Tag: economy
Trump Approval Crater Gets Deeper, Even On Immigration

Trump Approval Crater Gets Deeper, Even On Immigration

President Donald Trump's approval ratings appear to be plummeting because his voters are concerned about his approach of governance. A Reuters/Ipsos poll released on Wednesday revealed that only 37 percent of Americans agree with the way the president is handling the economy. This is the lowest rating he has ever received, dating back to the beginning of his first presidential term.

Axios highlighted three polls in a report Thursday, noting, "On the economy, the single most decisive issue of the 2024 election, Trump's polling has never been worse."

Gallup polling released this week also painted a bleak picture for the administration. For the first time since at least 2001, most Americans feel that their economic circumstances are deteriorating.

Another survey conducted by the Pew Research Center revealed that Trump's overall approval rating has decreased to 40 percent, and his economic leadership approval has declined to 45 percent — the lowest levels recorded since tracking started in 2019.

"Trump's approval rating is cratering not because voters reject his goals — but because they're increasingly alarmed by his methods," Axios noted.

The report also highlighted an average of polls by data journalist G. Elliott Morris, which found Trump is not polling great even on immigration, which is considered his best issue.

"Trump is now almost underwater on approval of his handling of immigration, widely regarded as his strongest issue — and 20+ points negative on inflation. In 3 short months, he has completely lost his advantage on both the issues voters elected him to fix," Morris wrote Wednesday on the social platform X.

50 percent of the YouGov survey participants indicated that Trump should bring Kilmar Abrego Garcia, an immigrant from Maryland who was wrongly deported to El Salvador, back to the United States. Only 28 percent believed he should not be allowed to return.

Reprinted with permission from Alternet.

Billionaire Trump Backer Bemoans Dollar 'Erosion' Amid Economic Chaos

Billionaire Trump Backer Bemoans Dollar 'Erosion' Amid Economic Chaos

One of the Republican Party's biggest billionaire benefactors is now lamenting the "damage" that President Donald Trump has already done just less than 100 days into his second term.

Semafor reported Wednesday that Ken Griffin, who is the founder and CEO of the investment firm Citadel, is now loudly condemning Trump's handling of the economy, and tarnishing the United States' "brand." He blasted the administration for "eroding" the power of the U.S. dollar and U.S. Treasury securities.

"We put that brand at risk,” Griffin said. “It can be a lifetime to repair the damage that has been done.”

Griffin was particularly worried that institutional investors around the world were no longer viewing U.S. Treasury securities as a valuable investment, despite them typically being regarded as one of the safest ways to park money given that they're backed by the full faith and credit of the United States. He observed that, in comparison to the Euro, the United States "has become 20% poorer in four weeks." And he lamented that the United States' allies were now looking at it in a lesser light.

“There’s no great opportunity when the pie is rapidly shrinking,” he said. “All you’re trying to do is tread water and not drown.”

“How does Canada feel about our country today versus two months ago? How does Europe feel about the United States today versus two months ago?” He continued. “And some people scream, well, it just doesn’t matter. But you know what? It matters for a very profound reason. The entire Western world is engulfed in a debt crisis.”

Griffin's remarks are particularly noteworthy given that he was one of the top five donors to Republican causes in 2024. According to campaign finance data compiled by Open Secrets, Griffin gave more than $100 million to outside groups backing Republicans last year, and was only surpassed by banking heir Timothy Mellon, Tesla and SpaceX CEO Elon Musk, Dallas Mavericks owner Miriam Adelson (the widow of GOP megadonor Sheldon Adelson) and shipping industry titans Dick and Elizabeth Uihlein.

Reprinted with permission from Alternet.

'Sudden Stop': A Trump-Branded Crisis Hits US Economy (And Dollar)

'Sudden Stop': A Trump-Branded Crisis Hits US Economy (And Dollar)

Bloomberg posted an article titled “Markets Are Discovering the Real Trump Trade Is ‘Sell America’.” That’s about right. Look at the value of the dollar on international markets, shown at the top of this post. For a while after the election investors loved Trump, not wisely but too well. But in the face of one idiotic policy move after another, they’ve gradually fallen out of love, and now seem to be capitulating. I think they still haven’t faced up to how bad it is, but they’re figuring it out.

What we’re seeing now is something familiar to those of us who have studied economic crises in other countries, usually but not always emerging markets. For this is looking more and more like a “sudden stop.” That’s what happens when a country that has relied on large inflows of foreign capital loses the confidence of international investors. The inflow of money dries up — and the economic consequences are usually ugly.

Trump inherited an economy in remarkably good shape. We’d had “immaculate disinflation”: The inflation spike of 2021-22, largely caused by Covid-related supply chain disruptions, had faded away without a large rise in unemployment:


Source: St. Louis Federal Reserve

But Trump wasted no time in squandering the hand he’d been given. It’s not just the destructive tariffs. It’s also the chaos, as policy zigzags wildly, and the craziness. If you were a foreign investor, would you want to bet on America right now? Would you even want to visit to look at investment prospects, given the risk that you might be imprisoned by ICE because you once sent a text critical of Trump?

The economic consequences of sudden stops are, as I said, usually ugly. I’m writing this from Portugal, which — along with other southern European nations — was hit by a sudden stop in capital inflows just as it was recovering from the global financial crisis of 2008. The result was another severe economic slump that produced immense misery:


Can the United States suffer comparably? We have some big structural advantages that, say, Portugal in 2011 or Argentina in 2001 lacked. Above all, America’s foreign debt is overwhelmingly in dollars. This means that a plunging dollar won’t cause the domestic-currency value of our debt to explode, the way it typically does in emerging-market crises. And U.S. businesses and individuals have large overseas investments that will become more valuable in dollar terms as the dollar falls. As a result, the Trump slump in the dollar will, at least temporarily, lead to an improvement in our international investment position, the difference between U.S. assets and liabilities.

On the other hand, Portugal in 2011 or even Argentina in 2001 had mostly sane leadership. We don’t. As a number of people have pointed out, there may be no other government in the world that would have kept Pete Hegseth in office given his performance so far.

And as things get worse, there’s no reason at all to believe that Trump and those around him will look for policy solutions. Instead, we’ll see a combination of denial and efforts to blame someone else. Trump has already declared that reports of rising prices are “fake news.” And he’s already setting the stage for making Jerome Powell — “Mr. Too Late” and “a major loser” — his scapegoat for everything that goes wrong.

Coming next are conspiracy theories.

[Screengrab may have been fake?]

None of this was necessary. The U.S. economy was doing well before Trump came into office. Trumponomics isn’t a response to real problems. It’s a president who has waged a war on competence indulging his personal obsessions.

But America and the world will suffer the consequences.

Paul Krugman is a Nobel Prize-winning economist and former professor at MIT and Princeton who now teaches at the City University of New York's Graduate Center. From 2000 to 2024, he wrote a column for The New York Times. Please consider subscribing to his Substack, where he now posts almost every day.

Reprinted with permission from Paul Krugman.

Reprinted with permission from Substack.

Why We Should All Fear A Trumpified Federal Reserve

Why We Should All Fear A Trumpified Federal Reserve

Sometimes the Federal Reserve has extraordinary power over the economy.

Consider what happened from 1982 to 1984. For most of 1982 the U.S. economy was in grim shape. Employment had plunged, especially in manufacturing. The unemployment rate hit 10.8 percent in December (it was 4.2 percent last month.) And economic pain helped Democrats make major gains in the 1982 midterms.

But everything was about to change, thanks to the Fed. In the summer of 1982 the Fed decided to ease monetary policy. Interest rates plunged, and about 6 months later the economy began a stunning rebound, growing 4.6 percent in 1983 and 7.2 percent in 1984. Ronald Reagan claimed credit for “Morning in America,” but actually it was the Fed that did it.

This episode illustrates the Fed’s power — power that must be insulated from abuse by politicians, especially politicians like Donald Trump.

Over the past several days Trump has been demanding that the Fed cut interest rates and calling for the Fed chairman’s “termination.” It’s worth looking at what he posted on Truth Social to get a sense of how, to use the technical term, batshit crazy he is on this subject:


And we really, really don’t want someone that crazy dictating monetary policy.

The reason we don’t want politicians in direct control of monetary policy is that it’s so easy to use. After all, what does it mean to “ease” monetary policy? It’s an incredibly frictionless process. Normally the Federal Open Market Committee tells the New York Fed to buy U.S. government debt from private banks, which it does with money conjured out of thin air. There’s no need to pass legislation, place bids with contractors, deal with any of the hassles usually associated with changes in government policy. Basically the Fed can create an economic boom with a phone call.

It's obvious that this kind of power could be abused by an irresponsible leader who wants to preside over an economic boom and doesn’t want to hear about the risks. This isn’t a hypothetical scenario. Consider what happened in Turkey, whose Trump-like president, Recep Tayyip Erdoğan, recently arrested the leader of the opposition. When the global post-Covid inflation shock hit, Erdogan embraced crank economic theories. He forced Turkey’s central bank, its equivalent of the Fed, to cut interest rates in the belief, contrary to standard economics, that doing so would reduce, not increase inflation. You can see the results in the chart at the top of this post.

How can we guard against that kind of policy irresponsibility? After the stagflation of the 1970s many countries delegated monetary policy to technocrats at independent central banks. Can the technocrats get it wrong? Of course they can and often have. But they’re less likely to engage in wishful thinking and motivated reasoning than typical politicians, let alone politicians like Trump.

What makes Trump’s attempt to bully the Fed especially ominous is the fact that the Fed will soon have to cope with the stagflationary crisis Trump has created. Trump’s massive tariff increase will lead to a major inflationary shock:

Moreover, Trump has also created huge uncertainty by radically changing his policies every few days, which will depress spending and may well cause a recession:

Not incidentally, Trump has been able to pursue these destructive policies because U.S. law gives the president enormous discretionary power over tariffs. And now he wants the same kind of discretionary power over the Fed.

As a consequence of Trump’s destructive tariff regime, the Fed will soon face a dilemma. Should it raise interest rates to fight inflation, or should it cut rates to fight recession? It’s a really hard call, and it’s quite possible that Jay Powell will get it wrong. Trump has made Powell’s dilemma even worse with his attempted bullying, because a rate cut would be seen by many as a sign that Powell is giving in to avoid being fired.

But one thing we know for sure is that we don’t want Trump making that call. Like Erdogan, he has embraced crank economic doctrines to justify his policies, in Trump’s case the ludicrous claim that tariffs won’t raise consumer prices. Does anyone doubt that when inflation rises, he’ll dismiss it as “fake news”?

So will Trump’s attempt to bully the Fed succeed? According to the Wall Street Journal, he has spent months talking privately about firing Powell. He doesn’t have the legal authority to do that, but Trump doesn’t worry about pesky things like legal limits to his authority. Yesterday he told reporters that he can easily get rid of Powell: “If I want him out, he’ll be out of there real fast, believe me.”

And given how quickly Trump has been able to subvert or destroy many other government institutions, it’s hard to feel confident that he can’t do the same to the Fed. Fear of market reaction — America is already facing a serious credibility problem, with the dollar falling even as interest rates rise — will probably restrain him, but he may not believe people telling him that taking over the Fed would cause the dollar to plunge while long-term interest rates soar as investors expect higher inflation.

Between Trump’s tariffs, the economic spillover from deportations and terrorization of immigrants and the attempt to politicize the Fed, the upside risk to inflation now looks very high. The bitter irony is that many Americans voted for Trump because they thought he would bring prices down.

Paul Krugman is a Nobel Prize-winning economist and former professor at MIT and Princeton who now teaches at the City University of New York's Graduate Center. From 2000 to 2024, he wrote a column for The New York Times. Please consider subscribing to his Substack, where he now posts almost every day.

Reprinted with permission from Paul Krugman.

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