Monday, September 24, 2018

Donald Trump, economic illiterate with no core set of principles

How much longer is he going to be able to brag about an economic turnaround with this kind of development nipping at his heels?

Optimism at the top levels of American businesses dipped in the three months through September, with fewer executives planning to hire workers and build new plants as President Trump's trade war bites into profits. 
About 56 percent of the corporate leaders in a Business Roundtable survey expected to expand payrolls, down 2 points from the spring quarter, while the 55 percent forecasting new capital spending fell six points. The overall CEO Economic Outlook Index dipped 1.8 points to 109.3, still well above its historical average of 81.6, according to the organization, which represents 200 of the largest U.S. companies. 
The index uses a scale of -50 to 150, with any reading above 50 indicating economic expansion, and gauges sentiment at businesses that, together, employ nearly 15 million people and account for more than 27 percent of U.S. stock market value.
"Contrary to the assertion that new tariffs and trade restrictions are making our economy stronger, almost none of our companies see it as a positive," Business Roundtable President Josh Bolten, the former chief of staff to President George W. Bush, said on a call with reporters. "These negative effects have important implications, not only for our member companies but their suppliers, many of which are small and medium-sized businesses."
The survey's findings mirror the assessments of C-suite executives during summer earnings calls, many of whom predicted increasing fallout from Trump's imposition of double-digit duties on metals, levies on $250 billion of Chinese imports and threats to impose levies on auto imports.
And Cummins, a Fortune 200 company in the power-generation business, says tariffs on Chinese goods is going to cost it $100 million this year.

Farmers in Tennessee and Illinois are feeling the harmful effects of tariffs.

The Coalition of American Metal Manufacturers and Users has it right: tariffs are taxes.

As I've asked before, how do things go when Kudlow and Moore are in the same room with Peter Navarro and Wilbur Ross, vying for the ear of the Very Stable Genius? It appears the VSG instinctively goes with the latter, given his taste for confrontation.


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