The response of the U.S government to the corona virus

Given that the corona virus chose the election year to appear in the U.S., it is instructive to examine the response of the U.S. authorities.

Specifically, the authorities, are driven by two goals:

1. Prove that the government can handle Corona
2. Prove that the Corona presence in the U.S. will not lead to justify stock market collapse.

Since a failure in achieving one of the goals will weigh heavily on Trump’s re-election chances, the best option for the U.S. government is to deny the existence of the problem and to reassure the public. Thus, we can identify 3 separate efforts aimed at calming the population before shit hits the fan in fullest.

First, there is the commander in chief, Trump, attempting to jawbone the markets higher through the voice of Larry Kudlow. Larry chimed in on 28th February, saying that “Stocks looks pretty cheap”. Here, I must ask- cheap in comparison to what exactly? If a mere 10% correction makes the stocks cheap (as opposed, to say, a 50% plunge), then the situation of the economy and the stocks must be excellent.

Secondly, Trump is also urging the Fed to cut rates, which the market has already priced in. This is also a purely cosmetic move, as even Trump realizes (he is far from being stupid), that printing money does nothing when the supply of goods stops due to a literal death threat.

CDC response is hardly any better, test kits are not delivered, and in a historical re-run of “don’t ask, don’t tell” no one is reporting anything. The call to “stop buying masks” should be viewed in the same vein – do not create the semblance of panic, because if you do, others who do not panic yet, may join the fun. While some moves are made and telegraphed, they intend to show that everything is under control.

In conclusion: U.S. government is very much afraid to upset the apple cart of public confidence, and due to already shaky economic situation it cannot say the truth outright.

It will be interesting to compare U.S. response of pretending to the response of the Chinese and Iranian authorities. I’ll try to do it in the next post.