Trump plays the economic blame game
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Trump delivers a speech marking his 100th day in office at Macomb County Community College Sports Expo Center in Michigan earlier this week. Photo: Jim Watson/AFP via Getty Images
Last week, President Trump disowned the U.S. economy as one still shaped by his predecessor's policies.
- Less than 48 hours later, he touted strong employment and said the administration was "just getting started!!!"
Why it matters: The economy did not change, but the data did. The tricky presidential balance of owning the economy — in the good and bad — is not new. But it has perhaps never been more on display than with Trump.
- "I think the good parts are the Trump economy and the bad parts are the Biden economy because he's done a terrible job," the president said plainly in an interview with NBC's Kristen Welker on "Meet the Press" Sunday.
What's going on...
- Trump has repeatedly called on Fed chair Jerome Powell to cut interest rates — accusing him of being "Too Late" — a move that sets the central banker up as the "fall man" should the economy weaken. "Trump will likely continue to position Powell to take the blame for the tariff-driven downturn and any recession that ensues," economists at Evercore ISI wrote in a client note.
- Trump pointed the finger at Biden for the stock market's drop in recent weeks, even after taking credit for the stock market rally months earlier.
- Amazon denied a report of plans to show consumers how much tariffs had increased goods prices, after the White House called the potential move "hostile and political" — even though tariffs are the reason why some companies are hiking consumer prices.
Zoom in: Trump's top economic officials have suggested that Biden is to blame for whatever happens to the economy in the first half of the year.
- "[T]he first quarter is surely Biden, the second quarter is Biden, but starting the third quarter you start to feel some Donald Trump and in the 4th quarter you will feel the power of Donald Trump's economy," Commerce Secretary Howard Lutnick told Bloomberg in March.
Reality check: In normal times, Trump and his advisors would be right.
- The economy is a mighty tanker ship, slow to turn, so much so that presidents usually don't affect its short-term course.
- The exception is when they take sweeping, rapid action on a massive scale. Both Biden and Trump have done that, resulting in economic data that can be directly mapped to policy choices.
State of play: Economic conditions are being shaped almost entirely by Trump, who quickly ripped up the longstanding global trade playbook, leaving businesses and consumers scrambling.
- Trump shrugged off the GDP report that showed the economy shrinking for the first time in two years in the first quarter: "That's Biden — that's not Trump," he said.
Yes, but: There is a flip-flop in the messaging when indicators suggest the economy is in good shape.
- For instance, the negative GDP headline was hugely distorted by a rush of pre-tariff imports.
- But underlying economic demand actually looked decent, as his economic advisers bragged about on cable news: "It was the best negative print I have ever seen in my life," Peter Navarro told CNBC.
- Just 15 minutes after the release of Friday's better-than-expected jobs report, Trump said the economy was "in a transition stage," though he bragged about the slew of good economic news under his watch.
For the record: A White House official said it's not completely Trump's economy yet and noted that it will take more time to pass Trump's tax bill, negotiate trade deals and deregulate the economy.
- "There remain lingering Bidenomics problems," the official said.
