Tags: Coronavirus | Financial Markets | Trump Administration | jim cramer | trump | coronavirus | recession

Jim Cramer: Trump Must Act to Avoid Coronavirus-Induced Recession

(AP)

By    |   Tuesday, 10 March 2020 09:30 AM

Investment guru Jim Cramer urged President Donald Trump to take immediate action to avoid a coronavirus-induced recession

“Rightly or wrongly, people are terrified of this pandemic. It’s very hard to be constructive about most stocks when the government’s focused more on optics than on appropriate precautions,” Cramer said on his CNBC show.

The three main U.S. stock indexes plunged more than 7% on Monday, the 11th anniversary of the market's longest bull run, as oil prices plummeted following pledges by top producers Saudi Arabia and Russia to increase output in an over-supplied market, Reuters explained.

The selloff was so sharp it triggered trading halts put in place in the wake of 1987's "Black Monday" crash, with the blue-chip Dow Jones shedding as much as 2,000 points and the indexes slipping toward a bear market.

“If the president wants to reassure the markets, he needs to consider a new approach — and if he takes it, call me a buyer,” the “Mad Money” host said.

Here are the four solutions Cramer wants the White House to pursue:

Fiscal stimulus: “The government should be offering no-interest loans to small businesses that won’t be able to handle the downturn,” he said. “We should subsidize companies that give their employees paid sick leave because it’s very hard to quarantine yourself if you’re living paycheck to paycheck.”

Change of tack from Trump: Trump should remain hopeful, but also plan for a worst-case scenario regarding the coronavirus outbreak, Cramer said. He suggested that the federal government expand capabilities and administer more tests, including everyone on cruise ships, those traveling from overseas and people in large gatherings, to inject more confidence in the general public. “We need to take a short-term hit here if we’re going to contain this thing: self-quarantine, work from home, stay away from crowd,” he added. “All of this slows down the pace of the infection and gives health care workers a chance to breathe, which is what really matters.”

Help scientists discover solutions: “We need the White House to push for a vaccine or a treatment or even just some better information [and] data that would allow our scientists to solve this thing,” Cramer said.

Support state and local governments: “We need to back our community based health system with unlimited resources, everything from mobile army surgical hospitals to ventilators and respirators and hazmat suits,” the host said. “State and local governments don’t have the money to pay for these things; this is what the federal government is for.”

For his part, Trump on Monday said he will be taking "major" steps to gird the economy against the impact of the spreading coronavirus outbreak and will discuss a payroll tax cut with congressional Republicans on Tuesday.

"We'll be discussing a possible payroll tax cut or relief, substantial relief, very substantial relief, that's a big number," Trump told reporters, according to Reuters.

He did not provide details but said a news conference will be held on Tuesday.

Among proposals that could be included are ensuring water supplies are maintained for people even if they cannot pay their bills as a result of the crisis, expanded unemployment insurance, medical leave and providing food for children who rely on school nutrition programs if schools are shut.

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Investment guru Jim Cramer urged President Donald Trump to take immediate action to avoid a coronavirus-induced recession
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2020-30-10
Tuesday, 10 March 2020 09:30 AM
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