The Economic Version of Lock Downs

In 2020, President Trump’s advisors gave us “fifteen days to stop the spread.” Now, they’re giving us tariffs to realign the American economy and make it great again.

Yesterday, the stock market fell due to uncertainty over the application of tariffs and the President not dismissing a recession. It will undoubtedly recover. But the decline from mid-February to now mirrors the decline the nation experienced with fifteen days to stop the spread that never ended.

It won’t take long for the Democrats to seize on the comparison and tie it to President Trump’s handling of the economy.

Undoubtedly, many of the President’s supporters will defend his policies and approach. As I said yesterday, if a recession is coming, having it come now and rebound quickly is the best of the bad case scenarios.

It is still a fact that the United States has the best and strongest economy on Planet Earth. It is a fact that stocks will recover, and this is a buying opportunity. It is a fact that major corporations have become dependent on other government subsidies, and the GOP wants to end the business of government-ordained winners and losers and let the free market work.

But, the sort of thing in the screenshot below is the wrong message.

Rob Schmitt is a Newsmax host. He is not inside the White House, but his tweet echos much of what we are getting from those around the President. This is pain due to President Trump transforming the American economy. This is very similar to talking points offered by Joe Biden’s base in 2021 as inflation began to rear its head. Even now, some of Trump’s supporters are attacking corporations and blaming them, much as the Biden team blamed “shrinkflation” on corporations.

Crediting Donald Trump “with the balls” to crater people’s 401(K) investments as “the pain that comes from real change” is a terrible talking point. Claiming that the working class has been left behind and a market correction helps the working class is nonsensical. A great deal of the working class is also an investor class.

In 2007, Republicans raised the red flag about Barack Obama claiming he would “transform this nation.” Before Election Day in 2008, Obama said, “We are five days away from fundamentally transforming the United States of America.” Now, MAGA is claiming to transform the American economy fundamentally and realign it away from a globally integrated economy.

That may sound good, but the reality is higher costs for Americans and fewer tariff winners than losers. And Americans reacted badly to Barack Obama’s attempt to fundamentally transform America. The 2010 midterms were brutal for his incumbent party.

Republicans risk doing what Democrats did in the last four years — get so focused on everything else that they forget it is the economy stupid.

President Trump is doing a lot of good. However, it risks being undone if his Administration cannot avoid a prolonged recession. Whether his supporters blame him or not, there are very real odds the American public, which opposes tariffs generally, will see tariffs as the precursor to a recession. Trump and tariffs are the only two big changes the country has made in the past few months.

Despite lots of rationalizations and apologetics that what is happening is a good thing and a necessary readjustment, if the pain lasts too long, do not expect voters to appreciate it. After all, “don’t rely on the markets as an indicator of economic health,” was a phrase repeatedly uttered by the Biden Administration as inflation skyrocketed.

One way for President Trump to mitigate tariffs and help the economy is to get Congress to pass his tax plan rapidly and make his tax cuts permanent. That would provide the stability that offsets the topsy-turvey world of tariffs. It would provide economic certainty to businesses and incentivize investments.

Tax cuts could provide an economic boost with the economy's trajectory trending down. Tax cuts arguably should have come before the tariffs, just like in the first Trump administration.

In the meantime, praising Donald Trump for a stock market slump is not a winning message to the voters who just traded in Joe Biden for Trump 2.0. The market has not just been down for a day. It has been sliding down for several weeks now.

On the other hand, Democrats yesterday spent all day ignoring the markets and defending a Hamas sympathizer set for deportation by the Trump Administration. So their priorities right now are not compatible with an attempt to win the midterms at the moment.