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Monday, December 09, 2019 {{ new Date().getDay() }}


Recession Hits US Manufacturing Sector In Trade War

U.S. factories are struggling so badly that the manufacturing sector is officially in a recession, according to a Bloomberg report. It’s thanks in large part to Trump’s trade war with China.

New data released Tuesday shows shrinking orders, production, and hiring in the manufacturing industry, hitting a three-year low. The news follows worrisome data from August showing new manufacturing orders and exports hit a 10-year low.

Factories are struggling so much that the manufacturing industry is “technically already in a recession in the U.S.,” Bloomberg wrote. A recession is defined as when the Federal Reserve observes two straight quarters, or six months, of declining output.

And a recession does not just mean fewer things are being made; it also means fewer people have jobs. Data shows factory employment dropped to the lowest level since March 2016, during President Obama’s final year in office.

As far back as early summer, economists looking at the decline in manufacturing under Trump expressed concern.

“In our view, a continued decline … will be hard to spin as anything but a manufacturing recession,” Binky Chadha, chief strategist at Deutsche Bank, wrote in June.

The manufacturing recession can be laid at Trump’s feet.

Trump’s “escalating trade war with China is taking a big bite from the manufacturing sector,” CNBC reports. For more than a year, Trump has engaged in a trade war with China, culminating in increased tariffs on almost every product imported from China. Those tariffs mean companies must pay more for materials and parts imported from China.

And whatever costs those companies don’t absorb, they pass along to buyers, meaning the tariffs are nothing more than a tax on American consumers, a fact even Senate Majority Leader Mitch McConnell admits. In total, families can expect a $1,000 tax hike, thanks to Trump’s trade policies.

In retaliation for tariffs ordered by Trump, China has stopped buying U.S. agricultural products, pushing American farmers into bankruptcy at record rates.

The trade war has gotten so bad that major banks warned that Trump’s policies could spark a nationwide recession.

“Trade tensions have pushed corporate confidence and global growth to multi-year lows,” Chetan Ahya, Morgan Stanley’s chief economist, said in early August.

The manufacturing recession could just be the beginning. The new data indicates “manufacturing is likely to have again acted as a significant drag on the economy in the third quarter,” Chris Williamson, chief business economist at IHS Markit, said in a statement.

When he ran for office in 2016, Trump vowed to restore “the glory of American manufacturing.”

But that’s not what is happening. Instead, the American manufacturing sector is experiencing a recession.

Published with permission of The American Independent.

Trump And Fox Blame ‘Fake Media’ For Looming Recession

Reprinted with permission from MediaMatters

President Donald Trump and his allies at Fox News have settled on a strategy to deal with the possibility of an oncoming economic recession: Blame the media.

The United States is currently experiencing the longest economic expansion on record, growing every quarter since the early days of President Barack Obama’s tenure. But no boom lasts forever, and key economic indicators suggest that the economy is now weakening and that a recession may be on the horizon. A recent survey found nearly three in four economists expect one by 2021, reflecting “growing skepticism among economists and investors that the U.S. economy will be able to withstand a protracted trade war with China without serious harm amid a weakening global outlook.”

Trump is reportedly worried about the impact that might have on his reelection campaign, and rightfully so, as sitting presidents who face recessions as Election Day approaches typically lose. His response — along with talking up the economy while lashing out at the response of his handpicked Federal Reserve chairman — has been to push the paranoid conspiracy theory that the press is deliberately trying to tank the economy to stop his re-election. This plays into Trump’s years-long campaign to delegitimize the press as the “enemy of the people.”

It is also absurd, a classic example of starting with the conclusion that your perceived enemy is responsible for your predicament and then backfilling the details. After spending years portraying journalists as vicious partisans out to get him, it’s a short step for Trump to declare they are willing to hurt millions of Americans in that effort.

But while one can always find an idiot pundit willing to sign on to a morally reprehensible position, the bulk of the press quite clearly isn’t cheering on a recession — it is reporting based on economic data and expert analysis that one may be imminent.

In addition to the lack of evidence for the president’s narrative, it also doesn’t make sense — even if you grant the premise that journalists are willing to create economic havoc just to hurt Trump (and you shouldn’t), would they really do that knowing that their industry’s already weak financial position means that their own livelihoods would be jeopardized?

The conspiracy theory’s fundamental stupidity hasn’t stopped the president’s loyal propagandists from pushing it. Fox commentators have played a key role in validating and popularizing Trump’s attacks on the press, and they’ve adopted his current salvo with zeal.

Indeed, Lou Dobbs, whose Fox Business show Trump watches religiously and who at times has advised the White House, levied the charge even before Trump did. On August 14, he responded to media reports that the inverted yield curve for U.S. Treasury bonds might signal a recession by accusing the “leftist national media” of “talking down the Trump stock market and the Trump economy” as part of an effort to elect a Democratic president.

Trump echoed Dobbs in a tweet the next afternoon, baselessly accusing journalists of “doing everything they can to crash the economy because they think that will be bad for me and my re-election.”

Blessed by the president, the narrative quickly took hold on Fox News and Fox Business as hosts accused the press of “talking down the economy deliberately” and trying to “make this economy go into recession.”

For Sean Hannity, this was evidence that journalists are willing to threaten the economic security of millions of Americans for political gain. “Some are desperately hoping — hoping and praying, hoping and praying Americans will lose their jobs, lose their savings, see a major decrease in their retirement, 401(k)s,” he claimed on Wednesday night. “They want people to suffer. Why? So they can get back power and President Trump will lose the election. Do you know what? It doesn’t get any sicker than what these people are doing.”

“How is it possible [journalists] don’t want America to succeed?” he later asked Dobbs. “I’m the dishwasher, I’m the cook, the waiter, bartender, construction guy. I want all those guys to succeed. That’s me.”

“Yes, it’s the foundation of the American dream. We want everyone in this country to succeed,” Dobbs replied. “And the nonsense that is being spewed — by the way, not just the radical Dems, but their complicit, national left-wing media friends — they are basically building a drumbeat for a recession.”

Fox News hosts Jeanine Pirro and Jesse Watters continued to push the conspiracy theory narrative through the weekend. Trump did too, tweeting from the G-7 meeting in Biarritz, France, that the news media is “trying to force a Recession” because journalists “hate” the United States.

Meanwhile, the president lifted up a segment from Fox News host Steve Hilton praising his economic stewardship as an example of good news coverage:

By Monday morning’s edition of Fox & Friends, the media’s “recession hoax” had become part of the network’s litany of purportedly false media narratives, along with Russian collusion and Trump’s racism.

Blaming bad economic news on the press might not help Trump with the majority of voters. But it will keep the base charged up against journalists — and make them less likely to question whether Trump’s policies haven’t worked out, keeping him from facing accountability.

Dow Plunges While The One Sector Of Economy Where Government Intervened Reaps Profits

Stocks dropped sharply Thursday over persistent fears about debt troubles in Spain and Italy and the American economy straddling the line of recession, but one bright spot was the sector Republicans slammed as dead in 2008 and that government took an active role in rescuing: cars.

General Motors indicated its second-quarter profits nearly doubled, thanks largely to increasing prices (and consumers being willing to pay them):

Second-quarter revenue rose 19 percent to $39.4 billion, while sales rose 7 percent. Although sales softened somewhat in the U.S. and Europe because of buyers’ worries about the economy, GM gained market share in every region outside South America.

It was the first time since GM emerged from bankruptcy protection two years ago that all of its regions were profitable. Europe, which is undergoing a restructuring, posted a profit of $100 million, versus a loss a year earlier. In North America, where the bulk of GM’s profits come from, the company earned $2.2 billion, up from $1.6 billion.

GM won more customers in the U.S. thanks to the Cruze, which was the best-selling car in America in June. The Cruze also sold well in China, where Chevrolet’s June sales rose 34 percent.

This is not to say the auto industry’s troubles are behind it so much as financial and business interests at large are nosediving at the same time a once-mocked sector of America’s economy — derided as a dinosaur that had no means of righting itself — is hinting at a major recovery.