Our economy is based on confidence. An investor has to believe they are going to get a return on their money. A person opening a business has to have confidence that they have a product or service that someone wants. A customer has to feel safe in shopping for or using a product.
Without confidence, not much happens.
The biggest reason the United States became the greatest country known to man is because of confidence.
Our Constitution provides people the confidence that they will have the individual freedom to pursue their dreams.
They have the confidence that they have certain inalienable rights that will not be infringed by the government.
They have the confidence that their property rights will be respected.
Those in the United States have also generally enjoyed confidence in their safety and security that few others in the world have enjoyed.
When confidence breaks down, bad things happen. It can also happen fast.
We saw it right after 9/11.
We saw it with the mortgage crisis and market meltdown in 2008/2009.
If people are not confident in their safety or security, or start to fear the future, that mindset becomes self-fulfilling.
We have seen it in the stock market this week.
Last week we were hitting record highs. This week saw 2,000 points shaved off the Dow in a few days.
Did that much change between last week and this week? We have been hearing about coronavirus (now being called Covid-19) for most of the year. What changed? Things were under control last week but perhaps they are not this week? CONFIDENCE.
There is no man that knows more about the importance of confidence than Donald J. Trump.
He is singularly driven by confidence. He knows how important that mindset is to achieving anything. That is why you often hear him refer to things as the best, the greatest, or it was just plain "YUGE"
Trump does not allow negativity or lack of confidence anywhere near him or to permit anything that does not convey confidence to pass his lips. He knows how important it is for people to believe in the positive to build confidence. There is nothing more important in his mind.
Trump understands branding and at its essence a brand is about confidence. It is knowing you are going to get exactly what you expect. It is knowing you can rely on it. It is knowing you can be confident in it.
This is why I am interested in seeing how President Trump will deal with the Covid-19 situation.
It is a tough situation for Trump because he knows he has to inspire confidence. However, he also knows that it could spin out of his control. It is unnatural for Trump to speak pessimistically. He will avoid it at almost all costs if you observe him closely.
Trump has to thread the needle on the issue by talking confidently about the proactive steps that were taken to limit travel into the United States early (taken earlier than most other countries) and the low number of cases we have seen to date. However, he also has to acknowledge that there is some unknowable risk. When he does this he will inevitably also reiterate his confidence in our country and the fact that we will respond as necessary. He will always default to optimism and confidence. It is his natural state.
The one thing Trump knows for sure is that if he does not speak confidently he will definitely have a problem because it is then just a small step where public confidence is quickly lost. It doesn't take much and the economy quickly goes over a cliff.
People quit traveling. (Are there any people anywhere who have not already cancelled a cruise or are thinking about it? How long before people avoid all foreign travel? How many cases in the United States would it take for air travel to contract substantially?)
People quit shopping. (Auto sales in China were down 92% in the first two weeks of February compared to last year.)
People quit eating out, going to the movies and bars.
People quit going to sporting events, concerts and other large gatherings of people.
All of this may happen and more if the virus is not contained and there is nothing Trump can do about it. It will be disastrous for the economy if it comes to that. Look no further than what China is going through.
However, if Trump starts talking like it is inevitable we are going to start seeing things like this tomorrow. Trump knows that for sure. That is why he is going to keep speaking confidently. You can count on it. He did not get where he is today without knowing how important confidence is.
That is why Trump made VP Pence his point man and he surrounded himself with a host of medical and infectious disease experts at his press conference. It is also about portraying confidence.
In the end, our lives are built on a confidence game.
It is really unnerving when you stop and think about it. The small difference that mindset can have on our life. All lying within each of our minds.
I guess that is why most of us don't stop and think about it very much.
I can assure you Donald Trump is one who thinks about it a lot.