As much as I’d like to take time to celebrate observe the death of David Koch, there is more significant news. As I write this, the Dow is down 457 points. Earlier today is was 500. It’s possible the Big Money people will dump enough money into the markets to prop it up before the bell rings, of course.
But what caused today’s financial scare? Trump, of course. Well, and China.
The trade war between the U.S. and China worsened Friday as Beijing imposed retaliatory tariffs on $75 billion in American goods and President Trump took the extraordinary step of calling on U.S. companies to stop doing business with China.
The new tariffs, which included reinstated levies on auto products, delivered a strategically timed blow as recession warning signs cast doubt on the strength of the U.S. economy.
Now, that’s a bad thing. What would a sensible, level-headed response from the White House be? Probably not this:
Trump initially directed his ire at Federal Reserve Chair Jerome H. Powell in Friday tweets, painting the Fed’s lack of monetary easing as a greater threat to American workers and businesses. But moments later, he said he would be responding to China’s tariffs later Friday and demanded American companies cut ties with China.
The Dow is down 573 points perhaps on the news that Representative Seth Moulton, whoever that may be, has dropped out of the 2020 Presidential Race!
— Donald J. Trump (@realDonaldTrump) August 23, 2019
Who knew that Moulton (which one was he, again?) was that significant? 573 points? Latest updates I can find say 536.26. Not lookin’ good.
Anyhoo — this morning the Federal Reserve Chair Jerome Powell said that interest rate cuts are on the table, but that the Fed could only do so much to counteract Trump’s trade policies. Well, he didn’t mention Trump, but that’s what he meant.
“Trade policy uncertainty seems to be playing a role in the global slowdown and in weak manufacturing and capital spending in the United States,” Mr. Powell said, adding that there were “no recent precedents to guide any policy response to the current situation.”
Trump went ballistic.
….My only question is, who is our bigger enemy, Jay Powell or Chairman Xi?
— Donald J. Trump (@realDonaldTrump) August 23, 2019
The thing is, recent events clearly point to, um, deterioration in Trump’s mental and emotional state. The Chinese are not stupid. They might have sensed the time to strike is now.
Trump really did order all U.S. companies to stop doing business with China. “Our great American companies are hereby ordered to immediately start looking for an alternative to China, including bringing your companies HOME and making your products in the USA,” he tweeted.
Wait. I thought we had all agreed that nothing Trump tweets is actually an order or anything like it. It’s merely a manifestation of how Trump wants his base to perceive him. In this case, he apparently wants them to perceive him as Albert Speer or something.
Anyway, the president obviously doesn’t have the authority to order US companies to do anything, even if he does use a big word like “hereby.” Still, I assume Republicans will all be shocked and outraged by this megalomaniac attempt to interfere in the free market. Right?
Ha. But I guess if you think you’re Jesus, it’s not that far a stretch to be emperor of commerce, too. And the G7 is about to start! Great fun!
Also: On a sober note, it’s been announced that Ruth Bader Ginsburg is being treated for pancreatic cancer. This is seriously bad.
Update: Just a couple of minutes before the closing bell the Dow was down over 700 points, but last minute trading brought it back up to 622.6. Still, there’s nothing like a bad Friday to lead to a worse Monday.