President Donald Trump is assuring the American public that the economy won’t go into recession for so long as he’s in office, and that if it does he’s certainly not to blame. Somehow that does not inspire confidence.
The stock markets have been up the last couple of days and the unemployment rate is still unusually low, while the gross domestic product has lately crawled forward at an Obama-era pace, but there are reasons for Trump and the rest of us to be nervous. The treasury markets recently went into an “inverted yield curve,” an obscure statistic that has presaged every recession of the last 50 years, business investment has lately been down, the federal deficit is up beyond Obama-era levels, such major economies as Great Britain’s and Germany’s are sliding into recession, China’s behemoth economy is rapidly slowing, and since July there has been a 6.4 percent decline in consumer confidence. The global smart money doesn’t seem to have much faith in Trump’s leadership, and increasingly sees it as yet another reason to be nervous.
All of which amounts to another conspiracy against Trump, of course. Trump explains that the “fake news” media — which now includes Fox News — is drumming up potentially self-fulfilling recession prophecies in order to deny him a landslide reelection. The media are merely reporting the official government statistics, but Trump is also skeptical of official government statistics. Back when President Barack Obama was in office and the stats showed slow but steady economic improvement Trump opined that the bureaucrats were cooking the books to make the boss look good. When Trump became president and the bureaucrats continued to report the same slow but steady trajectory he happily embraced it as official government statistics, but apparently anything that doesn’t look good is coming from the “deep state” cabal trying to make the new boss look bad.
Trump is also preemptively blaming Federal Reserve Chairman Jerome Powell, who has not done the severe interest rate-cutting Trump thinks is needed to prevent the upcoming recession that Trump assures us is not going to happen. Powell’s policies are quite prudent if the economy is the well-tuned ad humming machine Trump claims it is, and will come handy if that’s not the case and there are still interest rates to be cut, but if worse comes to worst Trump will have a handy scapegoat in the man he appointed to head the Fed.
No matter what, Trump will insist his global trade wars had anything to do with any global economic difficulties that might occur. He still insists that China is paying those billions of dollars of tariffs rather than the Wax-Mart shoppers, even as he backs off from his latest tariff threat for fear that Christmas shopping might not be as brisk, and there’s not reason a global trade war has anything to do with a downturn in the global economy.
Trump ran for president on the argument that all the military alliances and trading partnerships America had negotiated since the end of World War II were a raw deal, despite the relative global peace and prosperity that followed here and mostly abroad, and a promise that he’d knock it all down and negotiate a far better deal for the United States. So far he’s been fairly successful at the knocking it down part, but he’s not yet negotiated that sweetest deal ever.
None of the world’s dictators nor any of its democratically elected leaders have any reason to bail Trump out by agreeing to his demands for American hegemony, so that sweetest deal ever seems even more elusive. If they face any popular backlash to an economic downturn, both the dictators and the democratically elected leaders will happily and plausibly blame Trump.
On the other hand, the next recession might not happen before the next presidential election. There’s always a next recession, no matter who is president, what with the business cycle being an un-repealable law of economics, but they’re hard to predict. We’ve noticed they usually come at an inconvenient time for Republican incumbents, but despite his six casino bankruptcies Trump has often been lucky in his life.
An alarming 74 percent of the economists polled by the National Association for Business Economics expect a recession by 2021, but they probably have it in for Trump, and we remember the old joke about how economists have predicted the last 30 of the past ten recessions, and we hope they’re wrong. Not for Trump’s sake, of course, as we can’t stand the guy and will gladly blame his wrecking-ball economics if the global economy crashes to the ground, but because we don’t like recessions.
— Bud Norman