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The recession long feared for the US economy? “It’s here,” according to at least one economic analyst.
And Donald Trump’s push on Israeli Prime Minister Benjamin Netanyahu to bar two members of Congress from Israel is a direct response, to try to change the subject of the headlines away from the nation’s troubled economy, political analysts and others said.
Moves in the bond and stock markets, as well as other indicators in recent days, and CNN economic analyst Rana Foroohar believes that the recession is here.
“It’s here. And in fact, I said that on Sunday in a column. I’m not sure whether to be happy I’m right or devastated my retirement savings has gone down,” she said.
“The official arbiters of whether we are in a recession or not have not yet decreed anything and they generally don’t until long after something has happened, so I don’t want to get ahead of the keys,” she added. “There are a lot of things that are worrying about the data. I think the things that are most concerning to me are not whether we’ll fall into a recession which eventually we will, the business cycle turns. That’s why it’s a cycle. The real concern is how badly it will be mismanaged. I think that’s part of what markets are freaking out about right now.”
Credit so far for the economy is the only area where Trump gets positive marks from the general American public. So a recession could be a disaster for his re-election chances next year.
To deal with it, Trump is trying to shift blame onto the Federal Reserve, but the Fed has very little room left to help, according to former Treasury Secretary Larry Summers.
“Just look at the way long-term yields are less than short-term yields. Look at the decline in the stock market. Look at what’s happening to the manufacturing sector of our economy. Look at what’s happening abroad. Look at what’s happening to business intentions. These are the kinds of things that tend to precede recessions,” Summers said. “I don’t know whether it’s just above or just below 50/50 that a recession will start in the next year, but that’s the range we’re in. And it’s hard for people to have confidence in the resilience of the economy; hard because interest rates are so low that there’s not much room for the fed to cut them further.”
Moreover, Trump late this week tried to change the news altogether by pressuring Netanyahu to bar Democratic Reps. Ilhan Omar of Minnesota and Rashida Tlaib of Michigan from making a planned congressional trip to Israel.
Both are Muslim and have been targets of racist attacks by Trump in recent weeks.
“And folks, if the culture wars is the yin of the president’s re-election strategy, if you want to call it that, the economy is the yang. Which is why it is not lost on a lot of us that the president’s attacks on Omar and Tlaib conveniently came as the economy became the story because it was showing signs of slowing,” said MSNBC host Chuck Todd. “The president is lashing out at the Fed. He’s lashing out at the press after what was a brutal day of headlines involving the health of the economy, particularly due to his policies in China and it potentially imperils one of the most important pitches that he has on the campaign trail.”
Journalist Elise Jordan agreed that an economic crunch would spell political disaster for Trump.
“It’s political suicide. His political strength is premised on the idea that he has maintained and protected and cultivated a strong economy. His supporters and attractors overall agree that the economy has been pretty good the entire time of his presidency, whether it began with [President Barack] Obama, that’s another debate,” she said. “But you talk to voters and they love the economy right now. And that drops off it becomes much harder to excuse away the underlying instating in Donald Trump’s statements. There no longer is the excuse: ‘I’m a Republican who supports Trump because I like the economy.’ That’s a lot harder to say.”