Trump Crashes The Stock Market-- Next Comes The Economy

Have you known many people like Trump? Hustlers and grifters like him are a dime a dozen in New York. I once worked for one who was a firm believer that if you went around hissing your poison in enough peoples' ears, you would create a new reality of your own. Trump tried it Tuesday with his China trade-war bullshit (above)-- but all he created was the 4th biggest stock market collapse in U.S. history, down 799 points. The fucking orange orangoutang's tweets caused the Nasdaq composite to drop 3%, the S&P 500 and the Dow to each lose 2.5%. Small caps took the hardest hit as the Russell 2000 slumped 3.3%. The four biggest point drops in U.S. history have all occurred under Señor Trumpanzee. Whether you think of him as Pig Man or Tariff Man, "Global markets," as the Washington Post noted Tuesday, "demand consistency and reliability; Trump delivers neither. Instead, he makes knee-jerk announcements that surprise investors, lawmakers and even some of his own aides and advisers, who sometimes find themselves reversing course," depending on the asshole’s whims.

The next day, The Post reported that "three days after Trump emerged from his dinner with Xi touting an 'incredible' deal, U.S. and Chinese officials were offering different accounts of whether there was a 90-day deadline for progress in new trade talks, the schedule for China to increase its purchases of American farm and industrial products, and Beijing’s plans to reduce or eliminate specific tariffs." China's leaders are too wily and well-informed to buy into Trump's simplistic gaslighting.

The golden pig was back on the royal twitter machine early Wednesday morning, apparently hoping against hope for a better outcome:

Chuck Todd and Co. wondered if Trump can get out from under the trade crisis he created, reminding readers that "it’s a crisis that he ultimately might not be able to solve, because he doesn’t understand that tariffs mean higher prices for American business and consumers." There's a lot the failed businessman in the Oval Office doesn't understand-- like why the federal deficit is out of control, not despite his economic policies, but because of them. Scott Horsley, for NPR, two months ago:

The federal deficit ballooned to $779 billion in the just-ended fiscal year-- a remarkable tide of red ink for a country not mired in recession or war.

The government is expected to borrow more than a trillion dollars in the coming year, in part to make up for tax receipts that have been slashed by GOP tax cuts.

Corporate tax collections fell by 31 percent in the fiscal year ending Sept. 30, despite robust corporate profits. That's hardly surprising after lawmakers cut the corporate tax rate from 35 percent to 21.

Income taxes withheld from individuals grew by 1 percent. Overall tax receipts were flat. As a share of the economy, tax receipts shrank to 16.5 percent of GDP, from 17.2 percent the previous year.

Trump hasn't a clue what's going on, blames his own Fed chairman for increasing interest rates and is depending on the old right-wing trope-- that "accelerating economic growth will eventually help fill the deficit hole"-- though that never does work and today shows no evidence on any kind of exception. One of Trump's moron economic advisors, Mike Mulvaney, insists "This fiscal picture is a blunt warning to Congress of the dire consequences of irresponsible and unnecessary spending," while McConnell, lying his ass off, Trump style, blamed the deficits on Social Security, Medicare and Medicaid. Horsley reported that "McConnell's comments drew a swift rebuke from the top Democrat in the Senate, Chuck Schumer (D-NY), who blamed the rising deficit on Republicans' "tax cut for the rich. To now suggest cutting earned middle-class programs like Medicare, Social Security, and Medicaid as the only fiscally responsible solution to solve the debt problem is nothing short of gaslighting."

The fiscal year-end report from the Treasury Department was broadly in line with White House and Congressional projections. Although White House economic adviser Larry Kudlow falsely claimed in June that the deficit was coming down, the trend toward rising red ink was widely anticipated.

"As expected, recent tax cuts and spending increases-- all put on the national credit card-- are making a bad problem even worse," said Maya MacGuineas, president of the Committee for a Responsible Federal Budget.

Growing deficits, coupled with rising interest rates, will increasingly put pressure on other government spending priorities. MacGuineas notes that interest payments jumped 24 percent in the last 12 months, to $325 billion.

"Those elected to Congress this year will face stark and difficult choices to put the debt on a downward path and protect our nation's social programs from insolvency," MacGuineas said. "It's no longer a problem for the future."

Two more perspectives on this-- one from the Daily Beast and one from Joe Kennedy III. Asawin Suebsaeng and Lachlan Markay wrote that Trump's advisors have been whining to him about the national debt since the campaign but that souces close to the treacherous imbecile "say he has repeatedly shrugged it off, asserting-- the classic sociopath that he is-- that he doesn’t have to worry about the money owed to America’s creditors "because he won’t be around to shoulder the blame when it becomes even more untenable."

Kennedy, currently toying with a presidential run (yawn)-- I doubt he'll do it-- is urging fellow Dems in Congress to adopt some bullshit he's calling "moral capitalism," a pointed slam against both Trump and-- more to the point-- Bernie as a way of putting himself in the comfy political center even if his feel-good approach solves nothing at all.

Kennedy said the push is a rebuke to what he describes as the “trickle-down, feed-the-top, if-you’re-struggling-try-harder narrative” of conservatives.

It’s a narrative he says President Donald Trump has sharpened to divide Americans, many of whom share similar economic worries despite holding different political views.

“His is a country of bitter rivalry between fellow citizens, forced to endlessly spar over the scraps of our system,” Kennedy said Monday before a regional business association in Boston. “My wages can’t grow unless your food stamps go. Your medical bills can’t fall unless my insurance gets taken way. So Americans spend their days fighting each other over economic crumbs - while our system quietly hand delivers the entire pie to those at the top.”

Kennedy, without naming names, also chided the extremes on the liberal end of the political spectrum, which he said have failed to effectively counter Trump’s zero-sum game world view.

“For years, the left has failed to offer a competing-- compelling-- economic vision,” Kennedy said. “We’ll have to do more than tax the rich to meet our needs in infrastructure, childcare, health care, college and climate change.”

Stephanie Kelton, the most important economist in America, took a look at Kennedy's proposal and saw right through it. "He twice indicts the system, which is of course capitalism," she told me. "But it’s a certain kind of capitalism. It reminds me a little bit of Hyman Minsky, one of the most important economists of the 20th century. Minsky famously argued that there are as many varieties of capitalism as Heinz has pickles-- at least 57."

"Capitalism performed best, Minsky taught us, when we were growing the welfare state-- i.e. after WWII through the 1960s. We had the longest peacetime recovery in U.S. history, median incomes rose, the distribution of income was better skewed in favor of the bottom 90%, the banking system was robust, and we avoided any serious financial crisis. But then we transitioned away from 'welfare capitalism' to 'money-manager capitalism.' Reagan gave us trickle-down economics, we saw the decline of unions, deregulation became the order of the day, the welfare state was under attack, the working class lost ground, the top began to runaway with a larger share of the income and wealth, and we had the Savings & Loan crisis. Today, we've got 'finance capitalism.’ An extension of the Reagan dynamics with a massive explosion of the FIRE sector (Finance, Insurance and Real Estate). Recessions are longer and more protracted, and the policy response tends to focus on recovering conditions on Wall St. without much attention or help for Main St. So, yes, the system is not serving the majority of working people very well. Is a kinder, gentler capitalism the answer? And what, exactly, would that look like? The Congressman doesn’t tell us.

"Kennedy is right to point out that we are trapped in a policy framework that treats the federal budget as a zero-sum game. It’s the old guns vs. butter dilemma, where the only way to put more resources into education or infrastructure, e.g., is to pull some resources from defense. So what is his solution? He mentions taxes, but we don’t know what he’s thinking. He implies that we can’t get build a moral capitalism simply by taxing the rich. I agree! He says we need a new economic vision, but he doesn’t do much more than call for a rejection of trickle-down economics. What we need is to reject the fiscal straightjacket that leads to a too-timid use of the federal budget so that we can fund the programs we value. A moral capitalism will require the deployment of federal funds-- public money-- to meet the needs he describes: infrastructure, childcare, health care, college, and climate change.

"Until we do that, all we have is a feel-good exercise in our moral superiority over the Republicans."

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