“Most economists actually say we are not going to have a recession,” Trump told reporters in New Jersey on Sunday. “Most of them are saying we will not have a recession but the rest of the world is not doing well like we are doing.”
As he begins a bid to define the economy and hedge against a recession, Trump is testing a searing, materialistic message to voters who might spurn him if tougher times arrive.
“Lowest unemployment ever within almost all categories. Poised for big growth after trade deals are completed. Import prices down, China eating Tariffs. Helping targeted Farmers from big Tariff money coming in. Great future for USA!” Trump tweeted. The President knows that a recession in the run-up to an election can spell disaster for incumbents. For example, Jimmy Carter and George H.W. Bush could partly blame reelection losses on poor economic performance at the wrong moment.
The economy may be more important for Trump than it is for other presidents given that its current health is one of the few policy areas where polls show he has majority support.
“We don’t know yet, are we headed for a recession? That’s not my base case scenario,” Minneapolis Federal Reserve President Neel Kashkari told CNN’s Brianna Keilar on Friday. “But the risks have increased quite a bit.”
How a recession could make the 2020 campaign even more toxic
If a recession does materialize to threaten Trump’s reelection hopes, he can be expected to dial up the toxicity of a campaign in which he has already used the most strident racial rhetoric and demagoguery seen in top level politics in generations.
A recession would also transform the Democratic White House race. So far, candidates have mainly argued that the wealth created in the Trump economy has not been fairly shared and have been vulnerable to the facts of the lowest unemployment rate in half a century and broad public satisfaction with the economy.
But they are also now seizing on signs that Trump’s worsening trade war with China is hammering global sentiment.
“It’s … a fool’s errand to think you’ll be able to get China to change the fundamentals of their economic model by poking them in the eye with tariffs,” Democratic candidate Pete Buttigieg said Sunday in an exclusive interview with Jake Tapper on CNN’s “State of the Union.”
“There’s some basic facts you can’t escape, one of them is that American farmers are getting killed,” said Buttigieg, the mayor of South Bend, Indiana.
If the economy does stumble, Democrats would be certain to quickly pivot to a full-on attack on Republican economic management — including high deficits and the GOP tax reform bill — whatever Trump’s record of the past few years.
Fresh polling is revealing Trump’s political risk factors and is beginning to suggest stirrings of public disquiet with how he is handling economic issues — one of the few policy areas where he has enjoyed majority voter confidence.
Trump’s general approval rating in the poll was at 43%, suggesting that there is a significant minority of Americans who still like the Trump economy — even if they don’t like him.
If he can’t persuade those voters to swallow their broader doubts and back him in November 2020, his narrow path to reelection could disappear altogether.
So it’s not surprising that CNN and other media organizations last week cited sources as saying that Trump is more and more worried about the economy after a week of grim forecasts.
“You have no choice but to vote for me, because (if) your 401(k)’s down the tubes, everything’s gonna be down the tubes,” Trump said in Manchester, New Hampshire, on Thursday. “So whether you love me or hate me, you gotta vote for me.”
Earlier, Trump had told reporters that economic growth would end if he is turfed out of the White House after four years.
“The fact that I won lifted our economy greatly. And if I didn’t win, it would go down,” Trump said. “And, frankly, if, for some reason that happened in the 2020 election, you’ll see this economy go down the tubes. I will tell you that right now.”
Trump team sends message of coordinated economic optimism
Trump’s top economic advisers sent a coordinated signal of brash optimism about the economy on Sunday, perhaps intended just as much for a fretful President as outside consumption.
“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,” Larry Kudlow, the White House’s chief economic adviser, said on NBC’s “Meet The Press.”
Peter Navarro, Trump’s top White House trade adviser denied the trade war was hurting Americans, said it was seriously damaging China, and called the Trump economy “the best game on the globe.”
Speaking to Tapper on “State of the Union,” Navarro also accused the Federal Reserve and its chairman Jerome Powell of “suppressing” investment and exports.
“The Federal Reserve Chairman should look in the mirror and say ‘I raised rates too far, too fast and I cost this economy a full percentage point of growth,'” Navarro said.