Trump beefs up economic team as coronavirus intensifies
President Trump is expanding his economic team as the White House stares down what could be the sharpest downturn the U.S. has faced since the Great Depression.
Trump has brought back Kevin Hassett, former chairman of the White House Council of Economic Advisers, to help guide the administration’s response to the coronavirus pandemic and the financial harm it’s unleashing across the U.S.
The White House is also adding Joe LaVorgna, a veteran Wall Street economist, to help the National Economic Council (NEC) navigate the complex toll the outbreak is taking on financial markets. Trump is also moving to fill another key role by announcing his intention to nominate Mary Toman to be undersecretary for economic affairs at the Commerce Department.
“We just decided we needed some help on the virus and other things,” NEC Director Larry Kudlow, a member of the White House coronavirus task force, told The Hill in an interview Wednesday. “We’re just trying to enlist all the best people we can.”
Hassett, a conservative and veteran adviser to Republican administrations, served as the top White House economist from September 2017 to June 2019. He regularly touted Trump’s efforts to cut taxes and streamline regulations to boost economic growth in frequent media interviews, departing the White House as the president’s trade battles with China and Europe reached a fever pitch.
Kudlow said he had asked Hassett — “a good friend and close to the administration” — to brief the NEC after leaving the White House, and asked him to come on as an informal adviser as the coronavirus pandemic escalated.
“A bunch of us thought it would be a good idea to bring Kevin in,” Kudlow said, adding that Hassett will help compile data to project when normal economic activity can safely resume in certain parts of the country.
While Hassett was brought on to help with the coronavirus response, LaVorgna’s path to the White House was underway before the pandemic derailed the financial sector, Kudlow said.
LaVorgna joined the White House after serving as chief economist for the Americas at Natixis, a French investment bank. Before that he spent 20 years at Deutsche Bank and was a contributor at CNBC, where Kudlow was a host for more than a decade.
Kudlow said LaVorgna was brought on to bolster the NEC’s view into financial markets, which have been roiled with volatility as the pandemic spreads.
“He’s just one of the best Wall Street economists, business and financial economists and we just needed some strength there,” Kudlow said.
The White House declined to make Hassett and LaVorgna available for interviews.
Their additions come amid a significant shift in tone and approach among Trump and his top economic advisers after weeks of downplaying the potential health and financial threats posed by the coronavirus.
As of Thursday, there were more than 79,000 confirmed U.S. cases of COVID-19, the disease caused by the novel coronavirus, resulting in more than 1,110 deaths, according to data compiled by Johns Hopkins University. The U.S. now has more cases than any other country.
Last week, a record 3.3 million Americans applied for unemployment benefits, and substantially more are believed to have lost their jobs as businesses across the country close amid government efforts to slow the spread of COVID-19. The sudden halt to nearly all nonessential economic activity has threatened to bankrupt thousands of businesses and spur a wave of missed mortgage, rent, credit card and loan payments that could upend the financial sector.
More than a decade of consecutive monthly U.S. job gains and economic growth has all but formally ended, mere weeks after Trump and his top advisers exuded confidence that the resilient economy could weather the virus.
“The virus is not going to sink the American economy. What is or could sink the American economy is the socialism coming from our friends on the other side of the aisle,” Kudlow said on Feb. 28, several days after top public health officials warned that spread of the coronavirus within the U.S. was inevitable.
“The stock market is worried, it’s fearful. But if you’re the long-term investor,” Kudlow continued, “you might think about buying the dip.”
All three major stock indexes have crashed more than 10 percent since Kudlow’s suggestion, while the number of coronavirus cases has skyrocketed from several dozen in late February to tens of thousands.
Kudlow said Wednesday that the White House recognized the potential danger posed by the pandemic by the first week of March. He rejected the notion that he and Trump were too optimistic, insisting that no one could have predicted how quickly the virus would spread.
“It became clear that the coronavirus was going to be a much greater problem, Frankly, the way it’s taken off and exploded was virtually unimaginable. No one anticipated this,” Kudlow said Wednesday.
“As this situation develops, everybody realized we had to change strategies from containment to mitigation, for example. The economic consequences were going to be much greater.”
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