President Trump’s economic policies have the U.S. and other countries around the world slipping toward recession — and that puts his re-election prospects in serious jeopardy, say a growing number of observers, in and out of the administration.
“I’m very worried about the latest economic data. A lot of us are concerned,” an unnamed source “close” to the president told Axios. “Without the narrative on the economy, he can’t win.”
Another Axios source described as “a former senior White House official” said: ”Rather than attack the global system that has produced so much prosperity for America, Trump would do well to harness its potential for economic growth…. The consequences of further isolating ourselves from the world may turn out to be quite severe.”
And the consequences of a recession on Trump’s re-election hopes would be equally severe, say political and economic experts.
“Short of [Supreme Court] Justices Gorsuch and Kavanaugh disclosing membership in the Communist Party, it is hard to think of any development that could undercut Trump more than a recession,” Jack Pitney, a professor of government at Claremont McKenna College, told Bloomberg News.
“He promised the religious right that he would give them judges and he promised the rest of his base that he would give them prosperity. Take away prosperity, and he won’t have a prayer,” Pitney said.
“There is potential for a U.S. recession … because of the lunacy of trade policy and the damage it’s doing,” Ian Shepherdson, chief economist at Pantheon Macroeconomics, told the Washington Post.
Trump has been demanding that the Federal Reserve continue to stimulate the economy with recession-fighting interest rate cuts, and the New York Times reports the Fed “looks likely” to do so next month. Some call that too little, too late.
Among the most pessimistic financial commentators is libertarian Peter Schiff, founder and CEO of Euro Pacific Capital. He doubts that cutting interest rates will help the economy as much as it has in the past — because of Trump’s trade policies.
“This trade war is lost,” Schiff said in his latest podcast, according to MarketWatch. “The only question is when do we surrender and how do we admit defeat … I don’t think we’re going to get any kind of deal.”
“This is going to be the inflationary recession, there’s no way out and it’s a political disaster for Trump because the recession is going to start before he finishes this term, which means he won’t have a second term,” Schiff told Fox Business.
Bloomberg notes that the only elected presidents who lost re-election bids in the past century were those “who did so after overseeing a recession”: George H.W. Bush, Jimmy Carter and Herbert Hoover.
“For Trump, the economy may be even more important than for his predecessors. His low-40s approval rating is already perilous for an incumbent, and the economy is the main factor keeping him afloat. He scores poorly on most other policy issues and on questions of leadership and character,” Bloomberg says.
“Nine major economies around the world are in recession or on the verge of one,” reports the Post, “raising fears that a global economic slowdown could help tip the United States into an economic contraction as well.”
The nine countries cited by the Post include Germany, Italy, Mexico, Brazil, Britain, Russia, Argentina, South Korea and Singapore.