Keep your eye on this simple fact for the next couple of weeks, because it could be the final shot under the waterline that sinks the GOP battleship in November. The Dow dropped more than 800 points yesterday, and by midweek yesterday, it was already down a whopping 4% in just three days.
If we have a major market correction downwards, it is going to have an immediate and lasting impact on almost everybody in the country. While only a statistical minority of the population is directly involved in trading on the market, almost every company retirement plan, 401k, and IRA is heavily linked to the stock market. Everybody in the country will feel the corrective downturn, but one person will feel it more deeply than any other. Donald John Trump.
From day one, Trump has portrayed himself as an economic miracle, the consummate “deal maker.” In reality, Trump’s track re cord on the economy has been rather pedestrian. His formula was simple, don’t do anything stupid to upset the steady recovery that President Obama presided over, and he’s mostly succeeded. But what Trump did do was to shove Obama out of the way like that brunette shoving the male model off of the stool in that dandruff shampoo commercial. To hear His Lowness tell it, he alone created the economic boom cycle, after Obama had ground it to a halt. And his scatter brained base bought it, lock, stock and barrel.
And Trump isn’t the only one doing it. Treasury Secretary Steve Munchkin has had to give his official seal of approval. His Economic adviser, Larry Kudlow, wants Trump to get the Nobel prize in economics. And every conservative talking head is crediting Trump for straightening out the Laffer Curve. Trump has tied himself to the economy with the chain from the Titanic’s anchor.
If Trump were capable of learning anything more complicated than the $1 menu at McDonalds, he’d be getting a couple of hard life lessons right now. According to Ali Velshi or MSNBC, who began his career as a business and Wall St reporter, this pull back is being fueled by two things, interest rates, and the trade war. And both of these are gratuitous self inflicted wounds for Trump.
The first thing that any new President learns is to never fuck with the Federal Reserve Board. Wall Street hates uncertainty, and they vastly prefer it when a President leaves tinkering with Wall St to people like themselves. No President wants to criticize the actions of the Fed, because it increases tension that the President may be about to impose his will on money policy matters. And Trump has gone to great pains to signal his public displeasure at the Fed hiking interest rates to keep any sign of inflation under check.
The trade war is Trump’s personal Frankenstein, and he is uber proud of his creation. Being a two bit real estate swindler, Trump has absolutely no grasp of international trade concepts, save for the fact that Chinese steel is cheaper than the US shit. Besides, trade wars are easy to win, Trumpelthinskin said so himself. The concept of a trade war as a “shock tactic” was fine, if it didn’t go on long enough for practical effects to be felt. But rather than pulling in his oar, Trump is piling on more tariffs, playing a deadly game of economic chicken with China. And it appears that the effects are starting to be felt.
The economic effects of his trade war are cutting Trump two ways. First, the increased production costs are depressing US manufacturing, and leading to the drop in stock prices we’re seeing. That looks bad to everybody. Second, you gotta remember, companies hit with higher costs due to the trade war don’t suffer tht burden themselves, they pass it on to the consumer in the form of higher prices. If the manufacturers are starting to pass the increased cost on to the retailers, those increased retail prices are going to be felt by every American, most notably the Trump base supporters, whom Trump promised to transport to the land of ,ilk and honey. And increased prices at the register could lead to inflation, which starts a vicious cycle.
The effect on the GOP of a protracted economic downturn could be catastrophic. Because the economy is all Trump and the GOP have. They can’t run on repealing Obamacare anymore, they ain’t getting a stupid wall, and the tax cuts become more unpopular with every new poll. They have foolishly taken full ownership and possession of the booming economy, and it it comes down, it will be their fat, empty heads that it will crash down upon. People will have nobody else to blame, simply because Trump and the Republicans told them so.
Every election cycle has people breathlessly watching for the vaunted “October Surprise.” In 2016, it was the release of the Access Hollywood audio, followed by the release of the Clinton e-mails, and James Comey reopening the e-mail investigation into Clinton. Those events were all individual candidate specific. But if the economy continues to tank for the next couple of weeks, the damage won’t be contained to Trump alone. The entire GOP has taken credit for the economic miracle, and if it sinks, the entire GOP will go down with it on November 6th.
