If you come down with the coronavirus, don’t worry: The fever and coughing are just a Democratic hoax.
That’s the message from the White House, where President Trump and his minions are trying to deflect attention away from a global epidemic that’s roiling financial markets and spooking consumers. As stocks plunged on fears of quarantined businesses and a global recession, Trump blamed the wipeout not on the virus but on investors worried about Bernie Sanders becoming president. Acting chief of staff Mick Mulvaney likened media coverage of the virus to a hoax. On Feb. 25, White House economist Larry Kudlow said the coronavirus selloff looked like a buying opportunity. If you ignored that advice, good for you: stocks fell 6.5% over the following three days.
But warnings from public health experts suggest Trump may be facing his most serious challenge as president. The virus is likely to spread further in the United States, forcing school closures, canceled orders, empty stores and a lot of anxiety. Stocks have been plunging because nobody can measure whether the economic fallout will be modest or severe. So markets are pricing in a worst-case scenario.
Trump is doing the opposite, spinning the best-case outcome: a handful of isolated cases, no real harm, a quick rebound in stocks. If he’s right, we’ll all be lucky. If he’s wrong, and he tries to convince Americans a nationwide health crisis is a mere flesh wound, he’ll compound the problem and probably doom his reelection odds in November. Trump has little credibility to start with, and his coronavirus denials already feel like another scammy coverup. This week’s Trump-o-meter reads FAILING, the second-lowest rating.
Trump and his cronies argue that Democrats are trying to exploit the coronavirus for political gain. Of course they are, just as Republicans tried to exploit the death of Ambassador Chris Stephens and other vulnerable moments of the Obama presidency to undermine Trump’s predecessor. This is big-boy politics. If Trump can’t deal, he should quit and go recuperate in one of his golf clubs with a hypoallergenic service animal.
Trump is feeding red meat to his rivals by contradicting experts on the seriousness of the virus, and appointing his obsequious Vice President Mike Pence to be the solitary government mouthpiece on the matter. Trump, for instance, said researchers ought to be able to develop a coronavirus vaccine “fairly rapidly.” But the government’s top infectious-disease expert, Anthony Fauci, said there won’t be a vaccine until next year, at the earliest. After that, Trump instructed Fauci not to speak publicly without clearance from the White House.
Feel better? Prefer happy talk and lies over the facts about a deadly disease? Then you should buy stocks whenever Larry Kudlow says you should. Some eager seller will be happy to take your money, sucker.
The upshot of Trump’s performance regarding coronavirus is that he’s toast if the epidemic worsens considerably and he keeps telling people everything’s fine. He could get away with that during his disruptive trade fight with China, which was abstract to most Americans. Trade talks would hit the rocks, stocks would fall, Trump would promise some imminent breakthrough and stocks would recover. The harm of tariffs and other protectionist measures was indirect to most consumers and they never knew the difference. But if schools close, businesses idle and coronavirus victims start to die, Americans will know something is wrong and expect Trump to fix it. Talk isn’t a solution.
Trump could get lucky, as he often does. The Centers for Disease Control is competent and will do the best job possible to contain the virus, if Trump doesn’t interfere. The Federal Reserve may cut interest rates, providing some tailwind if the economy sputters. And investors might finally get greedy, fueling a buying spree that pushes stocks back up. But they’ll have to feel the coronavirus is under control, and Trump saying so won’t make it so.
Rick Newman is the author of four books, including “Rebounders: How Winners Pivot from Setback to Success.” Follow him on Twitter: @rickjnewman. Confidential tip line: firstname.lastname@example.org. Encrypted communication available. Click here to get Rick’s stories by email.