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Shutdown Ends: Did Ross’s Advice to Take a Loan Backfire?

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Jan. 28 2019, Published 8:16 a.m. ET

Shutdown

The US government shutdown that began on December 22 finally ended after President Trump and Democrats agreed to reopen the government for three weeks. During this timeframe, the two sides will negotiate funding for Trump’s proposed Mexico border wall.

Some see the event as a victory for Democrats, as Trump had taken a tough position on border wall funds. A day prior to the reopening, Wilbur Ross gave an interview with CNBC. In response to a question on some Federal workers using food banks, Ross advised the workers to instead take loans. He also played down the impact of the shutdown on the US economy (SPY). The comments were seen by some as insensitive towards workers who were set to miss their second paycheck.

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National security

While Trump has made enhancing US national security a key priority, the shutdown was also taking a toll on national security. On January 23, Air Line Pilots Association president Joe DePete, National Air Traffic Controllers Association president Paul Rinaldi, and Association of Flight Attendants-CWA president Sara Nelson issued a statement that said, “Major airports are already seeing security checkpoint closures, with many more potentially to follow.” Furthermore, the general public was also inconvenienced by the longest shutdown in history. Some polls showed that Americans blamed Trump for the shutdown.

Meanwhile, US stocks have been strong despite the longest shutdown. Amazon (AMZN) is up 11.2%, while Alphabet (GOOG) has gained 5.4%. Apple (AAPL), which fell sharply earlier this year on a guidance cut, has also recouped its losses. General Electric (GE) has also seen an upwards price action of 21% so far based on January 25 closing prices.

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