Donald Trump recently made a bold claim about his abilities, writing on Truth Social: “The only control or ‘guardrails’ that AI needs is a STRONG AND SMART (High IQ!) PRESIDENT, and the U.S.A. has that, in spades!”
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U.S.A. → make → spades
But in the days before and after that post, Trump made one mind-boggling statement after another, including one that raised the possibility of cutting off all trade with dozens of the US’s trading partners.
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that → make → partners
The president’s statements had many experts questioning not just his intelligence, but also whether he – and the outlandish policies he was proposing – were a clear and present danger to both the US economy and the world economy.
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he → have → economy
Public respect for Trump’s economic sense has fallen so low that just 7% of Americans think he should take the lead in regulating AI, according to a recent WSJ poll.
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he → fall → poll
Responding to Trump’s reckless statements, one prominent advocacy group, Republicans Against Trump, derided him as “Dumbest. President. Ever.”
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group → respond → President
First, he wrote on Truth Social: “I’ll stop trading with countries with which we have a deficit” if the Federal Reserve doesn’t cut interest rates.
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Reserve → write → rates
The second disconcerting statement was: “If we stopped Trading with every country that we have a Deficit with, which is most of them, we would make, at least, 1.5 Trillion Dollars a year.”
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we → stop → Dollars
Not only is Trump’s arithmetic childishly silly here, but any college student who took Econ 101 knows that if a trade-dependent nation like the US suddenly ended all trade with dozens of countries, that would lead to economic disaster.
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that → take → disaster
What’s more, it was worrisome that Trump views himself as almighty emperor with the power to singlehandedly halt hundreds of billions of dollars in trade.
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Trump → ’ → trade
If Trump ordered the US to terminate all trade with every place with which it has a trade deficit – that includes China, Mexico, Taiwan and the European Union – many US manufacturers would quickly find themselves in desperate straits, unable to obtain critically needed computer chips, rare earths, auto parts, aluminum and much more.
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themselves → order → chips
As a result, many factories would be forced to close.
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factories → force → result
Not only that, many farmers would be crippled because they couldn’t import the fertilizer they need, while many homebuilders would have to stop work because they couldn’t import needed lumber.
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they → cripple → lumber
Those were by no means Trump’s only recent mind-boggling statements.
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Those → boggle → means
Two days before the Federal Reserve raised its short-term interest rates to 3.75% to 4% to combat inflation, Trump was on a tear, badgering and bullying the Fed, telling it not only not to raise interest rates, but to cut rates sharply.
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Trump → raise → rates
“We should be at 1% or half a percent,” Trump said.
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Trump → say → %
Again, anyone who took Econ 101 knows that cutting rates so sharply and so low will push prices skyward at a time when the Fed and consumers already think inflation is too high.
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inflation → take → time
And let’s not forget that Trump was the guy who promised to reduce prices on day one as president.
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who → let → president
With that statement, the self-described “stable genius” president showed his utter failure to understand one of the most basic teachings of Econ 101 – when interest rates are extremely low, like 1%, that heats up the economy and that revved-up economic activity fuels inflation.
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activity → describe → inflation
Trump said that if the Fed bowed to his demands and slashed interest rates, “we could have a GDP [growth] of 14, 15, 16 and 20.”
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we → say → 14
Considering that the US economy grew at a moderate 2.2% rate in this year’s second quarter and rarely grows faster than 5%, talk of 20% growth is delusional.
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talk → consider → growth
Since the second world war, the US economy has grown at a rate at 20% or higher just once.
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economy → grow → %
That happened in the third quarter of 2020 due to extraordinary circumstances – in that quarter, myriad businesses rushed to reopen after the worst pandemic in a century caused many to suddenly shut down during the previous quarter.
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many → happen → quarter
(GDP plunged at a 28% rate that quarter.)
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GDP → plunge → rate
Then there was this colossally wrong-headed statement about trade: “The word ‘Deficit’ is nothing more than a fancy word for LOSS.”
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word → be → LOSS
Trump coupled that assertion with his misbegotten statement that the US would magically be $1.5tn richer if it terminated all trade with every nation with which it has a deficit.
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it → couple → deficit
This shows an infantile understanding of trade – and a stunning blindness to its mutual benefits.
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This → show → benefits
To explain how inane Trump is being here, let’s hypothesize for a second that in the US-France trade relationship, the only goods traded are wine and bourbon.
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goods → explain → relationship
Under Trump’s ludicrous logic, if the US buys $2bn of wine from France, and the French import $1bn worth of Kentucky bourbon, the resulting $1bn trade deficit means the US is simply giving away $1bn to France.
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US → buy → France
Trump bafflingly sees that as an outright $1bn loss.
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Trump → see → loss
Blinded by ignorance, ideology or an idée fixe, Trump fails to see that that’s not a harmful $1bn “loss” – rather, Americans are getting $1bn worth of fine wine to enjoy.
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Americans → blind → wine
No doubt wine lovers across the US see that as a gain and certainly not as a $1bn loss.
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lovers → see → loss
Bottom line, Trump’s delusional statements on the economy show that he is becoming more detached from reality and from rational understanding of how the world works.
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world → show → understanding
One can’t help but wonder why his economic advisers don’t stop him from making such ridiculous and at times dangerous statements.
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advisers → help → statements
If Trump turns his absurd economic notions into reality, as he done in his ugly, unnecessary trade war with Canada, that will be more bad news for Americans.
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that → turn → Americans
Voters should realize that Trump, with his failure to grasp basic economics, is a danger to the economy.
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Trump → realize → economy
He has brought us higher prices, slower GDP growth, and constant economic chaos and uncertainty.
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He → bring → prices
His tariffs and disastrous war against Iran have hit the great majority of Americans in their wallets and pocketbooks.
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tariffs → hit → wallets
Tragically, Trump’s Republican supporters in Congress either cheer him on or remain dismayingly silent while Trump does serious damage to the economy and to the finances of millions of struggling families.
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Trump → cheer → families
Americans shouldn’t forget this when they vote in November’s midterm elections.
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they → forget → elections
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Steven Greenhouse is a journalist and author, focusing on labor and the workplace, as well as economic and legal issues
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Greenhouse → focus → labor
The Aporia
