March 3, 2020

Mar 04, 2020

The novel coronavirus continues to roil the country as the administration continues to sow doubts about its ability to handle the crisis. Very late last night, we learned that Defense Secretary Mark T. Esper last week asked military commanders overseas to check in with him before making any decisions about protecting the soldiers under their command from the virus in order to avoid surprising the White House or contradicting Trump’s messages about it. An American soldier stationed in South Korea tested positive for the virus last week.

Cameras and audio were not allowed at today’s press briefing on the novel coronavirus. The White House permitted still photos only.

Concern about the virus continues to grow. Companies are cancelling conferences and events out of concern about transmission of the virus. This weekend, for example, more than 22,000 body builders, martial artists, and medieval fighters, along with 200,000 spectators, were expected to show up at the 32nd annual Arnold Sports Festival in Columbus, Ohio. But today, officials called off all but the final competition, limited to 4000 people who had already bought tickets. The festival was expected to bring about $53 million into Columbus.

This economic hit comes in addition to the economic hit of disruptions to the supply chain, which a reader at TalkingPointsMemo described as “bewildering.” He says manufacturers can’t get information from their suppliers, and air freight from Asia is chaotic. All they can do is to try to hold on while everyone figures things out.

This economic stress has shown in a falling stock market, which rallied yesterday only briefly. Today, under pressure from Trump to lower interest rates, the Federal Reserve did so. It lowered rates a half a percent, for the first time since December 2008. Trump immediately complained that the cut wasn’t higher, but while the stock market jumped briefly at the news, the cut has appeared to backfire. The market ultimately fell today with investors apparently interpreting the surprise rate cut as a sign that things are worse than they thought. The Dow Jones Industrial Average (which is only one way to measure the stock market, by the way) fell 786 points.

Meanwhile, the Bank Policy Institute, which lobbies for some of the nation’s biggest banks, has asked the government to ease banking regulations to enable banks to respond to any economic crisis posed by COVID-19. It has backed this easing for a long time without success, but apparently sees this crisis as an opportunity to argue that they need more flexibility. Senator Sherrod Brown (D-Ohio), ranking member of the Banking Committee, said that we need to make sure that our health agencies “have the resources they need to keep Americans safe. It’s not the time to reduce financial system protections to bolster the bottom lines for Wall Street.”

That the impulse of the bank lobby in this moment of crisis was to ask for more deregulation makes it sadly ironic that today’s Democratic Super Tuesday vote did not go well for Massachusetts Senator Elizabeth Warren, who was the initiator of the Consumer Financial Protection Bureau designed to protect consumers in the financial transactions with banks, credit unions, debt servicing operations and so on. Once Congress created the CFBP, Warren became Assistant to the President and Special Advisor to the Secretary of the Treasury on the Consumer Financial Protection Bureau to set up the new agency. President Barack Obama removed her name from consideration as the Bureau’s first director when it became apparent Republicans would never confirm her appointment. Trump has worked to gut the CFPB, and the Supreme Court is currently reviewing its legality: oral arguments in the case began today.

March 3, 2020, has been a crappy day twice over for Senator Warren.

It was far better for former Vice President Joe Biden. Today voters in fourteen states and one territory went to the polls and decided how about a third of the delegates to the Democratic National Convention this summer would be divided up. As I noted last night, for all its coverage, the voting in Iowa and New Hampshire is not necessarily indicative of how the race ultimately will go. Super Tuesday is much more important, but even it does not dictate who will get the nomination. Former Vice President Joe Biden did very well today, picking up a number of states by significant margins and proving that he is popular with African American voters, who are Democrats’ key demographic.

Still, Senator Bernie Sanders (I-VT), who has pledged to run as a Democrat, is still very much in the running. Sanders picked up Colorado and possibly California (as I write it is too early to tell). It is significant, though, that his numbers were not as strong as expected while Biden’s were stronger than expected. Momentum seems to be moving toward Biden.

But there are four long months between tonight and the Democratic National Convention in mid-July, and we are in the midst of both a health issue and a shaky economy, with a president who seems more unstable by the day (today he told reporters after a phone conversation with the cofounder of the Taliban that the two men had a “very good relationship”). I think it is a mistake to see the Democratic contest as separate from the crises in the nation at large, since those crises will certainly affect how the Democrats campaign, and whom Democratic voters see as their best choice as a presidential candidate.

As for the mechanics of the nomination, it is entirely possible that there will not be a clear front-runner at the convention. This situation used to be quite common, and actually has a lot going for it because it enables delegates to cement support for a candidate in a contested struggle. Senator Warren has said she will not leave the race, likely in expectation of a brokered convention when frustrated delegations could easily turn to her.

After spending millions on the race, former New York Mayor Michael Bloomberg also underperformed today. It is unclear what he will do.

Notes:

Troops: https://www.nytimes.com/2020/03/02/us/politics/esper-trump-military-coronavirus.html

Supply chains: https://talkingpointsmemo.com/edblog/covid-19-supply-chain-disruptions-china

Still photos: