Elizabeth Warren warned Thursday that the coronavirus could usher in a financial disaster of a similar scale to the global financial crisis of 2008 due to a trifecta of factors. During an exit interview with MSNBC's Rachel Maddow, Warren explained the U.S. economy had already been showing signs of strain with increased loan defaults, a struggling small business sector, and declines in manufacturing. Making matters worse, Trump and Republicans had already squandered "the bailout tools" on a "ginormous tax break" that ballooned the debt alongside interest rate cuts to juice the economy.
Nonetheless, little of that produced an infusion of investment in the economy. Rather most corporations used the cash infusion for stock buybacks that only served to pad the pockets of the already wealthy without producing more goods and services.
"So, OK, so you’ve got a kind of cracky economy, and you’ve got the tools spent down and along comes the coronavirus. And now you’re going to get hit again because it’s things like supply chains," Warren explained. "So manufacturers here in the United States that need 147 parts to put something together to send it out, two of those parts come from China, you’re done. You need the ingredients to be able to manufacture a drug, and two of those come from China, and you’re just done on this."
Warren also stated the obvious: that we have a completely incompetent administration where Donald Trump is telling people who have contracted the virus to go to work and Mike Pence, the guy who single-handedly created a public health crisis in Indiana, running point on the response. On Thursday we learned that after promising 1 million test kits by week's end, the administration's projections would fall woefully short.
But even with all the hurdles, passing a stimulus remains key, Warren stressed. "We need to be talking about stimulus now. And look, yeah, they did the tax cuts and ran the debt up, and that makes it a lot tougher for us to get stimulus through now," she said.
Before dropping out of the presidential race, Warren had proposed passing a $400 billion stimulus bill with paid emergency sick leave in order to mitigate the economic damage resulting from a coronavirus outbreak.
“Companies across America are already struggling with supply chain disruptions, and we don’t want these temporary struggles to lead to widespread layoffs or for otherwise solid companies to go under,” Warren wrote in her proposal.
Congressional Democrats should pick up where Warren left off and begin defining the terms of the debate around how large the stimulus should be and what it should include.
You can watch Warren’s master class on the economic pitfalls of the coronavirus below. And yeah, Warren’s the president we could have had but won’t.