It’s interesting who is getting agitated these days and it’s not the Democrats. We saw all this coming. We have all been one collective Cassandra, prophesying doom if Trump was reelected. The electorate didn’t choose to listen to us, and there is no satisfaction in saying, “We told you so.” Not in this instance. But the reaction to Trump’s latest “willy nilly tariffs” has sent the stock market screaming and that in turn has sent the Editorial Board of the Wall Street Journal into conniption fits. And it is always droll when they attempt to reason with Donald, which is an exercise in futility, just ask any of his relatives.
Take Friday’s jobs report, which showed employers added 151,000 jobs last month. That’s half as many as in November and December. Leisure and hospitality jobs have declined in the past two months, which may indicate that consumers are pulling back on discretionary spending.
The labor force participation rate also fell 0.2 percentage points to 62.4% owing to a decline among men. Manufacturing gained 10,000 jobs in the month. But the number of workers employed part-time who wanted but couldn’t get full-time work increased by 460,000 to 4.9 million, the most since spring 2021.
The Institute for Supply Management’s purchasing managers’ index (PMI) registered growth in manufacturing last month, but this was fueled by a surge in prices to the highest level since summer 2022 when inflation peaked. Comments from survey respondents showed that uncertainty about Mr. Trump’s willy-nilly tariffs are weighing on business sentiment.
A transportation equipment manufacturer said “customers are pausing on new orders as a result of uncertainty regarding tariffs.” A machinery manufacturer said “the incoming tariffs are causing our products to increase in price” as “sweeping price increases are incoming from suppliers.” When tariffs cause steel prices to rise, steel-using companies raise prices.
Even service businesses are being whipsawed. “Tariff actions have created chaos in information and pricing measures,” reported an accommodation and food services business.
Chaos is Trump’s chief product, whether domestically or abroad. Expect him to continue wreaking chaos, because that’s all he knows. Just as the Olympian gods reportedly mocked us for their sport, Trump loves to create chaos for his sport. His Russian-paid right-wing media shills love it, it makes good copy; and the MAGAs love it, they think he’s owning the libs and what a delight that is. But the fact of the matter is, that Trump’s actions are going to affect a lot of peoples’ bottom lines and that will be in the very near future. That is why the Wall Street Journal is in flip out mode.
Tariff uncertainty is coinciding with rising consumer anxiety. After an uptick last autumn, the Conference Board’s consumer confidence index sank in February as inflation expectations rose. Many respondents cited tariffs.
Consumers are showing strains from four years of inflation with delinquencies on auto and credit cards approaching levels last seen in the aftermath of the 2008-09 recession. A stock market correction could also harm Main Street by reversing the so-called wealth effect that has buoyed consumer spending. The top 10% of earners account for about half of consumer spending. Less government spending, while necessary to free up resources for private investment, may dent GDP in the short term.
All of which suggests slower growth ahead, even if the economy dodges recession. Mr. Trump’s deregulation and an extension of the 2017 tax reform should buoy business investment over the long term. But the higher costs and uncertainty caused by his tariffs are hurting the economy now. If Mr. Trump wants to quiet recession alarm, he would be wise to put his tariff plans on the shelf.
Now if Trump was any normal politician, seeing the undeniable signs of recession all converging, he would pull the economy out of the nosedive. But will he? Here’s what I think. The tariffs are Trump’s grifting mechanism. The idea is to set up a situation where businesses do for Trump so that Trump will waive them out of Tariff Hell. That’s a mob shakedown and that’s Trump’s plan.
Elon Musk has been for it since the beginning. He said during the campaign that there would be “temporary hardship” and this is echoed by Trump all the time. “Disturbance” is coming but we’ll “all be so rich you won’t know where to put the money,” is what Trump says when he lies to our faces.
So this is the long range plan. Not some 100-year long game, like the Chinese have. No, the long range plan is to make the billionaires even more wealthy and powerful, screw the lower class even more than it has been, and pay off anybody in the middle or upper end of the economy so that they pay fealty to Mad King Donald.
So will he do it? Will Trump keep the crazy tariffs in play? OR, will Republicans stand up to him, which I’m not banking on? It depends on how crazy it gets. As you saw, the Journal pointed out that delinquencies on car loans and credit cards are rivalling 2008 levels. The cracks in the economy are turning into fissures.
MAGAs themselves are rebelling over job losses. They have 401Ks as well. How long will it take before enough of them realize that Trump has no earthly clue what he’s doing and he’s taking them down with the ship of state? That may be the wakeup call and it may come sooner than you think.
Both Trump and Musk believe they can play with government like it was a big toy. The tremors of the seismic events they’re planning are already being felt. How long before everything starts shaking out of control?
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If we lose Social.Security and Medicare,we will.have to.choose between paying the mortgage and buying food and medication ( he is a Type 2 diabetic). I guess we live in our car.
I would settle for the rich paying $$$on their first million. Experts say paying on the first $400K would fund SD for 75 years.
My 2₵ worth
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Trump has realized that Elon is not gonna be able to get enough savings to give his rich buddies the tax cuts he promised. So he’s decided that you and me, ordinary Americans, are going to pay for those tax cuts through the tariffs. Get ready cause this ain’t gonna end well.
Welcome to ‘The Trump Slump’.
Where your 401(K) becomes 301(K).