18 MARCH

Coronavirus sweeps the world

A letter from the CEO

COVID-19 is changing the way the US Studies Centre goes about its business in that we are no longer hosting events and have had staff working from home this week. But our analysis and commentary — its quality and quantity — isn’t being diminished. In fact, just the opposite.

The US Studies Centre is adding public health experts to our roster, their voices soon to be joining our experts on foreign policy, economics and innovation. Dr Stephen Kirchner’s analysis of US and Australian fiscal and monetary policy responses appears regularly in the nation’s op-ed pages. Our foreign policy and defense team, led by Ashley Townshend, is working through the security implications of the pandemic, a stark reminder of the United States and Australia’s reliance on global supply chains and weak points in both countries’ resilience and sovereign capabilities. Claire McFarland is examining the response of the US tech sector, both independently and in concert with government. Our academic teams have worked hard to switch to online teaching.

As you’ll see in this edition of The 45th and in the weeks and months ahead, COVID19 has heightened the relevance of the mission of the US Studies Centre and the value of our analysis of America, delivering insight for Australia.

Professor Simon Jackman
CEO, United States Studies Centre

NEWS WRAP

COVID-19 tests US healthcare system, social safety net

Public health systems and political leaders are being put to the test by COVID-19 – literally in the case of testing capacity and figuratively in the case of decision making, communications and directions. In a new research brief, USSC non-resident expert and Adjunct Associate Professor Lesley Russell from the Menzies Centre for Health Policy at the University of Sydney offers a succinct look at how Australia and the United States are tackling the coronavirus pandemic, comparing and contrasting the approaches taken on some key issues. READ MORE HERE
Joe Biden has won another spate of Tuesday of primary victories, winning Florida and Illinois. Polls are yet to close in Arizona, though the state’s 67 pledged delegates wouldn't be enough to secure a comeback for Senator Bernie Sanders even if he won them all. Ohio was originally due to hold its primary alongside other March 17 states, but Governor Mike DeWine postponed the vote until June 2 amid coronavirus fears. READ MORE HER E
San Francisco has gone into an Italy-like lockdown in a bid to curb the spread of the coronavirus. The ‘shelter-in-place’ order came into effect at midnight on Tuesday, 18 March and will remain in place until 7 April. The directive impacts seven counties in the Bay Area, including the county and city of San Francisco, and affects more than 6.7 million people. The shelter-in-place order is mandatory and, according to the city, failure to comply will be considered a misdemeanour crime, though people will still be allowed to go shopping for groceries and supplies. READ MORE HERE
The US Federal Reserve dropped interest rates to a record low to try and insulate the economy against coronavirus fallout. It’s benchmark interest rate was slashed by a full percentage point, taking it to a range of 0 per cent to 0.25 per cent. In addition to the rate cut, the Fed launched a massive US$700 billion bond-buying campaign to further ward off an economic meltdown. The Reserve Bank of Australia took similar steps, dropping interest rates to a new historic low of 0.5 per cent on 3 March. READ MORE HERE
Joe Biden committed to having a female running mate if he wins the Democratic nomination. The former vice president made the pledge during the most recent Democratic debate, where he and opponent Bernie Sanders sparred while spaced six feet apart and facing no audience to all health concerns. Sanders said “in all likelihood” he would also select a woman to be his running mate. Those rumoured to be in contention a spot on the Biden ticket include former Democratic nomination opponents Senators Kamala Harris, Amy Klobuchar, and Elizabeth Warren, as well as rising Democratic star Stacey Adams. READ MORE HERE

We are not an authoritarian nation, so we have to be careful when we say, ‘Let’s do what China did. Let’s do what South Korea did'.

Dr Jerome Adams, US Surgeon General
Interview on "Fox and Friends"
16 March 2020

ANALYSIS

Politics in a time of pestilence in America

Bruce Wolpe
Non-resident Senior Fellow

COVID-19 is the greatest crisis President Trump has confronted in his presidency, and the pathogen is mightier than the tweet. Trump can’t bully it into submission or humiliation, nor can he bury it with massive rallies of his vaunted base.

Americans have had a crisis of confidence in his leadership, driven by two factors: Trump’s desire to minimise the danger - lest it reflect poorly on his leadership - and the failure of the health system’s mechanisms to provide adequate testing, without which pandemic control cannot be attained.

“Relax, we’re doing great, it all will pass,” Trump told the nation on Sunday. It was not the most convincing message.

The mood in America today is dark and uncertain. Virtually all public activity has shut down, from conventions and meetings to political gatherings. The public squares that constitute America are empty. Churches, synagogues and mosques have closed their doors to their congregations. All major sport has been deferred.

It will only get worse before it gets better, and no one knows when it will get better.

Politically for Trump, as he faces the November election, there are several salient factors. Firstly, the President is seen to have failed to lead effectively during this crisis. His national address last week added to the sense of diminishing confidence and anger at his leadership. This is exactly what the markets reflected as Trump read the words from his teleprompter, but was unable to convince viewers that the state of the nation would get better with him in charge.

Further, President Trump's greatest asset going into the election has been the economy. The US will at least see a significant slowdown, and likely a recession and surge in unemployment. In terms of personal economic security, the closing of public activity and commerce means tens of billions of dollars in lost sales and wages. In just the last two weeks in the stock markets, Americans' super funds have lost upwards of 80 per cent of the increase in value they enjoyed since Trump took office.

Trump pays exquisite attention to the markets and boasts of all the record closes in his tenure. The roaring economy kept swing voters in his column. His credibility as an economic manager is now under critical review by voters. President George HW Bush had over 80 per cent approval after the first Gulf War, but with recession imminent in February 1992, his approval rating was where Trump’s is today – well under 50 per cent. And he was defeated by Bill Clinton.

Presidents are assessed on how well they face crises: October 1962, John F. Kennedy and the Cuban Missile crisis, when he stood up to the Russians and the threat of nuclear war, and stared Khrushchev down; George W Bush and 9/11, when the president rallied the nation after an attack that saw 3000 Americans killed, then in 2005 with Hurricane Katrina, with a major city devastated for weeks and the White House unable to deliver effective relief, a failure which haunted the rest of his term.

The numbers of Americans infected with COVID-19 are likely to reach into the tens of thousands in coming weeks, with the fatalities expected to climb to the thousands. At its worst extreme some project millions of cases in the next few months, with tens of thousands dying. This could be a crushing political burden going into the election. Trump never talks about these numbers – he prefers the Federal Reserve’s interest rates, and Dow Jones point gains – but as president he will "own" the illness data.

This article is an abridged version which originally ran in the Canberra Times.