Trump Is Doing His Best To Reproduce Conditions Just Before The Great Depression

Official White House Photo by Shealah Craighead / Public Domain

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President Trump and his administration are on track to cause a global economic cataclysm.

Five specific characteristics of the current U.S. economy are helping to advance an oncoming financial storm. Without an administration to resolve these five problems, the country will continue to display economic conditions that are parallel to those before the Great Depression.

The first characteristic is record wealth and income inequality in the US. According to Business Insider, the gap between the rich and poor has widened tremendously, with income inequality reaching a “record high since the US Census began tracking it 50 years ago.” Taylor Telford from The Washington Post wrote that the “chasm is most prevalent in wealthy coastal states and areas with ‘widespread poverty,’” citing the US Census 2018 American Community Survey released in September 2019.

Accompanying record high income inequality is the “stagnant growth” in median household income. This accentuates “a 2018 report by the Pew Research Center, which found that America’s middle class is shrinking — while it’s stable in size, [its] financial gains were ‘modest’ compared to higher income households.” A Business Insider and Morning Consult survey found that “middle-class America isn’t faring that well. Middle-class Americans are behind on homeownership and retirement savings, partly because they have debt to pay off.”

Consistent with this data, the second characteristic of our current economy is historically high consumer debt levels. MarketWatch reported last year that US consumer debt is “above levels hit during the 2008 financial crisis” after it surpassed $14 trillion in the first quarter of 2019.

Ben Mohr, a senior research analyst of fixed income at investment consultant Marquette Associates, said the “increase in student loans — often cited as a source of consternation for economists and strategists — saw a notable increase.” At the end of the “first three months of 2019, student loan debt hit $1.486 trillion, according to credit data from the New York Federal Reserve,” MarketWatch wrote. “By comparison, student loan at the height of the financial crisis was $611 billion.”

“It has ballooned and that’s a dramatic increase,” said Mohr of the student-debt expansion.

Although “low interest rates have helped consumers to manage debt,” the report stated that “if the economy does begin to contract into recession as some economists fear, the debt load could be a more pressing matter.”

The third characteristic of our struggling economy under the current administration is unnecessary tariffs that are hurting the US. “Trade wars are good, and easy to win,” Trump claimed. “When we are down $100 billion with a certain country and they get cute, don’t trade anymore-we win big. It’s easy!” the president continued in his tweet on March 2, 2018.

However, according to the report written by Ryan Hass and Abraham Denmark on Brookings, the “ultimate results of the phase one trade deal between China and the United States — and the trade war that preceded it — have significantly hurt the American economy without solving the underlying economic concerns that the trade war was meant to resolve.”

The trade war “caused economic pain on both sides and led to diversion of trade flows” away from both countries. As described by Heather Long on The Washington Post, “U.S. economic growth slowed, business investment froze, and companies didn’t hire as many people.” Trump’s actions “amounted to one of the largest tax increases in years,” Long reported.

Hass and Denmark concluded that “Trump’s prioritization on the trade deal and de-prioritization of all other dimensions of the relationship produced a more permissive environment for China to advance its interests abroad and oppress its own people at home, secure in the knowledge that American responses would be muted by a president who was reluctant to risk losing the deal.”

The fourth characteristic of our worsening economic situation is deregulation of financial services. Four years ago, during his 2016 presidential campaign, Trump “promised to roll back the Dodd-Frank Wall Street Reform and Consumer Protection Act, which stiffened the regulations placed on banks in the aftermath of the financial crisis,” wrote Nasdaq.

The 2010 Dodd-Frank Act was the federal response to the economic collapse that had “resulted from the massive deregulation of the financial sector,” and “passing this law was virtually a miracle given the enormous amount of money and might the financial industry put into killing it,” according to The American Prospect.

Nasdaq wrote that in 2018, Trump signed into law the Economic Growth, Regulatory Relief and Consumer Protection Act, a bill “that loosened or got rid of some key regulations.” The big change “was letting smaller banks off the hook on many of the regulations in Dodd-Frank,” the report added. The deregulation of banks “might raise red flags for many Americans, particularly those who remember the meltdown of financial markets that prompted the Dodd-Frank Act in the first place.”

The history of the Great Depression and the 2008 Recession “is powerful proof that regulation and financial stability are not the enemies of growth and prosperity, but that broad-based deregulation is,” The American Prospect stated. “That is why Dodd-Frank re-regulated the financial industry and why the Trump administration’s deregulation is so reckless and dangerous.”

Lastly, the fifth characteristic of Trump’s dismal economy is poor or non-existent enforcement for financial crimes. “There’s never been a better time to be a white-collar criminal,” New Republic wrote on July 23, 2020. “Three and a half years after Trump took office, white-collar criminal enforcement is in its worst state in modern history — the result of top-down disinterest in, and occasional outright hostility toward, prosecuting financial crimes.”

Data from the FBI, the University of Pennsylvania’s Institute for Law and Economics, and PricewaterhouseCoopers (PwC) emphasized that internet crime, criminal misconduct at financial institutions, and overall fraud are all on the rise. Bloomberg reported that over the first three years of Trump’s term, compared to Barack Obama’s last twenty months in office, the number of white-collar crime defendants “was down 26% and 30%,” corporate fines “fell 76%,” and the IRS “saw a 36% decrease in new criminal investigations from fiscal 2015 to 2019.”

The reason for the “decline in white-collar prosecutions — even in the fact of data indicating that financial crimes are rising — is no coincidence,” New Republic continued. “Donald Trump was never likely to strike a hard line on the issue of white-collar crime.”

Evidently, these five characteristics of the US economy reveal a fractured, diminishing economic system with conditions being exacerbated by a pandemic-induced lack of consumption and congressional inaction. These issues, if not properly treated, can lead to a financial disaster that will fall on the American people to grapple with in the coming years.

References (in order of appearance):

  1. Hoffower, H. (2019, September 27). “The gap between the rich and the poor in the US has widened to a record high, and it mirrors the growth of ‘dynastic wealth.’” Business Insider. Retrieved from
  2. Telford, T. (2019, September 26). “Income inequality in America is the highest it’s been since Census Bureau started tracking it, data shows.” The Washington Post. Retrieved from
  3. US Census Bureau. (2019, September). “American Community Survey (ACS).” United States Census Bureau. Retrieved from
  4. Kochhar, R. (2018, September 6). “The American middle class is stable in size, but losing ground financially to upper-income families.” Pew Research Center. Retrieved from
  5. Williams, C. (2019, April 8). “Millennials and Their Money: The Kids Are All Right.” Morning Consult. Retrieved from
  6. Hoffower, H. (2019, May 23). “6 findings that show the dire state of America’s middle class.” Business Insider. Retrieved from
  7. DeCambre, M. (2019, June 25). “U.S. consumer debt is now above levels hit during the 2008 financial crisis.” MarketWatch. Retrieved from
  8. Marquette Associates. Retrieved from
  9. Deaux, J., Mayeda, A., Olorunnipa, T., & Black, J. (2018, March 2). “Trump Says Trade Wars Are ‘Good, and Easy to Win.” Bloomberg. Retrieved from
  10. Trump, D.J. [realDonaldTrump]. (2018, March 2). When a country (USA) is losing many billions of dollars on trade with virtually every country it does business with, trade wars are good, and easy to win. Example, when we are down $100 billion with a certain country and they get cute, don’t trade anymore-we win big. It’s easy! [Tweet]. Retrieved from
  11. Hass, R., & Denmark, A. (2020, August 7). “More pain than gain: How the US-China trade war hurt America.” Brookings. Retrieved from
  12. Long, H. (2020, January 15). “Was Trump’s China trade war worth it?” The Washington Post. Retrieved from
  13. GOBanking Rates. (2019, February 12). “Trump Is Deregulating Banks: Here’s What That Means for You.” Nasdaq. Retrieved from
  14. Kelleher, D. (2019, June 12). “Trump’s Assault on Financial Reform.” The American Prospect. Retrieved from
  15. Sponsor: Sen. Crapo, M (R-ID). (Introduced 2017, November 16). “S.2155- Economic Growth, Regulatory Relief, and Consumer Protection Act.” Congress. Retrieved from
  16. Khardori, A. (2020, July 23). “There’s Never Been a Better Time to Be a White-Collar Criminal.” The New Republic. Retrieved from
  17. Federal Bureau of Investigation Internet Crime Complaint Center. (2020, February 11). “2019 Internet Crime Report Released.” FBI. Retrieved from
  18. Lund, D.S., & Sarin, N. (Updated 2020, July 10). “Corporate Crime and Punishment: An Empirical Study.” Social Science Research Network. Retrieved from
  19. PricewaterhouseCoopers. (2020). “Fighting fraud: A never-ending battle.” PwC. Retrieved from
  20. Hurtado, P., Dolmetsch, C., Roth, C., & Voreacos, D. (2020, August 10). “Trump Oversees All-Time Low in White Collar Crime Enforcement.” Bloomberg. Retrieved from
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