President Donald Trump appears unprepared to deal with a potential recession, the Associated Press reported Friday.
"Facing a trade war against China that has shaken the global economy, President Donald Trump gathered his most trusted economic aides in the Oval Office," the AP reported. "The assembled brain trust for Friday’s urgent consultations included an economics chief best known for his stint as a cable TV commentator; a trade adviser whose pro-tariff views are outside the economic mainstream; and a treasury secretary (joining by phone on his way back from vacation) who made millions off the housing crisis and then turned to financing Hollywood movies."
"Where past presidents have relied on top academics, business leaders and officials with experience in prior administrations, Trump has gone a different route, building a crew of economic advisers known more for their allegiance to him than their policy chops," the AP noted. "Now, facing a test caused largely by Trump’s determination to force China to provide the U.S. with better trade terms, questions are mounting about whether the team is up to the challenges that lie ahead — and whether Trump would listen to them anyway."
Austan Goolsbee, who served as chair of the Council of Economic Advisers during the Obama administration, warned it was a recipe for disaster.
“The tougher the situation, the more important it is to have good advisers,” Goolsbee said. “But President Trump does not show any sign of listening to economists, so it probably doesn’t matter who is on the econ team. But, boy, is that a scary idea if we are going through a serious downturn.”
The AP noted Trump's team is not just unqualified, but also have credibility issues.
"Larry Kudlow, the president’s top economic adviser and a former CNBC commentator, said on CNBC that 2017′s $1.5 trillion worth of tax cuts had “virtually paid” for themselves through stronger growth — even though the budget deficit has jumped more than 20% this year," the AP noted. "Treasury Secretary Steve Munchin told reporters ahead of the 2018 elections that a separate middle-class tax cut was being developed, but it never materialized as promised. Trade adviser Peter Navarro, a cheerleader for tariffs, told CNN this month that the tariffs are “not hurting anybody here” — even though Home Depot, Macy’s and other companies have warned about the damage to corporate profits and academic research has quantified a cost being borne by U.S. consumers."
The situation could have major ramifications for the 2020 election.
"An organic slowdown in growth — not even a recession — would be tough on Trump’s reelection chances and he knows it, which is why he has aides talking up the economy on TV as he repeatedly hammers the Fed, said a former senior White House official who spoke on condition of anonymity to discuss private conversations," the AP reported. "The surest relief Trump could offer on the economy would be backing off the trade wars with China. But for the moment, the president is headed in the opposite direction, announcing increased levels of tariffs on Chinese goods Friday."