Although presidents typically get too much credit or blame for the performance of the American economy, one economist thinks that President Donald Trump's recent behavior might be enough to actually tip the economy into recession.
Noah Smith, a former assistant professor of finance at Stony Brook University who is now a columnist for Bloomberg, writes in his latest op-ed that Trump in recent weeks has "taken several steps that might end up conjuring up... a panic" that could undermine trust in global financial markets.
Among other things, Smith writes that Trump has proudly owned shutting down the federal government while also vowing to keep it shut down for as long as it takes to get funding for his border wall; has publicly feuded with his own Federal Reserve, which in turn may have added pressure on the Fed to raise rates to assert its independence; and reportedly goaded Treasury Secretary Steve Mnuchin into calling the heads of major financial institutions to assure them that "they have ample liquidity available" in case of a financial panic.
All of these moves, suggests Smith, have helped send markets tumbling -- and a panicky Trump would only make things worse in the coming months.
"If stresses and vulnerabilities have built up to dangerous levels, it seems like the turmoil and doubt created by the president’s words and deeds could be enough to tip the system into a downturn," Smith explains. "If Trump’s erratic moves manage to introduce chaos into an already shaky corporate debt market, then this president might really own the next recession."