The Week of Saturday March 7 through Friday March 13, 2020 [#34]
The Week’s Most Notable:
Coronavirus. Is there anything else? At this stage, it’s useful to note that countries have strategies to deal with the crisis. One strategy is to do extensive testing to determine the who and where of the infection and then target countermeasures (South Korea). Another strategy is total involuntary lockdown coupled with triage treatment (China, Iran, Italy). Where extensive testing and lockdown are not viable, some countries have chosen to do very little except to push people back to work to minimize the economic impact, while leaving the 10-20% of the more vulnerable and severely affected to chance (U.S., U. K.). Many countries have neither a plan nor a strategy, which should ensure a steady supply of the newly infected for some time into the future.
Coronavirus economic impact predictions range from an unpleasant 2-month blip, to a 6-month recession, to a catastrophic 12-month beginning of a depression. Notice that the operative factor is how long the coronavirus crisis lasts. Most economists agree that a recession of some significance is likely. Too many supply chains have been broken, people put out of work, and consumer life disrupted for economies to recover quickly. “Only” a recession presumes the world can get a handle on the coronavirus cycle or the cycle peters-out of its own accord; neither of which is a sure thing in the short run. Apropos, we still don’t know if the coronavirus will lie low during summer months.
The carnival of coronavirus confusion continues at the federal level. Books, documentaries, movies, and compendiums will no doubt memorialize the past weeks of contradictory statements, misinformation, and cringeworthy action-crippling happy talk. References to “like a Chinese fire drill” are not only ethnically maladroit, but don’t actually cover the serious failures and omissions of the Trump administration and its “perfectly coordinated and fine-tuned plan.” Most of the coronavirus response is now devolving with inadequate national coordination to the states and municipalities. It may mean you survive or die depending on where you live.
Saturday, March 7
[Saudi Arabia] Mohammed bin Salman (MBS) Consolidates Power – Using the pretext of a coup plot against King Salman, MBS appears to be removing rivals and troublesome relatives.
Sunday, March 8
[Coronavirus] Italy Locks Down Northern Provinces – Italy has become a benchmark country for Europe, as the coronavirus seems to have struck there with particular virulence. As of the weekend, Italy had 5,800 confirmed cases and 233 deaths, the highest totals outside of China. The Italian government has chosen to use travel restrictions and social isolation as the principal tools to prevent the spread of the virus
[Oil War] Saudi Arabia and Russia Square off in Oil Price War – The triggers were the falling demand for oil products as a result of the spread of the coronavirus (less travel) and the failure of OPEC to reach an agreement on pricing. The Saudis blame Russia’s unwillingness to cooperate with OPEC on production goals and began ramping up production (thereby forcing down the price) in retaliation and to hold market share. It’s notable that the stock value of Aramco, the newly capitalized Arabian state oil giant, fell below the price of its initial public offering. The instability of oil production and pricing has become a factor in a potential worldwide recession.
[International Women’s Day] Celebrations and Demonstrations Around the World for Women’s Equality – The largest turnouts, such as in Chile, were sparked by national and local issues. Because of the coronavirus, these demonstrations may be the last of the large sanctioned protests for a while.
Monday, March 9
[Stock Market] Record Stock Market Crash – The only correct word for the 8 -10% drop for markets worldwide is crash. The Dow Jones closed down more than 2,000 points, sending it into official bear market territory for the first time since 2008. Fear of the economic impact of the coronavirus spread and the unpredictable drop in the price of oil seems to have been a double whammy for the markets.
[Coronavirus] Italy Extends Coronavirus Restrictions Nationwide – This time the restrictions include closing businesses, curtailing civic activity, and restricting travel within the country. The actions encompass 60 million people and are among the most dramatic since those taken in China.
[Coronavirus] Cruise Ship Docks in Oakland California – The controversial docking of the ship off the California coast – with more than 3,500 people held in involuntary quarantine – was ordered by the governor of California, apparently against the wishes of President Trump.
[Coronavirus] Trump Floats Payroll Tax Cut to Stem Coronavirus Economic Impact – This suggestion became a persistent bone of contention between Democrats and Republicans throughout the week. Democrats pointed out that the people hurt most by a coronavirus recession, the ones out of work, furloughed, or self-employed, wouldn’t benefit from a payroll tax cut; besides payroll tax cuts might benefit employers more than employees. Republicans accused the Democrats of “not wanting to do enough to help Americans.”
Tuesday, March 10
[Elections 2020] Biden Almost Runs the Tuesday Primaries Table – With the exception of North Dakota Biden won Washington, Michigan, Idaho, Missouri, and Mississippi. While he has not sewn up a delegate majority, his lead has extended substantially (890 – 736). Sanders has acknowledged that his path to the nomination is “difficult,” but he is persisting and will participate in what promises to be a most unusual two-person debate this Sunday, March 15.=
[Mueller Investigation] Appeals Court Rules DOJ Must Give House the Mueller Grand Jury Evidence – The Trump administration will immediately appeal the ruling, most likely to the full appeals court (en banc), on the road to the Supreme Court.
[Coronavirus] School and University Closings Worldwide – As a common step in addressing the spread of the coronavirus, millions of students worldwide are being sent home, in many cases for the rest of the academic year. Where possible, schools are shifting to online education. While the coronavirus does not frequently affect young people, they are notorious carriers of the disease. Virtual home quarantine may be effective but it strains the work patterns of parents, which may affect the economy.
[Coronavirus] World Health Organization Declares Coronavirus a Pandemic
Wednesday, March 11
[Coronavirus] Trump Addresses the Nation – The Wednesday night address was intended to calm the global nerves. Jared Kushner and Stephen Miller scripted the eleven-minute speech, to which Trump added his own ad libs. The ad libs were spectacularly incorrect, including calling for a ban on (apparently) all travel from Europe to the U.S. for both passengers and cargo. The White House had to walk this and other bloopers back immediately after the speech. A common reaction to the speech and Trump’s performance, except for right wing media, was “robotic and spooky.” The futures market dropped precipitously even while Trump was speaking. European leaders denounced Trump for imposing travel restrictions without consulting or informing them. Chaos ensued among the affected (and unwarned) airlines. On the other hand, Trump mentioned no mitigation plans for those already infected.
[Iraq] U.S. and Iranian-Backed Forces Trade Bombing and Mortar Attacks – In the background of the coronavirus crisis the U.S. and Iran appear to be ramping up hostilities with fatalities on both sides. It could be skirmishing; it could be escalation. Under the circumstances, who knows?
Thursday, March 12
[Coronavirus] Event Cancellations Part of Reality Bites – Added to the growing list of significant cancellations, the NCAA announced cancellation of March Madness. Likewise, most other sporting events have been canceled or postponed including the PGA, NBA, MLB, and NHL seasons. While there are still pockets of resistance to the idea that the coronavirus crisis is “real,” these and cultural cancellations (Disneyland!) are driving home the reality of prospective disease and death.
[Coronavirus] Officials Quarantined Worldwide – Almost every day other high-level officials announce their quarantine. The latest is Prime Minister Trudeau of Canada, as his wife tested positive. Also quarantined were the British Health Minister, Sen. Ted Cruz, Rep. Mark Meadows, and other U.S. politicians, as well as a significant percentage of the Iranian government.
Friday, March 13 (Yes, Friday the 13th, a fitting end for this week.)
[Coronavirus] Trump Declares State of Emergency – In a strategic move, the state of emergency allows $50 billion in additional funding to help mitigate the effects of the coronavirus. The U.S. does not have a comprehensive plan to deal with the economic and health crisis, which makes the distribution of this amount of money problematic. Trump and the GOP seem intent on giving most of it to business interests.
[Coronavirus] House Passes Coronavirus Economic Relief Bill – Working through Friday night into the wee hours of Saturday, Speaker Pelosi and Treasury Secretary Mnuchin hammered out a bill that Trump says he will sign. It includes elements of paid sick leave, unemployment insurance, and free testing explicitly targeted for lower income people most affected by the crisis. Unfortunately, Senate leader McConnell sent the Senate home for the weekend. The bill may pass sometime in the coming week.
[Stock Market] U.S. Markets Rocket up a Record – With the Dow up nearly 2,000 points (9.4%), the week of yo-yoing stock prices ended on a positive note. At this point, plausible rationales appear superfluous.
The Biden-Sanders debate promises to be one of the more unusual in U.S. history. While the nomination is not settled, there is no question Biden is the likely winner. However, Sanders would be foolish not to take advantage of the highly visible debate platform to push his agenda: namely, in light of what Americans are experiencing with the coronavirus, his Medicare-for-All proposal. He and Biden can debate their approaches to healthcare, and there will be other topics; but don’t expect head-to-head confrontation. Both of them know they have two enemies here – Trump and the coronavirus – and they want these two things completely conflated.
There is another set of primaries this Tuesday; some big states are involved – Florida, Arizona, Illinois, and Ohio. If, as expected, Biden takes them all, then it’s only a matter of time before he accumulates the 1,991 delegates needed for nomination. Incidentally, because of the coronavirus crisis, Louisiana and possibly other states will postpone their primaries. There is already talk about staging the Democratic national convention online.
Here’s a question: What is the psychological impact on Trump if he can’t have rallies for months?
[The IUY Weekly Journal assumes readers are passingly familiar with names and events. For more details, check with internet search (Google it).]
Quotes of the Week
“The coronavirus is a global crisis, not limited to any continent and it requires cooperation rather than unilateral action. The European Union disapproves of the fact that the U.S. decision to impose a travel ban was taken unilaterally and without consultation.”
Statement of the European Commission, 3/12/2020
“I don’t take responsibility.”
President Donald J. Trump, 3/13/2020
“I believe [the coronavirus pandemic] is an attack on the president as much as anything to make him look bad, they gotta have a catastrophe and blow it out of proportion, it’s gone a bit too far. . . . The democrats have made this a major problem for the president. It’s mass hysteria and the media have definitely ramped things up. The economy is doing strong. Here’s the way you kill the economy – attack Trump.”
Debra Lamm, Tea Party Republican Candidate for Montana’s sole House seat, on KGVO Radio, 3/13/2020