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Trump Is Bad at Playing Cooperative Games

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Trump’s response to the coronavirus has been the same as his response to, well, most things.

  1. Claim that he’s got it handled
  2. Travel ban
  3. Lower interest rates
  4. Suggest fiscal stimulus in the form of tax cuts (preferably payroll)
  5. Replace officials with loyalists

More specifically, this is how a real estate charlatan (or LGM characterizations such as clown or semi-literate reality show host) might approach any problem. 

  1. Complaints about quality?  Deny.
  2. Problem tenants?  Evict them.
  3. Out of money?  Get a loan.
  4. Can’t pay back the loan?  Don’t pay taxes.
  5. Continued complaints about quality?  Blame your subcontractors.

The first and continued response from the Trump administration has been a near perfect imitation of Officer Barbrady: “nothing to see here”.  Trump’s rambling press conference included a number of nuggets of wisdom (wash your hands) and then cracking jokes about how coronavirus is way less dangerous than Ebola. 

Multiple sources indicated that a travel ban could backfire and that neither monetary nor fiscal policy would do much to solve the issues of the coronavirus.  Despite Trump’s efforts, the United States economy is still dependent upon a global supply chain.  No ships coming across the Pacific filled with electronics means there are simply no iPhones to sell, even if people have extra money in their pockets or take out a home equity loan.  Further, the glut of empty cargo containers upon which US exporters rely for cheap transport is all dried up.  Moreover, fiscal stimulus and easy monetary policy would remove critical tools to respond to whatever global recession might emerge once the coronavirus economic impacts spread to sectors less directly related to trade. 

Pandemics happen; this one has a higher death rate than the flu, but is still quite treatable.  How on earth might the US have inoculated itself against such an unanticipated economic sickness?  Well, arguably, with an actual inoculation – something the “deep” state was prepared to do until 2018 when Trump fired the very team specifically charged with fighting pandemics at the CDC.

Trump understands this problem as he understands all problems: as a problem that only matters insofar as it affects him.  It isn’t surprising that Trump doesn’t really comprehend the basics of disease much less the intricacies of the coronavirus or really anything health related given that he is a person who believes that the human body is a non-rechargeable battery.

Trump seems to be taking this problem somewhat seriously in his appointment of Mike Pence to be the chief coronavirus communicator.  Not that Pence is going to be particularly good at…well…anything much less a pandemic.  However, it is clear that the markets do not trust the Trump administration; and, more specifically, Trump’s ability to manage a bureaucracy tasked with fighting a pandemic.  Placing Pence in charge is not only about controlling the message to essentially treat coronavirus like Fight Club, but, it offers the investing class a political leader in a time of crisis who has actually governed something back in the pre-Trump era.  Again, governed that thing (Indiana) poorly, but, an individual that was chosen at the time when the Republican Party at least maintained a veneer of governing competence. 

Also, of course, if the pandemic heats up, Pence might be a nice fall guy in time for the Republican convention to choose a new vice president.  Okay.  That one is a little far-fetched.  I mean, it’s not like Trump has a history of making officials take the fall for his gross incompetence.  Oh wait, that’s step five: blame the subcontractors.

Still, the pandemic has a different feel about it.  Throughout the Trump administration, the market has taken the place of approval ratings for the President – and it has been a terrible week.

Thus far, Trump has been the King of Misdirection. 

The coronavirus might just cause him to lose his crown.

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