We are at a critical point in American history. We have a president (with fingers on the nuclear codes) who seems to be unwell. We are watching a descent into madness in real time on Twitter. We have a president who literally is throwing tantrums because he cannot get his way. What we are watching is near Shakespearean.
This is not a diagnosis. I am not a doctor and some who are seeing signs of narcissism, deep narcissism, with the president. What I see are parallels to national leaders in the past. Whether it is King George II, who ruled England in the 1700s, or Emperor Wilhelm II who was deposed in Germany at the end of the Great War.
Both men were cocksure of themselves. They knew more than their advisors. They were authoritarians who violated norms. In the end, they left a greatly diminished country. In the case of England, the empire lost its American colonies. Wilhelm II was deposed, and the country was on the losing side of World War I.
The country is at great risk of losing its place in the world stage. This hyper-nationalism is toxic, and it is isolating us from the rest of the world. It is hard making the country great when you walk away from all responsibilities.
The president claims he is the Hemingway of Twitter. He weaponized it. However, Twitter demonstrates a man that has no clue how the world works. It is complicated, and Donald Trump does not understand it. He has ideas about the world that were formed early in the 1980s. He has not changed an iota on this, and the world has moved well beyond his quaint (and wrong) views of the world.
This is a man who is very sure of what he does. He does not want or seems capable, of admitting when he is wrong. He attacks all the time. This is dangerous because this man is not one who knows how to negotiate. It is truly the Art if the Fail.
What we have is also a man in his seventies that exhibits the maturity of a young child. He is used to always getting his way. As Michael D’Antonio pointed on CNN his negotiating tactic is to demand all, and concede nothing.
That said, there are rumors that a cave on the wall is coming. For the first time in his life, he will face obvious consequences. He will lose this battle and might lose the war.
Then there is Fed Chairman Jerome Powell, who was appointed by the President. Trump is angry because the Fed is slowly raising interest rates. Partly this is to return arrows into the quiver. Why? There is an expectation of a recession, and the Fed needs those arrows to stimulate a slowed down economy.
The president hates this. It’s not just because he does not understand monetary policy. It may be costing his organization upwards of five million a year. If there is something that we know about Trump is that it is always about Trump. So this is raising his costs, why he even hinted he wanted to remove the Fed Chair.
We need an independent central bank. There are good reasons for that. And this is increasing the instability in the market. Central banks are independent, and should never be influenced by politics, or the personal gain of the president.
Monetary policy is far longer term than any presidency, and it tends to look long term. This is the best way to do it. What is clear, is that Trump is afraid of becoming another Herbert Hoover. His policies, including trade wars, may lead to that result. We know a recession is coming, but Trump policies will make it far worst
At the earliest, this would be declared by July. A recession is defined by two successive quarters with negative growth. So we will see what happens. However, we have three conditions that are fertilizer for this.
– Student debt
– Income inequality
– Flat to negative real wage growth
And lastly, the tax cut sugar rush is over
Have a great 2019. The ride will be fun.