Coronavirus: Trump says outbreak could trigger recession, damaging his re-election odds

Expert warns virus setting off economic 'ugliness' across the globe

John T. Bennett
Monday 16 March 2020 22:04
Coronavirus: Trump says 'new normal' of shutdowns and social distancing could last until August or later

Donald Trump signalled the coronavirus outbreak could threaten his re-election bid, saying the ailment's spread could plunge the US economy into a recession.

"Well, it may be," the president said in candid remarks during a White House press conference as US stock markets tumbled even deeper after another day of major losses.

"We have an invisible enemy. We have a problem that, a month ago, nobody thought about," Mr Trump said. "I've seen all of the other problems similar to the one we have. This one's a bad one."

With Election Day just eight months away, Mr Trump for the first time said the outbreak could last until July or August – longer than any administration official has predicted. On Saturday, Mr Trump said the country could be dealing with its slow shutdown for eight weeks.

The president, who defied critics who have called his response slow and incomplete by rating his performance since the outbreak hit the United States a 10, said he has told 13-year-old son Barron Trump "it's bad."

After years of touting the level of American stock indexes as a reason he deserves a second term, Mr Trump indicated he intends to take a hands-off role in reversing the recent slide.

"The market will take care of itself," he said. "The best thing I can do for the stock market is we can get through this crisis."

The often-bombastic Mr Trump, for a third consecutive day, came to the James Brady Briefing Room with a much different demeanour. His typical feisty persona has been replaced by a more serious and straightforward one. In a surreal moment, the chief executive who has railed against those who cover him as "fake news" said "I think the media has been fair on this."

But even while warning of a recession and acknowledging a large spike in US coronavirus cases and leaving the door open to a recession, Mr Trump did flash his communication quirks.

For instance, he said if his team does "a really good job, we'll hold the death down to a really good level."

He also sought to describe the economy as mostly strong, suggesting the stock markets "will be fine."

But his changed tone about the outbreak continued on Monday.

He said it is "not under control for any place in the world" despite a day earlier saying it was under "total control" in America. (He claimed Monday he was referring to having control over the federal response.)

But he also said this virus is so "bad" because "of how contagious it is."

And when asked if the country would have enough hospital beds and ventilators in case of a major, widespread outbreak, he said this: "It may not be enough."

Perhaps trying to ease fears about a major economic slowdown, the president, without providing supporting evidence or data, said he senses a "tremendous pent-up demand" inside the economy that would take the Dow Jones Industrial Average and other markets back to record levels post-coronavirus.

"Once this goes away," he said, "I think you're going to see a tremendous surge."

Should the virus continue to spread through August, such a "surge" could help turn the tide on any negative political effects the president feels should there be a big outbreak that leaves the economy hobbled – and voters wondering if it's time for a change in the Oval Office.

A major problem, however, for Mr Trump is the pandemic has left the global economy hamstrung, and the American economy will be dragged down by the virus's many ripple waves.

"When the 2008 financial crisis struck ... the precedents were post-war Brazil, Korea, Indonesia, which democratized and opened their markets because of a financial crisis," said Michael Green, a former White House National Security Council official. "But then again, you had the 1930s examples of Germany and Japan radicalising, militarising, introducing national socialism because of a financial crisis."

"We're not anywhere near any of those scenarios" he added. "But what we have for now is a lot of scratchiness, a lot of ugliness, and less cooperation than we had in prior crises."

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