Nearly sixty years ago, the recently retired U.S. Army Chief of Staff, General Maxwell Taylor, wrote a best-selling book about changing our long-term military strategy. Imagine the book that President Donald Trump might someday write – or have ghost-written for him – about his own long-term economic strategy. In these growingly turbulent economic times, we must be thankful for having such a “stable genius” as our nation’s leader. Just imagine how, in an alternative universe, “Crazy Bernie” or “Pocahontas” would have managed our economy.
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In his latest attempt to “Make America great again,” President Trump has outdone himself. He has ordered American companies to pull up their stakes and move their offices and factories out of China, and perhaps back to the good old U.S.A.
I think that virtually all of my fellow economists would agree – along with the leaders of all these American companies doing hundreds of billions of dollars of business in China -- that this just ain’t gonna happen.
Indeed, whether the president can or cannot force these companies to move their operations out of China is actually quite beside the point. The point is that they can’t and they won’t – no matter what the president orders them to do.
In fact, we can almost surely expect the president to back-peddle on this order, and then change his mind and then issue still more threats. But none of this really matters.
What does matter the most to the folks running our nation’s millions of businesses – large and small – is being able to plan months and even years ahead. But with this "stable genius" at our economic helm, they’re lucky if they can plan more than a day or two ahead.
Mr. Trump apparently has so many great ideas – albeit often contradictory – that he is not unknown to reverse course day-by-day. Well, with that kind of economic leadership, business uncertainty is rapidly mounting.
We can predict with confidence that lagging business investment will continue, while declining consumer confidence will soon lead to a slowdown in consumption spending. Finally, our trade wars will keep pushing up our steadily rising balance of trade deficits.
Still, economic forecasters can thank our president for making at least one thing increasingly certain. Our current economic slowdown is becoming more and more likely to turn into a full-blown recession. Luckily, after the 2020 election, we may still have our "stable genius" to lead us back to prosperity.