The rich (who are the stock owners benefiting from the market) have seen their portfolios balloon and their tax bills plummet. (Forbes reports: “The richest 1 percent received 9.3 percent of the total tax cuts, the top 5 percent got 26.5 percent, the top quintile received 52.2 percent and the bottom quintile got 3.3 percent.”) For a president obsessed with winning and outshining his predecessor, the stock market is a handy scoreboard. Until it isn’t.
The Dow Jones closed on Thursday down more than 1,100 points (4.4 percent). This was after (perhaps, in part, because of?) Trump’s frightfully incoherent press conference Wednesday. The New York Times reports:
The speed of the market slump has been stunning, with the S&P 500 falling more than 10 percent from its Feb. 19 high, a drop that Wall Street labels a correction to suggest the decline is more significant than a few days of downbeat trading.The last time stocks in the United States fell that much was late 2018, when investors worried that the trade war and rising interest rates might tip the U.S. economy into a recession. The Dow Jones industrial average also fell into a correction on Thursday, as did shares in London.
Trump’s forte has never been actually solving problem or providing quality; he excels at spin, exaggeration and shameless lying. Naturally, then, his response to a burgeoning health crisis and an economic earthquake is to muzzle those who might undercut his happy talk.
The Times reported: “The White House moved on Thursday to tighten control of coronavirus messaging by government health officials and scientists, directing them to coordinate all statements and public appearance with the office of Vice President Mike Pence, according to several officials familiar with the new approach.” The White House insists “the goal is not to control the content of what subject-matter experts and other officials are saying, but to make sure their efforts are being coordinated, after days of confusion with various administration officials showing up on television.” Nevertheless, you do get alarmed when “Dr. Anthony S. Fauci, one of the country’s leading experts on viruses and the director of the National Institute of Allergy and Infectious Diseases, told associates that the White House had instructed him not to say anything else without clearance.”
Trump has become so adept at bullying science-based government agencies and departments (e.g., the Environmental Protection Agency strips its website of climate change information, Trump’s Sharpie mark-up creates havoc at the National Weather Service) that the media and public do not know whom to believe. We used to be able to rely on the world-class Centers for Disease Control and Prevention for the most accurate information. With Pence in charge of the effort, do we have that same sense of confidence?
On the Senate floor, Senate Minority Leader Charles E. Schumer (D-N.Y.) practically pleaded with Trump: “The president must stop trying to minimize the nature of the coronavirus threat. His attempts at spinning the facts are just not credible, and they are harmful to the federal response.” He continued, “In order to prevent overreaction by the public, it is essential that the federal officials, especially the president and vice president, level with the American people. Telling the American people the truth — and then coming up with solutions to solve it — is the way to calm people down. … So let’s let the science and the facts guide us. The American people do not need or want uninformed opinions or spin from its leaders. They want the truth.”
When the administration demonstrates an effective approach to the health crisis and can be regarded as trustworthy, the markets should calm down. The bad news is that may be beyond the capacity of this president.
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