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This week in Trumponomics: The dark winter dawns

Rick Newman
·Senior Columnist
·4 min read

During the presidential debates in October, President Trump said the nation was “rounding the corner” on the coronavirus pandemic. Joe Biden was far more dour, warning that “a dark winter” was coming.

Trump was wrong and Biden was right. Voters normally prefer optimism over pessimism, but Biden may have won the 2020 presidential election because he’s deadly serious about a pandemic Trump has blithely dismissed. And it’s now clear Biden could face the worst moments of the crisis yet when he takes office on Jan. 20, 2021.

U.S. coronavirus caseloads have soared past 160,000 new diagnoses per day, and 1,500 deaths. The death rate isn’t quite as high as in the spring, when the virus was new and there were fewer tools for treating it. But we’re getting close. New York City may close its public schools all over again. The governors of Illinois and other states are warning of new stay-home orders. Hospitals are full in North Dakota and getting close in other parts of the upper Midwest. Most experts think this will all get worse, perhaps a lot worse.

But isn’t the economy rebounding faster than expected? Maybe not. Hiring has bounced back during the last couple months, but there are still 10 million fewer jobs than in February, before the pandemic hit. And people are still filing claims for jobless benefits at triple the pre-pandemic rate.

There are also new signs the exploding infection numbers are strangling the economy all over again. In early November, the Oxford Economics “recovery tracker” registered its largest decline since April. Economic conditions are deteriorating in 48 of 50 states as more consumers stay home and more businesses hunker down.

The Midwest is seeing a surge in cases. (Graphic: David Foster/Yahoo Finance)
The Midwest is seeing a surge in cases. (Graphic: David Foster/Yahoo Finance)

Forecasting firms are lowering their estimates of fourth-quarter economic growth. “The mounting wave of COVID-19 infections means the recovery is at risk of stalling over the coming weeks and months,” Capital Economics advised clients this week. Bars and restaurants have started hiring again, but that could go into reverse soon.

President Trump, sulking over his election loss, hasn’t said or done anything about the rising death toll and worsening crisis. President-Elect Joe Biden is forming his own coronavirus task force, with plans for stronger federal safety guidelines and better government coordination of resources once he takes office in January. Until then, more state and local ad hockery seems likely to be the norm, with governors, mayors and citizens all frustrated in their own way at the virus’s control over public life.

The United States is profoundly failing to manage the coronavirus, and the dark winter many health experts warned about is arriving. This week’s Trump-o-meter reads FAILING, the second-lowest grade. It should probably be SAD, except we need to hold that grade in reserve in case things get worse.

Source: Yahoo Finance
Source: Yahoo Finance

Trump seems to have given up on any effort to manage the virus, perhaps because losing two campaigns would be prohibitively difficult for him to acknowledge. But the coronavirus beat him, highlighting his leadership weaknesses and sinking his presidential campaign.

Encouraging news of progress on a Pfizer vaccine buoyed financial markets this week, but it will still be weeks before the government formally approves a vaccine and many months more before it’s widely available. Senate Majority Leader Mitch McConnell suggested that vaccine progress negates the need for a large fourth stimulus bill. But economists still think additional stimulus of $1 trillion or more is necessary to help people deal with prolonged unemployment, businesses that can’t fully reopen and bills that need to be paid.

Trump pushed for a big stimulus bill before the election, but he’s had nothing to say about that since. And it now looks like there may be no deal, big or small, before two runoff elections in Georgia in January that will determine the final two members of the Senate. There could be another 90,000 coronavirus deaths by then, with no corner in sight.

Rick Newman is the author of four books, including “Rebounders: How Winners Pivot from Setback to Success.” Follow him on Twitter: @rickjnewman. Confidential tip line: rickjnewman@yahoo.com. Encrypted communication available. Click here to get Rick’s stories by email.

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