One gets the impression that Trump finally has realized the coronavirus is a big deal (that could cost him the election) and that he should be doing something. The markets are rebounding a bit after the White House hustled out a stimulus package. There’s actually serious talk of sending some amount of cash directly to people, but I’m going to believe that one when I see it.
“I’ve always known this is a real — this is a pandemic,” Trump said. “I felt it was a pandemic long before it was called a pandemic.”
That followed a press conference Monday when for the first time he seemed to acknowledge the magnitude of the crisis (“this is a very bad one”), amid the expected self-congratulation (“we’ve done a fantastic job from just about every standpoint”).
I sincerely hope that Michael Bloomberg and his advertising team are putting together television ads replaying all the times Trump downplayed the virus and claimed it wouldn’t be a big deal. And I want to see television ads showing the time in 2018 Trump explained why he was cutting the pandemic team, juxtaposed with his claim from last week that he didn’t know anything about it. And I sincerely hope most Americans aren’t fooled. See also A new poll shows Trump’s magical lying powers are failing him.
The question is, can Trump and Senate Republicans do the right thing even if they try? Or will they water the stimulus proposal down, or make sure its benefits mostly flow to rich people, or add a bunch of abortion restrictions and dare Democrats to not vote for it, so that Dems can be blamed for not addressing the crisis?
Paul Krugman flat-out says that the entire Republican Party can’t do economic policy.
Why are Republicans useless at best in the face of an economic crisis? As I’ve pointed out before, there are many competent center-right economists, but the G.O.P. — not just Trump, but the whole party — doesn’t want their advice. It prefers hacks and propagandists, the people Mankiw famously called “charlatans and cranks,” whose only idea is tax cuts. The party truly has nobody left who is capable of putting together a plausible economic rescue package.
The Senate probably will eventually pass Pelosi’s bill. But with all signs pointing to a steep economic dive, we need a much bigger stimulus package — perhaps along the lines being developed by Chuck Schumer, the Senate minority leader — as soon as possible. This package shouldn’t include tax cuts; it should focus overwhelmingly on cash grants, perhaps a basic grant to every legal resident plus additional grants to those in special need.
And since there’s nobody left in the G.O.P. who can put together a coherent stimulus plan, Democrats will have to do the job, perhaps with help from the Federal Reserve intervention to stabilize highly stressed financial markets.
Economists agree that Trump’s favorite idea — a payroll tax cut — is a bad idea, mostly because it does nothing for those not getting a paycheck. But maybe he’ll warm to the cash giveaway, thinking it will buy him some votes.
David Atkins has an excellent analysis at Washington Monthly, Trump Is Running a Pandemic Response Like a Business, With Disastrous Results. This goes further than just explaining why Trump is screwing up; it explains why Republican ideas about the government’s role in the economy are screwed up, and why government must not be run like a business.
Today’s fast-moving capital markets are explicitly designed to be reactive rather than proactive, and every incentive built into them is to push for growth at all costs. Problems are meant to be pushed to the side and out of sight so the good times can keep rolling at the top; inconvenient costs are externalized and socialized on the backs of workers, the impoverished, and the environment. In the best of times, this dynamic creates massive inequalities and injustices that the market doesn’t notice, because the victims most affected are insignificant to—and go unnoticed by—the invisible hand. In the worst of times, however, it utterly hobbles a society’s ability to respond to crises that require active management before they can be directly felt in the marketplace.
Do read the whole thing. In short, business is always pushing to find the shortest route to profit. “Crisis management” in business is mostly viewed as a problem of reducing liability and maximizing public relations after something goes wrong. If possible, the damage and cost of a problem are pushed off on someone else (often the government). But by the time business notices there is a problem, it’s too late to stop it. “It’s true of any problem with an exponential curve whose solution requires acting well before the curve turns irrevocably steep, but where the action to prevent it would impact corporate profits,” Atkins writes.
As Trump said when he explained disbanding the pandemic team, “I’m a business person, I don’t like having thousands of people around when you don’t need them.” But by the time you realize you need them, you’re already way behind the curve. It’s like waiting until there’s a fire to start hiring firefighters.
There are a lot of “insider” looks at how the Trump White House mismanaged the crisis. See, for example:
Gabriel Sherman, Vanity Fair, “There’s No Boogeyman He Can Attack”: Angry at Kushner, Trump Awakens to the COVID-19 Danger
Maggie Haberman and Noah Weiland, New York Times, Inside the Coronavirus Response: A Case Study in the White House Under Trump