Trump’s Policies Spell Impending Recession for America

derailedcapitalism's picture

If President Trump continues down his current path of protectionism and anti-globalization, to try and put “America First”; then retaliatory measures by other world powers, huge domestic deficits, massive job losses and spiralling inflation could in fact put America last!

Those are words coming from Mark T. Williams, Boston University finance professor, former Fed official and author of the acclaimed book on the Lehman Brothers debacle “Uncontrolled Risk”.

DIRE PREDICTIONS

According to Williams, Trump’s economic and foreign policies ignore the undeniable benefits that free and open trade has delivered globally. Going back in history, it has been free trade that has made post WWII America into the global economic powerhouse that it is today. 

To support his thesis, Williams points to America’s $18 trillion plus GDP, and a $2.5 trillion export market as proof that global trade does pay – especially for America. Exports are responsible for creating and supporting nearly 12 million American jobs; with nearly 25% of all manufacturing jobs in some way related to exports.

Should Trump turn his economic guns to China, Williams predicts there will be a backlash that would only end in pushing America over the recession cliff. With a population of over 1.4 people, China’s growing middle class offers American exporter’s exceptional opportunity to further increase their trade footprint. Additionally, as a low-cost producer, China provides American consumers greater choice to buy lower-priced consumer products at home.

Any hint of a proposed 45% border tax kicking in, and China may very well stop importing items such as Automobiles, Soybeans and Boeing aircraft, amongst a host of others. And such a move will definitely lead to massive job losses in American factories.

A trade war with America’s Southern neighbor Mexico could further aggravate America’s fragile, yet recovering, economy. Despite all the rhetoric about huge trade imbalance between the two nations, US consumers are the net beneficiaries of 80% of Mexican exports to America. Any imposition of a proposed 35% border tax with Mexico could significantly increase US domestic prices for a whole array of goods – from cotton and coffee, to vegetables, cars, fruits and cell phones.

BAD FOR CORPORATE AMERICA

The current system of global trade and open movement of people, goods and services means only the fittest of corporations survive, assuring long-term value to their shareholders. According to a Toronto Tax Lawyer, "By forcing individuals and corporations to “Buy America”, Trump will have a negative effect on American companies."

CEO’s, scared of running afoul of Trump’s Twitternomics, will no longer take decisions that are in the best interest of the company, their shareholders or consumers. Instead, every decision will be second-guessed by the looming spectre of political expediency.   

While Carrier agreed to bow down to such tactics, resulting in 1,000 jobs remaining in the U.S (instead of heading South), the longer-term sustainability of such decisions is questioned. For instance: Would companies be better off – in the long run – by leveraging cheaper production costs, regardless of where such costs are to be found? 

NOT JUST ONE VOICE

Not oddly enough though, Williams isn’t the only high profile individuals espousing these views. Writing in the latest edition of Gold Investor, former Federal Reserve Chair, Alan Greenspan mirrored those same thoughts. 

Mr. Greenspan believes that the Trump administration’s infrastructure spending programs, coupled with the proposed tax cuts, will be a harbinger to deep recession. Increased spending and decreased tax revenue will exacerbate an already precarious debt situation. This will inevitably lead to a grave recession.  

Economic stability, job creation and long-term prosperity of any country depend on having broad global interactions and free trade. Protectionism and trade barriers will usher in a new era of economic slowdown for America. 

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perkunas's picture

This is the worst crap i ever read," it has been free trade that has made post WWII America into the global economic powerhouse that it is today." No Post WWII was a period of growth, becouse the world was bombed out. Everybody needed everything, and america had its factories intact. It was the Isolationalsim of pre WWII that ensured america had all the goods and factories it neaded intact.

MojoHoHo's picture

Whoever wrote this article was probably another sheeptard-Keynesian who was never taught that even without imports, If there is a profitable US demand, US capitalism will provide a profitable US supply, US employment, & increase US money velocity. Did they replace Old Economics 101 with the Keynesian garbage in high school as well? I voted for Trump because of his idea to tarif China out of viaable US markets & his supreme court opening. Its what this country needs to be advertising jobs on the radio again.

1.21 jigawatts's picture

Don't worry, Israel.  You'll still get your welfare.  You'll be fine.

HalinCA's picture

What an ignorant article. US post WWII economic growth was due to the fact the rest of the world's factories were destroyed in WWII and we had no real competition until the mid 60's when the Japanese began to import electronics and autos. All that ExIm bank money helped a bit too, along with the MIC spending.

Blue Balls's picture

Did this dumb ass ever hear of ZIRP?  

 

IranContra's picture

The Alliance Against Satan's Greater Iran Project

World Wars I & II were shaped by Zionism. Jews worked for banksters, supposedly to create Greater Israel.

However, Satan's plot for World War III involved both Jews and Shiites. Those Jews who really wanted to create Greater Israel were not told that Satan's ultimate goal was to create Greater Iran, not Greater Israel. Greater Iran's job is to slaughter Arabs and sabotage the return of Jesus Christ.

Arabs accept Jesus Christ as the only True Messiah and await his return. Shiites believe in a different messiah who speaks Hebrew and kills all Arabs before ruling the whole world.

Zionists did 9/11 for the sake of Greater Israel (Yenon plan). They thought that Arab countries would be balkanized and given to Israel. Instead, Rothschild canceled Yenon and turned his attention to the Greater Iran project.

Within few years of Iraq's invasion with Iran's help, the Arab Spring put Iranians (or crypto-Iranians) in power in Iraq, Syria, Lebanon, Libya, Sudan, Somalia, and Yemen. Obama almost had Iranians take Bahrain, and if Hillary had won, all the Arab states and much of North Africa would be under Iranian rule in collaboration with the Muslim Brotherhood.

When Obama put the Muslim Brotherhood in charge of Egypt, Iran helped massively. Iran helped the Muslim Brotherhood in Libya, too. Leaders of the Muslim Brotherhood are on record despising Arabs and praising Iran. Iran is on record that the best Shiites are the Muslim Brotherhood. In people's experience with the MB, MB acts like Shiites indeed. MB are not Sunnis.

The Almighty created the Arab-American alliance under Trump in order to destroy the Greater Iran project. This explains Trump's priorities. He wants to save America and the world from the Greater Iran project. MB and Hezbollah are here, all over America, supported by liberals, neocons, and many Jews. They can drown America in real terrorism, not staged terrorism, unless their masterminds in Iran are knocked out.

Jared Kushner may have Zionist background, but his loyalty is to Trump who is running the project. Zionism is no longer being pursued with the goal of creating Greater Israel. Instead, Israel hopes to be safe in its current borders from Greater Iran.  Still, Israeli cooperation is seen with limitation by Trump. His main allies are Egypt, Jordan, Saudi Arabia, UAE, and other Arabs.

Update: Tillerson explained this to Putin. All indications are that Putin will cooperate. Trump explained this to NATO's Stoltenberg and turned him around. NATO will no longer tolerate Iran and its Muslim Brotherhood.

Red Fred's picture

Iran = Shia Muslim. Suadi Arabia=ISIS=Muslim Brotherhood=Sunni Muslim. Got it yet?

Ozlo's picture

It's never a good time to help the people who built the country.

VWAndy's picture

 It aint Trumps policy he is just another puppet like the last few asswipes were.

erk's picture

"China may very well stop importing items such as iPhones" does the author of this article even know that iPhones are made in China?

 

RighteousDude's picture

Who cares what this clown says.

A Depression is already baked into the cake, it's just a matter of WHEN.

GUS100CORRINA's picture
Title: Trump’s Policies Spell Impending Recession for America

My Response: Really? I thought we were already in a recession heading toward a depression. Go figure.

Below are the facts about America's economic situation as of right now real time from a trusted source (shadowstats.com). The data points below are SCREAMING RECESSION for those with eyes to see and ears to hear.

====================

No. 879: March Employment and Unemployment, Help-Wanted Advertising, Money Supply M3

April 7th, 2017

• FOMC-Rattling ‘Substantially Adverse Economic Circumstances’ Loom

• March 2017 Real-World Employment Prospects Continued to Plunge at an Annual Pace of Decline Not Seen Since the Depths of the Economic Collapse

• Soft Payroll Jobs Gain of 98,000 in March Was Not Statistically Significant

• Declining Monthly Unemployment Rates Simply Were Not Comparable

• That Said, March Unemployment: U.3 Declined to 4.5% from 4.7%, U.6 Fell to 8.9% from 9.2% and ShadowStats-Alternate Fell to 22.5% from 22.7%

• Those Were the Lowest, Headline Unemployment Rates for U.3 since May 2007, for U.6 since December 2008 and for ShadowStats since April 2012

• Nominal Money Supply M3 Annual Growth Sank to a 57-Month Low in March, Real Growth Declined to a Level Not Seen Since Depths of the Economic Collapse

====

No. 878: February Trade Deficit, Construction Spending, Updated Consumer Liquidity

April 4th, 2017

• Sharp Narrowing in February 2017 Trade Deficit Reflected Plunging Imports of Consumer Goods, Such as Autos and Cell Phones

• Declining Consumer Demand and/or a One-Time Reporting Aberration?

• First-Quarter 2017 Real Merchandise-Trade Is on Track for Worst Deficit Since Third-Quarter 2007

• Despite a Nominal 0.8% Monthly Gain in February Construction Spending, Inflation-Adjusted Activity Remained in Stagnant Non-Recovery, Headed for First-Quarter 2017 Quarterly and Annual Contractions

• Consumers Face Continuing Income and Credit Stresses, Amidst Mixed Optimism

====

No. 877: Industrial Production Benchmark Revision

April 2nd, 2017

• Industrial Production Just Took a Hit with Its Benchmark Revisions, Given Higher-Quality, Weaker Historical Data from 2015

• Double-Dip Recession in Production Now Steeper than Previously Indicated

• Two or More Consecutive Quarters of Annual Decline in Production Are Unprecedented Outside of Formally-Recognized Recessions; There Were Five, Now There Are Seven Consecutive Quarters in Place

• Gold and Silver Mining Activity Revised Sharply Higher

• Negative Indications for Pending Benchmark Revisions to Retail Sales, Durable Goods Orders and the GDP

• Broad Outlook Continues for Non-Recovering Economic Activity

• Issues Foreshadow FOMC Problems, a Weaker Dollar and Stronger Gold

cheka's picture

look kids, another shill for the globalists.  tariff or continue to get bled out by nyc parasites