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The Federal Reserve just trampled on Trump’s boasting of an economic boom

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President Donald Trump got a mixed bag Wednesday from the Federal Reserve.

On the one hand — economists always have two hands — it signaled clearly that it doesn’t plan on raising interest rates in the next quarter, or at all for 2019. Trump has repeatedly criticized the Fed in recent months for its decision a raise interests rates under the lead of his appointee, Chair Jerome Powell. The fact that it won’t be raising rates any in the foreseeable future should be welcomed by the president.

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But on the other hand, the Fed’s decision to keep rates steady is driven by forecasts that are much more pessimistic than the White House’s view. While the White House expects growth at 3.2 percent in 2019 and at least 3 percent in 2020, the Fed actually cut its prediction of 2019 growth from 2.3 down to only 2.1 percent. It currently predicts an even more disappointing only 1.9 percent growth in 2020.

So even as the president and his administration try to cheer the success of his economic policies — most notably, the 2017 tax cut — the independent experts at the Fed, led by his hand-picked chair, disagree with their rosy predictions.

“And the Fed has marked its growth forecast down,” said economist Paul Krugman on Wednesday on Twitter. “Nobody but the Trumpies believes in the magic of their tax cut.”

The White House has been touting the strong growth of in 2018 as an effect of the president’s leadership, and there may be some truth in that. (Generally, though, presidents get way too much credit and/or blame for the economy.) Powell, in his speech Wednesday, noted that the year benefited from economic stimulus — which includes the effects of the giant tax cut and increases in spending — in addition to other “tailwinds.” But Republicans have traditionally dismissed the effects of stimulus, and their predictions about the benefits of the tax cut did not rely on the short-term injection of money into the economy, which will be a transitory anyway. Fundamentally, the Fed does not seem to believe there’s any reason to expect that new tax law will lift the U.S. economy in the way the GOP and the president promised.

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And as FactCheck.org noted, the administration has been desperately trying to spin the 2018 economic indicators to make the president’s case. The White House has been claiming, for example, that the growth rate in 2018 was 3.2 percent, even when the Commerce Department’s Bureau of Economic Analysis says it was 2.9 percent.

“That’s a disappointing figure for Trump, as it is still well below the 4 to 6 percent growth he promised repeatedly, both when he was a candidate and also as president,” the website explained. “The 2018 figure is no better than the real GDP growth in 2015, which was Obama’s best year.”

It continued:

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White House economists, however, focus on a different measure, one not normally used by economists in or out of government to gauge annual growth: BEA’s Table 1.1.11, which measures the change between the last quarter of the year compared to the same quarter a year earlier.

 

Voila! Now 2018 becomes a “banner year” with growth at “the fastest pace for any calendar year since 2005,” in the words of the White HouseCouncil of Economic Advisers. The White House website carries a headline banner saying “America’s economy achieves 3 percent growth for the first time in 13 years,” which isn’t as carefully worded, and is not correct.

So even when the economy is relatively strong, the White House feels compelled to lie about it and exaggerate economic growth. And when it comes to its predictions, the independent experts doubt Trump’s empty boasting. But not to worry — if Trump and his followers’ sky-high hopes fall short, they can always just lie some more.

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Vladimir Putin helped convince Trump to sour on Ukraine: report

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Russian Federation President Vladimir Putin successfully convinced President Donald Trump to turn on Ukraine according to a bombshell new report published by The Washington Post on Monday.

"President Trump’s effort to pressure Ukraine for information he could use against political rivals came as he was being urged to adopt a hostile view of that country by its regional adversaries, including Russian President Vladi­mir Putin," the newspaper reported, citing "current and former U.S. officials."

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Trump is ‘phony president’ who must immediately be removed from office: Ethics watchdog Richard Painter

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The former chief White House ethics lawyer in the George W. Bush administration argued President Donald Trump must be immediately removed from office during a Monday appearance on MSNBC "The Beat."

Guest anchor Ayman Mohyeldin played a clip of Trump saying the emoluments clause of the United States Constitution is "phony."

"What other parts of the Constitution are phony?" Painter wondered. "The First Amendment? Freedom of the press? The impeachment clause of the Constitution? He is going to find out than one soon. The 25th Amendment, is that phony? The 25th Amendment that empowers the cabinet and Congress to remove a president who is psychologically unstable, unfit for office? He wants to say the Constitution is phony."

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‘Donald Trump cuts and runs’: GOP strategist rips the White House ‘profound security threat’ to the US

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Republican strategist Steve Schmidt blasted President Donald Trump for "cutting and running" during a Monday appearance on MSNBC's "Deadline: White House" with Nicolle Wallace.

"Where are we?" Wallace asked.

"We’re in trouble," Schmidt replied.

"You see America in retreat. Literally," he explained. "With those trucks driving out of hard-won territory precipitously with no care to have the withdrawals done."

"The U.S.-led liberal global order that emerged out of the Second World War that was architected by FDR, Trump is dismantling it. What you heard was rhetoric today that could have been straight out of the 1930s, from the era of isolationism, that led to the world’s greatest tragedy," he argued. "What came after that was the United States filling the role as the world’s indispensable nation. And we are clearly deeply in an hour of retreat on that front. And we don’t know what the consequences of that are five years from now, ten years from now, fifteen years from now. But we will be feeling it for a long time."

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