Trump is peddling false hope on the economy

First it was reopening by Easter. Then by the end of April. Now, there’s “light at the end of the tunnel.”

Every tunnel ends, but President Trump’s repeat insistences about reopening businesses and sending people back to work are missing one crucial thing: a plan. Trump calls himself a “cheerleader” for America, but it’s more like he’s peddling false hope about magical solutions instead of leveling with Americans about the severity of the coronavirus crisis and explaining how we get out of this mess.

There are coherent plans out there—just not from Trump. Former FDA Commissioner Scott Gottlieb has a four-phase plan that involves the gradual reopening of schools and businesses, under strict precautions, once the virus is contained. Andy Slavitt, who oversaw Medicare and Medicaid from 2015 to 2017, proposes a 20-point plan to move from defense to offense and slowly start returning to normal.

The Trump administration, by contrast, seems to regard reopening the economy as somebody else’s problem, even as Trump prods and complains. Trump has taken modest steps to ramp up production of ventilators and other scarce medical equipment, but those steps have fallen far short of the warlike mobilization some critics are calling for. Washington, for example, could use emergency powers to take control of the supply chain for medical equipment and prevent price-gouging. Trump hasn’t done that, instead relying on private distributors that are hiking prices and provoking complaints of profiteering.

US President Donald Trump speaks during the daily briefing on the novel coronavirus, COVID-19, in the Brady Briefing Room at the White House on April 7, 2020, in Washington, DC. (Photo by MANDEL NGAN / AFP) (Photo by MANDEL NGAN/AFP via Getty Images)
US President Donald Trump speaks during the daily briefing on the novel coronavirus, COVID-19, in the Brady Briefing Room at the White House on April 7, 2020, in Washington, DC. (Photo by MANDEL NGAN / AFP) (Photo by MANDEL NGAN/AFP via Getty Images)

Financial markets have recovered a portion of steep losses during the last two weeks, fueled by optimism about a possible peak in the number of U.S. coronavirus infections and deaths. But there’s still no clear path forward once the virus ebbs, since relaxing distancing measures and sending people back to work could allow the virus to retrench. Some analysts think the rise in stocks since last March is a bear-market trap, with even deeper losses ahead.

Economists also see a more distant, and slower, recovery than Trump does. “Employment losses will be traumatic, and the rebound post-virus will be U-shaped with a full recovery taking 12 to 18 months,” Oxford Economics predicts. A U-shaped recovery is one with a prolonged bottom, whereas a more preferred V-shaped recovery bottoms out more quickly. “The new normal of fear will feature only a gradual relaxation of social distancing measures and a slow recovery until a medical solution to coronavirus ends the crisis.”

The ultimate medical solution will be a vaccine that provides everybody in the world with immunity, not likely to be widely available until mid or late 2021. There are interim steps that could allow parts of the economy to thaw, but Trump isn’t saying much about them.