by Praying Medic (Dave Hayes)
March 18, 2020
The coronavirus is providing Donald Trump with an intriguing opportunity. One that I don’t think anyone saw coming. Although the coronavirus pandemic itself is real, the actual threat it poses to world health is negligible. To date, fewer than 150 people have died in the U.S due to Covid-19. By comparison, the CDC estimates that between 36,000,000 and 51,000,000 Americans have been infected with the flu this year, resulting in somewhere between 22,000 and 55,000 deaths. Given those numbers, the hysteria over Covid-19 seems unwarranted. So what’s the deal?
I’ve been following the media’s reporting on Covid-19 since it began trending a few weeks ago. What struck me was the fear that found its way into news reports over a relatively innocuous virus. After a week of fear-laced headlines from major news outlets, stocks began trending downward. Stock prices are not affected by bacteria and viruses. They’re affected by the news. And in this case, the downtrend in stock prices seemed to be based purely on reactions to the previous weeks’ fearful news about Covid-19. The media then started another cycle of fear-based news reports. This one focused on the market’s panic over the coronavirus.
In the weeks that followed, every famous person who tested positive, every sporting event canceled and every word uttered by Trump about the virus became a headline. The coronavirus was now the subject of the majority of mainstream news reports. As fear grew, stock prices continued to decline. And as stock prices declined, another news cycle was created, predicting even greater losses. Public functions were canceled. Schools were closed. Employees were told to work from home. Many businesses were forced to close, and their employees were laid off. The media seized on the latest closings and published more fear-filled headlines. The stock market continued its decline.
The media know as well as anyone that investor fear drives stock prices lower, while confidence drives them higher. It seems the media have an interest in creating news cycles of fear, which they know will drive stock prices lower. Why would the press want to crash the market?
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