Having survived the swine flu and the bird flu and AIDS and SARs and the Ebola virus and all the other pandemics that were supposed to wipe out humankind, we’ve been feeling pretty cocky about our chances of surviving this newfangled coronavirus. After what happened on Wall Street on Monday, however, we’re at less a wee bit nervous.
News that the coronavirus has spread from China to South Korea, Iran and Italy renewed concerns that it will further disrupt the international trade system and the many gazillions of money that it generates, which has already seen much global several business with the gargantuan Chinese economy brought to a screeching halt. The Dow Jones Industrial Average dropped a jaw-dropping 1031 points, which is a jaw-dropping 3.6 percent, and the Standard & Poor and NASDAQ suffered even worse percentage losses, and for now all the smart money seems scared.
Aside from the already horrific death toll and severe economic consequences from the coronavirus, there are also political implications. President Donald Trump can’t plausibly be blamed for the coronavirus and the resulting stock markets, but he always implausibly claimed full credit for all the impressive stock market gains during his administration and has thus tied his political fortunes to the latest indexes. Decisive presidential leadership is called for, but at this point there’s not much Trump or any possible president might do.
The White House has requested congress to pass a $1.8 billion emergency spending bill to bring the total of spending on the coronavirus to $2.5 billion, which is a good idea that will probably win bipartisan approval, but by Washington standards that’s a relatively puny amount of money to throw at a problem of this size. There are many very smart people in America’s scientific community, but for now the smart money is betting that they won’t have this problem solved by election day, which seems a smart bet to us.
Trump is also calling on the Federal Reserve and the rest of the world’s central banks to reassure the world markets with a fresh infusion of that sweet opium of newly-printed cash, but at this point there’s not much more they can do. Several of the world’s biggest economies are offering below zero interest rates, which is every bit as stupid as it sounds, and despite what Trump has called the best American economy ever the Federal Reserve has been setting interest rates historically close to zero and the budget deficit is over a trillion dollars. A debt-ridden America and the rest of the debt-ridden world are ill-prepared to deal with one of those occasional Black Swan events, as the smarty-pants economists call it.
Which is not to say that any of those damned Democrats running for the presidency have any solutions. Self-described socialist and current Democratic front-runner Vermont Sen. Bernie Sanders will have a a harder time paying for his all his trillions of dollars of spending on all of America’s problems if there’s an economic downturn. The relatively sane and centrist Democratic candidates also don’t have any answers, and we frankly admit that neither nor do we few remaining NeverTrump Republicans,
Pretty much everyone anti-Trump will get their digs in, though. Trump has taken his usual position against foreigners entering the country, but some very quarantined cases of the virus have come in, and Trump’s skepticism about fancy pants scientists seems to have decimated the government agencies charged with dealing with pandemics. Trump has questioned the scientific community’s assessments of global climate change and the quality of America’s air and water and the cancerous effects of wind turbines, and he’ll probably soon ask you to believe that he knows more about the coronavirus than anyone.
Even so, we expect to eventually die from something other than the coronavirus, and to survive whatever political and economic upheavals it might bring. Which is not to say it will be a happy ending for anybody.
— Bud Norman