There’s new trouble in Trumplandia: Just when Mr. Trump figured he had his red-hatted MAGA sheep running mad with fear over the approaching hordes from south of the border, synchronized deceleration raised its ugly head. Whoa!
The toothy term describes an emerging economic condition that bodes ill for everybody — economists who stay four or five light years ahead of the Wharton School graduate’s intuitive-based excreta said so.
While Bozo the Clown entertains his base with financial fantasies, economic forecasters are saying it’s time to get out the leather punch and make new holes in your belt in anticipation of the belt-tightening economy that’s coming soon.
Economists around the world are becoming alarmed at Trump’s mismanagement of long-established trading relationships. Nerves are starting to jangle at financial institutions that above all prefer stability. In the staid, buzzword-buoyant world where economists dissect trade, manipulate money, and divine how buying coal in Wales ultimately makes a butterfly choke in Brazil, there is actual alarm that a recession is coming. They say the combination of tariffs, rising interest rates around the world, and a tightening supply of available cash for borrowing will all contribute to a slower pace of economic growth. The artificial stimulus from the GOP tax cuts and the massive bipartisan budget agreement are already fading like Thanksgiving flowers. Hopefully, so will Trump’s unearned reputation for being a brilliant international businessman.
In these throbbing economic times, a recession sounds far-fetched but it isn’t. The good news is the Fed and the institutions it services have a year to correct the problems Trump has created. The bad news is they are having a hard time getting around his disastrous policies while the nodding Republicans in the Senate remain afraid of him.
And that brings us to synchronized deceleration. It’s not nearly as conversational as Melania’s Botox and silicone contest with stepdaughter Ivanka, but it provides a why for Trump’s seemingly moronic decision to emphasis immigration over the booming economy in the late, great midterm wipeout.
Government forecasters, like their private-sector counterparts, use the same economic indicators to determine what is coming next. If Mr. Trump bothered to read a few of the government’s own forecasts, he already knows gloom is ahead. If not, the morally bankrupt man is either lying — or even more dangerously — believing his own bullshit.
One of the broadest and strongest economic indicators is comparing past performance with current economic trends to determine if synchronized deceleration is real. In the broadest terms, economists around the world said their apprehensions are manifested by the inane China-U.S. trade war, coupled with economic and trade upheaval in an European Community already mired in the rising tide of nationalism and right-wing extremism that is threatening E.U. markets.
It sounds gloomy because it is.
A financial investment firm called PIMCO explained the situation in its 2018 annual economic evaluation:
“We agreed that these recent political and market developments . . . because they have tightened global financial conditions and increased political and economic uncertainties . . . are all likely to damp corporate and consumer ‘animal spirits’ around the world.”
The economic elements aligned with the “animal spirits” are all slowing at the same pace and time. That is the synchronized part the equation. The slam from deceleration comes when investments slow down, collectible taxes fall, and wages remain stagnant or nearly so. The economy slows, then shrinks, then slumbers.
In the short term, there is still good news for Americans so no need to jump out a window yet. Several big financial firms have forecast a strong U.S. economy for another year. But hidden inside the silver lining is a dark, foreboding cloud. The destabilization of existing trade treaties is making a big winner out of China. Trump is currently lashing China for being too uppity, but the economic forecasts suggest that China will soon be bragging that it manufactured that lash.
A contributing factor that Trump can’t dismiss as Obama’s handiwork is the asinine tax cut he gave the wealthiest Americans. Economic forecasters are almost certain the U.S., Europe and China will all see slower Gross Domestic Production (GDP) growth in 2019 because of its unanticipated impacts on economic everything. GDP is a monetary measure of the value of all final goods and services produced by a country during a specific period.
The nebulous billionaires who take the lion’s share of newly generated wealth like to hide their fortunes in untouchable offshore bank accounts, idle and unavailable for stimulus (or taxes), and causing governments and consumers to pay more for money they borrow. Convicted money manipulator Paul Manafort did it for 20 years until he became mired in Trump’s swamp and almost drowned.
The U.S. State Department’s Bureau of Economic and Business Affairs is supposed to prevent dishonest Americans from hiding their money overseas, but that hasn’t worked out too well. Remember when GOP leadership promised that multi-national American corporations would happily bring their money home so it could be taxed? What a joke!
Until recently, 2018 was a banner year for economic growth with the U.S. gross domestic product rising to a reported annual pace of 3.5 percent in the third quarter and at 4.2 percent in the second quarter. Not anymore. Goldman Sachs, JPMorgan, and Bank of America Merrill Lynch all predict markets will cool in 2019. Add to that the dangling fate of American agricultural markets, along with oil-price turmoil that is just beginning, and the outlook for 2020 will suck.
The good news is that by then Trump will be up for re-election — if he survives the unsheathed Democratic knives already hungry for a slice of his ass — and a recession could ensure his demise.
Although sooner would be better, 2020 is already rolling in with a Blue Tide.