A Virus Spreads, Stocks Fall, and Democrats See an Opening to Hit Trump

WASHINGTON — Democratic presidential candidates have seized on President Trump’s response to the spreading global coronavirus outbreak, and the growing threat it poses to America’s record-long economic expansion, to attack the president on what has been his greatest strength with voters: the economy.

Until last week, the candidates had largely attacked Mr. Trump’s economic management on inequality grounds, at a time when growth has been steady and unemployment has sunk to a half-century low. But they have begun to attack his stewardship more directly after fears over the effects of the virus dealt stock markets their worst week since 2008 and forced Federal Reserve officials to reassure investors that they were considering interest rate cuts to combat a potential growth slowdown.

Two candidates in desperate need of delegates on Super Tuesday, Senator Elizabeth Warren of Massachusetts and former Mayor Michael R. Bloomberg of New York, revamped their stump speeches in recent days to aggressively attack Mr. Trump’s handling of the issue and portray themselves as the type of president the United States needs to endure a potential economic and public health crisis.

Mr. Trump has played down the virus, insisting several times last week that it might not spread any further in the United States, and the economic threats from it. And he has lashed out at Democrats, saying they were the ones spooking investors.

“Stock Market starting to look very good to me!” he tweeted on Monday, before four more days of losses. As markets continued to slide, he and members of his administration encouraged Americans to buy stock. “The market will all come back,” Mr. Trump told reporters on Saturday. “The markets are very strong. The consumer is unbelievably strong.”

Mr. Bloomberg told a Democratic Party dinner in Charlotte, N.C., on Saturday night that “the White House is endangering lives and hurting our economy” in its response to the virus. He has reserved three minutes of paid network airtime on Sunday evening to address the nation on the subject.

“We all know the stock market has plunged out of fear,” Mr. Bloomberg said in Charlotte, “but also because investors have no confidence that this president is capable of managing the crisis.”

Ms. Warren, who warned last summer that the economy could be tipped into recession by an outside shock, also called the virus an economic crisis in a speech Saturday night in Houston. She called for targeted stimulus measures, including direct support from Congress to businesses that have seen supply chains disrupted by quarantines and factory shutdowns in Asia, and low-interest loans from the Fed “to companies that agree to support their workers and that need a little help to make it through the next few months.”

“The impact on our families, particularly on babies and elderly people and people with other health challenges, could be severe” from the spread of the virus, she said. “And the impact on our economy could also be brutal, putting jobs at risk, threatening savings, undermining economic stability and even potentially destabilizing our giant, globally interconnected banks.”

The front-runners in the race, Senator Bernie Sanders of Vermont and former Vice President Joseph R. Biden Jr., who won the South Carolina primary Saturday, have also criticized Mr. Trump’s management of the virus response. They have focused less than Ms. Warren and Mr. Bloomberg on the economic effects and have emphasized public health issues.

Asked on Friday in a CNN interview how bad he thought the economic woes from the virus could get, Mr. Biden replied, “Well, I’m less concerned about the immediate economic impact than I am about whether or not we gain control of this.” He went on to criticize the Trump administration’s response. “The concern is: Do they have any idea what they’re doing?”

None of the candidates have changed their core economic platforms, which to varying degrees all call for trillions of dollars in new taxes on the wealthy and on businesses to fund programs meant to help the middle class and the poor. And they have often cited threats from the virus as new evidence to support the need for their plans, such as universal health care.

Mr. Sanders said in a tweet last week that the outbreak showed that “it has never been more important to finally guarantee health care as a human right by passing Medicare for All.”

Mr. Trump has called for the Federal Reserve to slash interest rates, though some economists caution that such a move may have a limited effect. And he has hinted at middle-class tax cuts, though tax experts who have spoken with the administration see the effort as more of a campaign centerpiece than an immediate stimulus package.

Democratic strategists say the virus — and its potential economic effects — have given candidates a new opportunity to criticize Mr. Trump’s management abilities.

“Candidates are right to be critical when the president and his economic team are whistling past the graveyard and putting out happy talk about the economy when it’s clear that a significant disruption is happening globally,” said Ben LaBolt, a partner at Bully Pulpit Interactive who was the press secretary for President Barack Obama’s 2012 re-election campaign. “There’s no doubt it could be a defining issue of the campaign.”

Economic forecasters say the spread of the virus in China — and the supply chain disruptions it has already caused — will at least temporarily slow growth around the world, including in the United States, this year.

Some economists expect the U.S. and global economies to rebound in the second half of the year, with minimal lasting damage: Goldman Sachs and Bank of America researchers have marked down their forecasts for U.S. growth this year by 0.1 percent because of virus effects.

Still, Goldman Sachs economists warned in a research note last week that “the risks are clearly skewed to the downside until the outbreak is contained.”

Morgan Stanley researchers said on Friday that in a worst-case scenario, where the virus spreads more widely across countries and sectors of the economy, growth could slow to a near halt in the United States for much of this year, resulting in a 0.5 percent growth rate overall in 2020, which would be the worst since the financial crisis. The unemployment rate would climb back above 5 percent in that projection.

Such a slowdown could hamstring Mr. Trump’s re-election prospects. Voters give him significantly higher marks on economic management than his overall performance as president.

That strength, and a relative lack of interest in economic issues among Democratic voters, has complicated candidates’ efforts to criticize Mr. Trump on his signature issue.

Some pockets of the Democratic electorate, particularly black voters, rate the economy as their top concern, according to a new nationwide poll conducted for The New York Times by the online research firm SurveyMonkey. But Democratic voters overall rate health care and the environment as more important issues. They are about half as likely as independent voters to call the economy a top issue.

Over the course of the campaign, Democratic candidates have generally sought to emphasize that the strong economy was not being felt by ordinary Americans, who they insisted were struggling to make ends meet. Several candidates blame Mr. Trump’s trade war with China for hurting American workers. Mr. Sanders and Ms. Warren have called for broad transformations of the economy, with far steeper taxes on wealthy people and corporations. The leading Democratic candidates are all eager to raise taxes on the rich, though they disagree about how far to go with increases.

Mr. Bloomberg and Ms. Warren levied more direct attacks this weekend, while championing their own qualifications to steer the country through economic tumult. Mr. Bloomberg said he had dealt with public health and economic crises as a mayor, as a philanthropist and as the leader of his business, Bloomberg L.P., “so I understand the economic damage that bad policies can cause.”

Ms. Warren said on Saturday night that the crisis demanded a more skilled leader than Mr. Trump or several of her Democratic rivals, taking shots at Mr. Sanders, Mr. Biden and Mr. Bloomberg. The moment required “someone whose core values can be trusted, who has a plan for how to govern and who can actually get it done,” she said.

Mr. Trump, in turn, has blamed his Democratic rivals for unnerving investors. “I think they’re not very happy with the Democrat candidates, when they see them,” he told reporters on Friday. “I think that has an impact.”

Jim Tankersley reported from Washington, and Thomas Kaplan from Charlotte, N.C.



Source link