Trump Proposes Fighting Coronavirus With Tax Cuts – tells Americans to take cruises to “certain locations” but not “other locations”
Here is what economists were saying about Coronavirus three days ago:
Leadership is key in a crisis. In order to avoid a recession, information should be clear, transparent, and accurate. Action should be proactive. My sense is the administration will slow track a fiscal response and try to embrace ineffective policies. For example, enacting corporate tax cuts would be bad policy – it would take many months to have an impact, and the cuts would target the wrong segment of the economy.
Here is Trump yesterday, saying Coronavirus is “not our fault”:
Speaking from the White House press briefing room the same day the Dow Jones experienced a record drop amid concerns that the growing coronavirus pandemic will result in a worldwide economic slowdown, the president said that he’d be speaking with Congress on Tuesday about some “dramatic” measures to stimulate the economy.
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“We’re also working with the industries including the airline industry, the cruise ship industry which obviously will be hit,” Trump declared. “We’re working with them very, very strongly. We want them to travel. We want people to travel to certain locations and not to other locations at this moment.”
“Hopefully that will straighten out sooner rather than later, but we’re working with the industries and in particular those two industries,” he continued. “We’re also talking to the hotel industry and some places actually will do well and some places probably won’t do well at all but we’re working also with the hotel industry.”
“Whether it be working with small companies, large companies, a lot of companies so that they don’t get penalized for something that’s not their fault,” he added. “It’s not their fault, it’s not our country’s fault. This was something that we were thrown into and we’re going to handle it and we have been handling it very well.”
Here is more on why we are headed for a prolonged recession:
Going on Recession Watch
by Calculated Risk on 3/09/2020 11:39:00 AM
As I noted in Predicting the Next Recession, the usual leading indicators are not useful if there is “a pandemic, significant military conflict, disruption of energy supplies for any reason, a major natural disaster (meteor strike, super volcano, etc), and a number of other low probability reasons”.
The reason I’m moving to Recession Watch now is a combination of the COVID-19 pandemic, and the response to the pandemic of the current administration.
Leadership is key in a crisis. Information should be clear, transparent, and accurate. Action should be proactive.
Usually the CDC leads the world in responding to a health crisis. However, the CDC was caught flat-footed this time. Testing for COVID-19 should already be ubiquitous and free for all (not just those with insurance). It appears testing will increase dramatically over the next several weeks, but the administration still needs to make testing free for all (otherwise the uninsured will avoid the test and spread the disease).
And the administration should have fiscal policies ready to go to address the economic impact of the health crisis. Here are my suggestions: Fiscal Policies to Address COVID-19. There is news out this morning that White House advisers will have a list of policy options for Mr. Trump today. My sense is the administration will slow track a fiscal response and try to embrace ineffective policies. For example, enacting corporate tax cuts would be bad policy – it would take many months to have an impact, and the cuts would target the wrong segment of the economy.
Before predicting a recession, we need to see how this unfolds. Perhaps COVID-19 will be seasonal like the flu and the economy will bounce back in the Summer. If that is the case, we will have time to prepare for a probable resurgence of the disease in the Fall. But that is a thin thread to pin our hopes.
Also – Oil Companies need a bail out:
How absurd is it to propose tax cuts at a time like this? It would be funny if it weren’t so pathetic. Also good luck in getting a payoff for Big Oil from the government, insane on it’s face it would enrage more then a few Americans. Me included.
The problem is that if oil prices crater, over-extended frackers will go bankrupt, causing the kind of domino effect we saw in 2008. Which means Wall Street’s brigade of lobbyists will be pushing har for more free money.
It was also absurd to cut taxes on the upslope of a recovery.
Yeah. That was dumb. These idiots are like the old pull-string dolls. “Tax Cuts! Tax Cuts! Tax Cuts!”
I mean, the idea that Larry Kudlow has an actual role in government is bonkers.