Official White House Photo: Shealah Craighead
President Donald J. Trump joins G7 Leaders for dinner Saturday evening Aug. 24, 2019, at the Biarritz Lighthouse in Biarritz, France.
Suddenly, the nation is facing what could be the most dangerous moment in the dangerous presidency of Donald Trump. It’s the peril many Americans feared from Trump’s first day in office: A serious national economic crisis threatening all our livelihoods requiring steady leadership by a thoughtful, well-informed president guided by the best advice of the nation’s leading economic experts. Fat chance of that.
The nation has been fortunate the steadily growing U.S. economy President Barack Obama handed over to Trump was continuing under Trump’s presidency. For two-and-a-half years, Trump boasted about his tremendous economy, taking credit for longest period of economic growth in U.S. history. Trump never mentioned the bulk of that economic success was the last seven years of Obama’s presidency. Instead Trump trashed Obama’s record as “American carnage,” dishonestly claiming he’d inherited an economy in ruins.
But now, economic indicators are warning America’s longest economic expansion is coming to an end. Three out of four U.S. economists expect a recession within the next year or so. It would be the first since the Great Recession from December 2007 to June 2009, the worst financial crisis since the Depression. That recession resulted in 8.6 million jobs lost and the net worth of American households plummeting $11.5 trillion.
There’s no way of predicting how bad a recession will be. The U.S. has had 11 since World War II. The shortest was just more than six months long in 1980; on average, they’ve lasted 11.1 months. But, of course, that depends upon the intelligence and skill of the crisis managers and whether there’s a unified, consistent political strategy. Are you terrified yet?
Costing American Households
The biggest threat to our current economy was self-inflicted by Trump. The rising tariffs in Trump’s reckless trade war with China are now costing American households $1,000 a year in higher prices and expected to rise to $1,500 a year in December, according to JPMorgan Chase. The famous last words on the tombstone of Trump’s presidency if he destroys our own economy should be the ignorant tweet: “Trade wars are good and easy to win.”
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No legitimate economic advisor would ever tell a president such a thing, but then Trump has no legitimate economists advising him. Larry Kudlow, Trump’s chief economic advisor and director of his National Economic Council, is not an economist although he played one on TV. Kudlow impressed Trump hosting business talk shows on CNBC. His only academic credential is a BA (in history) from the University of Rochester, N.Y.
Trump likes how Kudlow looks on television defending his trade war and denying any possibility of a recession. “Well, I’ll tell you what: I sure don’t see a recession,” Kudlow firmly declared on Meet the Press. Of course, that would be a lot more convincing if Kudlow hadn’t written a National Review column in December 2007 as the Great Recession was beginning: “There’s no recession coming. The pessimists are wrong. It’s not going to happen… The Bush boom is alive and well. It’s finishing up its sixth consecutive year with more to come. Yes, it’s the greatest story never told.”
Trump doesn’t employ advisors who tell him anything he doesn’t want to hear. That’s why he’s down the D-list who have no professional reputations to lose. None of those conscientious White House aides are left who used to steal papers off the president’s desk to prevent him from signing stupid stuff.
Off-the-Wall Tweets
Trump doesn’t trust economic experts who know what they’re talking about. An off-the-wall Trump tweet accused economic experts of conspiring with the news media to do “everything they can to crash the economy because they think that will be bad for me and my re-election.” Jerome Powell, Trump’s hand-picked chairman of the Federal Reserve, is one of those economic experts warning Trump his trade war could cause a recession.
That’s why Trump publicly attacks Powell, accusing him of possibly being a bigger enemy of the United States than the president of China. Trump is setting up Powell as the scapegoat if Trump’s trade war does create a recession. The president is demanding Powell slash short-term interest rates by a full percentage point, something usually done in terrible economies, not good ones.
The corrupt reason for Trump’s demand became clear when Bloomberg News reported that drastic rate cut—which would leave Powell few tools to fight a coming recession—would save Trump more than $3 million a year in interest on $360 million in loans on his Washington, D.C. and Chicago hotels and his Doral golf resort in Miami.
That’s the thing about this president. We never know whether Trump is spouting incoherent nonsense because he doesn’t know any better or to cover up corrupt, dishonest motives he doesn’t want anyone to know about. Either way, the president is putting our entire economy—and all our lives—in danger.
