COVID-19 Is Wreaking All Sorts of Economic Havoc

Helpful tip: Don't check your 401(k) today. Or anytime this week, or month, as the stock market had one of the worst days it's ever had yesterday. Two weeks ago, a record was set for the largest single-day loss (by points) in the history of the Dow Jones, with a drop of 1,190.95 points. Monday left that in the dust, as the Dow dropped a staggering 2013.76 points.

There are two proximate causes for the meltdown. The first, of course, is COVID-19, which is disrupting current and future business around the globe. The second, related to the first, is that—with fuel consumption way down, thanks to shuttered factories, canceled flights, and the like—Russia and Saudi Arabia could not agree on the amount of oil that their cartel (known as OPEC+) should produce. Talks between those nations broke down last week, and so the Saudis flooded the market with an eye toward starting a price war. As a consequence, global oil prices fell by about 20% yesterday.

In the very short term, the stock market is going to bounce back, as it generally does after a really bad day. Yesterday's decline represented a loss of about 7% of the value of the Dow Jones; the last time that the index took that big a hit (October 15, 2008), the next day saw a 2.17% gain. On the day after the infamous "Black Tuesday" in 1929, an 11.73% loss was substantially erased by a 12.34% gain. The Dow's single-biggest loss by percentage, 22.61% on October 19, 1987, was followed by a 10.15% gain. Already today, Dow futures are up by 500 points.

Of course, all of those previous recoveries were just temporary, and each of those big downturns presaged a significant recession or depression. And it's going to be awfully hard to avoid the same fate this time, thanks to COVID-19. The disease, of course, is already upending all sorts of economic activity. Conferences and other events across the country and the globe are already being canceled. This year's SXSW festival already went kaput (as did the jobs of one-third of the organization's staffers). The Irish have canceled St. Patrick's Day, for God's sake. Universities and businesses are restricting non-essential flights, and many schools have canceled classes. Factories in China and other nations are shut down. Construction projects are being halted. Large numbers of people, particularly in Italy, are being quarantined. All of this will hit the manufacturing, sales, construction, and tourism sectors hard. To take but one example, airlines are projecting a loss of over $100 billion in revenue, which will likely result in the loss of tens of thousands of jobs.

If that were not enough, governments, businesses, and other entities across the world are now, or soon will be, in the position of "placing their bets," as it were. Sporting events and leagues have to decide whether to cancel events entirely (big loss of revenue), or to hold them with no fans in attendance (significant loss of revenue, and still carries risks), or to press onward and upward (significant PR and legal risks). The Olympics, the NCAA basketball tournaments, MLB, and the NBA are getting particularly close to zero-hour in this regard. Seasonal businesses have to make their hiring decisions. Musicians on tour have to decide what they want to do (and several, including Pearl Jam, Korean boy band BTS, Green Day, and Mariah Carey have already postponed or canceled tour dates). Retailers have to figure how much new inventory to order (or not to order).

In short, there is, and will continue to be, significant economic upheaval for the next few months (or more). On top of that, every time the markets suffer a sharp drop, or another high-profile event is canceled, or another business lays off a bunch of staff, it makes people skittish about spending their money (except to hoard hand sanitizer and other nonperishable items). And if people stop spending, then the economy will suffer a slowdown, regardless of how long COVID-19 lingers, or what the federal government does.

And speaking of the federal government, it does not help that it's shot most of the arrows in its quiver. Obviously, the GOP gave out a hefty tax cut back in 2017, which means the government isn't in a great position to give another one (not that the Trump administration isn't talking about it; reportedly, a temporary reduction of payroll taxes is on the table). In addition, the Federal Reserve slashed interest rates last week; there isn't much more cutting to be done. The New York branch of the Fed also dumped $50 billion in the economy to try to calm things down, but that may prove to be like trying to cover a gaping chest wound with a band-aid.

Add it all up, and a bear market is all but inevitable. Further, many experts say that a "short, sharp" global recession may be unavoidable. And by "short, sharp," they mean a heavy downturn that lingers into Q3 of 2020. If true, that would be custom-made for the Democrats' needs—lasting just long enough to hurt Donald Trump at the polls, with recovery coming just as a new president is inaugurated. If November, December, and January see the start of a recovery, one can even imagine a President Biden or a President Sanders taking credit for it, saying that with a Democrat in charge, people have faith in the future and are starting to spend again. (Z)

Sanders Needs to Hope State Pollsters Are Wrong...

Sen. Bernie Sanders (I-VT) really needs a win in Michigan. This would slow Joe Biden's momentum, shift the narrative in Sanders' favor (at least a bit), and would allow the Vermont Senator to make the argument that he's the one to win back the upper Midwest for the Democrats. However, according to five new polls of the Wolverine State, from Data for Progress, Mitchell Research, Target-Insyght, Yahoo News/YouGov, and Monmouth, Sanders is headed for disappointment. Here are the numbers:

Candidate	DforP	Mitch	Targ.	Yahoo	Monm.	Average
Joe Biden	59%	54%	65%	54%	51%	56.6%
Bernie Sanders	38%	33%	24%	42%	36%	32.6%

That's quite a range; the closest one is Biden +12, the least close is Biden +41. At least one of those is way off. The odds that all five are way off, however, are not high.

Data for Progress, in addition to polling Michigan, also decided to check in on the other states that will vote today. The best news for Sanders, such as it is, is that they have Biden up only four points in Idaho (51%-47%), a state whose caucus Sanders won by 57 points in 2016. They also have the former veep up 6 in Washington (49%-43%), 30 in Missouri (62%-32%), and 55 in Mississippi (77%-22%). Obviously, if this is how things turn out, it's all kinds of bad news for Sanders. He will go 0-for-6 on a day that was supposed to be pretty favorable to him, he will regress everywhere relative to his 2016 results, and he will lose a nearly insurmountable number of delegates to Biden. And if the news is bad for Sanders today, that will give Biden more momentum going into next week, when four big states that all went for Hillary Clinton in 2016 vote. Which brings us back to the headline: Sanders needs to hope that the pollsters are way wrong, and are missing, for example, a last-minute progressive surge. Otherwise, he will be left figuring out how to shoot for a debate miracle. (Z)

...And National Pollsters, Too

The news from national pollsters is not much better for Bernie Sanders. Maybe worse. We have four new ones, from Quinnipiac, CNN, Morning Consult, and Reuters/Ipsos; here is how they have it:

Candidate	Quin	CNN	Morn.	Reut.	Average
Joe Biden	54%	52%	54%	45%	51.3%
Bernie Sanders	35%	36%	38%	32%	35.3%

These polls are much more consistent than the state polls above; they all have Biden up 13-19 points, and if you exclude Reuters/Ipsos (which was taken before Sen. Elizabeth Warren, D-MA, dropped out), then the range is even tighter: 16-19 points. A national preference poll is not necessarily all that instructive, given that the votes take place on a state-by-state basis. However, there is really no way to claim a party's nomination with only 35% of the vote. Unless, of course, the Democrats decide this weekend to switch to an all-caucus system from here on out. (Z)

Biden Picks Up Another Former Rival's Endorsement

On Sunday, Joe Biden picked up Sen. Kamala Harris' (D-CA) endorsement, making her the sixth former Democratic presidential candidate to throw her support to him. And on Monday, he made it a lucky seven, as Sen. Cory Booker climbed on board the S.S. Uncle Joe. Booker was previously rather critical of Biden, but says that's all past now. In other words: "If Joe becomes president, I don't want to be on his bad side."

This means that Biden now has the support of most of the country's prominent black leaders. The exceptions are the Obamas, who have yet to endorse (though it's pretty easy to guess where they stand), and Jesse Jackson. On Monday, in a clear bit of counter-programming to Booker's and Harris' endorsements, Jackson announced that he was throwing his lot in with Sanders. That's a nice get for the Vermont Senator, though it undoubtedly doesn't outweigh the value of Rep. Jim Clyburn's (D-SC) support, much less Harris', Booker's, and nearly the entire Congressional Black Caucus. This is presumably a part of the reason that Biden is set to swamp Sanders in Mississippi (see above), one of just two states where black voters make up a larger percentage of the vote than South Carolina (the other is Louisiana). (Z)

Democrats' Senate Hopes Are Looking Up

At the moment, the GOP is likely a slight favorite to retain control of the Senate. However, there's a lot of campaign left to go, and the blue team has gotten some pretty good news on that front this week. To start, there is Joe Biden's resurgence. There are a number of states where the Democrats could really use some presidential coattails, and Biden is likelier to have them in more of those states (GA x2, NC, MT, and probably AZ, while Sanders likely has longer coattails in just ME and IA).

Meanwhile, Gov. Steve Bullock (D-MT) officially took the plunge on Monday, and decided to challenge Sen. Steve Daines (R-MT). Bullock is probably the only person who could have put the seat in play, and now he's done so. The Governor won his last two statewide elections, against serious opponents, by 1 and 4 points. The Senator won his only statewide election, against a less serious opponent, by 17 points. That suggests that Daines will be a moderate favorite in the race. The only poll of the race so far, taken in February, suggests the same, as it had Daines up 9 points, 47% to 38%. Still, there's a lot of time between now and Nov. 3, and thus time for Bullock to flip that script.

At the moment, prognosticator Sabato's Crystal Ball, which is pretty darn good at this sort of thing, has the overall picture like this:

• Safe Rep. Seats (12): ID, WY, SD, NE, OK, AK, AR, LA, MS, TN, SC, WV
• Likely Rep. Seats (4): TX, KY, KS, AL
• Lean Rep. Seats (5): GA x2, ME, IA, MT
• Toss-Ups (2): AZ, NC
• Lean Dem. Seats (2): CO, MI
• Likely Dem. Seats (3): NM, MN, NH
• Safe Dem. Seats (5): OR, IL, VA, NJ, MA

If the Democrats were to take both toss-ups, and all the others were to go as expected, that leaves the GOP with a 51-49 majority. On the other hand, the Republicans are defending (on some level) 11 seats, including the two toss-ups. The Democrats are only defending 4 (if we exclude Alabama as a lost cause). Needless to say, 11 is considerably harder to defend than 4. (Z)

Democrats Get Serious about Florida

If Donald Trump is to be reelected, his path goes through Florida. There is no realistic map where Florida is blue and Trump wins a second term. Obviously, the GOP and Trump 2020 know this, and so their turnout machine in the Sunshine State is already oiled and ready to go.

Now, the Democrats are gearing up their efforts to retake the state. Actually, four different groups are all getting underway: the DNC, the Organizing Together 2020 PAC, the For Our Future PAC, and Mike Bloomberg's PAC. The first three intend to spend at least $10 million and to hire as many as 100 people to register Democratic voters and to encourage people to vote. It's not yet known how much Bloomberg will spend, but he could easily double or triple that amount without breaking a sweat.

It's hard to know exactly which side has the advantage here, especially in a state where election results are often so very close. On one hand, as noted, the GOP operation is already up and running. Further, nearly every statewide office (with Agriculture Commissioner the exception) is held by a Republican, which raises the possibility of shenanigans. On the other hand, between recently arrived Puerto Ricans and newly re-enfranchised felons, there are probably more new voters available to the blue team than to the red team. Further, presidential years tend to favor the Democrats. There hasn't been much Democrat vs. Trump polling of the state but the few polls that do exist say that Joe Biden is a slight favorite over the President (1-2 points) while Bernie Sanders vs. Trump is basically a toss-up. (Z)

Six Former Wrestlers Point the Finger at Jim Jordan

It's not easy to be the most reprehensible person in a chamber that includes Rep. Steve King (R-IA), but Rep. Jim Jordan (R-OH) is certainly giving it the old college try. Jordan has gained a fair bit of notoriety for his various stunts, in particular the heaping helping of red herring he dished out during the impeachment inquiry. While that may be aggravating to Democrats, however, and maybe even disrespectful of the Constitution and the Congress, it's not utterly craven. On the other hand, knowing that students in your charge are being molested and looking the other way most certainly is.

That is the claim now being made by six former wrestlers from the Ohio State University team, who were part of the program while Jordan was assistant coach, and team doctor Richard Strauss was sexually abusing wrestlers left, right, and center. The six wrestlers all say they personally spoke to Jordan about the issue, or were present when other wrestlers did so. Another eight team members insist that Jordan must have known, even if they don't have direct proof.

Jordan, of course, denies everything, and is allowing the PR person he hired to handle inquiries. Roughly 95% of the time (give or take a few points, depending on which study you believe), such claims of abuse are true. The odds that six people would all tell the same lie are...very, very small, shall we say. The odds that another eight would corroborate that lie are even smaller. In other words, the smart money says the Congressman is lying through his teeth. Of course, it doesn't matter, unless his Republican colleagues in the House decide to hold him accountable (don't hold your breath), or the voters in the R+14 OH-04 do (still not terribly likely, but you never know). To face off against Jordan, Democrats in OH-04 will choose from among three unknowns next week. (Z)

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---The Votemaster and Zenger