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Ex-Obama advisor: 'Take phone out of Trump's hand,' warns he's 'going to blow up the economy'

Ethan Wolff-Mann
·Senior Writer
·3 mins read

On Tuesday, President Trump fired off a tweet at 2:48 p.m. ET that sent the S&P 500 (^GSPC) down almost 2% in a flash.

“I have instructed my representatives to stop negotiating until after the election when, immediately after I win, we will pass a major Stimulus Bill that focuses on hardworking Americans and Small Business,” he said in a series of tweets.

A large swath of the country needs stimulus, and fast. Fed Chair Jerome Powell and pretty much the rest of the Federal Reserve said it’s needed. Urging Congress for more support, Powell said Tuesday there is “little chance of overdoing” a fiscal response to the current crisis that still has millions of people unemployed and poor prospects for the future.

Austan Goolsbee, a professor of economics at the University of Chicago’s Booth School of Business and former chairman of the Council of Economic Advisers under President Barack Obama, told Yahoo Finance that Trump needs to stop tweeting immediately.

“Get the phone out of the man’s hands,” Goolsbee said. “He’s been in the hospital — he is on medication. He should not be tweeting out things that will blow up our economic recovery. His own team knows that.”

For some time, Goolsbee and other experts have pointed out that to fix the economy, you need to fix the virus, and in the meantime it’s important to help keep businesses and households afloat while the vaccine effort continues. It’s a strategy that has worked well in Europe — and the first stimulus was widely seen as a success in the U.S.

U.S. President Donald Trump pulls off his protective face mask as he poses atop the Truman Balcony of the White House after returning from being hospitalized at Walter Reed Medical Center for coronavirus disease (COVID-19) treatment, in Washington, U.S. October 5, 2020. REUTERS/Erin Scott     TPX IMAGES OF THE DAY
President Donald Trump pulls off his protective face mask as he poses atop the Truman Balcony of the White House after returning from being hospitalized at Walter Reed Medical Center for coronavirus disease (COVID-19) treatment, in Washington, October 5, 2020. REUTERS/Erin Scott

“I hope that the president's allies are coming back and saying the economy will need some rescue and relief if we can't get control of the spread of the virus, which we haven't,” said Goolsbee. “If we don't get that rescue and relief, I do think the economy will stall out.”

"If they're not actually negotiating, there's not going to be a bill," Goolsbee said.

The way that Trump positioned the tweets, however, rubbed Goolsbee the wrong way, as it implied that if he lost the election, a stimulus would not be forthcoming until the next president.

“That was a barely-veiled threat,” Goolsbee said.

The question of how much money is needed to keep the economy afloat remains a key consideration. The $2.2 trillion CARES Act essentially identified the “run rate” of the partially-shut down economy to keep it on life support and if that is delivered, and the virus is at least kept in check, Goolsbee thinks the non-face-to-face labor market can get back to normal, and the stimulus would continue to help those in the face-to-face industries.

Ethan Wolff-Mann is a writer at Yahoo Finance focusing on consumer issues, personal finance, retail, airlines, and more. Follow him on Twitter @ewolffmann.