Coronavirus Shows the Problem With Trump’s Stock Market Boasting

“We have contained this,” Mr. Kudlow said. “I won’t say airtight, but it’s pretty close to airtight.”

That’s not what public health officials said, in a briefing that same afternoon.

“It’s not so much of a question of if this will happen anymore, but rather more of a question of exactly when this will happen,” said Dr. Nancy Messonnier, director of the National Center for Immunization and Respiratory Diseases.

“We are asking the American public to prepare for the expectation that this could be bad,” she added.

The effort to set an optimistic tone on the markets was clearly at cross-purposes with what public health officials see as necessary to minimize the damage from a potential pandemic.

“It’s understandable that the administration, in an election year, is focused on keeping the stock market and the economy strong,” said Michael Steel, a partner at Hamilton Place Strategies and former spokesman for House Speaker John Boehner. “But they risk creating the impression that they’re more focused on the economic impact of the virus than effective public health measures.”

Then there is the broader question of credibility. During the global financial crisis in 2008, White House and Treasury officials were acutely aware that if they seemed too boosterish in public comments on the crisis, it would undermine their credibility and the sense in markets that they were taking the threat seriously enough.

When the government announces some important good news toward resolving a crisis — whether it’s that banks have adequate capital or that a pandemic has been contained — you want people to believe it, which they will do only if the same government has been upfront about the realities of that crisis to begin with. Neither the president’s tweets nor Mr. Kudlow’s interviews suggest this administration is overly worried about this idea.

Article source: https://www.nytimes.com/2020/02/26/upshot/coronavirus-trump-stock-market.html