Economy

Fed's Kashkari Advocates For New Lockdown

federal reserve Bank of Minneapolis President Neel Kashkari, policymakers, stimulus, funding, coronavirus, stimulus package, small business assistance, tarp

Neel Kashkari, president of the Federal Reserve Bank of Minneapolis and Dr. Michael Osterholm, director of the Center for Infectious Disease Research and Policy at the University of Minnesota, said the defeat of the coronavirus will require sacrifice but will save thousands of lives.

In a New York Times opinion piece published Friday (Aug. 7), they wrote the choice is clear.

“We can continue to allow the coronavirus to spread rapidly throughout the country or we can commit to a more restrictive lockdown, state by state, for up to six weeks to crush the spread of the virus to less than one new case per 100,000 people per day,” Kashkari and Osterholm wrote.

Kashkari introduced the idea one week ago in a CBS “Face the Nation” interview, PYMNTS reported. He said the nation’s economy can come barreling back, but only if the virus is controlled.

The idea is not new, they wrote. Such aggressive public health measures have been taken in other countries.

“But we’re a long way from there right now,” Kashkari and Osterholm said. “The imperative for this is clear because as a nation what we have done so far hasn’t worked.”

Federal Reserve Chairman Jerome Powell agrees.

Last month, he said the road to economic recovery is extraordinarily uncertain and will be heavily influenced by how well the country keeps the pandemic under control.

In April, Kashkari said he didn’t have hope the economy would rebound quickly from the effects of the coronavirus without a vaccine.

At the end of January, there were 9,439 reported cases worldwide, mostly in China and six in the U.S. Six months later, there were 17 million cases reported worldwide, including 676,000 deaths. The U.S. had 4 million reported cases and 155,000 deaths. More than a third of all U.S. cases occurred during July alone.

“Why did the U.S. COVID-19 containment response fail, particularly compared with the successful results of so many nations in Asia, Europe and even our neighbor Canada?” they asked.

In its simplest terms, they wrote, the U.S. gave up on lockdown efforts well before the virus was under control.

“Many other countries didn’t let up until the number of cases was greatly reduced,” Kashkari and Osterholm wrote.

To successfully drive down the U.S. case rate to less than one per 100,000 people per day, a shelter-in-place order must be in place for everyone but essential workers.

“History will judge us harshly if we miss this life and economy saving opportunity to get it right this time,” they wrote.

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