Trump Owns This Pandemic. Trump Owns the Oncoming Recession. Do Not Let Anyone Forget It.
February 26th 2020
Donald Trump (Gage Skidmore)
By FrankDiPrima
In 2018, Donald Trump made the White House staff and the National Security Council incapable of responding to a pandemic by firing all the experts who could be of any help. That is typical of a “leader” who cares only about the next 24 hour news cycle. As Paul Krugman wrote today, Feb. 25, because of Trump’s actions, “we’ve clearly missed whatever chance we had of containing the disease’s spread. And it is going to be seriously disruptive.” Thus, we should not let anyone forget that Trump owns this pandemic, its potentially devastating effect on public health, and its devastating effect on the national economy.
Trump has chosen instead to become a sleazy stock-market tout. Yesterday, February 24, from India, he said the stock market looked good to him. And Trump trotted out his top economic adviser, the frequently drunk-on-TV Larry Kudlow, yes, shitface inebriated repeatedly on TV, to say buy stocks on the dips, whatever that means. (How the hell do you know if what you are witnessing is a dip or just the beginning of a freefall?) Anyway, since these two very stable geniuses told Americans to go buy stocks, the Dow has fallen another thousand points.
The Economy May Be Headed for Serious Pre-Election Downturn
No responsible commentator hopes for an economic downturn, let alone a recession, and I certainly do not. It will bring widespread suffering. But here is why I believe we are witnessing the onset of a serious downturn, if not a recession, and will feel the effects well before Election Day 2020.
The widely watched Purchasing Managers Index, out last Friday, Feb. 21, showed a further slowing of the manufacturing sector of the index and actually showed a contraction, or negative growth, in the service sector which comprises two-thirds of the American economy. The other one-third, the manufacturing sector, was already in a year-long recession, certainly brought on at least in part by the Trump tarriffs. This is the worst showing for the PMI since 2013. This is one of several shocks that we have seen in the economic outlook that we have seen in the past week or so. Others included Apple’s gloomy forecasts of disruptions on both ends — its supply chain (think China) and its markets (China) and the spread of the pandemic to Italy. No one can predict stock markets, but it is quite clear that the underlying economy is going to be worse between now and Election Day than it has been in many years.
We may have been due for a downturn anyway, but, plainly, Trump’s policies, including a series of mindless trade wars, contributed to that downturn. He may have artificially delayed the downturn with his for-the-rich-only tax cuts and his record deficit spending, which may only make the downturn, when it does come, that much worse. But Trump took away the Federal Reserve’s weapons to deal with a downturn by brow-beating the Fed into reducing interest rates at the height of the boom when they should have been inching up. Remember when he threatened, without authority, to fire Fed Chairman Powell, his own appointee?
Now comes the pandemic. The travel industry is in a downward spiral and will not recover for many months. The hospitality industry may follow suit. Ditto the entertainment industry; not only do people not want to travel, but also they do not want to congregate in large groups.
The stock market, which Trump loves so much to tout as the measure of his self-styled economic success, generally rises on the expectation of higher earnings, and earnings this year will be in the crapper. Neither device manufacturers (for example, smart phones), nor pharmaceutical manufacturers, can work their usual supply chains, and of course it is ordinary folks who will suffer most. In particular, many bulk ingredients of commonly used prescription pharmaceuticals are made in China. Economic downturns can come on rather quickly, even in presidential election years (think not just 2008 and 1992 but also 2000 when the dot-com bubble started to burst ). Trump’s approval ratings and with them his re-election chances will plummet.
Or so I predict. But what do I know? The far more illustrious Larry Kudlow assured us all last month that the coronavirus would have no material impact on the U.S. economy. Okay, Mr. Trump, that’s your guy, the same Larry Kudlow who said, pre-Lehman crash, that there was no housing bubble and it would not cause any harm. Do not let anyone forget that Donald Trump and his enablers in large part caused this state of affairs. Please, do not let them forget it for one minute.
Posted with permission