Are We Winning Yet?

A screen shot of the New York Times home page just now:

The Dow Jones Industrial Average fell 800 points today, I understand. That’s probably not good.

From WaPo:

The global economy has begun to shudder.

On Wednesday, the U.S. stock market tumbled after a reliable predictor of looming recessions flashed for the first time since the 2008 financial crisis. The Dow Jones industrial average fell around 800 points, or 3 percent, and has lost close to 7 percent in the past three weeks.

Two of the world’s largest economies, Germany and the United Kingdom, appear to be contracting. Argentina’s stock market fell nearly 50 percent in recent days, and growth in China has slowed.

Whether the events presage an economic calamity or just an alarming spasm are unclear. But unlike during the Great Recession, global leaders are not working in unison to confront mounting problems and arrest the slowdown. Instead, they are increasingly at each other’s throats.

And President Trump has responded by both claiming the economy is still thriving while dramatically ramping up his attacks on Federal Reserve Chairman Jerome Powell, seeking to deflect blame.

I am not qualified to explain inverted yield curves, but that’s what spooked everybody today. I understand that Trump’s trade war with China is not the only factor causes financial tectonic plates to shift, but it’s a major one.

Since financial reporters tend to be buoyantly optimistic about the economy until the moment the electricity is cut off and the foreclosure papers are tacked to the door, I find it unsettling that one story after another solemnly warns it ain’t lookin’ good out there. There are always qualifiers — disaster may not fall — but they are falling short of buoyant optimism today. It’s more like cautious hopefulness mixed with just a hint of panic.

Which brings us to the wonderfully understated headline Could managing the economy be more complicated than Donald Trump thought?

Paul Waldman:

Trump could not have been more wrong than when he insisted in 2018 that “trade wars are good, and easy to win.” His trade war is somewhere between a failure and a disaster, precisely because he thought it would be easy to win. “We’re learning that maybe China has a higher pain threshold than we thought here,” said Trump economic adviser Stephen Moore. You mean they wouldn’t just knuckle under and give us back all our jobs? Who could have predicted such a thing?

Well, anybody who knew anything could have predicted such a thing, but that leaves out Trumpsters.

That’s our short-term problem, but the long-term problem suggested by the study of CEO pay is that the economy has been and continues to be organized primarily for the benefit of those at the top. And if we do find ourselves in a recession, it may cause people to step back and realize that not only did Trump have no idea what he was talking about when it came to our immediate challenges, everything he has done will make inequality worse.

One thing we can say for sure is that whatever happens over the next year or two, economic policy turned out to be quite a bit more complicated than Trump thought. Of course, you could say that about almost any policy.

Trump has been tweeting frantically all afternoon, insisting that “Tremendous amounts of money pouring into the United States” (from where?) and about the “tremendous mistakes” of Federal Reserve Chair “Jay” Powell that are messing up his brilliant trade war that he would be winning otherwise.

I keep wondering when the money people will wise up and stop supporting this clown.

11 thoughts on “Are We Winning Yet?

  1. maha,

    tRUMPty DUMBty wanted to build a wall,

    Instead, tRUMPty DUMBty's making the economy take a great fall.

    And if it does:

    All of the Kings of Wall Street, and all of their ad-men

    Will try to make sure tRUMPty DUMBty doesn't get elected again!

     

     

     

  2. The only thing Trump had was a strong economy, handed to him on a silver platter. If that's gone in 2020, his 40% (which wasn't enough) will be a lot lower. The entire GOP platform will be reduced to, 'but you can't elect a Democrat'. WTF not when the economy is in a tail dive and none of Trump's promises have been kept? 

    This may degenerate into a one-sided race – the Democrat who wins the primary may walk into the WH almost unopposed if Trump's rhetoric is ignored by Independents and a lot of Republicans just stay home in November. 

  3. Well, I guess that when you have a president who traffics in an inverted reality it's only natural that you'd have an inverted yield curve to complement that inversion.

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  4. Well, I guess that when you have a president who traffics in an inverted reality it's only natural that you'd have an inverted yield curve to complement that inversion.

  5. The Dow today is flat. Usually after a steep drop, it goes up some the next day as speculators try to pick up bargains. As soon as the Dow flattens off, they dump for short-term gains. That's not happening – there's no upward movement. 

    There's a line from the first Star Wars episode (in the trash compacter) where Han says, 'I got a bad feeling about this.' when the tentacle monster flees, just before the walls start closing in. It may be mean to compare stock speculators to the tentacle monster, but I think the walls are going to close and they know it.

  6. What's it going to take for the money men to pull their support from Trump?  Recessions are cyclical, and I don't know to what extent this one is being brought on and/or will be made worse by Trump's incompetence.  And clearly, his "trade war" demonstrates he knows nothing about trade, but worse, his persistence in continuing down this rabbit hole shows there is no one around with either the knowledge and/or courage to make him change course. 

    But this will play out in the usual way, e.g. just as democrats usually leave incoming GOP administrations with a good economy, outgoing GOP administrations always leave incoming democratic administrations with a bad one to clean up.  But this time democrats should meet the caterwauling to come from the GOP and their MSM handmaidens on deficits and spending with a tax increase on the wealthy to clean up the mess.

  7. Twitters has been warned by wise money people that the stock market is not the gauge to use as the primary measure of the economy.  Twitters, though, often fails to hear things which conflict with his frequent delusions.  Until yesterday Bitcoin was on a tear.  I am surprised he did not use that as a measure of his success for the economy.  That would probably be a stretch, even for him, but what would be the proper measure for Twitters to use? With the base would not tattoo parlor density or new body art parlor construction show proper progress?  One could use attendance at cage wrestling events or NASCAR races to show that he was enriching his base.   I am going with the ad density of brain enriching supplements on TV for my measure.  Demand for relief from symptoms of dumb-down syndrome must be at an all time high.  Twitters could cite this and who would fail to credit him for the epidemic and apparent economic boom it created.

  8. This is what the right wing gleeful obsession with trolling has gotten them: a "president" who trolls trading partners and his Federal Reserve to amuse politically vengeful yahoos. What could go wrong?

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