The Virus Presidency

     "Seven hundred people died in Madrid last night!"

        Jim Cramer, CNBC, Friday morning, March 27, 5:50 a.m. PDT

   

 

    "The LameStream Media is the dominant force in trying to get me to keep our Country closed as long as possible in the hope that it will be detrimental to my election success. The real people want to get back to work ASAP."

          Trump tweet, Wednesday.

The stock market just crashed, losing 35% of its value in a month.  Then for three days it rebounded half way back up.  This morning, it is falling again.

The stock market is a barometer of business and consumer confidence. It is a battle between fear and greed, between the virus spread and the virus being just an overblown Democratic hoax. Even though only a minority of Americans own significant stock investments, a majority of employers own stocks. The stock market reflects their "animal spirits," their willingness to take the risks that keep their business working.

The stock market drew Trump's alarm at the end of February. It was falling, sharply. The happy talk and reassurances persisted by people in the know--including two US Senators were selling. Trump continued happy-talk, all was well. Larry Kudlow recommended people "buy the dips." 

The stock market kept falling. Gloom. Worry. The US would be like Italy. People would die.

Donald Trump started this week with a message that the shutdown would be brief. We would re-evaluate at Easter, Trump said.  Cheerleading didn't work. 

The Fed flooded the economy with liquidity, the Congress voted massive fiscal stimulus. That worked. But the reality of the virus persists. Financial liquidity is not a cure. Yesterday the US became the country with the most known cases of the virus. 

A cheerleader can motivate, but at some point the crowd cannot help but watch the game. The virus is winning, the stock market notices.  

Trump has a dilemma. The behavior most likely to minimize the spread of the virus is the behavior most likely to damage the economy for an indeterminate time. He wants what his own experts say is the impossible: business as usual and no virus. He needs that miracle. Maybe the spread is seasonal and the cure is the Easter spring season. 

In the meantime, Trump does what he does: deflect. If there is a problem, there is a villain to look at, and it is someone else: 

     "We've done a hell of a job, nobody's done the job that we've done--and its lucky that you have this group here right now for this problem because you wouldn't even have a country left." 

He was addressing reporters at his daily corona virus press conference on Wednesday.

Trump has his story: the virus is a problem but it has been over-hyped and things are getting better all the time because what the government has done is perfect. Trump is the hero, and Democrats are secretly cheering for virus deaths and economic destruction. Therefore, in Trump's version, Democrats and their media allies are playing up the risks. "The media would like to see me do poorly in the election." 

Will that message sell? It might. His audience is receptive. Trump supporters have fully internalized the message that Democrats, liberals, Never-Trump Republicans, and the news media all dislike Trump and will accentuate the negative. Referring to the economy Trump said: 

     "Just so you understand--are you ready?--I think there are certain people that would like it not to open so quickly. I think there are certain people that would like it to do financially poorly because they think that would be very good as far as defeating me at the polls."

Reality is reality. Trump's problem is that there are two fixed points which anchor Trump's fate. The virus will spread, or it won't. And businesses can go back to work, or they can't.

If the virus spreads, the economy continues to tank.

Jim Cramer: "The numbers we are hearing in Italy and Madrid are horrifying. . . . I wish the markets would calm down." 7:10 a.m. Friday, March 27.