Americans Support Restrictions, Salvini Eclipsed, and Biden's Basement

Demography Unplugged with Neil Howe

In this latest issue of my weekly podcast, I discuss Americans' broad backing for stay-at-home orders. Recent polls from the WP/University of Maryland and the AP show Americans are largely supportive of statewide restrictions. 80% of Americans support stay-at-home orders, while 22% think restrictions on public gatherings don't go far enough. If states that reopen see significant second waves, governors will have hell to pay.

Economic indicators continue to fall. In the US, the ISM Manu PMI fell from 49.1 in March to 41.5 in April. It was its steepest contraction since April of 2009. The Richmond Fed Manu Index saw its lowest reading on record, coming in at -53 for April. In Europe, flash GDP growth QoQ came in for Q1: Euro-Zone -3.8%, Italy -4.7%, and France -5.8%. In China, the Caixin Manu PMI read 49.4 for April, showing no growth for the second month in a row after its catastrophic fall in February.

Why are markets rising? Despite catastrophic economic projections, the total fall in the S&P 500 in February and March was quick and shallow... and now the index has regained about half its decline. Why? We run through a gamut of explanations. Many investors see the pandemic as a V-shaped natural disaster that will be over and done, without second waves. Others say the Fed and Congress are preventing major defaults by holding everyone harmless. Paul Krugman argues in the NYT that investors around the world have nowhere else to put their money but into US equities. Unquestionably, the Great Lockdown is hurting small businesses and contractors most and large (S&P) businesses least. State handouts are also favoring the big guys. There are two long-run sequels to this story. The good outcome for the S&P over the next year is probably bad for America. And vice versa.

Italy has a new rising star. The Governor of Veneto, Luca Zaia, was the first politician within Italy to set up rapid testing. While the neighboring providence Lombardy had 14,000 deaths, Veneto only had 1,500. National polls say that Zaia dealt with the virus better than any other politician. A member of the League Party, some are predicting he will take over the party from Salvini.

Democrats are still uneasy about Biden. While Biden is still ahead in the polls, the candidate still has some significant issues. David Axelrod and David Plouffe, Obama's 2008 campaign managers, recently wrote an op-ed in the NYT that Biden needs to get out of his basement and get on social media. During a national crisis, a leader who stays (literally) underground doesn't inspire confidence. And with a recently surfaced sexual assault allegation from his Senate days, Democrats are reminded that Biden represents the past. Younger voters want to move on to something beyond Trump. Biden voters (and there aren't many passionate ones) simply want to imagine that Trump never happened.
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