WASHINGTON — The Trump White House struck back Monday at pundits and economists who warn that a recession is near.
On Twitter, President Donald Trump accused Democrats of trying to “‘will’ the economy to be bad’ to win in 2020. Vice President Mike Pence made a pitch for a strong economy before the Detroit Economic Club, and counselor to the president Kellyanne Conway chided reporters outside the West Wing for being eager for bad economic news.
“It’s nice to see the media cover the Trump economy. You seem to cover it only when you can use the ‘Sesame Street’ word of the day, ‘recession,’” Conway remarked.
With the sluggish global economy, the White House decision to delay new tariffs on Chinese goods last week and an inversion in the bond-market yield curve that has been known to presage economic downturns, Trump also called for a 1 percentage point drop in the Federal Reserve’s benchmark interest rate to stimulate both the U.S. and global economies.
That came the day after Trump told reporters he sees no recession on the horizon and that while many economists cited his trade battle with China as cause for concern, “The tariffs have cost nothing, in my opinion, or certainly very little.”
Chief economic adviser Larry Kudlow told Fox News Sunday that he saw no signs of a recession. “Consumers, first of all, they’re working,” and they are “saving while they’re spending.”
“We should not be afraid of optimism,” Kudlow concluded.
Since before Trump took the oath of office in January 2017, he has been able to point to strong economic news.
Ten years past the June 2009 end of the Great Recession — when economists might expect an economic downturn simply because of normal economic cycles — Trump has been able to boast low unemployment, solid economic growth and wage growth.
The unemployment rate of 3.7 percent has been near 50-year lows. Wages are expected to rise some 3 percent — greater than an inflation rate expected to finish lower than 2 percent.
GDP increased by 2.5 percent last year, down from the 3 percent the White House had anticipated.
While polls have shown Trump to be underwater in job approval — the Realclearpolitics polling average shows that 54.3 percent of voters disapprove of Trump’s job performance — voters give Trump a passing grade on the economy: 52.5 percent approval by the same polling average.
Trump has been banking on a strong economy to win in 2020. Stumping in New Hampshire last week, Trump told supporters, “You have no choice but to vote for me because of your 401(k).”
Kudlow is scheduled to participate in calls with state and local governments, the private sector and community leaders to update them on Trump’s economic agenda with its emphasis on deregulation and energy production. According to the White House, the calls have been planned long in advance.
Research fellow Joel Griffith of the conservative Heritage Foundation warned that predicting recessions can be a tricky business. “We can avert a recession if we continue to embrace pro-growth policies,” such as the Trump 2017 Tax Cuts and Jobs Act and Trump’s moves to peel back regulation.
Trump’s tariffs on China, Griffith said, “are a significant concern. It’s having a real impact on businesses and consumers, introducing uncertainty and higher costs. We estimate that the average family has enjoyed roughly $2,900 per year in tax savings, but new tariffs on Chinese goods will eat away more than $800 of those tax cuts this year.”
Another factor, beyond Washington’s control, are global economic woes that have dented the economies of Germany and China.
“I’m pretty sure there’s going to be a recession, I just don’t know when,” Senior Policy Director for the Center for a Responsible Federal Budget Marc Goldwein said. But he said given the economy’s overall strength, it’s possible a downturn could be avoided over the next two years.
If the economy does retract, it won’t be pretty. “We’re approaching trillion-dollar deficits and the economy’s strong,” Goldwein noted, adding. “Imagine when it’s weak.” The demand for more unemployment aid and food stamps means the deficit would grow.
Griffith believes some left-leaning pundits have been “rooting for a recession,” but he added, “I personally have a lot of doubt over whether or not you can talk our way into a recession.”
Kudlow agreed. He told the Review-Journal that recession doom-saying cannot damage the economy because “people know what’s in their wallets and their pocketbooks.”
“I won the election, the markets went up thousands of points, things started happening,” Trump said at a rally here. “If, for some reason, I were not to have won the election, these markets would have crashed. That will happen even more so in 2020. You have no choice but to vote for me, because your 401(k), everything is going to be down the tubes.”
-President Donald Trump, Aug. 15