Friday, February 28, 2020
One nasty coronavirus side effect seems to be that it makes government officials forget how to act. Like the bug itself, this epidemic of shaky leadership is spreading quickly around the world.
As with Covid-19, the clumsiness began in China, where authorities spent the contagion’s early days denying anything was wrong. They got their act together soon enough, enacting drastic quarantine measures, but too late to stop the disease. By then, the World Health Organization had caught China’s overly optimistic attitude. It still won’t call the virus a pandemic, though it increasingly walks and quacks like one. The WHO’s desire to mollify China, a major donor, and avoid a panic have outweighed its need to protect public health, writes Therese Raphael. It’s got to get its priorities straight.
President Donald Trump too has overindulged in coronavirus denialism, with optimistic promises his health agencies, and events, almost immediately contradict. He had a chance to get everybody singing from the same hymnal last night in a news conference, in which he could have reiterated that the disease isn’t the end of the world, while also urging Americans to prepare. Instead, he rambled and ranted at his enemies and gave Vice President Mike Pence the keys to Virus Busters HQ while immediately undercutting his authority, writes Jonathan Bernstein. It was not reassuring.
The administration does seem closer to embracing reality, at least, Max Nisen writes. But its messages remain too mixed, and there’s still not enough action being taken. The disease will quickly test Trump’s claims it’s all under control.
The real poster child for irresponsible coronavirus leadership must be Iran, though, writes Bobby Ghosh. Its deputy health minister, who was caught feverishly sweating on camera even as he tried to downplay the disease, infected who knows how many people all by himself. The regime has been too blithe about the illness; and given how widely Iranians travel throughout the region and the world, this carelessness is a global health problem. It probably won’t be the last.
Further Dubious Virus Response Reading: Hong Kong’s stimulus seems designed more to boost already overinflated property values than to fight virus effects. — Andy Mukherjee
Stocks spent another day being slapped around by coronavirus headlines. All told in this sell-off, the major indexes have lost more than 10%, the technical definition of a “correction,” with the pain intensifying after news California is monitoring 8,400 people for the disease. This volatility is just going to be the norm for a while, writes John Authers.
John says these market declines are still orderly, but you can bet a certain president of the United States doesn’t feel that way. He probably agrees with Narayana Kocherlakota’s call for the Federal Reserve to cut rates immediately to fight the virus’s effects on sentiment and economic activity. It risks losing credibility otherwise, Narayana writes.
Ordinarily a rate cut, or simply the promise of one, would be enough to turn markets around. But in this case it would provide only temporary support, warns Jim Bianco. The market won’t truly bottom until it finally stops responding to negative news quite so negatively. And it won’t do that until we have a better handle on the scope of the crisis. And that could take a while.
Further Virus-Market Nexus Reading: