It was a good idea from Paul Krugman on Thursday, but by Friday, hopes for a sane approach to economic matters all but disappeared…
What about calling off the trade war that has been depressing business investment? This seems unlikely, because protectionism is right up there with racism as a core Trump value. And merely postponing tariffs might not help, since it wouldn’t resolve the uncertainty that may be the trade war’s biggest cost.
The truth is that Trump doesn’t have a Plan B, and probably can’t come up with one. On the other hand, he might not have to. Who needs competent policy when you’re the chosen one and the king of Israel?
Friday, chart of S&P's behavior last week:
Closer look at Friday's move:
Summarized in a news clip:
Wow! What an open from @jheil ! https://t.co/b4QwRBVGAv
— Nicolle Wallace (@NicolleDWallace) August 24, 2019
And the craziness continues on Saturday:
President Trump asserted on Saturday that he has the authority to make good on his threat to force all American businesses to leave China, citing a national security law that has been used mainly to target terrorists, drug traffickers and pariah states like Iran, Syria and North Korea.
As he arrived in France for the annual meeting of the Group of 7 powers, Mr. Trump posted a message on Twitter citing the International Emergency Economic Powers Act of 1977, a law originally meant to enable a president to isolate criminal regimes, not sever economic ties with a major trading partner over a tariff dispute…
For all of the Fake News Reporters that don’t have a clue as to what the law is relative to Presidential powers, China, etc., try looking at the Emergency Economic Powers Act of 1977. Case closed!
— Donald J. Trump (@realDonaldTrump) August 24, 2019
The president’s threat to all but cut off one of America’s most important trading relationships amid a so-far-unsuccessful trade war could disrupt a global economy already on the edge of recession while further unsettling companies in the United States that rely on China in their production of everything from clothing to smartphones.
From Trump Asserts He Can Force U.S. Companies to Leave China