We begin today’s roundup with economist Paul Krugman who warns of a possible recession and says the Trump administration is ill-prepared to take the steps to avoid one:
Neither I nor anyone else is predicting a replay of the 2008 crisis. It’s not even clear whether we’re heading for recession. But the bond market is telling us that the smart money has become very gloomy about the economy’s prospects. Why? The Federal Reserve basically controls short-term rates, but not long-term rates; low long-term yields mean that investors expect a weak economy, which will force the Fed into repeated rate cuts.
So what accounts for this wave of gloom? Much though not all of it is a vote of no confidence in Donald Trump’s economic policies. [...] Yes, the tax cut gave the economy a boost — a “sugar high.” Running trillion-dollar deficits will do that. But the boost was temporary. In particular, the promised boom in business investment never materialized. And now the economy has reverted, at best, to its pre-stimulus growth rate.
At The Daily Beast, Asawin Suebsaeng and Justin Baragona describe how the president is wrongly laying blame of a possible economic downturn at the feet of Democrats and the media:
According to three people who’ve spoken to Trump about recessions and the American economy since 2017, the president has repeatedly voiced concerns—or bitter annoyance—about what he views as media outlets’ ability, or even alleged desire, to help create economic recession through self-fulfilling prophecy.
“[Trump] thinks recessions or booms are often self-fulfilling prophecies,” another one of the sources said. “He’s said when the media starts beating the drum about a recession coming, that negativity gets into people’s heads and they change their behavior: less purchasing, fewer entrepreneurs starting small businesses, people moving money out of the market, [and so on]. That’s why he’s so concerned about the coverage of a potential recession… He believes he can will the economy in a positive direction by feeding optimism to the ‘American spirit.’”
More from Shane Croucher at Newsweek:
The Fed reverse that hike with a rate cut at the end of July. Now, Trump is accusing the Fed of moving too slowly, and continually making the wrong calls on rates. Investors are increasingly concerned about Trump's undermining of the Fed's independence.
Harry Enten at CNN breaks down the polling and says Trump’s reelection can’t afford a recession:
Now, many of those who approve of Trump currently would approve of him regardless of what he did. Still, he'd probably lose some of those who approve if the economy went south. He cannot afford for that to happen. At just 44% approval overall, Trump needs a few lucky breaks even if the economy stays steady. Further, a dip in the economy would probably lose Trump any shot he had at winning over
that 9% of voters who approve of him on the economy but not overall.
On a final note, don’t miss this piece at USA Today by Republican
Tom Nichols on why he cannot support Trump’s reelection:
I can live with policies I hate
Compulsive lying, fantastic and easily refuted claims, base insults and bizarre public meltdowns, however, are indeed signs of serious emotional problems. Trump has never been a reasonable man, but for two years, he has gotten worse. He literally cannot tell the truth from a lie, he often seems completely unable to comprehend even basic information, and he flies off the handle in ways that would make most of us take our children to a pediatrician for evaluation.
This is why policy doesn’t matter. I have only two requirements from the Democratic nominee. First, he or she must not be obviously mentally unstable. Second, the nominee must not be in any way sympathetic — or worse, potentially beholden — to a hostile foreign power.