How Trump is putting economy at risk

Let’s talk about the economy under Donald Trump’s second term. I have been very careful for over a decade about the ease with which others will sometimes predict the recession. There were folks during the 2012 reelection campaign of Brock Obama saying, if Obama wins, there will be a recession. Or if Obama loses, there will be a recession. We had people in 2016 saying there’s a recession coming either way, or there will be one if Hillary Clinton wins, or there will be one of Trump wins. We had folks, including Trump himself, saying, If Biden wins 2020 there will be a recession. During all of these situations, I would look at the economic data, and I would say it doesn’t seem at all obvious that there is a recession coming. GDP numbers are okay, employment numbers are okay. Stock market is okay. We had the COVID crash in March of 2020. It was short lived, lived and very quickly recovered from that. All goes to say, things seem very shaky right now. Now I want to put right up front, because I’ve got people emailing me saying, David, you’re hoping for a recession to prove a political point. I am not, and I was very quick to acknowledge that pre COVID, the Trump economy was very okay. It mostly follows a global business cycle. The trend of job creation under Obama mostly continued. Yes, Trump did some things to hurt manufacturing. Yes, Trump did some things to hurt farmers. But for the most part, things were okay, and I didn’t give credit nor blame to Trump much, the way that much of the economy does not depend directly on the president. But now we are seeing the Atlanta Fed revised Q, 1g D P, from 2% growth to 1.5% decline to 2.8% decline for q1 annualized 2020, 5g, d p under Trump, that’s a disastrous number. Trump promised explosive G D P growth and the Atlanta Fed is now predicting a decline the stock market last week, as Donald Trump announced and re announced and confirmed tariff, tariff, tariff, the Dow down six 700.1 day down six 700 points the next day. This is a level of instability that we have not seen for a long time. And the important thing is, you can say, well, who cares about the stock market? Stock market impacts a lot of things. Many businesses decide where are we in the cycle of expansion or contraction based on what’s going on with their stock price. If businesses decide to contract, meaning lay people off, even if you as an employee, don’t own any shares of that company stock, the fact that the stock price went down still means you can be laid off further. We now are contending with a decrease in consumer spending in February, the likes of which we haven’t seen in a very long time, and this is the contractionary behavior that individuals start to engage in when they suspect the money may be tougher to come by in the future, and therefore I need to save it rather than spend it. And as basic economics tells us, saving money is a far less economically stimulative activity then spending money in your community. So I am not yet at the point of starting to wave a pitch fork and say a recession is coming, but the totality of the situation right now is different than what I observed in 2012 2016 2020 you know all of the if Biden wins, it’ll be like 1929 that Trump would talk about in 2020 never believed it didn’t happen. The Biden economy, job creation, stock market growth, inflation came down to 2.9% things are looking different now, and so no, I don’t hope it happens. I would rather not prove any political points and have Trump get out of the way and let what is a very dynamic American economy. It’s not perfect. We have poverty, we have hunger, we have people unable to afford health care. We’ve got to deal with that. But big picture, the account, the American economy is dynamic, and if you get out of its way reasonably So, while maintaining needed regulation, it tends to do at least as well as the global business cycle. The concern now is that Trump’s tariffs, Trump’s gutting of federal programs, Trump’s gutting of all sorts of safety net elements, that is going to create an unsteadiness and a chaos that will be very bad for everyone involved. I hope that it doesn’t happen. What else will I be looking at? We will look at job creation, unemployment, stock market level, GDP, numbers. When we get it, we won’t get Q 1g, D, P, until well into q2 and in addition to this, it will be. Interesting to see what happens with the companies considered industry leaders, they will often signal whether they believe things will improve or not by virtue of their hiring and their inventory accumulation. So you can get a lot more information about this than what you will get on the three letter networks. You’ve got to look for it. But importantly, I don’t think Trump cares one way or the other. He wants to feel like a big boy that everyone’s cow towing to, and so far, what he’s doing is not good for the average American.