BRIDGEWATER, NJ – Growing signs of global economic distress this week have alarmed President Trump, who fears that a downturn could jeopardize his re-election, even if government officials admit it a possible recession is not planned.
Trump relies on a strong economy to win a second term in 2020, and has fought impetuously against the Federal Reserve in recent weeks, pressured Minister of Finance Steven Mnuchin to designate China as a "currency manipulator." Unexpectedly delayed tariffs on Chinese imports for fear of slowing retail sales during the holidays.
Despite the turbulence on the US stock markets and the economic slowdown in other countries, White House officials, the Treasury Department, and the entire administration are planning no new steps to avert a recession. Rather, Trump's economic advisors have presented the President with optimistic assessments arguing that the domestic economy is stronger than many forecasters predict. In turn, Trump has been trying to use his Twitter pulpit to drown out the negative indicators. On Thursday, he promoted the US economy as "the largest, strongest, and most powerful economy in the world," claiming that retail growth would only increase. He also accused the news media of "doing everything to bring down the economy because they think it will be bad for me and my reelection."
Secretly, however, the president sounded concerned and concerned. From his New Jersey golf club vacationing this week, Trump called a number of business executives and financial managers to investigate them – and they gave him a very mixed analysis, two people familiar with the discussions said Condition of anonymity, because the talks were confidential.
Trump is somewhat conspiratorial and tells some confidants that he distrusts statistics published in the news media, and that he suspects that many economists and other forecasters are presenting biased data, according to a close to government Republican Some of the conversations were taught, he thwarted his re-election.
"He's confused," said this Republican. "He believes that all the people who make these economic forecasts are a bunch of established little ones – elites who know nothing about the real economy and are against Trump."
Trump has inexorably angered Fed Chairman Jerome H. Powell over interest rates and told aides and allies that he would be a scapegoat if the economy went south.
The stock market has plummeted in recent weeks due to a number of factors. The trade war between the US and China has become increasingly violent and affects both economies. Germany and the United Kingdom seem to be approaching a recession. Argentina's stock market crashed. In the meantime, this week has triggered an important predictor of future bond market recessions – a reverse "yield curve" that frightened investors even more.
White House officials said fundamentals of the US economy remain very solid as unemployment, high productivity, low inflation and strong retail sales. They said the recent turmoil may be related to problems in other countries, and there is no reason to recalibrate the government's approach, which relies on low taxes, deregulation and low energy costs.
"I think that's right, what's actually happening," National Business Council Director Larry Kudlow said in an interview. "For me, it's a pretty good story, no one likes market volatility, I understand that, they get bears from the woodwork, I understand that, but we've been through that before."
The government's economic message, however, is confused While Kudlow publicly expressed optimism that an agreement with China could be reached, senior trade adviser Peter Navarro vigorously defended Trump's tough tactics and promised a tremendous economic rebound later this year Meanwhile, it has been largely absent in the public sphere since China's trade discussions worsened a few weeks ago.
In the past, leading politicians have joined forces to inform the public about a unified approach to tackling global economic turmoil threatened to impose tariffs on Japanese and German cars as well as on French wine, and supported British Prime Minister Boris Johnson's renewed appeal for the United Kingdom's exit from the European Union, even if it means a violent collapse that would end the economic collapse Standing endangered by several countries.
Lawrence H. Summers, a former finance minister and director of the National Economic Council, who headed the Obama administration's efforts to end the Great Recession a decade ago, said no president was immune to a recession and the crisis The government should always plan one and protect oneself from it.
"When the economy collapses, the credibility of policymakers is one of the important resources we have," Summers said. "Ridiculous predictions and economically ignorant statements have challenged the credibility of the president's economic team."
Summers added, "It's banana republican standard to deny statistics, to beat the central bank and to try to push the currency to foreign countries."
Trump has closely monitored the moves of his administration For weeks he was putting immense pressure on Mnuchin to call China a "currency manipulator", a move that the Treasury Secretary had repeatedly resisted because China's currency movements did not meet the Ministry of Finance's specified criteria, three people with direct knowledge of the move said. 19659022] [ Trump urged Mnuchin to designate China's 'Currency Manipulator', a move he had previously resisted.]
Government officials are not planning a recession because they do not believe that one will occur, and they fear that making such plans would confirm a negative business narrative and trigger a crash, so d he involved in internal discussions.
According to a high-ranking White House official, Trump is much more concerned about an economic downturn than his top advisers. Although the economy has sometimes come up in meetings with executives, the focus of these discussions has been on how to best promote positive trends, rather than prepare for a downturn, a senior administration official said.
Despite Recent Industry Declines According to Kathryn Wylde, who leads the partnership for New York City, which also includes CEOs of many of the country's largest companies, business leaders are still unable to predict the end of the world. "People do not see a dramatic downturn unless something really dramatic happens with China," Wylde said.
Nevertheless, some of Trump's Democratic challengers have focused on the possibility of a recession. Massachusetts Senator Elizabeth Warren issued a policy statement last month titled "The Impending Economic Crash and How to Stop It."
In it she diagnoses problems in what she calls "our precarious economy" – including records of auto loan debt and rising cost of living – and writes: "Warning lights are flashing." She also designs ideas to empower the manufacturing sector, to reduce private debt Households and to more closely monitor corporate debt risks.
To the point where she said, "There are enough worrying signs that I want to publicize my case," said Warren, the campaign's policy advisor, Bharat Ramamurti.
Former Vice President Joe Biden also had a strong focus on the economy fears of middle-class Americans and has touted his partnership with President Barack Obama to steer the country out of economic collapse with a stimulus package and other measures.
Trump has been thinking about the economy through the prism of his re-election campaign. He is aware of public and private surveys where his approval rate for dealing with the economy is always higher than for the overall or other question. To this end, Trump's political advisers believe that the key to his re-election is a strong economy.
"President Trump has returned to work, wages have risen, unemployment for Hispanics, African Americans, Asians and women is at record lows," said Republican National Committee Chair Ronna McDaniel on Thursday's Fox News Channel. "He has revolutionized our economy and is doing things that will improve the lives of Americans."
Some conservatives, who have previously praised Trump's economic policies, have, however, mocked his trading strategy.
"The president does not understand the fundamentals of the international economy, and his unpredictable behavior is likely to slow down corporate investment, affects against its signing corporate tax cuts and adversely affects chtigt his own re-election chances, "said Michael Strain, an economist at the right-wing American Enterprise Institute.
Josh Holmes, longtime advisor to Senate Majority Leader Mitch McConnell (R-Ky.), Said, "This President is in a much stronger position for reelection than is generally believed when the economy is in place , And if not, the opposite is true.
Public support for incumbent presidents and their party has collapsed in the past during recessions, as was the case in 2008 when John McCain did not convince voters to keep the White House in republican hands
The Democratic Party Pollster Peter Hart said Trump may be at heightened risk as survey data shows that some voters overlook the opposition to Trump's leadership style and support him mainly because of the strong economy.
"This president is so polarizing and repulsive to so many voters that he needs the good economic numbers to maintain his style," said Hart. "When you start experiencing an economic downturn, there is no personal element to support it."
But analysts said it is difficult to make predictions, considering that Trump has previously defied the laws of political gravity.
"A strong economy helps a president re-elect, and a poor economy hurts him," Republican pollster Whit Ayres said. "This is a standard truth in the history of the poll. But because so much of its support comes from cultural messages, a weaker economy can do him less harm than a more traditional president.
Paletta reported from Washington and Dawsey from Manchester, NH Annie Linskey, Toluse Olorunnipa and Matt Viser in Washington contributed to this report.