Laffer made the comments on “America’s Newsroom” one day after the Dow Jones Industrial Average closed over 2,000 points lower, coming back from a point drop of more than 2,150 points, or 8.2 percent, while the S&P 500 and Nasdaq Composite were lower by 7.9 percent and 7.2 percent, respectively.
When host Sandra Smith asked Laffer what he was thinking when he saw the Dow go down 2,000 points on Monday he said, “I was thinking make sure I put my hands in my pockets and do not do anything.”
“When markets are like that it’s like a falling knife,” he continued. “The last thing you want to do is reach in there and try to grab it, try to do a trade.”
“What investors should do right now, unless they have special knowledge, and I mean very few have special knowledge, is just put your hands in your pockets and wait until all of this settles before you do anything,” he went on to advise.
On Tuesday morning, markets rallied following President Trump’s address to the nation the night before where he spoke of “major” and “very dramatic” economic plans as a result of the coronavirus outbreak.
When Laffer was asked what he thinks about the president’s plans he said, “I think his proposal on a tax cut on payroll is great.”
He added, “Most politicians think spending is the way to solve the problem. It is not. Spending will only make the problem worse, but a tax cut will at least encourage people to want to continue working, want to continue to produce and that's what the problem is in the economy from the coronavirus.”
Laffer also noted on Tuesday that “more people's fortunes are ruined in panic-buying and selling."
“Whenever people make decisions, when they are either panicked or drunk, the consequences are rarely attractive and that especially goes for politicians, so I thought Trump's proposal of a tax cut on payrolls was great, but that's about all I would suggest him doing,” he continued.
Fox News’ Jonathan Garber contributed to this report.