Friday, August 23, 2019

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Trump to U.S.: “We Have a Strong Economy”

The AP nails 67% of what you need to know with five tight paragraphs:

“The International Monetary Fund and the World Bank have downgraded the outlook for worldwide growth. On Thursday, Moody’s Investors Service said it expects the global economy to expand 2.7% this year and next — down from 3.2% the previous two years. And it issued a dark warning: Get used to it.

“’The new normal will likely continue for the next three to four years,’ the credit rating agency said.

“Concerns are rising just as central bankers meet in Jackson Hole, Wyoming, and leaders of the Group of Seven advanced economies gather this weekend in the resort town of Biarritz in southwestern France. A spotlight will shine, in particular, on whatever message Federal Reserve Chairman Jerome Powell sends in a speech Friday in Jackson Hole.”

“The dour global outlook partly reflects President Donald Trump’s combative trade conflicts with China and other countries. A realization has taken hold that Trump likely will keep deploying tariffs — and in some cases escalating them — to try to beat concessions out of U.S. trading partners.

“’The trade uncertainty is here to stay,’ said Madhavi Bokil, senior credit officer at Moody’s.”

Per the Wall Street Journal: At 10 a.m. EDT Friday, Fed Chairman Jerome Powell will deliver a speech: on “Challenges for Monetary Policy.”

This Journal story rationally lays out why the Fed’s outlook and rate options are one big, giant, confused, and confusing mess, and this one isn’t (mostly) Trump’s doing.

The president leaves late tonight for Europe.  Chances he will comment before then on the economy and Powell?

Super high if the markets are doing well.

Super-duper high if the markets are doing poorly.

Larry Kudlow, bluffing: “I’m not going to second guess Jerry Powell…The handwriting is on the wall for lower rates.”

Larry Kudlow, Thursday night on Fox Business, bluffing: “You very may well see a new rollout of additional middle-class tax relief and small-business tax relief.”

White House spokesman Judd Deere, in an (unwitting?) homage to John McCain, bluffing:  “The fundamentals of the economy are strong because of this president’s pro-growth policies.”

Also, here’s Joe Biden, via the AP: “’Donald Trump inherited a growing economy from the Obama-Biden administration, just like he inherited everything in his life. And now he’s squandered it, just like he’s squandered everything he inherited in his life,’ said Biden, making sure to remind voters of his own role in revitalizing the economy during the last administration.”

So this is the day’s most essential read, a Washington Post tour de force on how Team Trump and its eponymous leader are handling the crashing intersection between bad economic trends and the looming re-election battle:

“Administration officials have scrambled this week to assemble a menu of actions Trump could take to avert an economic downturn. Few aides have a firm sense of what steps he would seriously consider, in part because he keeps changing his mind.”

“The economic message emanating from the White House is a product of tensions and debates about how to handle that bracing reality — and Trump’s own stubbornness on trade strategy and his anger about news coverage of the economy.”

“Trump has a lean and increasingly combative economic team, whose members often are at odds with one another on trade and tax policy. Almost all are deferential to the president, but they habitually jostle to advance their causes with him, sometimes maneuvering behind one another’s backs.”

This other Washington Post story teeing up the weekend’s G-7 meeting is filled with too many brutal quotes about Trump to make room to excerpt them here.  You will want to read this story in full, also.

The New York Times demonstrates that Trump’s Hong Kong postures are as all over the map as everything else regarding its economic policy these days.

My take: Partly guest authored by former Clinton/Obama Gene Sperling, via the Washington Post:

“The irony here is that Trump’s erratic, chaotic approach to the economy is probably the most significant economic risk factor in the world right now. Their response is just to show even more erratic behavior. It’s economic narcissism. It’s economic policy by whim, pride, ego and tantrum.”

A cable-news-obsessed Chaos President can apparently make it through North Korea nuke talks, Robert Mueller, Charlottesville, government shutdowns, staff turmoil, Twitter wars, fights and failure over the Wall that Mexico was supposed to pay for, etc, etc, etc. 

But in the potential political existential crisis of a weakening economy, the Chaos President is his own worst enemy.  One of the most important fundamentals of a strong economy is a president and an economic team that inspire confidence, risk taking, credibility, and predictability.

Team Trump did none of that this week. Starting from the top.  And of course it won’t change, no matter how many briefings, admonishments, or Electoral College warnings the president is given.

In other news:

Sanders, Harris set for showdown in delegate-rich California.

Elizabeth Warren takes heat on her health care stance.  Too vague and too much of a straddle, critics charge.

Kamala Harris takes heat on her health care stance.  Too vague and too much of a straddle, critics charge.

My take: Both contenders indeed want to avoid going so far left on health care that it hurts their electability cred, but they worry about failing one of the key progressive litmus tests.  The good news for them, if they can turn the focus, is that everyone else in the field has flawed health care plans, too.

The New York Times suggests that a Biden campaign built on an electability argument (and lacking enthusiasm) is a Biden campaign potentially living on borrowed time.

My take: The Times thesis is correct – unless Warren, Harris, Sanders, Buttigieg and the rest all fail to overtake Biden on electability.

And/but it is going to very hard for anyone to do that until and unless they beat Biden in Iowa.

Which is why Biden is pouring resources into Iowa. 

History and logic say Biden will indeed need to inspire more passion to win Iowa and the nomination. 

But with Donald J. Trump in the White House, history and logic are rarely part of any political equation, including perhaps the group calculations of Democratic nomination voters desperate to win.

Trump will never stop being a Chaos President; Joe Biden will never inspire the passions of some other candidates.  Those memes will be with us all for many months.

But there are no perfect presidential candidates running in 2020.

The Trump and Biden flaws might turn out to be only flaws, not Achilles’ heels.

Top sports story: Source: Left ankle sprain for Panthers’ Newton

Top business story: Corporate earnings show trade war straining US economy as companies lean on shoppers to prop up profits

Top entertainment story: ‘Grey’s Anatomy’ Showrunner Krista Vernoff Asks Bob Iger, ABC To Drop Sean Spicer From ‘Dancing With The Stars’

Big Four


Beto O’Rourke isn’t cutting investment in early states, but will spend time differently.

Woman to woman: Female Trump backers try to sell his message.

New Hampshire

Sanders campaign boss expects candidate to win N.H.

Two long-shot 2020 Dems vow to remain in the race.

South Carolina

Joe Biden courts churchgoers in SC with new faith outreach director.

Does the GOP’s ‘big tent’ still exist? SC Republicans wrestle with party under Trump.

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