amount of sense to rich people, according to Reich, because they have come to expect disproportionate gains as the system’s top winners. “The one flaw in their logic this time is that the coronavirus doesn’t understand class,” he added. “The more people are infected, the more likely it is that Blankfein and other billionaires will become infected as well.”
Jim Conway was a server in an Olive Garden in Pennsylvania until it closed about two weeks ago. He’s been out of work and isn’t getting paid while his application for unemployment benefits gets processed.
“Being an older worker, I’m in no hurry to go back in the middle of an epidemic,” Conway, 63, said. “Being a server means you’re in contact with lots of different people, and puts you at bigger risk of getting infected. I’m kind of glad they closed when they did.” He wants the outbreak under control before the restaurant reopens, but worries that politicians and businesses tend to focus on their bottom line before people like him.
“They’ve never really had our interests at heart,” he said. “And now would be a weird time to start.”
One of those government officials, Texas Lieutenant Governor Dan Patrick, said on Fox News that Americans should get back to work and let “grandparents” take care of themselves.
Dick Kovacevich, who ran Wells Fargo & Co. until 2007, wants to see healthy workers below about 55 or so to return to work late next month if the outbreak is under control. “We’ll gradually bring those people back and see what happens. Some of them will get sick, some may even die, I don’t know,” said Kovacevich, who was also the bank’s chairman until 2009. “Do you want to suffer more economically or take some risk that you’ll get flu-like symptoms and a flu-like experience?Do you want to take an economic risk or a health risk? You get to choose.”
Mark Cuban, who owns the Dallas Mavericks, wants Americans to listen to epidemiologists instead. “Ignore anything someone like me might say,” Cuban wrote in an email. “Lives are at stake.”
.. regulators told them that to fully pass the test, they would have to cut almost in half the combined $16 billion they had hoped to pay out to shareholders
.. Fed officials gave the banks an unprecedented option: If they agreed to freeze their payouts at recent levels, they would get a “conditional non-objection” grade and avoid the black eye of failure. That meant the banks could pay out a combined $13 billion, or about $5 billion more than what they would have given back to investors if they had decided to retake the test and get a passing grade.
It also will boost a profitability measure that helps determine how much Goldman Chief Executive Lloyd Blankfein and Morgan Stanley CEO James Gorman are paid.
.. The arrangement is the first of its kind in the eight years of the Fed’s annual tests, and one of the clearest signs to date of a significant shift in the regulatory environment for banks, which have been expecting a gentler approach from Washington ever since the election of President Donald Trump.
“New refs, new rules,” consulting firm PricewaterhouseCoopers LLP wrote in a note.
This round of tests was the first graded by Trump appointee Randal Quarles, a former Wall Street lawyer and private-equity executive who last year became the Fed’s regulatory czar.
.. “This year’s stress test followed the same notification process as in past years—all firms were notified of the results and given the fixed option to reduce their capital payout plans with no negotiations,” a Fed spokesman said.
.. Fed officials said their leniency toward Goldman and Morgan Stanley was due in part to the impact of the 2017 tax law, which reduced the value of certain tax assets held by the banks and meant they entered the crisis scenario with diminished capital reserves
.. The stress tests, arguably the most visible sign of the postcrisis crackdown on Wall Street, are being changed in ways that benefit the industry. The Fed exempted three firms with less than $100 billion of assets from the test this year under the new banking law. Its treatment of Morgan Stanley and Goldman—as well as State StreetCorp. , which got a pass although it also failed to clear capital requirements under the stress scenario—showed the Fed taking a more flexible approach to what had been a binary exercise.
“The Fed was very kind,” said Arthur Angulo, a managing director at Promontory Financial Group and a former Fed official. He added the Fed’s exercise of discretion on the quantitative portion of the test was “a potential slippery slope.”
.. The interim director at the Consumer Financial Protection Bureau, Mick Mulvaney, has largely stopped initiating new investigations and wants the consumer-finance regulator to be less antagonistic to the businesses it regulates.
.. If Goldman had been required to rejigger its plan until its capital ratios exceeded the Fed’s minimum, the bank would have been able to seek just over $1 billion in buybacks, instead of the $5 billion that was approved
After college, Mr. Schwartz got into finance. His first day on a trading floor was Oct. 19, 1987. The stock market plunged 22 percent on what came to be known as Black Monday. He remembers a colleague crying.
“If you’re around that environment, I don’t know anybody that couldn’t be sensitized to the cyclical nature of the markets,” Mr. Schwartz said. It left him with a permanent sense of jitters over how easily capital can be destroyed.
.. “He’s always been a good shepherd internally in terms of managing risk and balancing that with clients’ interests,”
.. Mr. Schwartz is cautious and can be tightly scripted. As a general rule, he waits 48 hours to collect his thoughts before addressing someone who has really annoyed him.
Some colleagues say he has a tendency to “mark to market” his underlings — meaning that, in accounting terms, he assesses their value to his objectives and treats them accordingly. That has frustrated some people.
.. In the early 1990s, Mr. Solomon joined Bear Stearns, where he helped run the bank’s junk bonds division, working with bankers and salespeople to devise and sell higher-risk bonds. At one point, he helped a Dallas movie theater company, which was struggling to finance its expansion into Mexico, raise money through a complicated bond transaction.
.. In 1997, Mr. Solomon worked alongside Jon Winkelried, then the co-head of Goldman’s bond division, on a deal to raise money for the Venetian resort in Las Vegas. Mr. Winkelried was impressed with Mr. Solomon’s handling of the deal and offered him a job running Goldman’s leveraged finance team, again raising capital for companies through higher-risk bonds. It was a rare instance of Goldman hiring an outsider and awarding him the rank of partner.
.. “I thought he was on the leadership track at Bear,
.. Once, he showed up to pitch for the Lululemon Athletica initial public offering wearing a maroon jacket and long sweatpants made by the brand. His colleagues were similarly outfitted. “Everyone on the other side of the table is in suits and ties,” Mr. Solomon recalled. “It threw people off.” Goldman won a lead role on Lululemon’s I.P.O.
.. Mr. Solomon also leaned on executives in Goldman’s human resources office to hire far more women. Given the nearly even split in society, he argued, there was no reason that Goldman’s ranks should not be equally balanced between men and women. He has taken that message on the road, too.
by the latest count she won 400,000 more votes than Trump, who got fewer votes than either Mitt Romney or John McCain.
.. Trump won Florida by one; Trump won Wisconsin by fewer than 30,000 votes.
.. nearly 10 percent of millennials voted for third-party candidates
.. On the reasonable assumption that by far most of those who voted for the third-party candidates would have otherwise gone for Clinton, Gary Johnson, the odd-duck Libertarian, with 3.2 percent of the popular vote, and Jill Stein, of the Green Party, receiving just 1 percent, damaged and perhaps destroyed Clinton’s chances.
.. A CBS News exit poll found that if those who voted for Johnson or Stein had had to choose only between Clinton and Trump they would have supported Clinton by nearly two to one. It’s not a stretch to conclude that, absent the third-party candidates, Hillary Clinton would have won the election.
.. Hillary Clinton wasn’t giving people a reason to vote for her. “Stronger together” meant what?
.. Bill Clinton worried that the leaders of his wife’s campaign were too fixated on their supposedly fearsome get-out-the-vote drive and were failing to craft a coherent message for her
.. Bill Clinton worried that the leaders of his wife’s campaign were too fixated on their supposedly fearsome get-out-the-vote drive and were failing to craft a coherent message for her
.. The “moral” of the story may be that if you’re going to lie in the course of a public contest, lie so often that people can’t keep up with you
.. she started off being dismissive, and then sarcastic: asked in a press conference if she’d wiped her server she replied, “With a cloth?” And her explanations were often legalistic and evasive
.. she got nearly five million fewer votes than Obama did in 2012—resulted in the lowest voter turnout in twenty years
.. Trump channeled the anger at Washington institutions that particularly the working class felt had failed them, while Clinton came across as the very symbol of those institutions. Though Trump was a wealthy man, his populist message—even the baseball caps—made him seem accessible
.. The Clintons’ greed kept getting them in trouble.
.. white voters, whom Trump won almost across the board: not just among the working class, as expected, but also among college-educated voters, except for college-educated white women, whom Clinton won by a small margin. Among white men overall, Trump dominated, winning 72 percent of non-college-educated ones and 54 percent of those with a college education.
.. For many women voters, culture and class mattered more than gender.
.. David Wasserman of the Cook Political Report, by an innovative method he devised: look at how people voted in the 493 counties that have Cracker Barrel Old Country Stores, and in the 184 counties with Whole Foods stores. In 2012 Obama carried 75 percent of the counties that had a Whole Foods and 29 percent of the counties with a Cracker Barrel. But that spread was exceeded this year—in the other direction—with Trump winning 76 percent of counties with Cracker Barrel stores and just 22 percent of counties with Whole Foods.
.. Clinton came across to them as an creature from another, urban, world—a wealthy woman who liked big government and didn’t understand them.
.. He uses a critical word in describing how Trump wins the support of so many of his people: relatable. “People who are drawn to Trump are drawn to him because he’s a little outrageous, he’s a little relatable, and fundamentally he is angry and spiteful and critical of the things that people feel anger and spite toward,”
.. Trump did a good job instilling fear of an America overtaken by immigrants and it didn’t take much imagination to understand his dark prophecies of where, when blacks were also counted, this country was headed. Trump’s presidency won’t be a good time to be poor, especially a black person who is poor. And in Trumpland, with a president who ran a racist campaign, divisions between the races are set to deepen, as already shown in incidents of harassment and violence against minorities since the election.
.. His ideas for education play to those who don’t care for integrated schools
.. I always tell my clients, If you lose, lose big. Then you won’t chew over for the rest of your life what you should have done differently.” The close election is all the harder to shake off
.. Steve Bannon, of Breitbart News, pushes the “alt-right” theme of white supremacy and is believed to have been the guiding spirit behind Trump’s chillingly anti-Semetic final campaign ad, which charged that Clinton associated with three people who happen to be prominent Jews: George Soros (“those who control the levers of power in Washington”); Fed chairman Janet Yellen (“global special interests”); and Lloyd Blankfein (“put money into the pockets of large corporations”). It’s hard to see how it could have been more blatant. These weren’t “dog whistles,” they were dogs barking loudly.
.. Trump has led his followers to expect a lot. He promised to end Obamacare “on day one,” which will be difficult because it was passed by Congress and therefore isn’t his to eliminate.
Iran deal
renegotiate trade agreements to get better terms for America
bring back jobs to the US
.. In probably our most divisive and ugliest election ever, he prevailed in part because he intuited much about the voters’ psyche and he’s an experienced entertainer.
.. He knew how to appeal to the angry and discontented, who saw in him someone who would “shake up Washington” and deliver on his campaign slogan to “Make America great again.”
.. what happens if Trump fails to deliver to his followers? Who, and what, will they turn to next?
