Resolute Square

The Economic Madness Of Donald Trump

Is it really possible, that Trump is intending to spike inflation, cause massive labor shortages, throw the economy into recession and do enormous harm to the global economic system that has driven prosperity here and around the world? "Well, yes," writes Simon Rosenberg, "That’s what he wants to do if he gets into the White House next year."
Published:June 27, 2024

*Published with the generous permission of Simon Rosenberg. Read more of his important work on his Hopium substack.

By Simon Rosenberg

A few weeks back we shared with you an analysis from our good friend Dr. Rob Shapiro of the economic impact of Trump’s mass deportation plans:

Trump’s plans for mass deportation would be an economic disaster. Besides being cruel, deporting 11 million unauthorized immigrants would cause labor shortages and slash national wage and salary income, likely triggering a recession and reigniting inflation

A few days ago Dr. Shapiro released an analysis of Trump’s plans to increase tariffs and cut the income tax:

Trump’s tax-by-tariff plan would enrich the wealthy, cripple the economy, and send inflation soaring. The latest crackpot idea from the presumptive Republican nominee would throw us back to the federal revenue model from the Gilded Age

So, is it really possible, that Trump is intending to spike inflation, cause massive labor shortages, throw the economy into recession and do enormous harm to the global economic system that has driven prosperity here and around the world?

Well, yes. That’s what he wants to do if he gets into the White House next year.
In January, Trump said he hoped the economy would crash:

Former President Donald Trump predicted the US economy would “crash,” saying he hoped it would do so within the next year – before he would assume the Oval Office should he win a second term in November.

“When there’s a crash, I hope it’s going to be during this next 12 months because I don’t want to be Herbert Hoover. The one president – I just don’t want to be Herbert Hoover,” Trump said in an interview that aired Monday on the right-wing platform Lindell TV.

The US stock market crashed during former President Herbert Hoover’s first year in office in 1929, which signaled the beginning of the Great Depression.

Yesterday sixteen Nobel Prize winning economists sounded the alarm on Trump’s dangerous plans:

Sixteen Nobel prize-winning economists are jumping into the presidential campaign with a stark warning: Former President Trump's plans would reignite inflation and cause lasting harm to the global economy if he wins in November.

Why it matters: The Nobel laureates are lending their academic prestige to a political argument the Biden administration has been making for weeks: Inflation would be worse under Trump.

"While each of us has different views on the particulars of various economic policies, we all agree that Joe Biden's economic agenda is vastly superior to Donald Trump," the 16 economists write in a letter, first obtained by Axios.

Driving the news: The economists' claim is part of a broader attempt by Biden's campaign to turn the 2024 election into a choice between the two candidates' plans for the future — and not necessarily a referendum on Biden's record.

"We believe that a second Trump term would have a negative impact on the U.S.'s economic standing in the world, and a destabilizing effect on the U.S.'s domestic economy," the economists write in the letter.

"Many Americans are concerned about inflation, which has come down remarkably fast. There is rightly a worry that Donald Trump will reignite this inflation, with his fiscally irresponsible budgets," they write.

The message was spearheaded by Joseph Stiglitz, who won the Nobel prize for economics in 2001.

He was joined by George A. Akerlof (2001), Sir Angus Deaton (2015), Claudia Goldin (2023), Sir Oliver Hart (2016), Eric S. Maskin (2007), Daniel L. McFadden (2000), Paul R. Milgrom (2020), Roger B. Myerson (2007), Edmund S. Phelps (2006), Paul M. Romer (2018), Alvin E. Roth (2012), William F. Sharpe (1990), Robert J. Shiller (2013), Christopher A. Sims (2011), and Robert B. Wilson (2020).

In part due to these crazy plans (and yes being a rapist, fraudster, traitor, felon), Trump does not currently have the support of a single Fortune 100 CEO:

There are zero Fortune 100 CEOs — a group that historically leans Republican — that have donated to former President Trump this election cycle, according to data compiled by Yale's Jeffrey Sonnenfeld.

Why it matters: It's very easy to overstate how much America's business establishment supports Donald Trump.

Just because corporate America has serious issues with Joe Biden doesn't mean they are in Trump's camp.

By the numbers: Donations by CEOs of the country's 100 biggest companies haven't recovered since Trump became the Republican nominee in 2016.

He also received no donations from the group when he opposed Hillary Clinton in 2016.

In 2020, when he was running as the incumbent, Trump managed to pick up the support of two Fortune 100 CEOs.

The last time a non-Trump Republican incumbent was running for president, in 2004, George W. Bush picked up the support of 42 CEOs.

Between the lines: Roughly two-thirds of CEOs are registered Republicans, but they're not MAGA.

"The top corporate leaders working today, like many Americans, aren't entirely comfortable with either Mr. Trump or President Biden," writes Sonnenfeld in a NYT op-ed.

"They largely like — or at least can tolerate — one of them. They truly fear the other."

Here’s Jeffrey Sonnenfeld talking about Trump’s struggle with the US business establishment on CNBC yesterday. This is must watch TV:

Yesterday I wrote that Trump the MAGA wrecking ball is literally proposing to:

  • End the NATO alliance which has keep us safe and free
  • End the American-led global economic order which has made us prosperous
  • End American democracy, which has inspired the world, for all time

As we discuss in my With Democrats, Things Get Better presentation and this recent post, Joe Biden is the third consecutive Democratic President to have seen sustained growth, higher wages and lower deficits on their watch. The last three Republicans have brought recessions, higher deficits, American decline.

In contrast to the madness of Donald, Joe Biden has been a strong and successful American President:In the last few weeks we’ve gotten repeated confirmation of the success of the Biden Presidency - inflation was *zero* last month and prices of many goods are failing, crime and murder rates are way down, gas prices are down, the flow to the border is down. We’ve had the strongest economic recovery of any advanced economy in the world, the best job market since the 1960s, the lowest uninsured rate in American history, the deficit is trillions less, the Dow has broken 40,000 and all three indices continue hover in record territory. Domestic oil, gas and renewable production continue to be at all time highs leaving America more energy independent than it has been in decades. The Wall Street Journal called the American economy the “envy of the world,” and the Economist just wrote about the unprecedented start up boom America is experiencing right now. Biden’s big three investment bills have dramatically accelerated the energy transition necessary to combat climate change and will be creating opportunities and jobs for our workers for decades to come.

Joe Biden promised to make things better for all of us, to get us successfully to the other side of COVID. And he has.

Here’s a new economic ad from the Biden campaign running in the battleground states. It’s called No Plan and it ends with this simple line “Joe Biden is fighting for your family:”

As we’ve said from our very first day here at Hopium, winning the big economic argument with Republicans is our most important issue comms job this year. This week it feels like together we are taking really significant steps towards that goal and establishing this basic frame I talk so much about:

with Democrats comes progress, with Republicans decline

Lots of work to do but the last few weeks have good ones for us.