During a March 9 Fox News interview, President Donald Trump was asked, “Are you expecting a recession this year?” His response was so disturbing the stock market tanked the following day:
I hate to predict things like that. There is a period of transition, because what we’re doing is very big. We’re bringing wealth back to America. That’s a big thing. And there are always periods of—it takes a little time. It takes a little time. But I don’t—I think it should be great for us. I mean, I think it should be great.
“No pain, no gain” can be good advice. But it’s hardly without limit. A regimen of daily jogging will tire your legs at first but eventually strengthen them. It’s not an argument for a gunshot to the thigh.
Most presidents, as a general rule, don’t go out of their way to egg a recession on, for good reason. Recessions hurt people, and they don’t necessarily come out of them stronger. Once one starts, they may not be easy—or cheap—to stop, as Barack Obama found out. Granted, not all recessions are multi-year “Great Recessions” driven by global financial system collapses. They are usually shorter in duration and—depending on the timing—can end fast enough to avert political consequences. But as George H.W. Bush learned the hard way, sometimes a recession can technically end with a return of positive economic growth, yet lingering negative effects such as elevated unemployment can still harm voters and befall politicians.
In theory, a strong leader can convince constituents to embrace a policy in which folks will have to weather a difficult period with a plausible argument that better times will follow. Trump, who has long sold himself as the most extraordinary businessman on the planet, surely believes that reputation is sufficient to convince the public he knows what he’s doing. “We’re bringing wealth back to America. That’s a big thing,” he assured, adding that during his last presidency, “I made the deal with China on farmers where they had to buy $50 billion worth of product, $50 billion, from 15 to 50. And it was great.”
First, and I know this might shock you, Trump was not telling the truth about that China deal. FactCheck.org addressed that claim in January 2020, “China agreed to increase agricultural purchases by $12.5 billion [in 2020] and $19.5 billion [in 2021] compared with 2017 levels … But there is no requirement that China increase purchases beyond 2021,” only projections.
Moreover, the size of the American economy, as measured by Gross Domestic Product, is nearly $30 trillion. Several billion dollars more in agricultural exports would benefit some farmers. But such a deal is hardly enough to offset the impact of an economy-wide contraction and help the vast majority of Americans who are not farmers. Even if similar bilateral deals materialized for other industries, they would likely be too small to influence the economy’s overall trajectory.
Trump’s factually dubious bravado is incapable of assuring average Americans, regardless of occupation, that they will be the ones who will ultimately benefit from his radical tariff strategy and come out ahead after any recession. If it were, the stock market wouldn’t have tanked.
And stock traders are a community of people presumably willing to give Trump the benefit of the doubt. Just last week, in a New York Times column, Steven Rattner, a Treasury Department official in the Obama administration and investment CEO, said, “Many, maybe even most, of the people I’m talking to in private are still quietly cheering his move-fast-and-break-things approach.” While most corporate executives don’t like higher tariffs, “they argue that these moves are mostly negotiating ploys.” Granted, Rattner cautioned, “I’m not so sure.” The market moves would indicate that his friends—after concluding that Trump is willing to bring on a recession in pursuit of higher tariffs—are now not so sure either.
The notion that Trump knows how to manage an economy was always ludicrous. Despite his cultivated image as a business genius, before he became a politician, he had filed for bankruptcy six times. After his first presidency, we got definitive proof that his reputation was built on lies. His Trump Organization was convicted of criminal tax fraud and deemed liable for civil fraud. He nevertheless managed to maintain a reputation for deft economic stewardship because the economy hummed in the first three years of his presidency before the COVID-19 pandemic hit. But he was only riding the upward trajectory handed off to him following Obama’s hard work digging out of the Great Recession. That so many corporate executives had been convincing themselves that the Trump of recent weeks was a clever negotiator and not a clueless megalomanic makes one doubt their wisdom.
Determining the motivation for Trump’s economic recklessness is a challenging, perhaps impossible, exercise. Logic can’t anticipate his actions. But taking his words at face value, he seems to cling to an outdated—and by outdated, I mean 19th century—view of the economy: when America was largely agrarian, manufacturing had yet to discover assembly lines, and the world’s nations were barely connected.
Asked on Sunday about the declining stock market, Trump bristled, “Not much,” and proceeded to complain that “we don’t make ships anymore.”
He pines for a return to the William McKinley era when the federal government was funded mainly by tariffs, ignoring that in the late 19th century, America didn’t have the expensive obligations of maintaining Social Security, Medicare, and global military supremacy—all of which he says he embraces. And while Washington’s coffers may have been flush during the Gilded Age, many people were destitute and rebelled against the regressive tariff system. Yet Trump insists tariffs, which the federal government collects, are “bringing wealth back to America.”
That’s even harder to argue when you admit what’s next is a loss of wealth for many individuals. Glibly musing about a recession as a mere “period of transition” is as foolish as dismissing high inflation as mere “transitory effects.” We all know how that worked out.
