By CCN.com: Morgan Stanley CEO James Gorman has expressed fears that the partial U.S. government shutdown could hurt the economy greatly if it drags on. Gorman was speaking in Davos, Switzerland at the World Economic Forum as the shutdown enters its 34th day.
In an interview with the CNBC (video below), Gorman empathized with the 800,000 federal government workers who have missed several paychecks now. Gorman pointed out that this was affecting hundreds of thousands of households whose breadwinners are federal employees.
As previously reported by CCN.com, unpaid federal government employees have resorted to food banks and other forms of charity. It is estimated that nearly 2,000 GoFundMe pages have been created to raise money for affected federal government employees.
According to Gorman, if the partial government shutdown continues, the consequences to the U.S. economy will be greater than just delays in the approval of initial public offerings:
If it goes on through months of this year, it’s going to have an extremely damaging effect not just […] forget IPOs […] I mean that’s just timing […] whether it happens first quarter or third quarter […] that’s not the big deal […] it’s just the momentum in the economy. So this thing needs to get resolved.
In the CEO’s view, the solution to the government shutdown was “straight-forward.” According to Gorman, both sides of the political divide need to reach a compromise in the spirit of give-and-take:
First, I recognize we have a wall. It’s 500 miles long. We’ve had it for a long time. It’s been sponsored by Democrats and Republicans for a very long time. If there are some sensible additions to be made to that wall to improve border security, let’s make them. At the same time, we have a lot of children affected by the DACA legislation. Let’s make some accommodations to those kids and their families. That’s the obvious solution.
The shutdown has even led to the rescheduling of the State of the Union (SOTU) address by President Donald Trump. This was after House Speaker Nancy Pelosi said that Democrats wouldn’t pass a resolution necessary before the speech is delivered. The move by Pelosi effectively prevented Trump from giving the annual address in the House chamber.
In a series of tweets that followed, Trump denied that he was looking for an alternative venue as had been speculated.
Trump later claimed the Speaker’s refusal to allow the SOTU address was because she is “afraid of the truth.”
The U.S. Senate will on Thursday vote on two competing bills, neither of which is expected to pass. One of the proposals backed by Republicans provides $5.7 billion for the U.S.-Mexico border wall that Trump wants. The Democrat-sponsored proposal offers nothing for the wall.
James Gorman Image from REUTERS/Yuri Gripas
Last modified: July 2, 2020 7:30 PM UTC