The Memo: Trump pushes back amid signs of economic slowdown

Signs of a slowdown in the economy are spelling danger for President TrumpDonald TrumpOhio Republican who voted to impeach Trump says he won't seek reelection Youngkin breaks with Trump on whether Democrats will cheat in the Virginia governor's race Trump endorses challenger in Michigan AG race MORE’s chances of reelection.

But he is doing everything he can to push back on the harbingers of gloom — and to shift the blame for any adverse developments.

Trump has lashed out several times at Federal Reserve Chairman Jerome Powell, whom he has accused of not cutting interest rates enough. He has argued that if a Democrat were to beat him next year, the economy would “go down the tubes.” And he has suggested that predictions of an economic downturn are being ginned up by a hostile media.


“The Fake News Media is doing everything they can to crash the economy because they think that will be bad for me and my re-election,” he wrote on Twitter on Thursday.

Despite his protestations, there is tangible evidence the economy is indeed slowing.

On Friday, Bloomberg reported that consumer sentiment was in decline, with “Republicans and independents ... losing faith in the economy at the steepest rates of Donald Trump’s presidency.” 

Output in the manufacturing sector has contracted for two consecutive quarters.  A technical development on the bond markets known as an “inverted yield curve” — historically a reliable indicator of coming U.S. recessions — has recurred.

In addition, the stock market has been extremely volatile. The Dow Jones Industrial Average sank more than 800 points on Wednesday, or more than 3 percent, amid concerns about Trump’s trade war with China.

All of that is bad news for a president who has been buoyed by a strong economy for most of his 31 months in office. 


“It’s huge,” said Terry Madonna, a professor and polling expert at Franklin & Marshall College in Pennsylvania. “One of his biggest arguments for reelection is the growth of the economy. ... There isn’t any doubt that if the economy goes south, it’s a serious blow.”

Trump critics often argue he engages in diversionary tactics to try to take the spotlight off unfavorable news.

This week, he unexpectedly inserted himself into international politics by encouraging the government of Israel to bar Reps. Ilhan OmarIlhan OmarEnough with the GDP — it's time to measure genuine progress Overnight Energy & Environment — Presented by the American Petroleum Institute — Democrats eye potential carbon price in reconciliation bill 'Squad' members call on Biden to shut down Line 3 pipeline in Minnesota MORE (D-Minn.) and Rashida TlaibRashida Harbi TlaibDemocratic bill would force Fed to defund fossil fuels Democrats brace for battle on Biden's .5 trillion spending plan 'Squad' members call on Biden to shut down Line 3 pipeline in Minnesota MORE (D-Mich.) from visiting.

He hit out at the two leading candidates in the 2020 Democratic field, former Vice President Joe BidenJoe BidenTrump endorses challenger in Michigan AG race On The Money: Democrats get to the hard part Health Care — GOP attorneys general warn of legal battle over Biden's vaccine mandate MORE and Sen. Elizabeth WarrenElizabeth WarrenFederal Reserve officials' stock trading sparks ethics review Manchin keeps Washington guessing on what he wants Warren, Daines introduce bill honoring 13 killed in Kabul attack MORE (D-Mass.), at a campaign rally in New Hampshire, where he also made headlines by insulting the weight of someone in the crowd.

Then there was a Wall Street Journal report that Trump had expressed interest in purchasing Greenland.

Asked about the troubling economic data, conservative radio host and Trump critic Charlie Sykes responded with a sarcastic laugh. “That’s why we need to buy Greenland, right? Think about that. That would solve a lot of problems,” he said. 

Sykes, more seriously, asserted that “a wobbly economy would pose an existential threat to Trump.”

That may be one reason the president and his allies are so adamant that no such wobbliness exists. 

Trump on Thursday suggested that good earnings from retail giant Walmart were an indicator of broader health in the economy.

The communications director of his 2020 campaign, Tim Murtaugh, tweeted that an increase in retail sales during July was “another strong indicator for the economy.” 

Brad Blakeman, a veteran of former President George W. Bush’s White House and a Trump ally, told The Hill that “the left is rooting for a recession, which is about as un-American as you can get.” 

“All the signs,” Blakeman insisted, “point to America doing well economically.”

Even some observers ideologically opposed to Trump wonder if he is quite so vulnerable to the political impact of economic fluctuations as previous presidents.

They point to a polarized nation and a polarized media — and to the relatively static nature of Trump’s approval ratings despite the innumerable controversies he has ignited.

Gbenga Ajilore, senior economist with the liberal Center for American Progress, said he thought the real economic picture was “mixed” and was being negatively affected by the trade war with China, among other factors. 

But he was more circumspect about whether Trump would suffer measurable political consequences.

“I’m not sure because he has a message that resonates with a large section of the population, and a lot of that is devoid of truth and facts,” Ajilore asserted. “If the economy were to tank, he would say, ‘That’s China’s fault,’ and that would still work.”

Tobe Berkovitz, a Boston University professor who specializes in political communications, agreed.

In the event of an economic downturn, “Trump would say, ‘My economy has been strong but here are the Democrats, the Fed, the Fake News, and that is what has tanked the economy. If people had let my policies work, things would be swell.’”

Even Sykes, a firm Trump critic, acknowledged that if the economy stayed strong, Trump could hold on to voters who did not care for his style but felt as if they were making financial progress.

“I think that’s what he is depending on — you demonize the Democrats as socialists and warn they will tank the economy,” he said.

But “that argument becomes a lot harder to make if there are signs that the economy is already tanking,” Sykes added. 

The Memo is a reported column by Niall Stanage, primarily focused on Donald Trump’s presidency.