Trump Is Flirting With Economic Disaster

Trump voters claimed their main concern was about prices and the economy - rather than the mainstreaming of racial hatred, white supremacy, homophobia, and bigotry in general the Felon was offering - yet so many of his voters are now silent as their glorious leader is creating economic turmoil, causing the stock market to sink and alienating long time allies around the globe. Their silence is telling and shows their claimed motivation was a lie.  What many of them truly want, including supposed "conservative Christians" who will be parking their asses in church pews for Easter but support policies that are the antithesis of Christ's gospel message, is a return to the 1950's where racial minorities, gays and even women were second or third class citizens. The Felon's and his Gestapo like henchmen and henchwomen (think ICE Barbie) assault on so-called DEI and seizure of people with zero due process underscores this agenda.  Meanwhile the Felon is at war with the Federal Reserve chairman and is plotting a path that could further an economic disaster even as there are signs investors around the globe appear to be loosing confidence in America and the dollar as a safe and stable investment.  A piece in The Atlantic looks at the economic disaster the Felon may yet unleash. Here are highlights (it is crucial to understand that all of the economic chaos stems from one individual, the Felon):

According to President Donald Trump, the banker he picked to lead the Federal Reserve is “WRONG.” His reports are a “complete ‘mess!’” And his termination “cannot come fast enough!”

These kinds of remarks would be extraordinary for any other resident of the White House. Presidents are normally deferential to central bankers and avoid lobbying for monetary-policy changes in order to maintain the markets’ faith in the Fed’s independence. Not Trump. He has blasted the Fed dozens and dozens of times over the years, labeling its policies “ridiculous,” calling its officials “pathetic” and “boneheads,” and branding Jerome Powell an “enemy.”

The markets (and Fed officials) have largely shrugged off this jawboning and name-calling. Trump hasn’t swayed the central bank’s policy in any appreciable way, and Powell—again, a Trump nominee—has proved a deft leader of the central bank. But interest rates are climbing and growth is falling, giving Trump trillions of reasons to get rid of the Fed chair. A pending court case might grant the president the capacity to remove him without cause, in contravention of current law.

And if Trump then manipulates the Fed to increase growth, he risks damaging the American economy for the foreseeable future.

As he is already doing. Trump has implemented sweeping global tariffs, including a 145 percent tariff on all goods from China and a 25 percent tariff on certain goods from Canada. The trade levies are equivalent to a 28 percent sales tax on foreign parts and products, the highest effective rate since 1901, . . . They are hurting farmers, killing off small businesses, spooking consumers, and dampening industrial investment, and they stand to cost the average family nearly $5,000 a year in the near term.

The trade levies will knock a full percentage point off GDP growth and eliminate hundreds of thousands of jobs, forecasters believe. Given their capacity to delay corporate investment and tank consumer confidence, the tariffs might even cause an extraordinary policy-induced recession later this year.

The diminished outlook for growth and corporate profits has led to a plunge in stock prices, with the S&P 500 down 14 percent since Trump took office. Remarkably, the price of Treasury bonds—normally a haven during a downturn, with their price moving in the opposite direction of equities—has dropped too. Investors around the world are dumping American assets, pricing in the risk of democratic decline and the cost of policy chaos emanating from Washington.

If Trump bullies the Fed into a policy decision by firing Powell and installing a crony in the central bank, investors around the world will dump even more American assets and flee to the relative safety of the euro, raising domestic borrowing costs as the central bank scrambles to shore up the financial system and tries to bring interest rates down. It would be chaos, with costs extending into the trillions of dollars and the ramifications felt for decades.

Powell himself has repeatedly said that the White House cannot fire him without cause, and has indicated that he would fight his dismissal in court. But the White House has shown no deference to the courts this term. . . . . Congress has done nothing to rein in the White House.

If he fires Powell, he won’t be able to bring down interest rates and boost growth. He risks a financial crisis, a massive recession, a permanently lower growth trajectory for the country, and the end of American hegemony over the financial markets.

Trump wants cheap money and strong growth. The surest path to those outcomes involves getting rid of the tariffs and leaving the Fed alone.

I hope renewed white supremacy policies make the Felon's supporter happy as they face a diminished economy, higher prices, and a reduced America in the global markets.