With President Donald Trump about to embark on yet another trade war — this time with Mexico — economists and financial analysts are surveying the economic landscape and are painting a frightening portrait of a coming recession as soon as 2020.
According to a report at Politico, “Trump is edging to the brink of a two-front trade war in a very different environment than he enjoyed last year, when the GOP tax cut pumped billions of dollars of stimulus into the U.S. economy,” adding, “Analysts now expect economic growth to slow closer to a 2 percent pace this year. And investors, Wall Street analysts and the Federal Reserve are signaling that if Trump doesn’t make quick deals, growth could stall out completely.”
In an interview with Politico, Gregory Daco, chief U.S. economist at Oxford Economics, said that Trump is doing damage to the economy that could be far-reaching and deep.
“If you combine the effects of Mexico and China tariffs, the drag on the economy is close to 1.5 percent and that is quite significant when you consider that growth is already slowing quite a lot,” he explained. “And who knows about the confidence shock from tariffs or the stock-market shock. The risk here would clearly be recession if we are talking about these blanket tariffs.”
With business payrolls showing small gains in the latest job report released today, and the stock market having just finished up a dismal May, investors and financial analysts see a perfect storm of economic chaos.
“We literally scared ourselves into a sharp market pullback last year in a stronger economy. Now we are doing all this in a weaker economy and it ups the risk that we fall straight through the ice,” Diane Swonk, chief economist at Grant Thornton explained.
Noting that “when investors get nervous that markets and the economy could be vulnerable, they tend to gravitate to long-term bonds, sending prices higher and yields lower,” Campbell Harvey, a professor at Duke University’s business school also held up a warning sign, stating, “This is not normal and it tells us something is wrong.”
Analysts are now speculating that Trump’s trade war with both Mexico and China will lead to a double hit of a drastic drop in car sales and a massive increase in the cost of goods for consumers, which economist Daco said spells massive economic upheaval to come.
“It’s one thing to impose tariffs when the economy is on the way up and we are doing fine,” he explained. “But once you’ve reached the inflection point, and we’ve passed that point, then any push you give with tariffs is just going to make the slowdown more rampant and throw fuel on the fire.”
You can read more here.
Here’s how Trump hopes to recreate his 2016 presidential win — and how Democrats can send him packing
Writing for CNN on Saturday, election forecaster Harry Enten explained how President Donald Trump's recent, racist behavior lies in his desire to recreate the same electoral conditions that gave him a victory in 2016 in the presidential election next year.
"The Trump strategy is pretty simple: 1. Drive up the unfavorable ratings of his Democratic rival as he did in 2016 in order to compensate for his own low ratings. 2. Bank on an electoral college/popular vote split as he did in 2016. 3. Use a campaign of racial resentment to drive up turnout even more among groups favorable toward the President," wrote Enten. As he noted, Democrats have excellent odds to flip back Michigan and Pennsylvania, but they will have to work harder to win back any of the other states Trump flipped from the 2012 Obama camp — in particular Wisconsin, which was the closest state after those two.
Do politicians actually care about your opinions? This researcher says no
Earlier this month, a New York Times op-ed written by two political science professors, Ethan Porter of George Washington University and Joshua Kalla of Yale, discussed their troubling research findings: State legislators, the two claim, don't much care about the opinions of their constituents, even if they're given detailed data regarding their views.
This article first appeared in Salon.
Mitch McConnell’s big donors are Wall Street firms — and only 9% of his funds comes from Kentucky
Wall Street contributions helped Senate Majority Leader Mitch McConnell raise $3 million last quarter. But just 9 percent of his donations came from individual donors in his home state of Kentucky.
The biggest blocks of contributions to McConnell’s campaign between April and June came from 29 donors at New York’s Blackstone Group, who donated a combined $95,400, and from 14 executives from the financial firm KKR & Co., who contributed a combined $51,000, the Louisville Courier Journal reports. Executives from firms like Apollo Global Management and Golden Tree Asset Management contributed another combined $65,100.