Coronavirus, Economics, and Elections
Given the mass hysteria that we’re getting from the media, I want to provide some thoughts and analysis on the coronavirus, the economy, and how both may impact the elections.
But first, I want to offer my condolences to those who have lost family members and loved ones to this new virus. More people will be infected and additional lives will be lost. Those impacted are in our prayers.
Yesterday, the government reported that 273,000 new jobs were created in February. That smashed predictions of 175,000 new jobs. And there was more good news. The jobs figures from December and January were revised upwards by 85,000.
Within minutes, the stock market rallied 2,000 points — not. The pre-market was down 780 points and it remained down 780 points. What in the world could explain that?
The answer is not that complex. There were several new coronavirus cases reported in the United States in the last 24 hours, and to frightened investors that cancelled out the fact that 273,000 more Americans were working last month than before.
Yet when it comes to the virus itself, there are reasons to feel cautiously optimistic.
The spread of the coronavirus in China is slowing.
Key economic activity is returning to normal.
In countries with better healthcare systems, like South Korea, the death rate is much, much lower than the 3% figure that has been widely reported.
Children are not at great risk.
Thousands of people are recovering every day, but those numbers are not being reported by the media.
People over 65 are at greater risk, particularly if you have heart disease, lung disorders, diabetes, or other physical ailments.
But along with that good news is the reality that as tens of thousands of people in the United States get tested in the next few weeks, the number of reported cases is going to go up. (And I believe, as a result, the death rate will go down.) We will see the proof that for most people this is the equivalent of the normal seasonal flu or severe cold.
Thank God that Donald Trump, Mike Pence, and their team of free-market experts have been running the U.S. economy for the past three years. The result is that we are going into this health crisis in an incredibly strong position as yesterday’s report of 273,000 new jobs shows.
If this had happened during the Obama/Biden years, I shudder to think of the economic pain that would have ensued.
In a democratic society, what people tend to ask is, “What did you do for me today?” And the coronavirus could have profound effects on the standing of the administration and, whether we care to acknowledge it or not, on the November elections.
In spite of the obscene efforts of Pelosi, Schumer, and their media allies to blame the Trump/Pence administration for the spread of this virus, the fact is they have done virtually everything correctly to date.
In fact, the head of the World Health Organization on Thursday praised President Trump's leadership and handling of the crisis.
The one area where there was a lag was in testing kits. That was due to an Obama/Biden-era regulation that permitted only the Food and Drug Administration to develop tests for new viral agents. The president quickly repealed this regulation to speed up the development of new test kits.
Sadly, even in a best-case scenario, it is going to take at least another 30 to 45 days to fully know with greater certainty the degree of damage done to the economy and to those infected by this virus.
Like many viruses, it should die out when temperatures get above 75 degrees for a prolonged period of time. By May and June, the worst should be over.
In the meantime, virtually every economic report is likely to show a slowing economy, and the election will be only five months away.
My hope is that the administration can make the case that because of its policies America entered this crisis in a strong position and that the suffering was significantly limited compared to what happened in China.
I hope the American people would realize that because the economy is fragile, they should want the Trump/Pence team growing us out of this, not Biden and his socialist gang. They are demanding big tax hikes (twice as much as Hillary proposed!), the worst possible thing you could do to a nation recovering from a shock.
Under this administration’s direction, work on a vaccine is quickly advancing. But what else can be done?
There is a lot of talk about the need for an economic stimulus program. The president has hinted at tax cuts. But before the virus, the thinking was that they would introduce that idea during the campaign. I think they need to move forward now.
One possibility would be a payroll tax cut so that millions of Americans would immediately have larger paychecks. Under George W. Bush, taxpayers and families received stimulus checks in 2008. It’s not clear whether that actually worked.
This idea may annoy fiscal conservatives, but you can make a case for setting up a $1 trillion emergency fund right now and getting that passed through Congress to deploy in whatever area makes the most sense.
The 10-year Treasury bond is at 0.77%. The inflation rate is 2.5%. In other words, the federal government today can borrow billions of dollars at an interest rate lower than inflation.
There is no better time to borrow the money to help the economy recover more quickly so that revenues come in more quickly so we can manage the debt.
Trump’s Town Hall
Did you catch President Trump's town hall event in Pennsylvania Thursday night? It was terrific!
One question posed to the president is something I am frequently asked about — his aggressive style. Asked whether he could take it down a notch or two, the president replied, “When they hit us, we have to hit back. I really feel that … I wouldn’t be here if I had turned the other cheek.”
He’s absolutely right!
As I have written before, it does us no good to lose gracefully. In 2008, John McCain refused to make an issue of Jeremiah Wright. Mitt Romney is a decent man, but the left mercilessly smeared him.
And something else I often hear about is the “lack of fight” in the GOP. Well, Trump is changing that too. The best example is Sen. Lindsey Graham.
I have big differences with Sen. Graham over certain issues. But just imagine how the Kavanaugh hearings would have turned out if Lindsey Graham hadn’t fought back so effectively!
My friends, there’s simply too much at stake for us not to fight for the values we cherish and the country we love!