Friday was a particularly bad day for the United States.
It was a day on which President Trump’s tweets either, depending on your priors, began or continued to show him as desperate and panicky enough about re-election, and driven so much by a need to appear “strong,” that he is willing to turn to authoritarian approaches particularly unbecoming of a Republican.
Just before noon Eastern time, the president probably alienated more on-the-fence-but-usually-Republican voters than any other politician, including even himself, has in a two-minute span or in two sentences on Twitter.
First, just after Federal Reserve Chairman Jerome Powell gave a speech from the Fed’s annual meeting in Jackson Hole, Wyoming, noting the economic headwinds caused by “trade policy uncertainty” and the limited ability of Fed (monetary) policy to address those headwinds, Trump tweeted, “My only question is, who is our bigger enemy, Jay Powell or Chairman Xi?”
Now, I’m no fan of the ivory-tower-cloistered never-had-a-private-sector-job marble-mouthed Wizards of Financial Oz whom the public has been convinced have a magical power to cure all economic ailments. But even to mention the Fed chairman in the same breath as the dictatorial president-for-life of the Chinese Communist Party, a man whose goal is to weaken the United States both economically and militarily in order to pave the road (or more precisely the “Belt and Road”) for the Middle Kingdom to become a global hegemon, is reprehensible. For a president to do so is unacceptable.
Powell is right: rate cuts cannot fix economic speed bumps caused by trillion-dollar federal deficits or trade wars (even if you think an aggressive trade policy with China is justified, which is a view I largely ascribe to), particularly when rates are already low. Like pushing on a string, Europe proves every day that lowering already low rates won’t help.
My objection to Trump’s tweet is not as much his persistent lack of understanding of basic economics but rather his libel of a key figure in the American political economy, a man he appointed, a man who nobody outside of this president and a few of his most uninformed and cultish followers believe has any motivation other than to guide his institution and the country through Trump’s tempest-tost economic seas.
Two minutes later, the president issued a tweet that may end up in future hindsight having cost him the 2020 election: “Our great American companies are hereby ordered to immediately start looking for an alternative to China, including bringing … our companies HOME and making your products in the USA.”
A working definition of economic fascism — not to be confused with the Left’s mindless and offensive caricaturing of Republicans as 1930s brownshirts — is the state controlling the activities of nominally private companies in order to pursue the government’s goals. On Friday, through the thin veneer of “America First,” we watched Donald Trump take a large and unnecessary step toward that authoritarian approach. For the country’s sake, including preventing the election of a radical left-wing Democrat (if you will pardon the redundancy) in 2020, he should take a giant stride back from giving orders to “our great American companies.”
Lest you believe that this was mere rhetorical flourish, the president pointed, 12 hours later and without even accurately naming the law, to the International Emergency Economic Powers Act as the source of his authority for this order. He then repeated this reference in televised remarks.
This is a typical Trump gambit: Throw a controversial idea out on Twitter, gauge the public reaction, and then decide whether or not to proceed. Hardly the definition of leadership, but I digress …
The Congressional Research Service describes IEEPA as giving the president “broad authority to regulate a variety of economic transactions following a declaration of national emergency.” While IEEPA has never been used to impose tariffs, its text would not seem to prevent such an action despite CRS saying earlier this year that “the use of IEEPA for this purpose (is) unlikely” (CRS, p. 43).
The wording of IEEPA gives the president wide leeway in defining, declaring, and continuing an “emergency.” (The average “emergency” has lasted nearly a decade.) And while even some Republicans (and almost all Democrats, blissfully unaware of their own often fascistic policy views) might want to push back if Trump continues down this path, to date Congress has never “acted to terminate or otherwise express displeasure with an emergency declaration invoking IEEPA” (CRS, p. 42).
Regardless of IEEPA, approximately zero percent of business owners in America whose supply chains involve China believe that the president should have the authority in this situation to “order” them to disrupt or replace business structures that have been decades in the making. Yes, China is a strategic competitor and a bad actor in important ways, but it is not murdering Americans, not a global sponsor of terror, not a nuclear proliferator — in other words not Iran or North Korea or otherwise in the category of rogue nations with which commercial transactions might be morally, not just legally, prohibited.
Trump’s tweeted order is the kind of statement that, even if Trump does not follow up on it — and I’d bet that he won’t — will move moderate but typically Republican-leaning voters, particularly white men (one of Trump’s few remaining pockets of strength) to say, “I just can’t risk giving this guy another four years.”
In the several hours of stock market trading remaining on Friday after Trump’s tweets, the S&P 500 lost 2.6 percent and the Nasdaq 100 lost 3.15 percent. Yes, the value of American stocks dropped by over three-quarters of a trillion dollars in response to two tweets. And several hours after these tweets, the president announced, again on Twitter, that he’s raising tariff rates on over $500 billion dollars (annually) of Chinese goods coming into the United States, punishing U.S. consumers for his having entered into a trade war because they are, as he told us previously, “good, and easy to win.”
Friday’s tweets are the latest — and the worst — in a series of unforced errors in which President Trump could have made a valid and effective, or at least not overtly mendacious or ignorant or divisive, point but instead chose the most incendiary approach possible.
It doesn’t have to be this way.
He could question the Fed’s interest rate policy without calling the chairman an “enemy.” He could “urge” companies to do something rather than “order” them, the latter being an approach so foreign to our American experience that businessmen will react to it with horror, as will their soon-to-be-fired employees.
He can (and should) wonder why Jews vote for Democrats without saying that those who do are “disloyal” — meaning disloyal to Israel, playing right into the hands of Ilhan Omar and other reprehensible anti-Semites who claim that American Jews have divided loyalties.
He can (and should) question the policy viewpoints of “the Squad” without calling on them to be “sent back” to their countries of origin, not least because three of them were born in the United States.
He can (and should) question the persistent harm done to some of our biggest cities by Democrats and their policies and corruption without picking solely on one black congressman, not just because members of Congress have much less to do with the results in any one city than local officials do, not just because doing so lets his opponents continue to suggest that he’s a racist, but because there are plenty of cities being destroyed by Democrats with a wide range of melanin content in their skins. (See here, here, and here.)
On all of these issues except his assertion that cutting interest rates would have an important positive impact on economic growth, President Trump is on the right side but devolves into messaging that is not just unhelpful, not just divisive, not just hyperbolic, but unnecessarily harmful to his own re-election prospects.
The overall economic situation in the United States is quite strong, although some important indicators have weakened modestly in recent months. People tend to vote on economics, at least when we’re not in the middle of a large war. Trump’s job approval when it comes to the economy is where the public gives him his highest marks. And yet his overall job approval languishes and betting odds have him well under 50 percent to be re-elected. It’s not too late to fix this. But he must, to use the language that we use with our middle-school-aged children, make better choices.
Trump’s supporters have claimed for the last few years that “he’s playing chess while everyone else is playing checkers” or that he “has a master plan.” Instead, Friday’s tweets suggest that he is a man foundering in breaking economic waves of his own making without having had the foresight to take a life jacket along.
But it doesn’t have to be this way.
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That’s right, the Grinch (Joe Biden) is coming for your pocketbooks this Christmas season with record inflation. Just to recap, here is a list of items that have gone up during his reign.
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