Donald Trump prepares his desperation heave
Donald Trump and his band of economic “geniuses” Larry Kudlow and Peter Navarro were all over the talking heads circuit this past Sunday morning, denying any recession or bad signs ahead. For those keeping score at home, Kudlow had similar prognostications late in 2007, just before the crash.
Kudlow stated on Sunday: “No, I don’t see a recession. And let me add just one theme … Just one theme. We’re doing pretty darn well, in my judgment. Let’s not be afraid of optimism.”
Navarro, the White House trade advisor, invented a new economic theory. Instead of the Laffer Curve, we now have the Navarro Laugher Inversion, because according to him, despite the yield curve being inverted, he claimed that “technically” it was not inverted.
Trump assured the nation on Sunday that things were so good, First Lady Melania had to wear shades- or perhaps she is always wearing them. Trump said before heading back to Washington: “We are doing tremendously well. Consumers are rich, tax cut loaded up with money. I saw Walmart numbers through the roof, better than any poll.”
All this assertion of “Fake News” would suggest real strength in the economy, or at for least true believers in Trump’s orbit. However, all of the bravado belies an interesting development. According to a new article from the Washington Post, “White House officials eyeing payroll tax cut in effort to reverse weakening economy,” the administration is considering a temporary payroll tax cut.
President Obama did this last in 2011 and 2012 during the Great Recession to stimulate the economy. But this cut affects the average worker’s Social Security and Medicare potentially, depending on the length of the cut, because these taxes on workers and employers go to those two programs. If the economy were as strong as Trump and his team would have us believe, this type of stimulus would not be needed, and it would continue to balloon our ever-expanding deficit. The administration denied that it is discussing such measures, but time will tell. Perhaps Kudlow this time does see the freight train coming.
Daniel is a lawyer writing and teaching about SCOTUS, and is the author of the book “The Chief Justices” about the SCOTUS as seen through the center seat.