Wall Street crashed again yesterday, this time as a real time direct result of President Trump’s rage tweets at the Fed and at China. What caused his meltdown today was twofold.
First, “China announced that it will impose additional tariffs on a total of $75 billion of U.S. goods in retaliation for President Trump’s latest planned levies on Chinese imports,” Bloomberg reports. “Some of the countermeasures will take effect starting Sept. 1, while the rest will come into effect from Dec. 15, according to the announcement from the Ministry of Commerce. This mirrors the timetable the U.S. has laid out for 10% tariffs on nearly $300 billion of Chinese shipments.”
Second, his own Fed Chair’s comments at a conference. Chairman Jerome Powell said Friday that the Trump-China trade war is a “complex, turbulent” situation and vowed the central bank will “act as appropriate to sustain the [economic] expansion,” suggesting another interest rate cut may be coming but not the large decline President Trump has demanded, the Washington Post reports.
Trump flipped the fuck out and responded on Twitter: “As usual, the Fed did NOTHING! It is incredible that they can ‘speak’ without knowing or asking what I am doing, which will be announced shortly… My only question is, who is our bigger enemy, Jay Powell or Chairman Xi?”
Then Trump decided he was a fascist dictator and “hereby ordered” all American businesses to stop doing business of any kind with China. LOL.
Friday evening, “President Trump said he would raise tariffs against China from 10% to 15% in the aftermath of a steep stock market drop following his earlier tweets denigrating Fed chair Jerome Powell and China,” Axios reports. Trump’s announcement came after the stock market closed. And with expected disaster in Paris at the G-7 this weekend, the Dow will likely lose up to 5% of its value, or over 1,000 points, on Monday.
“Sources close to President Trump tell Axios that the White House is in a China bind: A trade deal with China is ‘tough to improbable’ in this deteriorating environment, with escalating security tensions between Washington and Beijing.”
“The biggest tool Trump has to pump the economy and the markets is a trade deal with China. But if anything, senior administration officials have turned harder against China in recent weeks.”
Jonathan Chait: “President Trump is in the midst of a public meltdown that is humiliating, scary, and banana republic–y even by Trumpy standards. The reason is that Trump started a trade war and China refuses to back down, having announced this morning that it is imposing retaliatory tariffs on $75 billion worth of U.S. goods.”
“Trump has picked fights with lots of countries. Usually they either placate him or try to give him a face-saving way of de-escalating (e.g., Mexico, which is never going to pay for the wall but doesn’t talk about the fact that it’s never going to pay for the wall anymore). Sometimes they get Trump to fold by stroking his ego (the North Koreans have carried out the most over-the-top version of this tactic).”
“China is playing it differently.”
Josh Barro: “It’s also worth considering the possibility that we have gotten too far down the trade-war road for the president to unwind the problems he’s caused. To the extent there are signs of weakness in the domestic economy, they are largely on the producer side. The consumer sector still looks decent. But tariffs and uncertainty over future tariffs have already discouraged businesses from producing and investing. And China has less reason to participate in a de-escalation than they did a year ago, since they can just ride out the next year and hope to be facing a new, less-hostile president.”
“With a China less willing to back down and a trade war maybe too far along to stop, the president is backed into a corner. He may feel he can’t save the economy by folding. And so he may follow his instinct — one of the few consistent policy views he has expressed for decades — that protectionism is good for the economy, and that despite what the markets and his advisers are telling him, trade wars are good and easy to win and more tariffs and more disruption will only mean more winning for the U.S.”
“What the president showed us today is he’s prepared to hit the gas as he approaches the cliff. That should make us all worried about the economic outlook — and it should make Republicans very worried about the political outlook.”
“Like an annual holiday gathering where the main goal is to get through the day without a family explosion, one of France’s main objectives as host of this weekend’s Group of Seven summit is to minimize the chances that President Trump will blow it up,” the Washington Post reports.
“Subjects on which to tread lightly include some of the biggest problems the world’s major economies are facing — trade, the system of international rules that has ordered the democratic world for decades and climate change, according to U.S. and other G-7 officials.”
“Already, Trump has shaken up the schedule, calling at the last minute for a special meeting Sunday morning to discuss the global economy. Senior administration officials said he will contrast U.S. growth with Europe’s economic doldrums and press his pro-jobs and ‘fair’ trade messages.”
Washington Post: “We learned this week that the deficit is rising faster than the Congressional Budget Office previously predicted and that it could hit $1 trillion as soon as this year. The GOP’s tax cuts haven’t created the growth it promised, which means less revenue is coming in to the federal government. Combine that with spending hikes, and the president who said he would not just balance the budget but also eliminate the entire national debt is on a very fiscally unconservative trajectory toward a massive broken promise.”
“Not to worry, though; he can just get around to fixing it after he wins reelection.”
“That’s the constant refrain emanating from the White House and GOP circles. Repeatedly, internal leaks and GOP lawmakers have suggested President Trump could get serious about this come January 2021.”
Andrew Sullivan: “‘Absurd,’ it turns out, is a trigger word for Trump, as it well should be. When the prime minister of Denmark, Mette Frederiksen, was asked to respond to the idea that Donald Trump wanted to ‘buy’ Greenland, she found the mot juste. The proposal was ‘absurd.’ Perhaps at one point at the beginning of the Cold War, some kind of strategic presence in Greenland would have been worth considering briefly. Now? Yes, absurd. The only thing more absurd is canceling a planned state visit to Denmark at the last moment in response to the prime minister pointing out the bleeding obvious, and adding the insult ‘nasty’ to yet another independent woman for good measure. But this too is predictable: ‘We know that a humiliated narcissist must release his narcissistic rage somehow, best on those who caused his psychic injury.’ Bad luck for Denmark.”
“President Donald Trump is absurd. His presidency is absurd. His party is absurd. We have known this ever since that absurd journey down an escalator, and the surrealism has only intensified since. Perhaps it takes a sane foreigner, not subject to years of almost hourly Trump abuse, to point out the obvious.”
David Remnick: “As perilous and unnerving as things are, any form of political despair at such a moment remains unforgivable. Despair is a form of self-indulgence, a dodge. Trump’s derangements in policy and character should instead instill a kind of Trump Clarification Syndrome, a reckoning with what confronts us.”
“A reckoning, as the Amazon rain forest burns, with climate change. A reckoning, as Trump threatens to revoke the barest protections for immigrant children and the guarantee of birthright citizenship, with the history and persistence of bigotry in all forms. With the structural persistence of inequality of income and opportunity. With matters of truth and falsehood.”
“Trump’s presence in the White House is depressing, there is no doubt, but to wallow in that gloom, or even to imagine that public life will ‘return to normal’ on its own after his departure, is insufficient, even inexcusable. Democrats, Independents, and Republicans who cannot countenance Trumpist politics ought to welcome the most urgent kind of political debate on matters of policy and on who we are as a country. Perhaps it is a form of derangement to say it, but it’s entirely possible that Donald Trump, who has been such a ruinous figure on the public scene, has at least done the country an unintended service by clarifying some of our deepest flaws and looming dangers in his uniquely lurid light.”
“Justice Ruth Bader Ginsburg has just completed three weeks of radiation treatment at Memorial Sloan Kettering Cancer Center in New York,” NPRreports.
“The radiation therapy, conducted on an outpatient basis, began Aug. 5, shortly after a localized cancerous tumor was discovered on Ginsburg’s pancreas. The treatment included the insertion of a stent in Ginsburg’s bile duct, according to a statement issued by the court.”
“The Trump administration took its hardest line yet to legalize anti-gay discrimination on Friday when it asked the Supreme Court to declare that federal law allows private companies to fire workers based only on their sexual orientation,” BuzzFeed News reports.
“An amicus brief filed by the Justice Department weighs in on two cases involving gay workers and what is meant by Title VII of the Civil Rights Act of 1964, which bans discrimination ‘because of sex.’ The administration argues courts nationwide should stop reading the civil rights law to protect gay, lesbian, and bisexual workers from bias because it was not originally intended to do so.”
“The office of an African American employee of the U.S. Department of Education was vandalized earlier this week, and other employees have expressed concern that the attack may have been racially motivated,” NBC News reports. “African art figurines were found beheaded, with their limbs removed, and a school desegregation poster was damaged.”
“Lawyers for Deutsche Bank and Capital One repeatedly refused Friday to tell an appellate court in New York whether the banks are in possession of President Trump’s tax returns, citing ‘contractual obligations’ not to disclose the information and drawing the ire of a panel of judges,” CNNreports.
“The three-judge panel was so frustrated by the lawyers’ refusal to answer that at one point one of the judges suggested the appellate court might seek an order for the information.”
“After several minutes of argument on the subject, the panel directed the lawyers to file letters under seal within 48 hours saying whether the banks have Trump’s tax returns. But while the banks’ lawyers indicated they would respond in writing, it wasn’t clear that they agreed to provide that information.”
Politico: “Fresh off Thursday evening conversations with White House staffers and a recent call with the president himself, [U.S. Senator Chris Murphy (D-CT)] says it is still possible that Trump and Senate Republicans will act in the wake of several recent mass shootings. While Murphy deems the chances of movement less than 50 percent and recognizes some may deem him naive, he said it’s his ‘obligation’ to keep pushing.” He can and should keep pushing, but to expect a possibility of action with Republicans in charge of the Senate and White House is naive.
A Michigan city council candidate shocked a public forum when she said she wants to keep “Marysville a white community as much as possible,” the Port Huron Times Herald reports.
Jean Cramer went on to state that she would not like “foreign born” people to settle in Marysville. She said that she’s not “against blacks” but believes married couples “need to be the same race.”
“Top White House advisers notified President Trump earlier this month that some internal forecasts showed that the economy could slow markedly over the next year, stopping short of a recession but complicating his path to reelection in 2020,” the Washington Post reports.
“The private forecast, one of several delivered to Trump and described by three people familiar with the briefing, contrasts sharply with the triumphant rhetoric the president and his surrogates have repeatedly used to describe the economy.”
“Even as his aides warn of a business climate at risk of faltering, the president has been portraying the economy to the public as ‘phenomenal’ and ‘incredible.’ He has told aides that he thinks he can convince Americans that the economy is vibrant and unrattled through a public messaging campaign. But the internal and external warnings that the economy could slip have contributed to a muddled and often contradictory message.”
Catherine Rampell: “There are lots of reasons to worry about how President Trump would handle a recession, should we tip into one. There’s his incompetent economic team. Or the limited fiscal policy tools at his disposal, given that Republicans already spent nearly $2 trillion on tax cuts. Or his efforts to discredit the Federal Reserve just when we’ll need it most.”
“One underrated concern: Trump’s tendency to double down on stupid and destructive ideas, despite — perhaps because of? — overwhelming evidence of their stupidity and destructiveness.”