March 9, 2020
When the stock market opened today at 9:30 am, the fall in oil stocks and bank stocks was so fast that it set off an automatic trading halt, set to trigger at a drop of 7%. The fifteen-minute break was introduced after the stock market crash of October 1987 in order to stop panicked trading and reset the market. When it reopened this morning, the free fall had stopped, but the Dow Jones Industrial Average nonetheless finished the day down 2,013 points, a drop of more than 7%. Oil prices fell 25%, the biggest loss since the 1991 Gulf War. This was the worst drop in the stock market since 2008.
The immediate trigger for the selloff was the oil war between Saudi Arabia and Russia that I wrote about last night, but the long range issue, of course, is the spread of novel coronavirus. Today Italian leaders declared the entire country under quarantine after the country counted more than 9,000 cases and close to 500 deaths. China has announced its dramatic quarantine worked: the number of new cases has declined markedly in the last several days.
Infections continue to spread across America. More than 700 people have tested positive for the virus, and 26 people here have died of Covid-19, the disease the virus causes. Major events continue to be cancelled—Boston’s St. Patrick’s Day parade, scheduled for this weekend and expected to attract more than a million people, is off—and employers are cancelling travel and asking people to work from home. Schools are closing—which badly disrupts communities as parents scramble to figure out childcare and many must stay home-- and universities are moving courses from in-person to on-line instruction. (I did lecture today, but then spent the rest of the day rewriting my courses and learning the programs for distance learning. Trying to see this as an opportunity to try new things….)
In Washington, six congresspeople have self-quarantined after being exposed to the virus. Five of them are Republicans who were exposed to someone with the virus at CPAC (Conservative Political Action Conference) at the end of February, where, ironically, a chief topic of conversation was that the coronavirus was being hyped by Democrats to weaken the president. They are: Doug Collins (R-GA); Paul Gosar (R-AZ); Matt Gaetz (R-FL), who showed up on the floor of Congress in a gas mask the other day to illustrate how silly all the preparations for the virus were; Senator Ted Cruz (R-TX); and Mark Meadows (R-NC), Trump’s incoming chief of staff. Democrat Julia Brownley of California is also self-quarantining after meeting with an individual who tested positive for the virus.
Louie Gohmert (R-TX) was also at CPAC, but has refused to self-quarantine and is simply avoiding personal contact as he continues even to give tours of the Capitol building to constituents.
None of these lawmakers is experiencing any symptoms of Covid-19.
Trump had personal contact with most of the Republicans on this list, but remains unconcerned, shaking hands with supporters today as he headed to a fundraiser in Orlando, Florida. He continues to compare Covid-19 to the flu and blames the Democrats for mounting concerns. “The Fake News Media and their partner, the Democrat Party, is doing everything within its semi-considerable power (it used to be greater!) to inflame the CoronaVirus situation, far beyond what the facts would warrant. Surgeon General, ‘The risk is low to the average American,’” he tweeted this morning. Shortly thereafter, Health and Human Services Secretary Alex Azar said: “Make no mistake, this is a very serious health problem. Nobody is trying to minimize that. It is a very serious public health threat to the people of the United States.”
After the stock market slide, Trump announced at an evening news conference that he is discussing a possible economic relief package for the country. On the table are a payroll tax cut, relief to hourly workers, as well as aid for tourist industries—airlines, cruise ship companies, and hotels (all of which are in Trump’s wheelhouse, of course). To my mind, notably absent in his comments was aid for those already in serious trouble from closures, including food-insecure children who are no longer receiving food at school.
Treasury Secretary Steve Mnuchin and National Economic Council Director Larry Kudlow will brief Senate Republicans on fiscal stimulus options tomorrow, but it is not clear that the Republicans will get on board for any or all of these measures. As Trump’s economic advisor Larry Kudlow said Friday: “We’re not looking at these massive, federal, throw-money-at-people plans.”
Trump clearly has his reelection in mind as he hopes for economic measures. Minutes after his morning tweet about “The Fake News Media,” he tweeted: “Now the Democrats are trying to smear Bernie with Russia, Russia, Russia. They are driving him Crazy!” and “The Obama/Biden Administration is the most corrupt Administration in the history of our Country!” He told reporters this weekend that he will continue to hold rallies, “tremendous rallies,” which he insists are safe.
His apparent unconcern is affecting popular understanding of the risks of contracting the virus. At CPAC, journalism professor and New Yorker writer Jelani Cobb overheard a person saying “I don’t believe anything the CDC [Centers for Disease Control] says about this virus. It’s full of deep staters who want to use this to create a recession to bring down the president.” On the Fox News Channel tonight, Trish Regan echoed this very argument, saying that Democrats are using the coronavirus “to demonize and destroy the president.” Their criticism was “another attempt to impeach the President,” and the crashing stock market was simply one of the casualties of their hatred.
My overall impression of today was that people are frightened and rudderless because of the confusion and lack of information and professional advice coming from the administration. While I am not a doctor or an epidemiologist, what I read suggests that our main goal as a nation right now is to slow down the spread of Covid-19 so that the number of serious cases stays within the capacity of medical professionals to handle them. To that end, we all owe it to each other to do everything we can to try not to spread the virus.
While not a medical professional, though, I do have chops in the historical profession, and the missteps of the administration in the face of this snowballing crisis reminds me overwhelmingly of the same confusion in the Herbert Hoover administration when faced with the stock market crash of 1929. In response to that vacuum, ordinary Americans began the movement to remake the nation. They looked at what was currently missing in their leadership and articulated what they wanted their government to do to head off the on-going crisis and to make sure such a disaster never happened again.
It seems to me a good time for us to do the same.
For my part, I will start the conversation by saying I want my lawmakers to believe not in a fictional narrative that serves their ideology, but in reality.
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Notes:
https://www.nytimes.com/2020/03/09/business/stock-market-today.html#link-6b39cab9
https://www.nytimes.com/2020/03/09/business/stock-market-today.html
https://www.washingtonpost.com/world/2020/03/10/coronavirus-live-updates/
https://abcnews.go.com/Politics/gop-reps-collins-gatez-quarantine-interacted-trump-weekend/story
https://www.cnn.com/2020/03/09/politics/coronavirus-lawmakers-quarantine-isolation/index.html
https://abcnews.go.com/Politics/stocks-dive-coronavirus-spreads-trump-repeats-risk-covid/story
https://www.politico.com/news/2020/03/09/white-house-plots-coronavirus-stimulus-124800
https://nymag.com/intelligencer/2020/03/trump-vows-more-rallies-despite-cpac-coronavirus-case.html
School closing: https://www.washingtonpost.com/education/2020/03/09/is-it-really-good-idea-close-schools-fight-coronavirus/