Trump’s call with Wall Street didn’t go as planned

WALL STREET TO TRUMP: KEEP IT SHUT — The White House held a call this morning with top Wall Street titans and other senior bankers and financiers to talk about how to reopen the economy, part of a barrage of phone confabs between President Donald Trump and executives from industries including hospitality, health care, technology, construction, sports and many more.

There was a small problem with the Wall Street call. Actually several problems.


Many of the bankers said they knew nothing about the call until late Tuesday night. Several had quarterly earnings calls this morning that directly conflicted with the timing of the White House summons.

Goldman Sachs CEO David Solomon couldn’t be on the call because of earnings. Neither could JPMorgan CEO Jamie Dimon, though not because of earnings. Bank of America CEO Brian Moynihan was able to dial in right after his earnings call ended. Another senior executive from JPMorgan attempted to get on the call in Dimon’s place, two people briefed on the call told POLITICO, but couldn’t get through for 20 minutes and finally gave up.

One top executive described the call as a “shit show” that produced little of substance. Trump asked several questions, including to Moynihan about how the small business loan program was going. That program is now slated to run out of money soon.

Trump on the call praised the bravery of Morgan Stanley CEO James Gorman, who got Covid-19 but recovered. Gorman said his case was relatively mild and tried to deflect the praise.

Several executives called for more Covid-19 testing, something Trump has been hearing for six weeks from anxious governors, health care leaders and lawmakers. And that was pretty much it for the Wall Street conversation, according to people briefed on the call. “It was really nothing,” one person briefed on the call said.

Beyond the haphazard nature of the call, senior bankers are getting increasingly frustrated with Trump’s approach to the crisis. They say pressure tactics to reopen the economy as fast as possible make no sense if the virus isn’t fully under control and consumers and businesses don’t feel safe to resume anything close to normal activities.

“I really don’t understand how they are communicating on this,” one CEO told POLITICO on condition that neither they nor their firm be named for fear of angering the White House. “He’s got to stop talking about turning the economy back on and start talking about making people feel safe, things that are happening around testing and the health care system. That’s the only way you will really get the economy reopened over a period of time.”

Bankers are also saying similar things publicly on their earnings calls. Moynihan did it today, suggesting that stopping the virus and providing financial support in the meantime should both come before reopening. Dimon made similar remarks Tuesday. Wells Fargo CEO Charles Scharf said there remained a great deal of uncertainty about when it would be safe to fully reopen the economy.

It’s not that bankers don’t want the economy reopened. Many of them are taking huge earnings hits because of massive increases in loan-loss reserves for expected defaults on mortgages, auto loans, credit cards and other products due to lost income from the 20 million or more laid off or furloughed workers in recent weeks. They’d obviously love markets to keep rocketing higher (though they also profit from volatility).

And the economic data continue to be deeply and terrifyingly horrid. Retail sales plunged a record 8.7 percent in March, blowing out the previous record, a 3.7 percent drop in November 2008 during the Great Recession. Pretty much everything fell off a cliff other than grocery shopping driven by virus-fearing hoarders.

Industrial production dropped 5.4 percent, the biggest monthly fall since 1946. New jobless claims number will arrive Thursday morning. They are expected to show another 5 million in new layoffs and furloughs pushing the total to around 22 million in a single month, matching all the jobs created in the last decade. In other words, the economy is in total free fall.

But the answer from much of corporate America — though perhaps not from some frontline businesses like restaurants and bars — is not to panic at these numbers and try and force a hard reboot of the economy on May 1, as Trump seems to want. That could lead to further shutdowns, more virus spread and more panic.

Instead, the preferred approach is take the big hits now, get the virus in check, and restore people’s sense of safety while providing them with as much financial support as possible. Only then can the economy truly start to crawl back toward anything resembling normal.

CAN HE DO THAT? — Trump said at tonight’s coronavirus briefing that he would exercise his “constitutional authority to adjourn both chambers of Congress” to allow him to make recess appointments if they don’t gavel out themselves. “The current practice of leaving town while conducting phony pro forma sessions is a dereliction of duty that the American people cannot afford during this crisis,” he said. Unlike so many Trump zingers with a half-life of barely a single news cycle, this one may trigger a longer debate over presidential powers.

Welcome to POLITICO Nightly: Coronavirus Special Edition, a nightly intelligence brief from our global newsroom on the effect of the coronavirus on politics and policy, the economy and global health. How is it only Wednesday? Reach out with tips: [email protected] and @renurayasam.



First In Nightly

THE NEW ICU SHORTAGE — Hospitals in New York City are seeing a sudden shortage of dialysis fluids as thousands of coronavirus patients develop kidney failure, an unexpected development that could presage the next critical supply shortage nationwide, health care reporters Sarah Owermohle and Amanda Eisenberg write.

Roughly 20 percent of coronavirus patients in intensive care need the kidney treatment, often for weeks, a development that many providers did not see coming. The Federal Emergency Management Agency held a call Monday with the Food and Drug Administration and Centers for Medicare and Medicaid Services to discuss the possibility of issuing emergency use authorizations to import more dialysis fluids, according to a document obtained by POLITICO.

The same day federal regulators met, major New York hospital systems convened to discuss the emerging dialysis crisis. Some are struggling with dire shortfalls of dialysis fluids and trained nursing staff and have reached out directly to manufacturers for help, according to two people on the call.



Nurses and supporters participate in a vigil at New York City's Lincoln Hospital. | Getty Images

Around the Nation

AS GOES MICHIGAN ... Thousands of demonstrators swarmed the grounds of the state capitol in Lansing, Mich., today, most of them staying in their cars and honking their horns in protest of Gov. Gretchen Whitmer’s expanded stay-at-home order, Tim Alberta writes. Scenes from #operationgridlock, as organizers dubbed it, flooded social media. (Much of the attention owed to ambulances being impeded; there were also militiamen, Confederate flags and chants of “Lock her up!”) Getting beyond the sensational images, it’s worth having some perspective on what unfolded in Michigan — and what could be coming soon to a statehouse near you.

Last Thursday, I published a profile of Whitmer in POLITICO Magazine. In my weeks of reporting on the governor, I spoke with dozens of people, including many Republicans, about her management of the health crisis. The overwhelming consensus was positive. As it happened, on that same day, Whitmer announced she would expand the scope of her emergency stay-at-home order. The new restrictions included a ban on traveling between residences and on buying certain goods, including many gardening and home improvement items, at stores. And, unlike in other states, there was no exception made to allow landscaping businesses to do their work.

Almost instantaneously, Whitmer became the subject of fierce partisan criticism. My Facebook feed exploded. Republican leaders who’d backed her began publicly slamming the policy. Voters who’d been quietly complying began circulating petitions and organizing a protest in Lansing.

Their complaint wasn’t with the continued quarantining, but rather with additional restrictions that many felt were arbitrary and overreaching. Why allow the sale of plumbing equipment, Michiganders wondered, but not lawnmowers? Why is a liquor store “essential” when a lawn service business that operates seasonally, outside and far removed from its customers is not?

Having spent a day in Whitmer’s office, watching her take calls with residents who are suffering and traumatized, I think it’s valuable to understand the governor’s mindset at the moment. Her state is being hammered. Michigan has now seen nearly 2,000 deaths from Covid-19, the third-most of any state. When you’ve spent the last three weeks on the phone hearing horror stories from your constituents — nurses without masks, kids without food, doctors racing between rooms to make sure that someone is accompanying a patient as they die — you’re disposed to taking drastic measures.

That’s not to say Whitmer’s decisions are the right ones — or the wrong ones. I can understand the fatigue and frustration many Michiganders are experiencing right now; I can also understand the daunting responsibilities weighing on a governor during a time of unprecedented crisis. That fundamental tension, pitting the restlessness of citizens against the wariness of the elected officials tasked with protecting them, is fast becoming an undercurrent of the 2020 campaign, with both parties attempting to strike an impossibly delicate balance in the eyes of voters.

There’s one more piece of vital context. As I wrote in the profile, Whitmer has in the span of two months gone from political obscurity to a trendy pick to become Joe Biden’s running mate. I've got to believe that some of President Trump’s supporters here, having monitored the governor’s feud with the president — and having heard the V.P. buzz — were waiting for a reason to pounce on Whitmer. Her order gave them a perfect opening.

The restrictions are scheduled to lift in just over two weeks. But you can bet that if, in fact, Whitmer becomes the Democratic Party’s vice-presidential nominee, these scenes from Lansing — and the accusations of big-government authoritarianism — will shadow her for the duration of 2020.

Gig workers hit speed bump — The $2 trillion rescue package was supposed to help out Uber drivers, freelance workers and other independent contractors who usually aren’t eligible for unemployment benefits, Megan Cassella and Rebecca Rainey write. But the 23 million gig-working Americans are running into dead ends, delays and bureaucracy trying to collect an unemployment check, thanks to delayed Labor Department guidelines and states deluged by millions of claims.



Talking to the Experts

Should the coronavirus pandemic lead Joe Biden to break his pledge to choose a woman as his running mate?

“All the reasons for picking a woman are still very valid. I don’t see how a pandemic would change things. The only way it might change it is if you might decide that he should pick Tony Fauci, but that seems unlikely. Plus it’s not a debatable question. It would be a terrible mistake not to follow through. Biden was unfairly criticized for being too stick-in-the-mud and conventional. By picking a woman, it would be hard to say this is a contest dominated by old white men. First he needs to pick someone who is capable of being president. John McCain made a mistake on that. And second, someone who will win the election, with one caveat: You can’t pick a senator in a state with a Republican governor because then you would lose the Senate seat.” — Former House Financial Services Chairman Barney Frank (D-Mass.)

“Why would he do that? From the front lines of hospitals to the halls of Congress and to governors’ mansions, women are leading the fight against the coronavirus in the absence of a president who has failed to step up. Joe Biden is a man of his word.” — Rep. Cheri Bustos (D-Ill.), as told to POLITICO Magazine’s Michael Kruse

Our question for our readers this week: How will you measure when this pandemic is over? What is your personal yardstick for a return to normalcy? Use the form to send us your responses, and we plan to feature several later this week.



Nightly Number

3 percent — Odds that New York Gov. Andrew Cuomo becomes president of the U.S., according to gamblers. By the time Bernie Sanders — a candidate with an actual campaign and delegates — dropped out of the race last Wednesday, Cuomo had already moved ahead of him. (h/t Jordan Mueller)



Second grade teacher Joanne Collins Brock waves goodbye to her students after teaching online in her empty classroom in Kentucky. | Getty Images

The Global Fight

THE PATH BACK — The world remains deeply divided over how and when to return to normal, in effect running dozens of parallel experiments on human life and economics, writes Ryan Heath. The biggest economy (Germany) and the biggest population (India) under nationwide lockdowns are both working towards May 3 as a new crucial milestone for revisiting national restrictions.

Germany agreed today to let smaller stores reopen on April 20. That follows moves this week by Austria, Czech Republic, Denmark and hard-hit Spain to allow some openings of shops, workplaces and schools.

Not everyone is opening up: Canada, U.K. and France are maintaining their restrictions into May, while others including Turkey and Nigeria are expanding city lockdowns. You can — and will — be jailed in Australia and Singapore for breaking lockdown rules.

Belgium may have the smartest approach: The government has delegated lockdown exit planning to a single broad-based committee including doctors, economists and politicians. Surprise! They’re also aiming at May 3.



Parting Words

HOPE — In Portugal, there is cautious optimism the country may be pulling off an unlikely victory over the coronavirus. With one quarter of the population of neighboring Spain, Portugal has around one-tenth of the number of Covid-19 cases — and a 3 percent mortality rate that’s far lower than the European powers. Yet the country has more citizens over the age of 80 than anywhere in the EU except Italy and Greece, plus a health service that’s poorly equipped and underfunded. Explanations for Portugal’s relative success have ranged from cleaner air to decades of anti-tuberculosis vaccinations to intervention from Our Lady of Fatima. What seems sure is that luck and geography gave authorities time to take action that decisively slowed the pandemic. The first Portuguese case was registered on March 2, a month after the disease appeared in Spain and Italy.

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Follow us on Twitter Renuka Rayasam @renurayasam