Former FDA Chief: Controlling Coronavirus Vital to Avoid Recession

Dr. Scott Gottlieb said lifting lockdowns won’t prevent the economy from going into a recession.

In an opinion piece published in The Wall Street Journal, the former FDA chief along with director of economic policy studies at AEI Michael Strain, note that controlling the coronavirus is the only way to avoid a recession.

They wrote that even though the country is “open for business” in several states, “as long as COVID-19 is an epidemic, many will be cautious, and the economy will be weak.”

“There has been debate over whether lockdown orders or concerns about catching the virus is the primary driver of the economic downturn,” they wrote. “Both contributed, but consumer worries may now be the more prominent factor in many parts of the economy. Supporting recovery, and minimizing the risk of a double-dip recession, requires controlling the epidemic”

They pushed for more testing and mask-wearing to help curb the spread of the virus. They cautioned that if the U.S. doesn’t promote more mitigation measures that the country will face more deaths and economic tragedy.

“Even if risk tolerance is increasing, the economy is likely to have a recession-level output gap driven by reasonable fears of COVID,” they wrote. “States are unlikely to reimpose lockdowns no matter how widely the virus spreads, and the Trump administration won’t turn to a ‘stay at home’ strategy ahead of the election. The fate of the economy this fall and winter depends on controlling spread.”

They wrote that even though “lockdowns are largely over” that consumers are “still nervous and skipping activities they view as option or too risky.”

They cited a Goldman Sachs analysis that found the personal care industry is only at half of its previous level of activity.

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