Economy

Everything is Fine, Kudlow Says

SK Ashby
Written by SK Ashby

Centers for Disease Control and Prevention (CDC) officials say Americans should be prepare for "severe" disruptions to daily life if the coronavirus spreads throughout communities in the United States; a possibility that officials believe is just a matter of when.

The data over the past week about the spread in other countries has raised our level of concern and expectation that we are going to have community spread here,” Dr. Nancy Messonnier, the CDC’s head of respiratory diseases, told reporters on a conference call.

What is not known, she said, is when it will arrive and how severe a U.S. outbreak might be. “Disruption to everyday life might be severe” and businesses, schools and families should begin having discussions about the possible impact from the spread of the virus, Messonnier cautioned. [...]

In a teleconference later on Tuesday, Dr. Anne Schuchat, the CDC’s principal deputy director, said that while the immediate risk in the United States was low, the current global situation suggested a pandemic was likely.

It’s not a question of if. It’s a question of when and how many people will be infected,” Schuchat said.

So, that's what the experts say. But what does non-expert Larry Kudlow say?

Trump's top economic adviser, who is almost always wrong, says the Trump regime has placed an "airtight" lid on the virus and it's not a threat to the economy.

We have contained this. I won’t say airtight, but it’s pretty close to airtight,” Kudlow told CNBC’s Kelly Evans on “The Exchange.” He added that, while the outbreak is a “human tragedy,” it will likely not be an “economic tragedy.”

The market dropped by over 1,700 points between Monday and Tuesday when Kudlow said this. Treasury yields have also dropped to an all-time record low.

It's not as if the word of Goldman Sachs is law, but the world's second largest investment has informed their clients that they expect economic growth will fall to 1.2 percent because of the virus. And that was before the CDC's warning to the public.

Kudlow also told CNBC that the U.S. economy will avoid a recession even if the virus causes a global recession, but I personally can't place much value in Kudlow's assessment. His words feel like the kiss of death more often than not.

I don't know what's going to happen next regarding the virus and its impact on the global economy, but we're seeing two entirely different messages from the Trump White House and health care officials. It's the former's propensity to declare that everything is fine that concerns me the most.