Trump’s economic anxiety comes to a boil

Trump’s economic anxiety comes to a boil

As with many presidents before him, Donald Trump’s prospects for being reelected to a second term have largely rested on the strength of the economy. For two years, he was able to point to relatively strong job numbers and increasing GDP (even if less than promised) to try to make his case that he was making America great again.

But as economic warning signs began piling up last week, Trump’s legendary bravado began to falter. The bond market twice flashed an inverted yield curve in the past week. That arcane milestone, which means that short-term Treasury bond investments pay more than long-term ones, is seen as a precursor to recession, and triggered an 800-point free fall of the Dow Jones Industrial Average.

This led the president to assure the country that all was going well with trade negotiations between the U.S. and China, and that, if anything, the only “problem” facing our economic juggernaut was the man he appointed to lead the Federal Reserve, Jay Powell.

An inverted yield curve was not the only worrisome economic news, however. Figures released Thursday showed U.S. manufacturing growth slowing to the lowest level in 10 years. This undercuts one of Trump’s favorite talking points, that he saved manufacturing jobs that his predecessors could not. As he did in an interview with the Wall Street Journal last week, Trump often boasts that, thanks to him, the U.S. steel industry is now booming. Tell that to U.S. Steel, which, citing lower prices and soft demand amid Trump’s ongoing trade war with China, laid off hundreds of workers this week in Michigan.

Still, job growth has been a bright spot for the Trump administration. The president routinely boasts that he has “created over 6 million new jobs since the election.” (The economy has added 5,983,000 since Trump was inaugurated.) That’s still a lot of jobs: 193,000 per month, in fact, which is just shy of the 221,000 monthly jobs added during Barack Obama’s final 29 months in office. But Trump’s solid numbers faltered this week when the Bureau of Labor Statistics reported that the U.S. economy created 501,000 fewer jobs from the end of 2018 through early 2019 than was initially reported. (The total number of jobs created since Trump’s inauguration has been downgraded to 5.2 million.)

President Trump (AP Photo/Alex Brandon)
President Trump (AP Photo/Alex Brandon)

As economists and financial journalists fretted over the incoming data, executives from four automakers dealt Trump another blow, striking a deal with California to adhere to fuel efficiency standards negotiated with the Obama administration. Trump had planned to roll out weaker targets this summer, but found himself ignored as the nation looked to begin addressing carbon emissions contributing to climate change, something the president believes to be a “hoax.”

For Trump, “America first” has always meant that the economic ends are justified by the means, even when, as most scientists believe, those means could spell the end of life on earth.

Like a Jedi mind trick, Trump’s boundless faith in himself is what appeals to many of his supporters. It’s what gives him the ability to utter sentences like “I am the chosen one,” when speaking Wednesday of taking on China’s trade practices. You see, it’s hard to find fault with a person who is simply carrying out God’s orders. Divine trade intervention only goes so far, however, toward explaining who is to blame for our current trade war with Beijing that has resulted in billions of losses to U.S. farmers, the American tourist industry and the economy as a whole.

“This isn’t my trade war,” Trump told reporters at his “chosen one” gaggle. “This is a trade war that should have taken place a long time ago by a lot of other presidents.”

Despite Trump’s claim that the trade war is making America rich again, the president’s frequent assurances this week that the “economy is doing really well” was laid bare by a double-barreled economic blast. First, Federal Reserve villain Powell declined to lower interest rates. Then, China announced retaliatory tariffs on $75 billion worth of American goods. This one-two punch led Trump to erupt on Twitter.

So incensed at what he perceives as the obstacles to keeping America great, Trump, in a tweetstorm that will be forever recorded in socialist history books, “ordered” U.S. companies to “start looking for an alternative to China, including bringing your companies HOME and making your products in the USA.”

The U.S. Chamber of Commerce politely rebuffed Trump’s latest big idea.

“While we share the president’s frustration, we believe that continued, constructive engagement is the right way forward,” Myron Brilliant, executive vice president and head of international affairs at the chamber, said in a statement. “Time is of the essence. We do not want to see a further deterioration of U.S.-China relations.”

While Trump continues to blame any number of people and groups for a weakening economy — Democrats, Powell, the “fake news media,” Western allies, China, former presidents, automakers and immigrants — it remains to be seen whether his belief in himself will be enough to prevent a recession. If you ask him, however, the answer is already clear.

But as the stock market took another big dive Friday over Trump’s inability to strike a trade deal with China, even the president’s playful quips seemed to convey the simple truth that continued economic turbulence could keep him from attaining a second term.

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