9 votes

Will Trumponomics Collapse?

4 comments

  1. [2]
    reese
    Link
    If we're comparing recent presidencies over time by growth of the Dow Jones Industrial Average, then Trump has had almost the same rate of growth we observed during Obama's presidency after the...

    If we're comparing recent presidencies over time by growth of the Dow Jones Industrial Average, then Trump has had almost the same rate of growth we observed during Obama's presidency after the Great Recession. This seems... expected, to say the least. I'm not saying Obama caused the rate of growth, nor am I saying that the Dow is the only measure of economic health, but I am saying that we're observing the same rate of growth we've seen since 2009. A recent blip in the average provides a good time to reflect and write editorials, especially regarding a president who believes that the Dow is the ". . . primary confirmation that his vision for the U.S. economy is working."

    Richardson says later:

    Trump puts pressure on one of our closest allies so that a crony can make some money; Trump strong-arms Carrier so that a few hundred people can stay employed for a few weeks longer; Trump decides which industries and which countries should thrive and which should fail. The salient point is not consistency or theoretical rigor. It is that the world economy is governed by Trump’s whims. Trumponomics is not a steady state. It is, by its nature, constant turmoil.

    Prior to that statement, Richardson points out that the International Monetary Fund's World Economic Outlook expresses concern. About what? The numerous trade wars that Trump has started. The report projects major consequences for the U.S. economy sometime in 2019 or 2020. That's about when Trump could be replaced. Then the next person in charge will be inevitably blamed for Trump's belligerent and intentional intervention in the economy.

    Richardson finalizes with this:

    . . . on any given day, the businessperson looks at the numbers that provide clarity (unemployment, wages, G.D.P. growth, the stock market) and sees no reason for today to be the day for despair. Yes, of course, they are all looking, anxiously, at the President, always unsure of what he will do next but knowing something, someday, might be cataclysmic. But before then, perhaps, he’ll do something else, something that helps their business and makes them richer. They don’t know, because there is nothing to base their forecast on other than Trump’s own gut. And that is precisely how he wants it.

    5 votes
    1. bananameltdown
      Link Parent
      I think the author misses an opportunity to address something more substantial that ties into the last paragraph you quoted and earlier one that says: For some people trading on financial markets...

      I think the author misses an opportunity to address something more substantial that ties into the last paragraph you quoted and earlier one that says:

      Decades of research show that economies run best when there are clear and neutral rules, fairly applied.

      For some people trading on financial markets or making day-to-day purchasing or sales decisions looking at the information from 'any given day' is fine, but the question I would like to answered is how the chaos (to use the author's word) is affecting long-term decisions involving capital investments and what effects those might have.

      Are companies delaying investment decisions because of a lack of clarity in what is going to happen at a more macro level with taxes, interest rates, or trade agreements? I've heard examples for individuals whose companies are taking a wait and see approach on large scale projects with a 10+ ROI horizon. My guess is that those kinds of situations can be a drag on growth, but it's just that, a guess. In any case, I think economic reporting has more to dig into than trying to drive home a point about chaos through historical comparisons.

      3 votes
  2. spit-evil-olive-tips
    Link
    Excellent analysis by Adam Davidson, IMO one of the best reporters on economics and the economy.

    Excellent analysis by Adam Davidson, IMO one of the best reporters on economics and the economy.

    3 votes
  3. jlpoole
    Link
    Trumponomics -- a term derived from Trompe-l'œil ?

    Trumponomics -- a term derived from Trompe-l'œil ?

    2 votes