Paul Krugman: The ‘Trump boom’ is collapsing and taking the president’s re-election hopes down with it
According to Nobel Prize-winning economist Paul Krugman, although the economy seems to be humming along business leaders see an end to the so-called “Trump boom” and have little faith President Donald Trump can turn it around.
In his column for the New York Times, Krugman broke down the latest economic indicators, but not before taking a time-out to fire a shot at GOP House members who stormed a closed-door meeting on Wednesday in an attempt to derail the ongoing impeachment inquiry.
“Everyone is following the impeachment story, and I don’t have much to add, except a warning: At every stage of this process, Republicans have proved willing to engage in stunningly bad behavior. Did anyone foresee Wednesday’s physical attempt to disrupt the House inquiry? The point is that as the net closes in, the G.O.P. response is likely to be uglier than you can possibly imagine,” he wrote.
With that out of the way, he got back to Trump’s growing economic downfall.
“Trump was convinced that he could run on the basis of a booming economy. Never mind that his claims to have run up the best economic record in human history were easily refuted; the reality seemed good enough to sell as a big success story,” he began. “What a difference a few months make.”
Noting “the overall state of the economy is still pretty good,” Krugman warned that those who look at longterm economic indicators see big warning signs.
“Important parts of the economy are lagging. Manufacturing production is down over the past year; combined with weakness in shipping and very hard times in agriculture, around a fifth of the economy is effectively in recession,” he noted. “In particular, manufacturing employment has been falling in Michigan, Wisconsin and Pennsylvania, states that chose Trump by tiny margins in 2016, giving him a win in the Electoral College despite losing the popular vote.”
“Probably even more significant, there has been a dramatic decline, almost a collapse, in business confidence,” he then warned. “You can see this collapse several ways. One is through surveys of business executives, who spent Trump’s first two years being very bullish, but have now become remarkably pessimistic.”
“So what happened to the Trump boom? The collapse in confidence began late last year, when it became clear that Trump was serious about waging trade war on China; it continued as evidence accumulated that the 2017 tax cut was a big fizzle, doing basically nothing to boost business investment and providing at most a brief sugar high to overall growth,” he continued. “Business interests spent a long time in denial, but now even they are facing up to the reality that Trump and his team are very strange people who have no idea what they’re doing — and the uncertainty that reality implies.”
He then concluded with a warning for the president by writing, come election time, “the economy probably won’t be his friend.”
You can read the whole piece here.