Yesterday, Trump loyalist and failed nominee for the Federal Reserve, Stephen Moore, visited Fox News with some happy talk about the stock market, even as it was crashing amid coronavirus fears.
As the screen showed the market diving more than 800 points, Moore took a pause to “rejoice over this amazing jobs report today. I mean, this was one hell of a blockbuster report. It shows how healthy the economy was on the eve of this virus. I mean it shows that Trump tax cut and trade policies and deregulations have been working like a charm.”
Even Moore had to agree the coronavirus (COVID-19) “is certainly a danger to the economy.” But he told host Bill Hemmer, "It’s not the virus that’s hurting the economy, it is the fear of the virus. People, in my opinion, are over-reacting. I’m not saying that this isn’t serious but this idea, Bill, that every sports event is going to get canceled and people can’t gather, you know, for dinner and you can’t go out and everybody’s going to hibernate in their caves – that’s ridiculous.”
I am not one who’s panicking. In fact I drafted this post at my local public library, a germ incubator if ever there was one. But I prefer my economists not to accuse others of over-reacting to an epidemic that has been deadly for thousands worldwide and for 19 right here in the U.S.
Austan Goolsbee, an economist and member of President Barack Obama’s cabinet was the other guest. He was much more cautious. “We’ve had a tale of two economies,” he said, meaning that trade and manufacturing have been “pretty lousy” while “the great strength” has been the consumer and the record-high consumer confidence. But “If the coronavirus undermines consumer confidence,” he added, “we could have problems.”
Hemmer quickly interjected to prompt some Trump cheerleading: “It seems as if the White House is saying that we were built for this slowdown, Stephen. Are we?”
Why, surprise! Moore, assured us the glories of Trump’s economies are untarnished, despite the fact “there’s no question, Bill, people are going to lose jobs and we’re gonna see some layoffs in March and probably in April.” He also acknowledged that businesses have hit “a brick wall” lately.
But those are molehills in the landscape of Trump’s glories! Moore continued, “Look at the construction numbers, they’ve been fantastic. We’ve been in one of the biggest housing booms in the country’s history. Technology is doing fantastic,” Moore gushed. He claimed the economy’s “in very sturdy shape to deal with [COVID-19]."
Hemmer asked Goolsbee if the market goes back to “the big old days” once the epidemic is over.
“I hope so,” Goolsbee said, but it depends on how long it lasts. If it’s just a few months, he predicted the market would “come booming back.” But, he warned, in China, “a lot of service sector businesses have actually started going broke because they couldn’t survive having their business all dry up for a short period.” If the virus causes a financial crisis, “the recession from it would potentially be longer lived,” he said.
“So, you’re putting a period of one to two months,” Hemmer replied, which is so not what Goolsbee said.
Moore admitted, “We really don’t know how long this will last.” But he predicted, not surprisingly, that once the situation is stabilized, “the economy’s going to boom back to life.”
But that was not enough cheerleading for Moore. “By the way, Bill, I’m not a stock adviser,” he began, “but I love the stock market right now with these depressed prices. If you’re in the market, Bill, you know, for your retirement funds, or for five or ten or 20 years, you buy stocks today, you’re going to love it in five years from now. That’s my advice!”
Goolsbee was horrified. “I wish you wouldn’t say that,” he interrupted.
But Hemmer tried to validate Moore. “Up 12 or 14 % - is this a buy, Austan, quickly – yes or no.”
“Look, they need to stop saying stuff like that,” Goolsbee responded. “The White House getting up and saying, oh, it’s a time to buy. Look, all you can do is make yourself look bad and destroy your whole credibility by saying things where there are such big uncertainties.”
Moore interrupted. “All I’m saying is that, yeah, if you’re investing for six months or a year, you may want to stay clear of the market. What I’m saying Austan - you know this Austan, it’s stocks for the long run.”
I'm no expert on the stock market or on epidemics. But I do know that the average age of Fox viewers is 65. That means they are not likely in a position to be speculating with their retirement funds.
You can watch the irresponsible shilling below, from the March 5, 2020 Bill Hemmer Reports.