Lack of coordinated pandemic response has hurt economy, says private equity investor Glenn Hutchins

  • North Island Chairman Glenn Hutchins told CNBC on Wednesday that the U.S. failure to coordinate a national response to the coronavirus pandemic has hurt the nation's economy. 
  • "This is a bad situation, and it's because we haven't pursued a unified response across our states," Hutchins said on "Squawk Box." 
  •  "The pandemic has gotten worse. A lot of the projections for the economic activity were expecting the pandemic to get better," the co-founder of private equity firm Silver Lake Partners said. 

North Island Chairman Glenn Hutchins told CNBC on Wednesday that the U.S. failure to produce a coordinated national response to the coronavirus pandemic has hurt the nation's economy. 

"This is a bad situation, and it's because we haven't pursued a unified response across our states," Hutchins said on "Squawk Box." "The pandemic has gotten worse. A lot of the projections for the economic activity were expecting the pandemic to get better." 

Hutchins, co-founder of technology-focused private equity firm Silver Lake Partners, said the shortcomings of the U.S. pandemic response have continued through July as Covid-19 cases and deaths increased, setting back the economic recovery. 

"It's very clearly … on a worse trajectory than we had managed at the end of the shutdowns in sort of May, early June," he said. "June and July have been very poor months, largely because of the mismanagement of the pandemic across the Southwest and the very early return to social activity and the lack of rules around social distancing and mask wearing and all those sorts of things." 

Hutchins comments Wednesday came shortly after ADP said in its monthly report that private payrolls increased by only 167,000 in July, well below the 1 million that economists polled by Dow Jones had been expecting. The numbers represented a slowdown from the 4.314 million created in June, a figure which was revised significantly higher, according to ADP. 

And on Tuesday, Paychex CEO Martin Mucci told CNBC that its recent data indicates a backslide in the small business employment situation. "We saw the July jobs index drop," he said on "Squawk Box." "That puts us back to about April, so we're flat over the last three months."

Hutchins rattled off some economic statistics he found concerning, particularly a recent U.S. Census Bureau survey showing that nearly 11% of Americans say their households do not have enough food to eat. He also raised concern about the millions of Americans who told the census they worry about being able to pay the next month's rent. 

Hutchins, who was economic and health policy advisor to former President Bill Clinton, contended that the current U.S.  landscape necessitates a more robust policy response from Congress than would have been required if economic reopenings had been done more carefully. 

Negotiations between the Trump administration and Democratic leaders on additional coronavirus aid are ongoing on Capitol Hill. Senate Minority Leader Chuck Schumer, D-N.Y., said Tuesday night that some progress has been made, but added, "we're still far away on a lot of the important issues." 

"We played politics with the reopening. We should not play politics with the next relief package," Hutchins said. "It needs to go back to the very basics about giving people support for unemployment insurance, rent relief, help for the states and the cities who will continue to suffer." 

Hutchins rejected proposals from Republicans and Democrats alike in Washington who support another around of $1,200 stimulus checks to Americans. He said those payments should be targeted to people who have lost income due to the pandemic. The broad-based payments that are proposed are designed to get "as many checks in the hands of voters as possible" in an election year, he contended. 

"A new plan is important. Unfortunately, it need not have been important, but it is," he said. 

Source: Read Full Article