Trump's Bout With Covid Sends Political Wheels Spinning
Early reports that President Trump was suffering only from "light" symptoms of Covid-19 proved overly optimistic. Late Friday a helicopter whisked him from the White House south lawn to Walter Reed Hospital, said to be the most state-of-the-art medical facility in the world. A masked Trump insisted on being filmed walking to the chopper, and released a video in which he said he is doing well. Doctors at Walter Reed agree, and when asked by a member of the media scrum why, if he is doing so well, Trump was admitted to the hospital, one said, "Because he is President of the United States," a phrase that likely has deeper meaning for the physician than for the reporter.
No Traffic Jam For The President
Source: France 24
He has not transferred power to the vice president nor, unusually, formally notified house speaker Nancy Pelosi, third in the line of succession. Doctors and staff say he is working away in the fully equipped office that is part of the six-room suite the hospital maintains for patients who also happen to be Presidents of the United States.
Pelosi announced she is praying for the President, as did Joe and Jill Biden, both of whom had been exposed to an unmasked President and his entire family during Tuesday's debate (the rules required masks but the Trump family ignored them). Angela Merkel sent her best wishes, as did MSNBC's Rachel Maddow, both despite their differences with the President. Others were less pleasant: Xi Jinping's media announced the President and the first lady "paid the price for [Trump's] gamble to play down the Covid-19"; filmmaker Michael Moore suggested Trump is lying in order to gain sympathy before the election; Bette Midler said Trump might be trying to get out of the next debate. Twitter is suspending users who "wish death" on the virus-stricken President.
The usual announcements out of the way, Washington and Wall Street turn to the effect of the Trump illness on things in which they are really interested. Start with the politicians. The most immediate reaction was to seek reassurance that vice president Pence has not been affected - he tests negative. Since he is the potential successor to an overweight, 74-year old patient, famous for a less-than-optimally healthy life style, classified as a "vulnerable", and since the incubation period is prolonged, Spence will be tested repeatedly. So will all those who engaged in maskless debate prep sessions, members of the president's security service, attendees at rallies, and the massive White House staff. Meanwhile, doctors at Walter Reed report Presidential vital signs that seem to belie - or perhaps enable - his life style.
From there it is on to things that really matter. Top of the list for politicians is the election. Trump's illness is seen as a negative for his already poor chances of wiping out Biden's lead. For one thing it shifts attention from the former vice president's health and possible incapacity to his own. For another, it makes his anti-mask policy and insistence on ignoring social distancing in favour of shoulder-to-shoulder mass rallies seem reckless, not an attractive characteristic of a man with access to the nuclear button. In short, hold the details: Biden was right, Trump was wrong on the most important issue in this election. There is a mindless quality to that reasoning. After all, the signal provided by the President's infection should be laid against the cost of Biden's proposed shuttering of the economy, borne largely by lower earners who cannot work from home.
Still another reason the illness will damage Trump's chances is that it will diminish the force of his argument that reopening state economies is more in the nation's interest than taking the advice of "the scientists" and Biden to shut down the economy. There might not be any reason why the President's affliction should affect the pace of reopenings, but we are dealing with Washington, which does not specialize in rational argument.
There might be greater reason to worry about the confirmation of Amy Coney Barrett, nominated by Trump to fill the Supreme Court seat vacated by the death of Ruth Bader Ginsburg. Republican senators Mike Lee (Utah), Ron Johnson (Wisconsin), and Thom Tillis (north Carolina) have tested positive for Covid-19, and in the unlikely event that they will unable to cast ballots the Republican majority in favor of confirmation, already shriveled by two defections, would evaporate. So far, senator Lindsey Graham, chairman of the Judiciary Committee, says the confirmation hearings will remain on track. Judge Barrett, who contracted the disease late this past summer, recovered, and has been teaching her classes at Notre Dame, is regularly testing negative.
Then there is the relief bill. Most observers believe that Trump's illness increases the until-now slim chance that a relief bill will emerge from negotiations between treasury secretary Steve Mnuchin and House Speaker Nancy Pelosi, although few can explain why that would be so. More important is that Pelosi's insistence on cash to bail out profligate state and city governments received a boost from reports on Friday that government employment declined by 216,000 in September, creating images of laid-off cops, firemen and other essential workers. Add that her bill would provide $75 billion more for testing and there is a real possibility that by the time you read this a relief bill will pass, and an even greater possibility that one aimed only at preserving jobs for airline workers will be on the books. Why flight attendants, pilots and supporting cast are more worthy of protection than other workers is not clear, although their powerful unions, the presence of airline employees in many constituencies cannot be ignored as an explanation.
Turn to the markets. Markets abhor uncertainty, and a presidential illness certainly produces it. Witness the efforts of the Woodrow Wilson and FDR teams to hide the seriousness of their man's illness, and of John F. Kennedy and his team to conceal his multiple illnesses, among other things, from the public and investors. Of course, concealment would be more difficult today, in the presence of a media with a lesser regard for personal privacy and greater interest in negative news about the President.
The immediate effect of Trump's announcement is difficult to divine. Markets fell, but the magnitude was not very different from the volatility that the markets have been exhibiting in recent weeks. Most experts say it would be foolish to sell on that downtick, since the long-run effects of the President's illness on the economy will be between indiscernible and nil compared with progress in developing and distributing a vaccine.
Unless ... some analysts have it right when they argue that Trump's electoral prospects have gone from dim to dimmer, and that a Biden presidency would be good for share prices. Trump is chaos and uncertainty incarnate, most recently unsettling even his own supporters by suggesting that he might deem the election so rigged that he would refuse to leave were he to lose; Biden exudes calm and moderation. His election, said one wag during the primary season, will produce a national sigh of relief.
More important, a President Biden will ramp up spending by considerably more than he will raise taxes, giving the economy and share prices a boost, even if it is only a temporary sugar high from his looser fiscal policy. So goes the argument that the bad news for Trump is good news for the economy and share prices.
All of this is playing out against the background of an economy that continued to expand in September for the fifth consecutive month. Both the service and manufacturing sectors report solid growth. Sales both of new and existing homes are at levels not seen since 2006. Business investment is at pre-Covid levels, and August retail sales were 2.6% above 2019 levels. The private sector added 877,000 jobs last month and the unemployment rate fell from 8.4% to 7.9%. That matters more to investors and perhaps to voters than Trump's indisposition, at least as it is now described. Perversely, Trump's problem could accelerate the economy's growth: if it increases the use of masks and social distancing, which in turn would reduce the spread of the virus, it would bring forward the date at which the economy fully recovers.