Trumpcession

Trump is running the economy into a ditch…again

An unprecedented recovery, a jobs boom, a renaissance in domestic manufacturing, and historic gains for Black workers may soon be a distant memory. President Joe Biden’s success in improving real incomes while fostering 21^st century industries and revitalizing American infrastructure was consistently underplayed in corporate- and billionaire-owned media. Soon, those outlets may be pining for the good old days.

Though the full impact of President in Name Only (PINO) Donald Trump’s massive layoffs of federal workers, erratic and inflationary tariffs, and plans for a huge deficit increase have yet to be felt, the economy is sputtering.

We saw merely 151,000 jobs added in February, well below the consensus expectation of 170,000. Unemployment ticked up from 4 to 4.1 percent. (By comparison, and as a reminder of the robust Biden economy, the December jobs numbers was revised upward from 307,000 to 323,000 jobs.)

Last week was a dreadful one for markets, with the Dow Jones down 2.4 percent for the week and the S&P 500 and Nasdaq both down more than 3%. “Trade tensions battered markets again Thursday, as traders and portfolio managers grappled with fears that policy volatility will weigh on U.S. economic performance,” the Wall Street Journal reported. “Declines were broad-based, with financial and tech stocks notching some of the largest losses. The dollar weakened, heading for its lowest close since election day and its worst four-day stretch since 2022.”

Most troubling, the growth outlook for the first quarter has plummeted. Reuters’s Jamie McGeever warned to be on the lookout for the “Trumpcession.” He explained: “The Atlanta Fed's GDPNow model estimate for annualized growth in the current quarter was a stunning -2.8% on Monday, down from +2.3% last week. A month ago, the model showed that growth in the January-March period was tracking close to +4.0%.”

That dreary projection echoes the dismal plunge in consumer sentiment, which has dropped precipitously. “Consumer sentiment in January slumped the most in three and a half years, retail sales dropped by the most in nearly two years, real spending fell at the fastest rate since early 2021, and retail giant Walmart has warned of a tough year ahead.” The throughline is evident. “The huge level of uncertainty being created by U.S. President Donald Trump's agenda: trade protectionism, particularly tariffs; his apparent growing closeness with Russia and distance from traditional allies like Europe; and the DOGE (Department of Government Efficiency) scythe being taken to federal spending and employment.”

If these trends continue—and there is no sign Trump will magically become stable or economically literate—the economic situation may deteriorate further.

The Nevada Current highlights how Trump’s reckless policies play out in just one state. As tariffs ripple through the economy, the cost of everything from groceries to cars will increase. “The ‘little disturbance’ to the economy forecasted by Trump on Tuesday could render a Las Vegas vacation out of reach for tourists, and slash disposable income for residents, many of whom earn their living in hotels, restaurants, and retail establishments.”

Trump’s onslaught deals another blow to the housing market, already suffering due to soaring interest rates. “Tariffs on Mexican and Canadian imports that came into force this week will make it more expensive to build housing,” the Wall Street Journal reports. “Around 8% of the materials used to construct a new home are imported from outside the U.S., the National Association of Home Builders estimates. This includes everything from Canadian softwood lumber used for door frames and decking, to refrigerators from Mexico.” Moreover, if Trump plows ahead with mass deportations, undocumented labor (which is critical to home building) will be scarce, pushing up prices even higher.

The potential for stagflation has added to economic anxiety. When reduced purchases and layoffs are combined with high prices, growing deficits, declining GDP, and a massive tax cut for the rich, we may be back to tracking the “Misery Index” (inflation + unemployment,) which defined one of the worst economic crises in recent history.

The business press reflects rising panic:

• “Stagflation fears bubble up as Trump tariffs take effect and the economy slows” CNBC

• “The stagflation nightmare of the 1970s could rear its ugly head to take a toll on Americans’ wallets and livelihoods” Fortune

• “The Two-Headed Monster Stalking the Economy Has a Name: Stagflation” Wall Street Journal

• “‘Stagflation’ Is One of Wall Street’s Biggest Nightmares. How to Prepare for the Worst” Barrons

• “Trump's Tariff Flip-Flops Revive 'Stagflation' Fears” Investopedia

Now, even Trump won’t rule out a potential recession. If other consequences of Trump mismanagement and chaos manufacturing arise (e.g., a government shutdown, a default on the U.S. debt, escalation of violence in the Middle East), the damage will be profound.

It is not too late to avoid the worst pain. Trump could permanently rule out tariffs. Congress could significantly scale back the tax cut and produce a more responsible budget. Acting president Elon Musk could cease mindless cuts and wholesale layoffs of federal employees. And the administration could drastically scale back mass deportation.

But all of that would require Trump and his MAGA troops’ recognition that they are propelling us toward economic catastrophe. The likelihood that this bunch will engage in some humility or self-reflection, revise course, rely on economic expertise, and reject inane conspiracy theories (e.g., “globalists” are sinking the stock market) is close to zero.

Electing an ignorant, narcissist president and spineless supplicants to control Congress has real consequences. Tragically, the ones most affected will be the most vulnerable Americans.