Bad news for the economy, perhaps good news for the Left

August 5, 2019 • 3:50 pm

According to the article below, the escalating trade war between the U.S. and China, which involved China’s devaluing its currency relative to the dollar today, and Trump threatening to escalate with more tariffs, has led to the year’s worst day on Wall Street.

For many people, the only thing Trump has going for him is that the economy has been relatively strong. If Trump continues his stupid trade war and his idiotic tariff increases, things could well change. And when Americans get hit in the pocketbook, they tend to want a change in the ruling party.

It’s ironic to wish for a tanking economy so we can get rid of the authoritarians who rule us, but so it goes. Am I a bad person to think that?

64 thoughts on “Bad news for the economy, perhaps good news for the Left

      1. Wait, isn’t that the same guy who bitched that Obama golfed too much, spent too much time away from the White House, and signed too many executive orders?

        Consistency, thy name be not The Donald.

        1. Come to think of it, Trump used to bitch about Obama using a teleprompter, too.

          Anybody catch him exercising his remedial reading skills today on the canned speech about the weekend massacres somebody else had written for him? “Empathy” seems not to be in the man’s extemporaneous repertoire. He declined to answer questions, too, apparently for fear he’d “both sides” another one.

          Based on his halting reading and illiterate tweeting, English punctuation is not his métier, either.

          1. If you compare Trump’s public speaking performances now with those during his campaign you might find it a bit shocking how much worse he seems. I think there is a serious medical issue going on with him along the lines of dementia.

        2. Not only did he bitch about how much time Obama spent golfing, he said he wouldn’t golf when he was in the White House because he’d be too busy working.

          He’s actually spent far more time golfing than Obama ever did.

          And he even charges the Secret Service for the use of the golf carts at his own clubs to follow him around while they’re protecting him.

          This site keeps track of Trump’s golfing and the cost of it to taxpayers: https://trumpgolfcount.com/

  1. RE PCC(E)’s: “It’s ironic to wish for a tanking economy so we can get rid of the authoritarians who rule us, but so it goes. Am I a bad person to think that?”

    Drastically bad “leadership” requires drastic action. The Drumph is so evil and so dangerous that honorable, rational people are driven to thinking irrational thoughts. But, in this case, The Drumph has brought it on himself and the consequences of his craziness are finally, it seems, catching up with him (and us). So, there is no need to “wish for a tanking economy.” My wish is that not too many innocent people will be badly hurt by The Drumph’s and his enablers’ twisted minds. Regrettably, I don’t think that my wish will be granted.

  2. This is a uniquely Trumpian disaster and a vindication for everyone who said letting a guy with six bankruptcies run the country was not a smart idea. No other Republican would have dug his heels in this far, and the magical power of tariffs seems to be the one policy area in which Trump maintains a principled (if laughably wrong) stance. No matter what other Republicans and business leaders keep telling him, he’s sticking to his guns on the trade war.

    It’s just a matter of how much more Republicans can tolerate of this. Right now they’re more scared of Trump and his fanbase than they are the donor class, but the arithmetic could change any day if this keeps up.

  3. A tanked economy would be good, but let’s remember Trump is the master of screwing around, threatening and backing off at the last minute. Even though he is an ass, this gets him news coverage and makes him look reasonable to his idiot followers when backs off instead of going over the cliff. I hope he goes thru with his new tariffs, but I would not bet on it.

  4. It doesn’t necessarily make you a bad person. If it was merely a personal dislike for Trump, that would be different.

    Those of us with guaranteed incomes or large and not-easily raided savings are in a better position to enjoy the schadenfreude of a Trump admin shot down by a bad economy. But
    tens of millions of Americans are one paycheck away from economic disaster and some of us have only recently gotten our heads above water after the last crisis. In short, I have a hard time hoping for a recession even if it means an end to Trump.

    1. This says well what I was considering. I have been moving toward hoping the economy does not tank and precipitate a one-term presidency. I want the 1 term. But not like that.

      1. Yes. I haven’t recovered from the great recession and probably never will. I’d really rather avoid another serious economic downturn. But I do understand the sentiment.

  5. I wish the Chinese would loudly call his bluff calling him weak and stupid. This might make the whiny little bugger go thru with the tariffs. Unfortunately, this probably wont happen.

    1. I agree that he’s too much of an uber-weasel to ever go down a road that would screw things up for himself that badly. He’ll wriggle out of this somehow.
      He knows perfectly well how crucial the economy is and besides, he’s been priming his supporters with constant attacks on the federal reserve. They’ll be the fall-guys if anything shite happens.

      I don’t think that will save him if the economy truly tanks, but then I’m more and more inclined to think that he’s a paper tiger and that he’s going to get vaporised in 2020 anyway.

  6. If that’s what it takes to get rid of trump and the Republican Senate majority, I’m willing to take a hit in my investments.

  7. As long as the tanking is due the moron’s moronic trade wars and other moronic economic policies, it is fine to hope that those fail badly enough to turn the electorate against him. We should not wish that the economy fails in a more general sense, but that those bad policies cause enough harm to get a new leader elected.

    1. Yep. Trump gets credit for Obama’s policies that prevented a depression and gave Trump a growing economy, while the next Democratic president will get the blame for the coming collapse of Trump’s insane bubble economy.

  8. Don’t worry; Trump will get rid of the tariffs as soon as the Chinese govt. does what he wants — nmaely, cut down on Fentanyl production — which the latest comments from the Chinese govt. show that they’ll be willing to do. The Chinese govt. is addicted to playing economic warfare, but Trump is good at that game too. Patience!

  9. I’ve explained previously why comprehensive, long-term tariffs against China are a good idea, but I’ll do so again, though I won’t list all the points.

    (1) China has had tariffs on US goods for years.

    (2) This is a very important point: tariffs only hurt the US temporarily, but, if they are kept long enough (say, four or five years), they will damage China significantly and permanently. As soon as the tariffs are lifted, the effects on the US stop. The damage to China will be important not only to the US and its economy, but to most other nations as well (see point 3 below). Why will the damage to China be permanent? Because China’s manufacturing sector has continued to see rising wages. Meanwhile, countries like Vietnam have been ramping up their manufacturing capabilities considerably and continue to do so, and they and the other countries in their class have significantly lower wages, and thus lower prices for the same goods. The tariffs will likely lead to a significant amount of manufacturing moving out of China to other countries if they remain in effect long enough, which will be beneficial to those other nations and to all the nations (read: nearly every) that buy these goods from China.

    (3) China has been manipulating worldwide currency and stealing intellectual property and patents for decades now, and have also been selling pirated goods. This leads into point number four:

    (4) China’s political institutions are significantly more fragile than any other in the First World. If the tariffs last long enough, China will be forced to back down from their constant shenanigans regarding corporate espionage, stealing of intellectual property and trade secrets, selling of pirated/copied products, and decades-long manipulation of worldwide currency. The only reason China’s ruling party can remain in power is because it is providing a steadily rising economy. It is an extremely repressive regime, but people put up with it because standards of living continue to increase. If the economy slows or stops growing, China’s ruling party will be forced to back down and sign a fair trade deal.

    (5) Not having a trade deal robs China of certain certifications that would bring in billions of dollars in multinational investment.

    The trade war with China is not a bad idea; in fact, I think it’s the only way to deal with them. Their economic shenanigans have worked brilliantly for at least 20 years now, and this is because the world has allowed them to continue engaging in them. These things must be stopped at some point, and a trade war is really the only way to make that happen. Tariffs are the biggest weapon in that war.

    1. Note: this is not to say that Trump actually understands all of this. I’m merely trying to explain why long-term tariffs and a larger trade war with China are a good idea.

      One more point I forgot: China has also started shenanigans when it comes to data collecting through their own tech companies, like Huawei. Huawei builds distributive tech and is selling that tech to Western nations and, more worryingly, governments. The prospect of China being able to collect and even manipulate data on sensitive material is pretty frightening.

      1. Let’s not forget how the Trump administration lifted sanctions against another yooge, cheating Chinese tech company, ZTE — quite coincidentally, I am so sure — immediately after a state-owned Chinese lender made a cool half-billion dollar loan to an Indonesian theme park in which Trump holds a major interest (and, also quite coincidentally, immediately after the Chinese government approved a shitload of Chinese patents Ivanka had pending).

        Does anyone have any idea of the extent of Donald Trump’s foreign financial entanglements and conflicts-of-interest? Silly question, I know.

      1. All I can say about Krugman is that I think he is one of the worst popular economists around. He was a good one many years ago, but I feel his economic theory became more based on political beliefs and backing up Democratic administrations’ policies, rather than sound economic theory, and that’s when it went off the rails. I’m sure many people disagree with me, just as I’m sure many people will disagree about tariffs. But I think it’s important that people understand tariffs because, every time I have a conversation with someone in real life about the issue, they always say the same line they’ve read/heard in the media: “it’s just a tax on Americans!” The vast majority of people don’t understand what tariffs are, how they’re used, and how they’d be useful in this particular situation, and knowledge of the issue is far more important to me than people agreeing with me about whether it’s a good idea.

    2. All interesting. To your #2 point, it would be helpful for us to get our companies who manufacture off-shore to disengage from China and set up shop in Vietnam and to other countries. I was wondering about whether some could help set up companies in South America where people are fleeing in part from economic reasons.
      Look at me, talking about exploiting workers for cheap manufacturing. I am feeling conflicted right now.

      1. “Look at me, talking about exploiting workers for cheap manufacturing. I am feeling conflicted right now.”

        Hey, don’t feel guilty! You’re bringing jobs to those people that provide them with wages that are higher than what they normally make in a day. These are the ways countries begin to develop further. You’re not exploiting anyone 🙂

        We (I assume you mean the US government or citizenry) can’t really push companies to move their manufacturing or their purchase of manufactured goods from China to somewhere like Vietnam. For the moment, Vietnam is still building in many sectors, but that building would go a lot quicker if these tariffs/trade war remained in place, as billions more in investment would come from foreign sources to build those sectors. But, in the meantime, any good that can be bought for less from China will be, as no big corporation is going to pay more and lose millions just to switch countries for political reasons.

        If the tariffs are left in place, the Chinese goods that are produced in other places will cost more and places like Vietnam will beat their prices, while the goods that are not yet produced in places like Vietnam will quickly start being produced there with the help of foreign investment.

      2. There are certainly negatives and many, perhaps most, of the people involved didn’t do it for altruistic reasons, but the businesses of wealthy nations setting up manufacturing in poorer nations to take advantage of cheap labor and other incentives has had significant positive impact over time. Has it been worth it? Have the positives justified the negatives? I don’t know. I’m conflicted like you. But I think it’s clear that done better, with the right kind of regulation, I don’t think there’s much doubt that it could be a very positive tool for helping to raise poor nations.

        Similarly, the US buying China’s cheap consumer crap for decades was a significant enabler that helped China achieve the status it has today. China doesn’t need our help in that way anymore.

    3. “Trade wars are good and easy to win.”

      — Donald J. Trump, ersatz president of the United States, 2017 — ???

      Thing is, Trump seems to think he can cram down the president-for-life of the world’s most populous nation, which holds markers on #1.2 trillion in US debt, as though Xi were a Canarsie concrete subcontractor who will take an 80% haircut on his outstanding tab the minute Trump threatens that otherwise he’ll declare bankruptcy and the shnook’ll get nothin’.

  10. We all remember well, early in the previous election cycle, how so many Republicans spoke up against Trump. They often expressed shock and disgust about the various utterances of this human walking disaster. Then he became the nominee, and many got into bed with him. Then he won, and most of the Republicans sold out to him.
    Well, what goes around comes around. If he loses his base, the politicians in the unprincipled party may sell out once again.

  11. I wish we had a real president, but that wish does not extend to the desire for economic disaster just to make him look bad.
    We are talking about circumstances that would lead to actual quantifiable suffering for lots of people. And not just among the rubes in flyover country.

    I cannot think of anyone who I hate enough that I would want innocent third parties to suffer, on the off chance that the person I hate might incidentally harmed by the event.

    1. Yes, but I was thinking about the BALANCE: is temporary economic downtown for the long term increased well being of the U.S. if it gets a Democratic President. That was my thinking, not just to hurt Americans so Trump would go.

  12. Ha! You are saying the same thing that Bill Maher is getting pilloried over:

    “I feel like the bottom has to fall out at some point, and by the way, I’m hoping for it because I think one way you get rid of Trump is a crashing economy,” Maher said during the June 8 show. “So please, bring on the recession. Sorry if that hurts people but it’s either root for a recession, or you lose your democracy.”

    I think that if you are looking at the big picture you would have to agree with him. The country as a whole would suffer much more than a few (or ten) million citizens. And ironically, the people most likely to suffer are the people who voted him in in the first place.

    So, no. You shouldn’t feel bad.

    1. “‘…it’s either root for a recession, or you lose your democracy.’

      I think that if you are looking at the big picture you would have to agree with him.”

      Maher’s statement there is insane. He’s saying he wants the economy to fail because Trump will otherwise be democratically elected again, and by being democratically elected, we will no longer have a democracy. This statement is the opposite of democracy. He’s saying it’s only democracy if the guy he hates loses.

      1. I don’t think he meant that, BJ. I’m reasonably sure he meant that Trump himself is a threat to democracy. That may be a bit hyperbolic, but frankly, it’s only a bit. Without a doubt he has irredeemably debased it, but perhaps we will yet avoid the worst of our fears about his administration. Time will tell. Do you think if he loses next year he’ll give up power quietly?

        1. Will he give up power quietly if he loses? Hell no. He’ll spout all sorts of conspiracies. But he certainly won’t threaten democracy by refusing to leave office, at least IMO.

          Anyway, it is what Maher is saying and it isn’t. I understand the point he was trying to make, and you are of course right that he’s trying to say that, but he’s also saying that the Democratic election of the person he doesn’t will be the end of our democracy. And I just don’t see it. Trump is terrible and an embarrassment, but I still don’t know how he has threatened democracy itself. The only idea we had for that was the whole Russian collusion thing, and it turns out there is no evidence he ever colluded with the Russians to undermine our democracy. Everything else is “his rhetoric is scary and his policies are really bad and he’s a nasty person,” which are all things I agree with, but not threats to democracy.

          We can have worst fears about his administration, but if none of them have happened yet (assuming your worst fears are fears about literally undermining our democracy, rather than just debasing it), maybe it’s time to update our view to the idea that he’s not threatening our democracy, just making an embarrassment of it.

          Regardless, he’s shown no inclination toward undermining our democracy, so I think it’s pretty fucked up to say we need a recession where millions in this country and possibly billions around the world suffer because Trump getting democratically elected again will mean we “lose our democracy.” And I think it’s particularly callous, self-serving, and just plain nasty coming from a rich Hollywood type who will be perfectly fine and living the high life, smoking weed with beautiful women in hot tubs overlooking LA, no matter what happens.

          And I happen to really like Bill Maher! So this does not in any way come from a place of hatred for him.

  13. Many economists remind us that the stock market is not at all equivalent to the entire economy. In fact, most voters don’t own stocks. This will hit the investor class first so perhaps the GOP will have a shiver of fear. Certainly, the pressure on Trump to end his trade war will increase. We probably won’t hear of it as it will be captains of industry and investment that will bend Trump’s ear. I’m not sure he’ll listen though.

    Trump’s mismanagement of the economy will take much longer to trickle down to most voters. They will see higher prices already for some goods but I suspect it won’t hurt regular folk that much. Trump will have done a lot of damage to our real economy by the time that happens.

    1. At some point, I predict, Trump will declare victory over the Chinese and call off the trade war. He’ll take credit as the economy recovers from the recession he caused.

    2. Anyone who has a 401-k as their retirement plan owns stock. Lots of people saw their retirement fund shrink in the last financial collapse. The stock market has a direct impact on a lot of voters.

    3. “Many economists remind us that the stock market is not at all equivalent to the entire economy. In fact, most voters don’t own stocks.”

      This is true, but when the stock markets crash it does quickly impact ordinary folks. Not because they own stock that loses value but because the inevitable reaction of the big finance companies is that they stop lending money.

      That’s what fucks up the economy. Almost all businesses, including small businesses like “Mom & Pop” places, rely on borrowing money on a regular basis. On a monthly basis they are borrowing and paying down the loan in a regular ebb and flow that allows them to operate their business.

      When the big finance companies get scared and stop lending money all the lenders below them, right down to the local branch bank, stop lending money too. Suddenly the line of credit Mom & Pop have had for years to operate their business is frozen. “Sorry, we aren’t closing it but you can’t use it right now.” That’s what kills the economy. When that day to day borrowing that greases all the gears is inhibited businesses can’t do business.

  14. You know I love you and your site Jerry, but you’ve asked an honest question and I assume you want an honest answer.

    I don’t think you’re a “bad person” for thinking the way you do, but I think it’s a bad and callous way to think. Recessions don’t just stop as soon as someone else gets elected. What if it’s as bad as the 2008 recession? What if it’s worse? Millions of people losing their homes, savings, retirement funds, etc. What if it lasts for a decade? I guess you think the damage that would be done to people by a bad recession will be less than the damage that would be done by another term with Trump in office, but nobody can calculate that, and nobody can calculate whether Trump will win or lose if there is a recession, nor whether he will win or lose if there isn’t.

    I think it’s easier for people to see things this way when recessions don’t affect them and the people they know as much as they do many others. I don’t know many people who took terrible blows during the 2008 recession, but I know there were many, many millions who did. It’s natural for us to think more about those close to us (hey, it’s evolution), but, if we stop and think about those other people, perhaps some of us might come to the conclusion that rooting for a recession isn’t a good idea.

    And remember, a recession doesn’t just affect people here in the US, but people all around the world. This isn’t just about us.

  15. FWIW, I don’t think it is any worse than Mitch McConnell saying he was going to do anything he could to make Obama a one term President. He obviously did not want him to have a second term, the American people be damned.

  16. And to put a finer point on it, everyone posting here including Jerry knows whether he wants a recession or not will make not make a difference. Mitch actually could have an affect although that is debatable.

  17. The nation has been in an expanding economy since the Great Recession of 2008. Nothing lasts forever. And, as the title of Republican never-Trumper Rick Wilson’s book has it, everything Trump touches dies. Trump has no real clue what he’s doing, and no respect for longstanding American norms, like the independence of The Fed.

    Trump’s tariffs have been disastrous for American agriculture and (as everyone knows, but Trump himself refuses to admit) aren’t being paid by the Chinese, but by American consumers. Plus, Trump thinks he can bribe rural states to remain red with taxpayer bailouts, the national debt be damned.

    I hate to see the human suffering attending any economic recession, but if that’s the price for driving this stumblebum nincompoop from office, so be it. I hope it’s a short and mild one.

    1. Is Wilson’s book good? I’ve been meaning to get it. I like what I see of him, and his articles are always enormously juicy fun(although I’d imagine that if you’d asked me about him ten years ago I’d have said he was one of the most despicable fuckers on earth). He really gets it, like Sam Harris and Sullivan and Bill Maher; he really gets that Trump isn’t just a stupid, dimwitted, incompetent bad-dream of a president, he’s something much worse. He’s a bat-signal for the world’s most awful white people.

      There are a lot of critics of Trump around, but only a few of them really get just how bad he is, and more than that, are able to put it in terms that don’t sound meaninglessly cliched.
      I thought Sam Harris’s podcast on Trump pre the election was the most vivid example of this, but he also did one with Sullivan that was equally riveting, and Wilson and Maher are both fighting the good fight every week in the media in similarly cutting fashion.

      1. Wilson’s book is a model of mordant and hilarious invective.

        I laughed my ass off, even as Wilson was making his most serious points.

  18. “It’s ironic to wish for a tanking economy so we can get rid of the authoritarians who rule us, but so it goes. Am I a bad person to think that?”

  19. (Oops)
    “It’s ironic to wish for a tanking economy so we can get rid of the authoritarians who rule us, but so it goes. Am I a bad person to think that?”

    No, and (speaking as an outsider) it’s well overdue. tRump’s idiotic trade war is likely to cause massive collateral damage to everyone else’s economies too, so the sooner the chickens come home to roost – if that’s what it takes to get someone sane in charge – the better.

    Same goes for Brexit and tRump’s mini-me Boris, I guess.

    cr

    1. Yes, I think that is correct, better a little economic pain now and getting rid of Mr Trump, than a continued Trump rule and a greater crash in, say, a year or five.

      One of the things that should worry Americans (US-ians) most (IMMO) is that the tax cuts for big companies are used for 90%+ to buy back own stock, instead of being invested in R&D, work force (remember H Ford), expansion, etc. Moreover, the baby boomer generation is retiring, which will probably also slow the movement of money (a bad thing).
      And then we did not even talk about say, lifting environmental regulations, which will make US industry less competitive worldwide in the long run.
      I guess that from an economy pov alone the US needs to get rid of Mr Trump ASAP, even if that means some economic downturn right now.

  20. It’s ironic to wish for a tanking economy so we can get rid of the authoritarians who rule us, but so it goes. Am I a bad person to think that?

    It depends on whether Trump is worse than a poorly performing economy. Speaking from the right hand side of the Atlantic I would say he is, but then I won’t be one of the people losing my job if the US economy goes down the tubes.

  21. No, you are not. If it we were talking about crime, it would be a tought crime, which we already know is ridiculous. It isn’t neither a “bad an callous way to think” as BJ said (comment #18). the only thing you are doing is seeing the upside in the downside. What would be bad is you acting on that thougth and purposelly bringing the economy down (if you somehow could) so you could help bring trump down.

    If one is anti-Trump, usually it goes by hand thinking that his leadership is necessarily going to bring economy down, so at worst this happening would mean that you feel good with the confirmation of your prediction.

    And for the efectiveness of the trade war, or the lack of, at least as expressed by BJ (#13), it’s only especulation and it looks like wishful thinking. The assessment rests on a lot of assumptions, namely how much the chinese people would endure the consecuences and how much, if they were not willing to coninue to do so, the government would endure that resistance. One must have to take on account that on ocasion the chinese people have endured way worse that whatever is inmediately foreseable in the consecuences of this trade war.

  22. “the only thing you are doing is seeing the upside in the downside.”

    I don’t think this is the case. Jerry said [emphasis mine], “It’s ironic to wish for a tanking economy so we can get rid of the authoritarians who rule us, but so it goes. Am I a bad person to think that?” Wishing for the economy to tank so Trump doesn’t get reelected is very different from saying, “I don’t want the economy to tank, but, if it does, at least Trump might not be reelected.” And we’ve seen plenty of people in this thread say they’d rather see millions suffer the possible loss of their homes, savings, retirement funds, etc. in this country alone to get Trump out of office, to say nothing of the billions of people around the world who will be affected, many to the point that they may no longer be able to afford the cost of simply living as they normally do.

    Anyway, regarding your other point: literally all economics past a certain point is predictions. But let’s say China’s political institutions don’t fail under extreme economic pressure. It’s still unlikely to matter, as keeping a torrid pace of growth is far more important to them than any First World nation, including the US. Their political institutions breaking down is not at all a prerequisite for the trade war/tariffs to work, and the rest of what I wrote involves some of the safest predictions you can make (e.g. manufacturing moving to Vietnam and similar countries) and simple facts (e.g. China not receiving certain certifications that would bring in billions more in foreign investment).

  23. Sometimes you just know that, put it off as long as you can, you just have to throw up before you can begin to feel better.

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