And he has only himself to blame.When he isn’t raving about how the deep state is conspiring against him, Donald Trump loves to boast about the economy, claiming to have achieved unprecedented things. As it happens, none of his claims are true. While both G.D.P. and employment have registered solid growth, the Trump economy simply seems to have continued a long expansion that began under Barack Obama. In fact, someone who looked only at the past 10 years of data would never guess that an election had taken place.
But now it’s starting to look as if Trump really will achieve something unique: He may well be the first president of modern times to preside over a slump that can be directly attributed to his own policies, rather than bad luck.
There has always been a deep unfairness about the relationship between economics and politics: Presidents get both credit and blame for events that usually have little to do with their actions.
- Jimmy Carter didn’t cause the stagflation that put Ronald Reagan in the White House;
- George H.W. Bush didn’t cause the economic weakness that elected Bill Clinton; even
- George W. Bush bears at most tangential responsibility for the 2008 financial crisis.
More recently, the “mini-recession” of 2015-16, a slump in manufacturing that may have tipped the scale to Trump, was caused mainly by a plunge in energy prices rather than any of Barack Obama’s policies.
But unlike previous presidents, who were just unlucky to preside over slumps, Trump has done this to himself, largely by choosing to wage a trade war he insisted would be “good, and easy to win.”
The link between the trade war and agriculture’s woes is obvious: America’s farmers are deeply dependent on export markets, China in particular. So they’re hurting badly, despite a huge financial bailout that is already more than twice as big as the Obama administration’s auto bailout. (Part of the problem may be that the bailout money is flowing disproportionately to the biggest, richest farms.)
Shipping may also seem an obvious victim when tariffs reduce international trade, although it’s not just an international issue; domestic trucking is also in recession.
The manufacturing slump is more surprising. After all, America runs a large trade deficit in manufactured goods, so you might expect that tariffs, by forcing buyers to turn to domestic suppliers, would be good for the sector. That’s surely what Trump and his advisers thought would happen.
But that’s not how it has worked out. Instead, the trade war has clearly hurt U.S. manufacturing. Indeed, it has done considerably more damage than even Trump critics like yours truly expected.
The Trumpist trade warriors, it turns out, missed two key points. First, many U.S. manufacturers depend heavily on imported parts and other inputs; the trade war is disrupting their supply chains. Second, Trump’s trade policy isn’t just protectionist, it’s erratic, creating vast uncertainty for businesses both here and abroad. And businesses are responding to that uncertainty by putting plans for investment and job creation on hold.
So the tweeter in chief has bungled his way into a Trump slump, even if it isn’t a full-blown recession, at least so far. It’s clearly going to hurt him politically, notably because of the contrast between his big talk and not-so-great reality. Also, the pain in manufacturing seems to be falling especially hard on those swing states Trump took by tiny margins in 2016, giving him the Electoral College despite losing the popular vote.
And while many presidents have found themselves confronting politically damaging economic adversity, Trump is, as I said, unique in that he really did this to himself.
Of course, that doesn’t mean that he will accept responsibility for his mistakes. For the past few months he has been trying to portray the Federal Reserve as the root of all economic evil, even though current interest rates are well below those his own officials predicted in their triumphalist economic projections.
My guess, however, is that Fed-bashing will prove ineffective as a political strategy, not least because most Americans probably have at best a vague idea of what the Fed is and what it does.
So what will come next? Trump being Trump, it’s a good bet that he’ll soon be denouncing troubling economic data as fake news; I wouldn’t be surprised to see political pressure on the statistical agencies to report better numbers. Hey, if it can happen to the National Weather Service, why not the Bureau of Economic Analysis (which reports, by the way, to Wilbur Ross)?And somehow or other this will turn out to be another deep-state conspiracy, probably orchestrated by George Soros.
The scary thing is that around 35 percent of Americans will probably believe whatever excuses Trump comes up with. But that won’t be enough to save him.
Trump Buying Greenland Seemed Like a Joke. Then It Got Ugly.
It started as a headline seemingly straight out of The Onion. Then it unleashed a torrent of jokes on late-night television and social media. And finally it exploded into a serious diplomatic rupturebetween the United States and one of its longtime allies.
In the latest only-in-Trumpland episode skating precariously along the line between farce and tragedy, the president of the United States on Wednesday attacked the prime minister of Denmark because she will not sell him Greenland — and found the very notion “absurd.”
Never mind that much of the rest of the world thought it sounded absurd as well. Amid a global laughing fit, Mr. Trump got his back up and lashed out, as he is wont to do, and called the prime minister “nasty,” one of his favorite insults, particularly employed against women who offend him, like
- Hillary Clinton and
- Meghan Markle, the Duchess of Sussex.
All of which might be written off as just another odd moment in a presidency unlike any other. Except that attacking Denmark was not enough for the president. He decided to expand his target list to include NATO because, as he pointed out, Denmark is a member of the Atlantic alliance. And he chose to do this just two days before leaving Washington to travel to an international summit in France, which also happens to be a NATO member.
Mockery, of course, is not the reaction most presidents seek to inspire in foreign counterparts heading into important meetings. Most of the other leaders of the Group of 7 powers will no doubt save their eye-rolling for when he is not looking, but they have come to see mercurial behavior as the new norm by the president.
“This is yet another blow to American credibility under President Trump,” said Ivo H. Daalder, a former ambassador to NATO under President Barack Obama. “No leader, friend or foe, will take America seriously.”
“It’s not just the unthinkable notion of buying and selling territory as if we’re talking about a building or golf course,” he added. “It’s also the abrupt cancellation of a state visit as a result of the totally predictable rejection of that notion.”
To be sure, Greenland has increasingly absorbed American policymakers lately because of the opening of the Arctic with warming weather. American officials have talked about how to counter China, which has expressed interest in expanding ties with Greenland.
American leaders “remain concerned about some of the involvements of both the Chinese and the Russians in the Arctic,” Morgan Ortagus, the State Department spokeswoman, said on Wednesday.
The aborted Greenland venture comes at a time when Mr. Trump has seemed particularly erratic. In recent days, he proudly quoted a radio host declaring that Israeli Jews love him as if he were the “King of Israel” and “the second coming of God,” while Mr. Trump himself accused Jews who vote for Democrats of “great disloyalty.”
Speaking with reporters on the South Lawn on Wednesday, he suggested that God had tapped him to lead a trade war with China. “I am the chosen one,” he said, glancing heavenward. In the Oval Office on Tuesday, he exhibited his universal suspicion. “In my world, in this world, I think nobody can be trusted,” he said. At a rally last week, he ridiculed a man he thought was a protester for being fat, only to learn later that it was one of his supporters.
Some former Trump administration officials in recent days said they were increasingly worried about the president’s behavior, suggesting it stems from increasing pressure on Mr. Trump as the economy seems more worrisome and next year’s election approaches.
After casting off advisers who displeased him at a record rate in his first two and a half years in office, Mr. Trump now has fewer aides around him willing or able to challenge him, much less restrain his more impulsive instincts.
With a growing schedule of campaign rallies, he will be talking in public even more in the coming months, each time a chance to say something provocative that may distract from the messages his staff would prefer to emphasize.
Greenland, for one, was not on the staff’s list of priorities for the week. But while Mr. Trump has long derided nation-building, his flirtation with nation-buying turned out to be more serious than many originally thought. He has been talking privately about buying Greenland for more than a year and even detailed the National Security Council staff to study the idea.
At one point last year, according to a former official who heard him, he even joked in a meeting about trading Puerto Rico for Greenland — happy to rid himself of an American territory whose leadership he has feuded with repeatedly.
The notion of acquiring 836,300 square miles, or three times the size of Texas, appealed to the real estate developer in Mr. Trump, even if most of it is covered in ice. Aside from the potential military position and natural resources to gain, it fit his desire to do something big as president, in this case literally to increase the size of the country by more than 20 percent.
Supporters said Mr. Trump was onto something. “This idea isn’t as crazy as the headline makes it seem,” Representative Mike Gallagher, Republican of Wisconsin, said last week, calling it “a smart geopolitical move.”
“The United States has a compelling strategic interest in Greenland,” he continued, “and this should absolutely be on the table.”
Yet even Mr. Trump at one point seemed to see the absurdity of it, posting on Twitter a picture of a giant gold Trump Tower in a barely developed Greenland and writing, “I promise not to do this to Greenland!”
But when Prime Minister Mette Frederiksen made clear that Greenland was not for sale, Mr. Trump canceled a trip to Denmarkscheduled for September. Even though the president initially insisted that the trip was not about buying Greenland, in canceling it he said it actually was.
His original polite response to Ms. Frederiksen on Tuesday, when he expressed gratitude that she was “so direct” because it saved time and expense, turned darker on Wednesday amid the derision heaped on him.
Mr. Trump focused on Ms. Frederiksen’s comment that selling Greenland was an “absurd discussion,” as she put it. “It was nasty,” Mr. Trump told reporters as he left the White House for a trip to Kentucky. “I thought it was an inappropriate statement. All she had to do is say, ‘No, we wouldn’t be interested.’”
To Mr. Trump, it was not just an insult to him but to the nation as a whole. “She’s not talking to me. She’s talking to the United States of America,” he said. “You don’t talk to the United States that way, at least under me.”
That was not enough, however. He then took to Twitter to further assail Denmark, saying that as a NATO member it did not contribute enough to military spending. And then for good measure, he went after NATO as a whole for not spending enough on their militaries.
“We protect Europe and yet, only 8 of the 28 NATO countries are at the 2% mark,” he wrote, referring to the goal set by the alliance for members to spend 2 percent of their gross domestic product on defense.
The dust-up could have wider ramifications, analysts said. “The president’s anger and his menacing tweet about Danish defense spending reignites Europeans’ worst fears about the U.S. commitment to NATO,” said Constanze Stelzenmüller, a German scholar at the Brookings Institution. “Presumably, the administration isn’t considering foreclosure. But is selling our territory now a proof of fealty for President Trump?”
Ms. Frederiksen opted not to fire back. “I’m not going to enter a war of words with anybody, nor with the American president,” she said on Danish television. She added that she found the Danish response to Mr. Trump’s planned visit and its cancellation “good and wise.”
It fell to Secretary of State Mike Pompeo to do damage control, calling his Danish counterpart, Jeppe Kofod, to express “appreciation for Denmark’s cooperation as one of the United States’ allies,” according to Ms. Ortagus.
“Appreciate frank, friendly and constructive talk with @SecPompeo this evening, affirming strong US-DK bond,” Mr. Kofod wrote on Twitter. “US & Denmark are close friends and allies with long history of active engagement across globe.”
Engagement, but no sale.
Trump Calls for a Big Fed Rate Cut, Again Criticizes Central Bank Chairman
President Trump on Monday called for the Federal Reserve to cut its benchmark interest rate by 1 percentage point, a move that would typically be considered only when the U.S. economy is on the brink of a recession, and again criticized his own central bank chairman for a “horrendous lack of vision.”
In a pair of tweets Monday morning, the latest in a series of attacks Mr. Trump has levied against Fed Chairman Jerome Powell, the president said a combination of a reduced interest rate and a resumption of the Fed’s crisis-era bond-buying stimulus would improve the economy both in the U.S. and globally. “Good for everyone!” Mr. Trump tweeted.
Mr. Trump, who returned Sunday from a 10-day vacation at his golf course in Bedminster, N.J., has repeatedly attacked Mr. Powell for the state of the economy, even as he and his advisers have projected optimism that the decadelong economic expansion will continue. Mr. Trump has repeatedly called on the central bank to lower interest rates more than it has, saying that would further boost growth. U.S. economic growth slowed to 2.1% in the second quarter from 3.1% in the first three months of the year.
Last Wednesday, on a day when the Dow Jones Industrial Average slumped 800.49 points, or 3%, the president spent much of the day attacking the Fed chairman on Twitter.
White House and campaign aides acknowledge privately that a recession would threaten Mr. Trump’s 2020 re-election campaign, which has made a booming economy a central selling point. On Tuesday, the White House has arranged a call in which National Economic Council Director Larry Kudlow is expected to reassure state and local officials about the state of the economy.
Asked in an interview on Fox News about possible economic alarm bells, White House counselor Kellyanne Conway on Monday played down the chance of a slowdown.
“It’s nice to have the mainstream media finally covering the economy, but they only cover it when they can use Sesame [Street’s] Grover word of the day, ‘recession,’ ” she said. Pointing to strong employment numbers, she said the economy’s “fundamentals are very strong.”
The last time the Fed reduced rates by a full percentage point was during the 2008 financial crisis.