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White House Kept Public in the Dark While Warning Donors of the Threat the Virus Posed to the Economy; American Families Still Wait for Relief After Trump Ran Economy Into the Ground

By October 15, 2020No Comments

White House Warned GOP Donors of Virus Threat in February, Igniting Stock Selloffs 

While GOP Donors Protected Themselves, More Than 64 Million Americans Have Filed for Unemployment Since March

8 Million Americans Have Fallen Into Poverty Since May

Trump, Senate Republicans Still Refuse to Provide Relief for Americans 

The coronavirus pandemic has wreaked havoc on American families. Beyond the fact that 8 million people in the United States are infected and that 216,000 have died, millions more are struggling amid the economic fallout that President Trump made worse by failing to contain the virus. 

64 million people have filed for unemployment benefits since this crisis began. 8 million Americans have fallen into poverty since May, when the White House and Senate Republicans failed to take up legislation that would have offered relief to families and workers.

And now, Americans are learning that as President Trump was publicly lying about the threat of the virus and refusing to take action to contain its spread, members of his administration were privately offering doomsday briefings to an elite inner circle of Republican donors who went on to “short” crumbling stocks and profit off of the country’s economic collapse.

While Publicly Downplaying the Seriousness of the Virus, the White House Was Warning Republican Donors About the Threat It Posed to the Economy

  • On February 7, Trump Acknowledged Privately To Journalist Bob Woodward That The Virus Was “Deadly Stuff” And More Than Deadly Than The Flu. “President Donald Trump acknowledged the ‘deadly’ nature of the coronavirus earlier this year in a series of recorded interviews with The Washington Post’s Bob Woodward, even as Trump publicly sought to dismiss the disease’s threat to Americans. Recounting a conversation with Chinese President Xi Jinping, Trump told Woodward on Feb. 7 that the coronavirus is ‘more deadly than your, you know, your — even your strenuous flus.’”  [Politico, 9/9/20]
  • On February 24, Weeks After Privately Calling The Virus “Deadly Stuff”, Trump Publicly Declared That The Coronavirus Was “Very Much Under Control” And That The Stock Market Was “Starting To Look Very Good.” “On the afternoon of Feb. 24, President Trump declared on Twitter that the coronavirus was ‘very much under control’ in the United States, one of numerous rosy statements that he and his advisers made at the time about the worsening epidemic. He even added an observation for investors: ‘Stock market starting to look very good to me!’” [New York Times, 10/14/20]
  • But Hours Earlier On February 24, Senior Members Of Trump’s Economic Team Warned The Conservative Hoover Institution That The Virus Would Have A Worse Effect On The US Economy Than The Administration Was Saying Publicly. “But hours earlier, senior members of the president’s economic team, privately addressing board members of the conservative Hoover Institution, were less confident. Tomas J. Philipson, a senior economic adviser to the president, told the group he could not yet estimate the effects of the virus on the American economy. To some in the group, the implication was that an outbreak could prove worse than Mr. Philipson and other Trump administration advisers were signaling in public at the time.” [New York Times, 10/14/20]
  • On February 25, Larry Kudlow Again Indicated To Board Members Of The Hoover Institution — Many Of Whom Were Republican Donors — That Things Might Be Worse Than The Administration Publicly Admitted, Causing A Hedge Consultant To Began Circulating A Memo About The Severity Of The Virus.  “The next day, board members — many of them Republican donors — got another taste of government uncertainty from Larry Kudlow, the director of the National Economic Council. Hours after he had boasted on CNBC that the virus was contained in the United States and ‘it’s pretty close to airtight,’ Mr. Kudlow delivered a more ambiguous private message. He asserted that the virus was ‘contained in the U.S., to date, but now we just don’t know,’ according to a document describing the sessions obtained by The New York Times. The document, written by a hedge fund consultant who attended the three-day gathering of Hoover’s board, was stark. ‘What struck me,’ the consultant wrote, was that nearly every official he heard from raised the virus ‘as a point of concern, totally unprovoked.’” [New York Times, 10/14/20]
  • New York Times: “The President’s Aides Appeared To Be Giving Wealthy Party Donors An Early Warning Of A Potentially Impactful Contagion At A Time When Mr. Trump Was Publicly Insisting That The Threat Was Nonexistent.” “The consultant’s assessment quickly spread through parts of the investment world. U.S. stocks were already spiraling because of a warning from a federal public health official that the virus was likely to spread, but traders spotted the immediate significance: The president’s aides appeared to be giving wealthy party donors an early warning of a potentially impactful contagion at a time when Mr. Trump was publicly insisting that the threat was nonexistent.” [New York Times, 10/14/20]
  • The New York Times Reported That A Memo Written By An Attendee Of The Meeting Between Trump Aids And The Hoover Institution Helped Elite Traders “Gain Financial Advantage During A Chaotic Three Days When Global Markets Were Teetering.” “Interviews with eight people who either received copies of the memo or were briefed on aspects of it as it spread among investors in New York and elsewhere provide a glimpse of how elite traders had access to information from the administration that helped them gain financial advantage during a chaotic three days when global markets were teetering.” [New York Times, 10/14/20]
  • The New York Times Reported That Information About The Virus That Was Relayed To The Hoover Institution By Trump Aides Caused Investors To “Short Everything.” “To many of the investors who received or heard about the memo, it was the first significant sign of skepticism among Trump administration officials about their ability to contain the virus. It also provided a hint of the fallout that was to come, said one major investor who was briefed on it: the upending of daily life for the entire country. ‘Short everything,’ was the reaction of the investor, using the Wall Street term for betting on the idea that the stock prices of companies would soon fall. That investor, and a second who was briefed on the Hoover meetings, said that aspects of the readout from Washington informed their trading that week, in one case adding to existing short positions in a way that amplified his profits.” [New York Times, 10/14/20]

Trump’s Failure to Contain the Virus and His Attempts to Play It Down Have Had Disastrous Effects on the Economy and Forced Millions to File for Unemployment

  • More Than 64 Million Americans, Roughly 40% Of Nation’s Labor Force, Has Filed For Unemployment Since March. “More than 64 million Americans — roughly 40% of the nation’s labor force — have sought jobless aid since the coronavirus lockdowns began in mid-March.” [Fox News, 10/15/20]
  • Roughly 1 Million Unemployed Americans Have Sought Aid Every Week For The Past Six Months. “Roughly 1 million unemployed Americans have been seeking aid each week for the past six months, when the COVID-19 crisis triggered an unprecedented shutdown of the nation’s economy, pointing to a sluggish turnaround. It’s down from the peak of more than 6 million claims in late March, but remains well above the 200,000 reported in February. Before the pandemic, the record high was 695,000, set in 1982.” [Fox News, 10/15/20]
  • There Are Roughly 10.7 Million More Americans Out Of Work Than There Were Prior To The Pandemic. “There are still roughly 10.7 million more out-of-work Americans than there were in February before the pandemic hit.” [Fox News, 10/15/20]
  • Food Insecurity Has Doubled Overall And Tripled Among Families With Children Since The Beginning Of The Pandemic. “What Martin is seeing in Mississippi has been happening all over the country. A June report by the Institute for Policy Research (IPR) at Northwestern University found that food insecurity had doubled overall and tripled among families with children due to the pandemic, relying on data from the U.S. Census Bureau’s Household Pulse Survey. One of the authors of that report, IPR director Diane Whitmore Schanzenbach, wrote in a September report for the Food, Research and Action Center that the number of adults who reported that members of their family often did not have enough to eat rose from nearly 8 million in 2018 to between 26 and 29 million between this April and July.” [CBS News, 10/15/20]
  • Researchers At Oxxford Information Technology Ltd. Projected That As Many As 1.4 Million Small Businesses Had Closed Since The Beginning Of The Pandemic And That 4 Million Would Close By The End Of The Year. “The stakes are rising. More than 150,000 Americans have died from Covid-19. Its spread has forced many small firms to cease or curb their operations. As many as 1.4 million small businesses closed their doors or temporarily suspended operations in the second quarter, according to Oxxford Information Technology Ltd. in Saratoga, N.Y., which tracks more than 26 million U.S. businesses with less than $10 million in annual revenue. Oxxford expects that as many as 4 million small businesses could be lost in 2020.” [Wall Street Journal, 8/1/20]
    • The United States’ Economy Experienced The Worst Economic Downtown On Record In The Second Quarter Of 2020 With The Gross Domestic Product Contracting 32.9. “Gross domestic product from April to June plunged 32.9% on an annualized basis… It was the worst drop ever, with the closest previously coming in mid-1921… Neither the Great Depression nor the Great Recession nor any of the more than three dozen economic slumps over the past two centuries have ever caused such a sharp drain over so short a period of time. By comparison, the worst quarter during the financial crisis of 2008 was the 8.4% GDP drop in the fourth quarter of that year. The previous low-water mark was a 10% slide in the first quarter of 1958, while the worst in recorded history came in Q2 of 1921.” [CNBC, 7/30/20]
  • Eight Million Americans Have Fallen Into Poverty Since May, After Federal Aid Ran Out And As Mitch McConnell Failed To Take Up Legislation That Would Offer More Relief. “After an ambitious expansion of the safety net in the spring saved millions of people from poverty, the aid is now largely exhausted and poverty has returned to levels higher than before the coronavirus crisis, two new studies have found. The number of poor people has grown by eight million since May, according to researchers at Columbia University, after falling by four million at the pandemic’s start as a result of an $2 trillion emergency package known as the Cares Act.” [New York Times, 10/15/20]

Despite That 8 Million Americans Have Fallen Into Poverty Since the House Passed the HEROES Act, President Trump and Senate Republicans Still Refuse to Take Action to Help Americans Who Are Suffering

  • On October 15, Senate Majority Leader Expressed That He Was Not Willing To Make A Deal On A Coronavirus Relief Package. “McConnell specifically asked if there can be a compromise in the $1.8T-$2.2T range: ‘I don’t think so … That’s where the administration’s willing to go. My members think what we laid out, a half a trillion dollars, highly targeted, is the best way to go.’” [Twitter, @ericawerner, 10/15/20]
  • On October 6, Trump Announced That He Was Withdrawing From Economic Relief Talks Until After The Presidential Election Only To Backtrack Hours Later And Advocate For “Some Additional Assistance.” “I have instructed my representatives to stop negotiating until after the election when, immediately after I win, we will pass a major Stimulus Bill,” Mr. Trump wrote Tuesday on Twitter. Mr. Trump’s tweets appeared to end the long-running effort between House Speaker Nancy Pelosi (D., Calif.) and Treasury Secretary Steven Mnuchin to negotiate an agreement on another trillion-dollar-plus coronavirus relief deal. But late Tuesday Mr. Trump appeared to backtrack, calling on Congress to approve some additional assistance for airlines and a small-business aid program.” [Wall Street Journal, 10/7/20] 
  • It Has Been 153 Days Since House Democrats Passed The HEROES Act Aimed At Providing Help To Struggling Families While Trump, Senate Republicans Have Yet To Provide A Relief Bill. “House Democrats on [May 15] passed a $3 trillion tax cut and spending bill aimed at addressing the devastating economic fallout from the coronavirus outbreak by directing huge sums of money into all corners of the economy. But the White House and Senate Republicans have decried the measure’s design and said they will cast it aside, leaving uncertain what steps policymakers might take as the economy continues to face severe strains.” [The Hill, 5/15/20]
  • Millions Of Jobless Americans Will Run Of Unemployment Benefits By The End Of The Year Unless Congress Passes A New Economic Relief Package. “A failure by Congress to enact a new economic relief package would prolong the pain of the coronavirus crisis for many Americans, but those without jobs face a special threat — millions could run out of unemployment benefits altogether by the end of the year.” [Politico, 10/14/20]