Search This Blog

Defying the Odds

Defying the Odds
New book about the 2016 election.

Monday, February 24, 2020

Coronavirus and the Economy

In Defying the Odds, we discuss the tax and economics issue in the 2016 campaign.  The update  -- recently published --includes a chapter on the 2018 midterms.  In 2020, a good economy could tip the election in Trump's favor.  A bad economy would drag him down.

Desmond Lachlan at The Hill:
The number of those infected with the coronavirus is already some ten times higher than was the case with the 2003 SARS epidemic. At the same time, in an effort to bring the epidemic under control, around 150 million Chinese residents remain under lockdown. That is preventing Chinese factories from returning to normal production schedules, causing havoc in the Chinese transportation system and inducing Chinese consumers to scale back on their purchases.

Already China’s economic problems are reverberating throughout the global economy. As underlined by Apple and Hyundai’s recent earnings warnings, global supply chains, reliant on in-time Chinese parts deliveries, are being seriously disrupted. At the same time, commodity export-dependent emerging market economies are being dealt a body blow by a Chinese induced decline in international commodity prices, while those economies reliant on Chinese tourism are being severely impacted by a generalized suspension of international flights to China....
The coronavirus threat to the world economy is also coming at a time that the global economy is suffering from serious financial market vulnerabilities. A decade of ultra-easy monetary policy by the world’s major central banks has left the world drowning in debt. This is underlined by the fact that global debt to GDP levels today are higher than they were on the eve of the 2008 global economic and financial market crisis. More troubling yet, global equity market valuations appear to be stretched, global credit risk has been seriously mispriced and global credit has been grossly misallocated.
Peter Nicholas at The Atlantic:
Now a new coronavirus that originated in China is confronting him with a potential pandemic, a problem that Trump seems ill-prepared to meet. A crisis that is heading into its third month could draw out every personal and managerial failing that the president has shown to this point. Much of what he’s said publicly about the virus has been wrong, a consequence of downplaying any troubles on his watch. He has long stoked fears that foreigners entering the United States bring disease. Now he may double down on xenophobic suspicions. He has hollowed out federal agencies and belittled expertise, prioritizing instead his own intuition and the demands of his political base. But he’ll need to rely on a bureaucracy he’s maligned to stop the virus’s spread.
Peter Baker at NYT:
According to data compiled by Kathryn Dunn Tenpas, a senior fellow at the Brookings Institution, turnover among what she calls Mr. Trump’s “A team,” meaning his senior staff, has hit 82 percent, more in three years than any of the previous five presidents saw in their first four years. Moreover, the Trump administration has been notable for a high level of serial turnover, with 38 percent of the top positions replaced more than once.
“Many key departments and White House entities have been hollowed out,” Ms. Tenpas said. The president has thus been left with acting officials in many key areas. “He seems completely unbothered,” she said. “He claims that actings give him flexibility, but fails to see that temporary leaders cannot advance his policies nearly as well as a Senate-confirmed appointee who has the stature and all the powers to do so.
For your consideration, the top leadership at DHS as of late February:
  • Secretary (acting), Chad F. Wolf 
  • Deputy Secretary (vacant), Ken Cuccinelli, Senior Official Performing the Duties of the Deputy Secretary
  • Chief of Staff (acting), John Gountanis
  • Executive Secretary (acting), Juliana Blackwell
  • General Counsel (acting), Chad Mizelle