Trumponomics Threw All Economic Knowledge Out the Window
President Donald Trump ran on a platform to disrupt the status quo and engage in an economic experiment, which is leading us at a full sprint into the end of our economic cycle, according to Business Insider.
Instead of following the past few decades of economic liberalization, multilateralism, and openness, Trump chose to close the economy, renegotiate trade deals nation by nation, and refocus the U.S. economy on manufacturing, a sector that makes up less than 20 percent of the economy.
Economists warned Trump of the well-known consequences of protectionism, such as the effect of steel tariffs, which have only brought the U.S. pain, disrupting the North American Free Trade Agreement, our trade deal with Canada and Mexico, the implications of stepping out of the Trans-Pacific Partnership, and about confronting China alone.
The inverted yield curve, the Institute of Supply Management services survey, and the services contraction that followed the manufacturing’s decline--which reached its lowest point since 2009--all point to a looming recession. While employment numbers remain strong, hiring is beginning to slow.
President Trump’s policies have ripped up global supply chains, costing the government billions in aid to subsidize U.S. agriculture and manufacturing amidst multiple trade wars.
As global growth further slows, the World Trade Organization predicts that countries will revise their monetary and fiscal policies that could “destabilize volatile financial markets” and “produce an even bigger downturn in trade.”