Yahoo Finance’s Myles Udland breaks down why supporting the economy for a few months is easier than doing so indefinitely.
- We have been talking a lot about fiscal stimulus-- what it could look like, if it's still coming, when it could come. Myles, you wrote about that in this morning's Yahoo Finance Morning Brief about, given that we are now sort of expecting a vaccine to come at some point doesn't mean we don't need stimulus, but maybe it changes what it looks like, how big it needs to be, et cetera.
MYLES UDLAND: Yeah. I mean, look, I don't think any of us are naive enough to believe that fiscal stimulus is magically going to happen in the next 62 days before, you know, Joe Biden is sworn in as the next president. It seems dead right here. And I think that's very unfortunate. And the vaccine news makes that even more unfortunate, because I can understand why politicians who believe themselves to be fiscal hawks or whatever are reticent to write blank checks for indefinite periods of time when we do not know what the future path of the economy looks like given what we don't know about the virus.
But right now, we have pretty good-- you know, to use a consulting term-- pretty good line of sight on when this pandemic may get under control, may even be able to end. And that is two or three quarters from now. And it is frustrating to see politicians not view that timeline as a reason to get acting today on helping businesses that are going to be closed today.
The restaurant industry here in New York City is in crisis. It's facing an additional crisis on those headlines we just mentioned, Bill de Blasio saying that indoor dining is probably going to be closed. That effectively kills seated diners at restaurants in New York City. That's happening right now. These businesses are not going to make it through the winter, but there is going to be a somewhat normal summer, we hope, and we think we can be confident in that because of the vaccine.
And for politicians to not see that timeline as a reason for them to act right now is quite frustrating. And it's-- it's basically backwards, right? When you have a timeline, you should act on that timeline. I can understand arguments around, I don't want to indefinitely put plan x, y, or z into place. But when you can say, all right, this money is going to get you to point A, which we know is six months away, nine months away, that couldn't be clearer, in my view, on why and what these businesses need.
- And Myles, you know, it doesn't help that that restaurant in New York City that's about to close and potentially close for good, asset buying from the Federal Reserve. I mean, really, what else can the Fed do here?
MYLES UDLAND: Well, I mean, the Fed is-- the Fed does what the Fed can do, right? They do monetary policy, and they can help to encourage fiscal policy. Their facilities are designed for Congress to authorize all kinds of programs to support all kinds of businesses. But yeah, look, right now that means that Apple gets to come to market for even less-- for even less borrow. And, I mean, I guess Apple doesn't really need the help to shore up its balance sheet from the Fed.
And I think it's-- look, it's a failure of imagination in a number of different levels. Look, we've got the federal level, the local level, the state level. You see the MTA news yesterday. I know we're going to talk about that later. I mean, that's just-- where is the federal government, right? The MTA has rules. Federal government has unlimited money, and we're going to ruin a city's infrastructure based on $12 billion, which, over the next couple of decades, is basically nothing?
I mean, I think, again, it's all a failure to really conceive what is happening and what the resources we have are to fix that. But that's been in place since March.
- Yeah. I mean, and also, just to keep in mind, this all comes down to partisanship, right? And if they can't get together on this urgent issue, it's not a very helpful view for what can get accomplished in terms of legislation to build the economy or do anything else over the next few years, it seems to me.