The Economy is Crashing -- Trump and the Repubs in Congress Own it

The government released a disappointing jobs report today (April 6), and the stock market took an enormous hit. I can't see how anyone can deny with a straight face that the future of the United States' economy is looks to be headed for bad times.

 

https://www.nytimes.com/2018/04/06/business/economy/jobs-report.html

The slowdown in March wasn’t a surprise. February’s job growth was probably inflated by a surge in hiring in construction and the retail sector that reflected unseasonably warm weather in much of the country. Both sectors slumped in March as winter storms blew through the eastern United States.

March was the 90th consecutive month of job growth, by far the longest streak on record. Employers have added an average of just over 200,000 jobs per month so far in 2018, a pace that has held relatively steady for the past two years. The unemployment rate hasn’t budged since October, but remains at its lowest level since 2000.

 

Yes, the stock market was going up until the budget busting tax cut mainly for the rich and the "yuge" deficit in the Congressional budget came along. Then the market started down. The tweets about how the USA could easily win a trade war with China accelerated the decline beginning in March.

Did Trump forget that he needs China to buy treasury bonds to fund his enormous budget deficit? Given the irresponsible fiscal policy of our government, if the Chinese government starts dumping treasury bonds, we're in deep dodo. The investing class knows that and is dumping US stocks before it's too late. The rich will have their money safely invested overseas when our economy collapses again. We ordinary people will be the ones who suffer.

If we are to eliminate our trade deficit with China, we'd better also bring our federal budget in balance first. It's China's humongous trade advantage that gives it the dollars to finance our federal government. Without the Chinese financing our government, it would go broke.

 

Trump decided he had not done enough damage to American corporations on Wall Street in the last quarter, the worst in two years. He decided he had not done enough damage to Americans' savings (have you looked at your 401K lately?) He decided he had not done enough damage to his party's chances in November (nearly all the gains from tax reform are wiped out). Trump hated the idea of Larry Kudlow, his new economics chief, trying to ease tensions on Wall Street and across the land. Kudlow was stealing the show with the good news. Can't have that.

So, Trump let it be know that he is considering and additional $100B in tariffs against China. "In light of China's unfair retaliation, I have instructed the [United States Trade Representative] to consider whether $100 billion of additional tariffs would be appropriate." The DOW plunged another 572 points.

One Republican spoke out, only one. Nothing from McConnell or Ryan ... again. Nebraska Senator Ben Sasse called the move "the dumbest possible way to do this." "Hopefully the President is just blowing off steam again but, if he's even half-serious, this is nuts," he said in a statement.

The Republican oriented National Retail Federation, an industry group, said in a statement that while it agreed on the need to address China's unfair trade practices, "these tit-for-tat trade actions could ... make it harder for Americans across the country to afford everyday products and basic necessities."

Trump took the pie-in-the- sky approach to the problem. "I'm not saying there won’t be a little pain," Trump said on WABC radio in New York. "So we may take a hit, and you know what, ultimately we're going to be much stronger for it, but it's something we ought to do." I will refer you to my first para. Trump seems to live in his own little world.

Trump apparently does not know the U.S. economy is the third largest. These figures were updated in March 2018. In 2017, China was the world's largest economy for the third year in a row. It produced $23.1 trillion in economic output according to World Factbook The European Union was in second place, generating $19.9 trillion. Together, China and the EU generate 33.9 percent of the world's economic output of $127 trillion. The United States remained at third place, producing $19.4 trillion. https://www.thebalance.com/world-s-largest-economy-3306044

Moreover, it is not Trump vs. China. It is Trump vs. the rest of the world. The Washington Post reports, Trump's "latest salvo, moving two of the world’s largest economies closer to an open brawl, is certain to spook U.S. allies in Europe and Japan as well as American business leaders, who are desperate for a negotiated resolution of the dispute." Our friendly trading partners want no part of the trade wars sparked by Trump's tariffs, and they will do anything to stop it ... anything.

The largest single holder of U.S. government debt was China, with 21% of all foreign-held U.S. Treasury securities.

Trump does not know that he is hardly in a good bargaining position.

His base is thrilled with all this. No one knows why.

Including his base.

When will trump be satisfied by the damage he has done? Does he lack the ability to be President? It would seem so. Unfortunately, the Republican leadership remains totally silent.

 

You talked me into it. We need a balanced budget amendment immediately! It's a national security priority!

 

Update time... The economic timebomb is ticking. Trump's spanking new trade wars on top of what must be historically unprecedented irresponsible fiscal policy are accelerating our way to economic implosion.

China: 'The US has launched a trade war'

The world's two biggest economies are now at war over trade.
China accused the United States of firing the first shot on Friday when the White House confirmed that it would impose tariffs of 25% on $50 billion worth of Chinese goods.

The announcement confirms a threat first made by President Donald Trump in March and follows months of trade talks between the two sides. A truce was announced in May but it proved short-lived.

"The United States has kept changing its mind and now launched a trade war," China's Commerce Ministry said in a statement.

The Chinese government said it would respond in kind to the US tariffs, which will apply to roughly 1,100 exports and will target China's aerospace, robotics, manufacturing and auto industries.

"China does not want a trade war," it said, adding that it would "fight back vigorously" in defense of its national interests, globalization and the world trade system.

Related: Trump announces tariffs on $50 billion worth of Chinese goods

"We will immediately launch tariff measures that will match the scale and intensity of those launched by the United States."

It also said "all economic and trade agreements reached by previous negotiations will be nullified at the same time." That includes a tentative deal to increase Chinese purchases of energy and agricultural goods.

The Commerce Ministry statement gave no further details of the American products that would be hit. China has previously promised to respond with retaliatory tariffs on US products such as cars, planes and soybeans.

Trump has long complained about China's huge trade surplus with the United States. In a statement Friday, he said trade with China "has been very unfair, for a very long time."




The US president said the new tariffs, which will start to take effect on July 6, were designed to punish China for the theft of American intellectual property and technology.

And he warned that any retaliation by Beijing would trigger another round of tariffs on Chinese goods.

Related: These are America's top trading partners

That raises the specter of an intensifying trade war, which would hurt consumers, companies and the global economy. The Dow fell nearly 200 points on Friday after the tariffs were announced.

Growth forecasts for major economies are already being slashed due to the rise of protectionism. Germany's central bank cut its forecast for Europe's biggest economy on Friday.

"An escalating global trade dispute or widespread rises in import tariffs would have a marked negative impact on Germany's export oriented economy," it said.

Related: IMF's Lagarde warns US about trade, deficits

The United States has already imposed tariffs on steel and aluminum from Canada, Mexico and the European Union. All have promised to hit back.

The 28 members of the EU agreed Thursday that retaliatory tariffs would go into effect in the coming days.

"In this day and age, launching a trade war is not in the interest of the world," China's Commerce Ministry said. "We call on all countries to act together to firmly stop such an outdated and backward move, and to firmly safeguard the common interest of all mankind."

-- Steven Jiang contributed to this article.

 

Yes it is time for an update.

Economy still good. Carry on.

 

You either live in an alternative universe, or your smoking something, or doing drugs that enable you to ignore the economic news that obliterates your false narrative!

 

Still waiting...

 

There is much to think about in this post (see OP). Robber Barons. 1927-1929 was the end of an age of Robber Barons, it might be argued that 2007-2008 was another. There are commonalities in these periods, the accumulation of wealth among the upper classes, a permissive government, easy access to money, irrational exuberance, and sector greed. In 1927, it was speculation in real estate, in 1929 it was speculation in the market, in 2007 it speculation in real estate. Another bubble broke in 1987 when speculation in S&L stocks took the market to its largest one day loss in history.

Two things drive capitalistic economies, greed and fear. That there will be another meltdown is inevitable, the $64,000 question is what will drive it? I was trained in economics, not wizardry. Is the market too high? Is the economy tapped out in a very bad way? Is there too much credit out there? Is the world unstable? Have Robber Barons killed the middle class? "Wall Street climbs a wall of worry." ????

 

This thread was started in April of 2018. You think that the economy would have crashed by now. Since 2018, the stock market has set dozens of new records. Since 2018, our economy has grown, and by any metric, things have improved dramatically.

 

Goodness, this didn’t age well.