Juan Williams: A 'Trump slump' would sink the president

President TrumpDonald John TrumpHouse Republicans move to block Yemen war-powers votes for rest of Congress Trump says he's considering 10 to 12 contenders for chief of staff Michael Flynn asks judge to spare him from jail time MORE famously said, “Real power is…fear.”

Now it is Trump who is afraid.

Yes, he has to fear Special Counsel Robert MuellerRobert Swan MuellerSasse: US should applaud choice of Mueller to lead Russia probe MORE’s probe. Yes, he has to fear the new Democratic-controlled House of Representatives readying subpoenas.

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But the biggest political boogeyman is the very real fear that 2019 may be the year the U.S. economy goes into a “Trump slump.”

Trump showed fear last week with his attack on Jerome ‘Jay’ Powell, the chairman of the Federal Reserve. Trump told The Washington Post he made the wrong decision in putting Powell in control of interest rates, bonds and other levers controlling the economy.

“I’m not even a little bit happy with my selection of Jay,” Trump said, “not even a little bit.”

He added: “I think the Fed is a much bigger problem than China.”

And that scolding was before the Fed’s meeting last week when Powell and others suggested “further gradual increases” in interest rates are coming to protect against inflation.

Trump is lashing out at Powell because any sign of an economic slowdown will be political poison for his 2020 campaign.

The troubling indicators are already here. General Motors is laying off 14,000 people — 15 percent of its workforce. Housing sales are down. The global economy is slowing and Trump has started a trade war with China.

So, Powell has every reason to be cautious. He does not want inflation burdening the economy. Already, the U.S. stock market has given back most of its gains for the year.

If there is an economic slump, you can bet your bottom dollar that Trump will accept zero responsibility. He will blame Powell, Democrats, the media and the Chinese, probably all of them in the same tweet.

Trump’s defenders, specifically top economic adviser Larry Kudlow, are busy telling people to ignore warning signs. Talk of an impending recession is “nonsense,” he said, while noting that market corrections “come and go.”

But the politics can’t be ignored.

Republican business leaders already have their tax cut. The donor class has turned a blind eye towards Trump’s racism, misogyny, attacks on immigrants and even his refusal to call Saudi Arabia out for the murder of a journalist, because Trump has boosted their bottom line. If the economy gets shaky, look for those big dollar supporters to reassess Trump's value to them.

And what happens if the unemployment rate — now at 3.7 percent — starts going back up?  

Also, recall that Trump dismissed the low unemployment rate during Obama’s presidency as fake. He said too many workers were discouraged and stopped looking for a job, artificially lowering the unemployment rate.

Well, what does he say now?

The current labor force participation rate is 62.9 percent, meaning more than a third of Americans are either not working or have given up looking for work. Where are those same caveats and naysaying about the labor force participation rate now? Crickets.

Where is his concern that pressuring the Fed to keep interest rates artificially low is a danger to economic stability?

Why is there no alarm from Trump’s backers that his massive tax cut package will push the deficit to $1 trillion over the next decade, according to Trump’s own Office of Management and Budget? Where are those GOP deficit hawks from the Obama years?

At his rallies, Trump stirs fear of a return to the Obama economy and boasts about all the jobs he has created. But with Obama in the White House, the nation saw more jobs created in his last 21 months than in Trump’s first 20 months.

Trump critics, including me, have to be careful to separate opposition to Trump from concern about a possible recession. Every American, including those derided by the far right as socialists for pointing to growing income inequality, wants continued prosperity in the New Year.

It was wrong when conservative talk radio king Rush Limbaugh said in 2009 he hoped “Obama fails.” It was equally wrong when liberal comedian Bill Maher joked earlier this year, “So please, bring on the recession. Sorry if that hurts people, but it's either root for a recession or you lose your democracy.” To be fair, Maher later elaborated, “A recession is a survivable event, what Trump is doing to this country is not.”

But Trump’s lower taxes and cuts to regulation have not stopped GM, Harley-Davidson and Carrier, among other big manufacturers, from taking American jobs overseas.

So it is not reckless for the Federal Reserve, under Powell or any other chairman, to keep close tabs on the economy to make sure the markets do not repeat the blow up of 2008 that led to recession.

It is not up to Powell to hide the fact that Trump is hurting farmers and factory workers he promised to help during his campaign.

In 1992, Bill ClintonWilliam (Bill) Jefferson ClintonJared Kushner: The White House’s results-driven tactician California dreamin’ in the 2020 presidential race Mueller filings threaten Trump but fall short of case for impeachment MORE defeated then-President George H.W. Bush on a message of “It’s the economy, stupid.”

Twenty-eight years later, it’s entirely possible that another Democrat could beat Donald Trump running on the same message. 

Juan Williams is an author, and a political analyst for Fox News Channel. His latest book, "'What the Hell Do You Have to Lose?' — Trump's War on Civil Rights" is out now, published by Public Affairs Books.