We’ve seen some strange stuff since launching the Alternative Fact of the Week feature at the dawn of the Trump administration, from the president accusing his predecessor of tapping his phone to claims of millions of illegal immigrant votes for Hillary Clinton in 2016. But this week we’ve entered uncharted territory. It’s not new that members of President Donald Trump’s administration liedabout concerns that the economy could slide into recession or that his trade war with China is hurting Americans. What’s remarkable is that the person who called them on it was none other than Donald J. Trump.
To be clear, the U.S. economy isn’t officially in a recession (that can only be determined after two consecutive quarters of GDP declines), and economists are divided on how ominous the signs of slowing economic growth are compared to other positive indicators, like strong consumer confidence and low unemployment. But many have started taking the risk of a recession more seriously this month because of a wonky economic development called an inverted yield curve. The explanation for what that means is a little complicated — short-term Treasury bond yields are higher than long-term Treasury bond yields — but what it portends is not. Yield curve inversions have preceded every recession since the 1950s, not necessarily immediately but eventually.
The need to maintain the pretense that Trumponomics are responsible for all that is good in this world is so strong in the administration that President Trump and his toadies have repeatedly taken a break from dumping on former White House communications director Anthony Scaramucci’s book, goading Benjamin Netanyahu to keep sitting members of Congress out of Israel and obsessing about Greenland to insist that the economy is doing great, thank you very much. The chief White House economic adviser Larry Kudlow went on Meet the Press Sunday to insist sunny skies are ahead with no chance of recession. Alternative fact all-star Kellyanne Conway declared the fundamentals of the economy “very strong.” And President Trump himself tweeted that “our economy is the best in the world, by far.”
Our economy is the best in the world, by far. Lowest unemployment ever within almost all categories. Poised for big growth after trade deals are completed. Import prices down, China eating Tariffs. Helping targeted Farmers from big Tariff money coming in. Great future for USA!
The trouble is that even in the Trump administration the belief in the power of the big lie is not sufficient to cover the likelihood that a real economic downturn would doom the president’s re-election chances. So, amid the various denials of concern, Trump administration officials have been looking into ways to goose the economy to at least push a recession past November, 2020.
And who would call them on that little bit of duplicity? Why, none other than the Great Pinocchio himself, who has taken to lying about the economy and correcting himself in the same sentence, or the same tweetstorm, as the case may be. A day after that “best in the world” tweet, the president’s thumbs were at the screen again insisting in one moment that “Our economy is very strong” and in the next demanding that the Federal Reserve approve a big interest rate cut to stimulate the economy.
.....The Fed Rate, over a fairly short period of time, should be reduced by at least 100 basis points, with perhaps some quantitative easing as well. If that happened, our Economy would be even better, and the World Economy would be greatly and quickly enhanced-good for everyone!
On Monday, the White House denied a Washington Post report that the administration was considering a payroll tax cut as a means to shore up the economy, but on Tuesday President Trump told reporters, “Payroll tax is something that we think about and a lot of people would like to see that,” leading to a classic Wednesday headline in The Post: “Trump eyes fiscal jolt, denies need for it.” The president also indicated that he’s considering changes to the way inflation adjustments work in calculating capital gains taxes — because, obviously, cutting taxes for the rich, as Mr. Trump and the Republican Congress did in 2017, will totally recession-proof our economy. The president even acknowledged that the barrages of tariffs in his trade war with China are hurting the U.S. economy and could push it into a recession. (Um, duh. Despite all the “China is paying” talk on the presidential Twitter feed, J.P. Morgan analysts estimate that the tariffs already in effect are costing American families $600 a year, which will rise to $1,000 if President Trump follows through on his most recent threats.)
Will this latest flirtation with the truth lead President Trump to acknowledge that his fiscal policies (less taxes, more spending) are already pushing the federal budget deficit to levels not seen since the Great Recession, leaving us with few options should even a minor recession hit? Nah, it’s much more fun to claim Democrats and the media are rooting for economic disaster and to use unflattering golf metaphors to describe Federal Reserve Chairman Jay Powell’s management of interest rates. Have no fear, Alternative Fact of the Week fans, President Trump isn’t going to force us to retire this feature anytime soon.