Trump Previews His Response to the Next Recession

There is often little use in psychoanalyzing Donald Trump: His behavior is so erratic, his thinking so shallow that any definitive assertion about his character or temperament is disproven within minutes. Moreover, given that the president is angry more or less all the time, it’s particularly difficult to isolate moments when he is especially angry, let alone single out moments when he is angry about something important. This is, after all, someone who spends most of his day live-tweeting cable news.

Nevertheless, President Trump has seemed to be particularly upset over the past week. He has ranted about the supposed disloyalty of American Jews, and at Denmark for refusing to entertain an offer for Greenland. He joked that he was the Messiah and freaked about reports that he had openly and repeatedly asked aides to investigate the possibility of nuking hurricanes. But most of the president’s rage was aimed at the economy.

There is good reason to believe that bad economic news—a wheezing stock market, a trade war that’s become an increasingly costly boondoggle, and, above all, a looming recession—inspired the week of tantrums. Over a memorable Friday, he accused Federal Reserve Chair Jerome Powell—whom Trump handpicked for the job but whom he now openly detests—of treason, saying he was an “enemy” on par with Chinese leader Xi Jinping. Amid signs trade negotiations with China were hitting more roadblocks, the president took to Twitter:

By the weekend, aides were grumbling to The New York Times’ Peter Baker that “he was hurting the economy and was doing lasting damage to his own prospects for reelection.”

All in all, it was a fair preview of what to expect from the president should a recession begin during his time in office. Not a disciplined, unified response to a crisis from this White House; instead, an unhinged president issuing feeble edicts from his bed, many of which could cause a sputtering economy to spiral. As the economy tanks, Trump’s poll numbers will also stumble, risking a pattern that could grow worse and worse.

Trump’s economic narrative is at the center of his political one, which helps explain why he’s so obsessed with trumpeting its performance. Since taking office, he has repeatedly claimed that he is a kind of financial wizard, bringing previously unimaginable success to every layer of American society. At the same time, he has pointed to the stock market as a key metric (often the sole metric) of his time in Washington. If things were really as bad as they seemed—or as bad as reports from CNN and The New York Times made them seem—then why was the country prospering?

This narrative was never particularly accurate. Trump inherited an economy that had been growing for nearly eight years; the ill-advised tax cuts passed at the end of 2017 acted as a temporary stimulus, but seem to have had little meaningful long-term impact. As CNBC’s John Harwood wrote earlier this month, “Benefits from what President Donald Trump called ‘the biggest reform of all time’ to the tax code have dwindled to a faint breeze just 20 months after its enactment. Half of corporate chief financial officers surveyed by Duke University expect the economy to shrink by the second quarter of 2020. Two-thirds expect a recession by the end of next year.” At the same time, the economy Trump inherited was rife with inequality, something that has only grown worse since he took office.

Trump was dealt a great hand, in other words, but has done little to capitalize on it. Faced with growing evidence that his trade war with China was not going well, Trump doubled down. After the stock market tanked, he appeared to have learned his lesson, issuing a soothing statement about the two countries being close to a deal at the G-7. That almost certainly wasn’t true, but it was enough for the Dow to recover on Monday—yet another sign that the stock market isn’t the barometer many think it is. Still, while Trump may have calmed the markets, there’s no sign that the fundamental reality has shifted. The trade war with China is not going to end any time soon, and the two countries don’t appear to be close to a deal; there’s no reason to believe that even a trade-war-induced recession would change the president’s thinking.

Instead the basic recipe for the Trump White House response to a slowdown is already apparent. There would be a heavy dose of more of the same: More tax cuts and more tariffs, neither of which have done anything to improve economic fundamentals during Trump’s time in office. These ineffectual measures would be punctuated by rage-fueled tweets aimed at Jerome Powell (for not pushing negative interest rates), Xi Jinping (for not having immediately surrendered to an inept trade warrior), and the media (for the usual stuff). The good news is that is a recipe for a one-term presidency. The bad news is it’s also one for a brutal recession.