Trump preps conspiracy theory to explain faltering economy
Want a perfect example of effrontery? At a rally in New Hampshire this month, President Donald Trump told voters, “You have no choice but to vote for me because your 401(k), everything is going to be down the tubes” if the Democrats win. “Whether you love me or hate me, you’ve got to vote for me.”
That doesn’t sound like an inducement. It sounds like a threat. Where does the president get off making threats? Sounds like he’s getting desperate.
And he should be. Because lots of signs are pointing to an economic downturn in the next year, maybe even a recession. And nothing is more certain to doom Trump’s prospects for reelection.
According to the National Bureau of Economic Research, the U.S. has experienced 10 recessions since 1950. All but one of them started during a Republican administration. (The exception: the recession of 1980, when Jimmy Carter was president.)
Recessions generally spell doom for a president and his party. Carter found that out in 1980, as did the first President Bush in 1992 and the second President Bush in 2008. Recessions helped elect John Kennedy, the nation’s first Roman Catholic president, in 1960, and Barack Obama, the nation’s first African American president, in 2008.
Right now, President Trump gets his highest rating for handling the economy. Actually, it’s the only issue where he gets a positive rating. Since the Great Recession ended in 2009, the U.S. has enjoyed the longest period of continuous economic expansion in the nation’s history. “We’re doing tremendously well,” Trump told reporters last week. “Our consumers are rich. I gave a tremendous tax cut, and they’re loaded up with money.”
But he is clearly worried about an economic downturn next year, just in time for the 2020 election. While Trump was saying the country is “very far from recession,” he was also considering a temporary cut in payroll taxes to boost consumer confidence and spending. He claimed, “I’ve been thinking about payroll taxes for a long time.” So, it has nothing to do with concern about an economic downturn, see?
Does President Trump have a political strategy for dealing with a downturn? It appears that he does. He’s trying to turn the economic issue into a social issue. How? By hyping the divide between his populist base and educated elites. He is warning his supporters about a conspiracy of elitist anti-Trump forces trying to bring him down by bad-mouthing the economy and undermining economic confidence.
Who’s in this conspiracy? Democrats and the news media, of course. Plus economists, among whom 3 out of 4 are predicting a recession by 2021. Also the Federal Reserve Board, which is refusing to make big cuts in interest rates to stimulate the economy. Plus nervous bond investors who are betting against future prosperity. And foreigners in China and Europe who are causing a slowdown in global economic growth. A loyal Trump supporter at the New Hampshire rally told The Washington Post, “If the [U.S.] economy dropped, I’d think that someone else in the world fixed it against America.”
Populists on the liberal side — such as Sens. Bernie Sanders (I-Vt.) and Elizabeth Warren (D-Mass.) — target Wall Street, multinational corporations and “the 1 percent.” But Trump is not targeting the rich. He’s targeting experts and know-it-alls who claim to understand the economy better than he does. People such as former Treasury Secretary and Harvard University President Larry Summers, who recently disparaged Trump’s economic advisers. “Ludicrous forecasts and economically illiterate statements have dissipated the credibility of the president’s economic team,” Summers told The Washington Post, adding, “It’s ‘banana republic’ standard to deny the statistics, bash the central bank … and lash out at foreign countries.”
A Republican close to the White House said that President Trump “thinks that all the people that do this economic forecasting are a bunch of establishment weenies — elites who don’t know anything about the real economy and they’re against Trump.”
What about all those stories in the press about the bond market predicting an economic slowdown? Trump tweeted his response: “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.”
Trump believes that the divisive strategy that worked for him in 2016 will work again next year. But Trump did not win the 2016 election on the economy. Voters who said their top concern was the economy voted for Hillary Clinton.
Trump’s signature economic issue is trade. He takes the populist position — that tariffs on foreign imports will create more American jobs. That view horrifies the establishment, including establishment Republicans who argue that tariffs are a tax hike on American consumers.
The latest NBC News-Wall Street Journal poll has some bad news for the president: 64 percent of Americans now believe free trade is good for America. That number has been rising since Trump took office. And it’s likely to rise further as more tariffs go into effect. Just in time for Christmas shopping.