Fiscal policy on the horizon
Things are edging back up a day after the Dow fell two thousand points the most in twelve years. I'm David Brancaccio in New York. Even talking about stimulus through government spending to combat the corona virus is stimulating a stock market at the moment twenty minutes into the trading day. The Dow is up six hundred. Seventy one points two point eight percent the SNP and P. is up two and a half percent the Nasdaq also up. Two and a half percent the. Us Federal Reserve tried with monetary policy last week. Now the other lever fiscal policy to decode. Here's Jeffrey Cleveland's chief economist. At paid in wriggled in Los Angeles. What do we mean by fiscal policy? David I think at the end of the day. It means returning money to the economy. One way it could happen is through a payroll tax. Cut Consumers would see that immediately in their income Another way would be you know. Income tax cuts and then spending that would directly target industries. That have been impacted by the downturn so tourism cruise lines airline etc a payroll tax cut percolates into the economy. Quickly but question is. How quickly could they enact such a cut right so the central bank can meet overnight and implemented and then emergency rate cut policy makers could take longer? It's something that could take. Let's say three to four weeks. David and in the interim will financial markets have patients. That's a question Jeffrey. Cleveland is the chief economist at Payton. Unreal thank you very much. Thank you David. Despite the balance this morning the Dow is down sixteen percent from its high February nineteenth with people avoiding airplanes. The CEO of Southwest Airlines is taking a voluntary ten percent. Pay-cut CEO Gerry. Kelly announced the move in an internal message to employees focused on the economic impact of covered. Nineteen marketplace's Nancy. Marshall Genzer is in Washington. Nancy docking one's own. Pay To what end. Well David something. Ceo's do during tough times to try to show workers. They're willing to share the pain but Kelly is taking a ten percent cut to his salary. According to southwest latest proxy filing his salary in two thousand eighteen was seven hundred fifty thousand dollars but his overall pay package including stocks and bonuses was more than seven million dollars still cornell university economist. Kevin Haluk told me this is not an empty gesture is real money. Even you know ten percent of a CEO's pay can be many many workers salaries for the year so it may be a way to keep people on in the firm for example. You think we should expect other see us to do this. Nancy. Well how it says. It's too soon to tell. It depends on a company's culture some corporate executives did take voluntary pay cuts during the financial crisis. Though and Haluk says this can be a way of telling employees. You know what they're going through especially in companies facing pay cuts layoffs. Nancy Marshall Genzer. Thank you very much and today. Representatives of the Centers for Disease Control are due on Capitol Hill to talk about strategy and funding marketplace's Kimberly Adams reports president trump's 2021 budget proposal for the CDC cut funding to the agency by about sixteen percent now with an eight billion dollar funding package. That was just signed into law. Jay Shambaugh the Brookings Institution says. You're seeing continued activity to try to make sure anything that needs to be funded from a public health. Standpoint is funded and right now thanks to low interest rates. The government can borrow money cheaply says Desmond Lachman at the American Enterprise Institute but takes time to spend that kind of money efficiently. So I wouldn't expect an increase in the very near future. Shambaugh at Brookings says the money is good in the short term. But now there's a much broader conversation in Congress about an appropriate kind of fiscal response that stretches beyond the immediate funding the public health agencies as well responses like tax cuts or paid sick. Leave that may address other consequences of the outbreak in Washington. I'm Kimberly Adams for marketplace. The State of New York population twenty million is just going to wait around for scarce hand. Sanitizer it's gotten the New York prison system to go into production on its own brand dubbed New York clean for now it's just for US government agencies like prisons or the subway governor. Andrew Cuomo gave himself a Spritz to Purell and Mr Amazon and Mr Ebay. If you continue the price-gouging we will introduce our product which is superior to your product. And you don't even have the floral bouquet. The floral bouquet of Lilac and hydrangea Cuomo claimed Tulips Amazon for its part has been working to get the gouging off the side and Ebay has banned. Us sales of sanitizer go Joe. The parent company of Mr Parral has increased production. It is your last chance to get our new marketplace t shirt with a donation of just thirty dollars whether you're giving for the first time or renewing your support. This is an opportunity that you don't WanNa miss but don't hesitate. This special offer ends this week contribute to independent journalism that trust today at Marketplace Dot. Org and get this shirt as a special. Thank you from us once again. It's marketplace dot Org and thank you checking in with organizations as they figure out the right thing to do given this rapidly changing corona virus story today. The group that helps medical schools coordinate among other things eighty one thousand med school students currently doing clinical rotations in hospitals. The training is required and parameters are very specific yet in some situations. The students may be asked to leave. John Prescott is an emergency room doc. Who is now? Chief Academic Officer at the Association of American Medical Colleges. Thanks for linking up glad to be here Dr Prescott. I assume your association is continuing to meet on this issue and gather information as new information comes in. We are meeting every single day. We have internally we have something called our our rapid response team and we are checking into here. What's going on nationally and locally We're working with the federal government We are working with our teaching hospitals to figure out how to best meet the challenges that are going on with the with cove nineteen might some of the hospitals. Ask The students to leave temporarily or might some of the medical schools be interested withdrawing their students temporarily depending on the situation on the ground involving corona virus. Yes that could happen. Students could be asked not to attend certain clinical rotations because of several factors one might be the lack of a personal protective equipment which is essential for for their safety. And that's been an issue that we're starting to hear more about And as a second thing may be that the team is so busy taking care of patients that they may not have enough time to teach the students. The students get training early on in how to keep themselves safe. I mean the guidelines of the CDC put out are things that students learn early on in their medical education. I mean this is. This is what we do medical schools. Get accreditation you're making changes to your approach to some of this training in the face of the corona virus. Is there a danger that schools could run afoul of the promises they make under accreditation? Our accrediting body. The Liaison Committee on Medical Education has been reaching out to our medical schools and likewise the medical schools have been reaching out to the Al-Shimi so that they don't run a foul Really with the coal goal of of accreditation is is to assure the public that the graduates of medical education programs are going to be good doctors even as we are confronting the challenges of Covert Nineteen. John Prescott is the Chief Academic Officer of the Association of American Medical Colleges. Dr Prescott. Thanks for doing this. Well thank you very much and dear listeners. At your organization. Have you been in these meetings now to figure out how to keep your people in your customer safe? We would very much like to hear how your company is approaching this given so much uncertainty. Email US using morning report at marketplace dot. Org in New York. I'm David Brancaccio. This is marketplace morning report from APM American public media.