Can the Effect of the Coronavirus on the Stock Market Defeat Trump?
On March 9th, due to concerns over the coronavirus, Italy’s prime minister placed his entire nation in a state of quarantine. And while American governors declare States of Emergency, the President of the United States is taking an entirely antithetical, much less drastic approach.
President Donald Trump’s media strategy regarding coronavirus has not merely been an unceasing argument against its severity. He goes further than that.
In one infamous moment of brutally honest speech — add it to his collection — Trump plainly told journalists at the Center for Disease Control that he would “rather have the people [with flu-like symptoms] stay” on the Grand Princess cruise ship they were on. “Because I like the numbers being where they are. I don’t need to have the numbers [of people with coronavirus in the U.S.] double because of one ship,” he said.
These coronavirus numbers are important to President Trump, because he sees the link between their going up and the stock market’s going down. So, naturally, he is doing whatever he can to calm the panic.
In one example, the president tweeted a comparison of U.S. coronavirus rates with flu rates, implying that COVID-19 is of far less concern than the latter.
Well, what can we expect from the Incredible Stock Market Man, who swoops in to save the day by distracting voters from distasteful GDP growth — a meager 2.3% last year — by instead pointing them toward the glorious all time highs of the S&P500?
Surely, in those moments of sheer market bliss, some Americans are asking themselves, Can Donald Trump really be that bad of a leader if the stock market is doing so well? Perhaps, despite all the flack he gets about being a failed businessman, he is good at business after all.
Those are not the sorts of questions being asked today.
Enter the evisceration of an entire year of market gains. Down and down we go, no one yet prepared to call a bottom. Now, President Trump is pointing everyone’s gaze as far away from himself and those market values as he can. But it is hard for him to escape the age-old reality: if you take credit for the all time highs, you are given credit for the unacceptable lows.
I am willing to believe, as the president tweeted, that the oil price war between Russia and Saudi Arabia, and even Fake News shares some of the blame for our falling markets. Nevertheless, I am not willing to accept that COVID-19 shares none of it, as he seems to imply.
Whether or not the coronavirus pandemic justifies a high level of panic or extreme governmental response, the U.S. market will inevitably be affected by it.
For one, there is an increasing unwillingness to travel or spend time in highly populated places (such as retail outlets, convention halls, concerts, and theme parks). Many major corporations are closing their offices and telling their workers to stay at home. That includes some workers who cannot perform their jobs from home! These are just a few ways coronavirus bares its teeth to frighten stock traders. But make no mistake about it: they are afraid because these examples will hurt revenues. It is not an irrational fear.
If fears do cool down quickly and this market downturn is written off as a “dip,” Trump will rise with its revitalization. If, however, coronavirus has precipitated a recession, no multitude of worthy explanations will spare President Trump’s reelection campaign. In fact, he may regret downplaying its effect on the market. That would have been a convenient, fair, reasonable excuse.
