Maybe Donald Trump will go Herbert Hoover one better. Hoover was in office six months before the great crash of 1929. Trump may best him by wrecking the economy way before then. And Hoover was elected by a landslide almost a hundred years ago, not by 1.5%. The main difference between Hoover and Trump, though, is that Trump has chosen to wreck the economy. Hoover had faith in the self-correcting of markets and he, too, thought that tariffs were a good idea. He came up with the Smoot-Hawley tariff act. And the rest is history. But while Hoover was out of touch, Trump is very much seeking to wreck the economy. Not just my opinion, they’re saying the same thing at The Bulwark.
Here is a thing you must understand: Trump has chosen to wreck the economy.
None of this was necessary. Trump inherited a stable, thriving economy and he then chose to:
- Engage in a massive, haphazard reduction in force for the federal government without any thought given to function.
- Turn the federal government into a division of Tesla, Inc.
- Spook our European allies by (1) demanding that Denmark cede Greenland to us; (2) telling the allies that we are pulling back from Europe and that the true enemy is not Russia or China but liberal European citizens; (3) switching sides in the Ukraine war to ally America with Russia’s interests.
- Start a trade war with our two biggest trading partners.
These are choices designed to create instability and chaos, not growth. Which is exactly what we’re getting.
Good and hard.
I regret to inform you and even our Dear Leader is being affected. DJT (the stock for his personal “media and technology company”) is the primary store of Trump’s wealth1 and it is . . . not doing great.
Down 30 percent in a month? While the guy holding the bag is the most powerful man on earth? Yikes.
And the Trump coin—$TRUMP—is also down large.
Nourish yourself with the tears of unfathomable sadness.
Two aspects of this market correction interest me.
First: How deliberate it has been. There was no sudden drop; no moment when everyone on Wall Street woke up and realized, “Holy shit this is happening. We put a madman in the Oval Office.”
This tells us something about market mentality. Maybe it’s that markets don’t assimilate information as quickly as they should. Or maybe it’s that markets aren’t able to see over the horizon—they can react to what they think will happen tomorrow, but not to what they think will happen a week from now.
Or maybe it tells us that markets believe they can thrive in an illiberal system? Check out this graph of the performance of the German stock market during the Nazi years:
I don’t know about you, but that’s a pretty stark reminder that markets aren’t just amoral—they can be willfully, catastrophically stupid. If you were an investor in the German stock market and you thought that opening up a second front would be good for the economy . . . well, I can’t really help you. But remember: Lots of German investors obviously believed that.
What I think is going on here is that Trump is operating from Mad King Donald mode. He believes that he can do anything he wants. On some level he believes he did win by a landslide and that the voters truly do want him in office for life. And he’s got Musk and Putin backing up that kind of thinking.
The Bulwark says that Trump is going to monkey with government data and of course he will. That’s Elon’s goal, is to control the information we get, about the economy and everything else. However, the problem with that is that the markets are worldwide and it’s pretty blatant if the price of a certain automobile has gone up nine or twelve grand overnight, which is exactly what is being discussed today in light of these stupid tariffs with Mexico and Canada affecting the health of the auto industry. It’s pretty obvious if businesses start going bankrupt or if the prices at the market keep skyrocketing. But I don’t doubt that Trump/Musk will attempt to blame it all on the Deep State.
Let’s see if Trump explains any of this in his State Of The Union address.
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