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Defying the Odds

Defying the Odds
New book about the 2016 election.

Sunday, August 18, 2019

Economic Clouds

In Defying the Odds, we discuss the tax and economics issue in the 2016 campaign.  The update  -- recently published --includes a chapter on the 2018 midterms. and explains why the Trump tax cut backfired on Republicans.

Trump has a somewhat conspiratorial view, telling some confidants that he distrusts statistics he sees reported in the news media and that he suspects many economists and other forecasters are presenting biased data to thwart his reelection, according to one Republican close to the administration who was briefed on some of the conversations.
“He’s rattled,” this Republican said. “He thinks that all the people that do this economic forecasting are a bunch of establishment weenies — elites who don’t know anything about the real economy and they’re against Trump.”
Trump has relentlessly bludgeoned Fed Chair Jerome H. Powell over interest rates and has told aides and allies that he would be a scapegoat if the economy goes south.
 Catherine Rampell at WP:
Trump’s economic brain trust consists of a guy who plays an economist on TV, a crank who has been disowned by the (real) economics profession and the producer of “The Lego Batman Movie.”
...
Moreover, Mnuchin’s Treasury Department is rife with vacancies. Many senior jobs lack even a nominee. There is likewise no nominee for the Senate-confirmed job of chair of the Council of Economic Advisers. The acting chair is a health expert.
John Harwood at CNBC reports that there is no tail wind from the tax cut:
Instead, benefits from what President Donald Trump called “the biggest reform of all time” to the tax code have dwindled to a faint breeze just 20 months after its enactment. Half of corporate chief financial officers surveyed by Duke University expect the economy to shrink by the second quarter of 2020. Two-thirds expect a recession by the end of next year.
Corporate executives blame the darkening outlook on Trump’s trade war with China. The president blames mismanagement by Jerome Powell, the Federal Reserve chairman he appointed.
But economists who have examined the impact of the 2017 Tax Cuts and Jobs Act say it isn’t helping much in any of the ways advocates once advertised: overall growth, business investment, or worker pay. The strongest current case for the law’s economic benefits is that it remains too early to see them.