Bernie Sanders Hits a Pothole; Trump and the Coronavirus

Insights and Market Perspectives

Author: Greg Valliere

February 25, 2020

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PERHAPS THE ECHO CHAMBER IN VERMONT has distorted Bernie Sanders’ sense of what the American public is willing to tolerate. He won’t back off his praise of Fidel Castro’s literacy program or other compliments to dictators, and he can’t credibly explain how he will pay for his massive new programs — and, suddenly, Bernie Sanders has hit a pothole.

IT’S NOT TOO LATE TO BLOCK SANDERS: We will circle today on the calendar, Feb. 25, as the day the pushback begins. Mike Bloomberg is far more impressive than he showed in his first debate, and he will join the other candidates in bashing Sanders in tonight’s debate.

AND WHAT A JUICY TARGET THEY HAVE: Check out this morning’s Washington Post, which details the infatuation Sanders had for Nicaraguan dictator Daniel Ortega and the Soviet Union. This article alone should disqualify Sanders. And he still doesn’t have a remotely coherent plan to pay for a wide range of programs such as student loan forgiveness (a touchy issue for those of us who paid back our loans, an income drag well into our 30s).

AND THEN THERE’S THE ISSUE OF GUNS, which Bloomberg inexplicably failed to raise in the first debate. Sanders has refused to back strict gun control measures, which is a litmus test for many Democrats. Another issue is Sanders’ health records; will he ever release all of them?

AFTER A SAVAGE POUNDING TONIGHT, Sanders will face another obstacle: the endorsement of Joe Biden later this week from the most powerful Democrat in South Carolina, Rep. James Clyburn. By Saturday, Sanders should be softened up sufficiently to ensure Biden’s victory in the South Carolina primary.

WILL THIS BE ENOUGH TO DENY SANDERS THE NOMINATION? There will be a steady drumbeat of Sanders disclosures this spring — about his past trips, his past statements — that will reinforce a narrative that he coddled Communist dictators.

THIS WON’T BE PRETTY —
but it will be mild compared to what Donald Trump and the right wing would throw at Sanders if he wins the nomination (even though, of
course, Trump has coddled up to dictators with impunity).

THE KEY TO STOPPING SANDERS: Several Democrats will have to drop out. Amy Kloubuchar should be getting the hint; her poll numbers are awful. Same with Pete Bittieieg. Ditto for Tom Steyer. What if, for example, Buttigieg or Klobuchar dropped out and endorsed Biden? It would make a difference.

THE MOST LIKELY SCENARIO is that Sanders amasses a plurality of delegates, after spring primaries in Ohio, Michigan, etc. — even if he doesn’t finish first in every state; California next Tuesday will give him a cushion. But will he attain a majority of delegates? We’re not sure of that. We are sure of this: if there’s a credible chance to stop Sanders, it begins tonight.
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DONALD TRUMP HAS TO GET ON TOP OF THE CORONAVIRUS, ASAP: His typically upbeat comments yesterday do not reflect the growing anxiety within his administration that the U.S. needs to quickly appropriate funds to deal with a potential outbreak here.

AND THE LONG KNIVES are already out for HHS Secretary Alex Azar, who has few allies at the White House and is the near-certain scapegoat if the virus spreads.

AS WE WROTE YESTERDAY, the greatest risk to Trump’s re-election is a black swan event like this, which could drag down global economic growth and depress corporate earnings. At the least, Trump faces softer first half economic growth than an incumbent wants.

DEMOCRATS, WHO ARE DESPERATE for an issue that could change the subject from Sanders, are claiming that Trump has been “asleep at the wheel” on the virus — an exaggeration, but he needs to pivot quickly from India and begin calming public anxiety.