Do you think it is possible that University of Pennsylvania’s Wharton School of Finance would withdraw the degree previously awarded to Donald Trump. Wharton might have to refund the donation Fred Trump gave on behalf of his son. Hmmm. But isn’t the image of a first class business school worth more than Fred Trump’s money?
Donald Trump, now President of the United States, has made a cock-up of both the US and the world economy in such a short time. If the job was about screwing things up, President Trump would be a great face for the Wharton School. Sadly, it appears the President has no clue as to what helps or hurts the economy. Consequently, the world economy is trending poorly and the potential for political fallout in traditional US allies is a real possibility. Unstable foreign governments is not good news.
- The President and his advisors (including Republican Congress members) were gleeful in passing an unfunded tax cut. Just watch the economy explode the President said. So far the only things that have exploded are the national debt and the cash reserves of the US’ largest corporations. Now if the economy is entering a recessionary period, tax policy is a tool no longer in the drawer.
- Oh, but the Fed could lower interest rates and thereby stimulate the economy. Hmmm. This traditional tool is a bit limited since interest rates are already at historically low level. And if the Fed did lower interest rates by 100 basis points as the President has demanded, what will the Fed do if the recession is severe?
- But the economic gun that continues to shoot President Trump in his foot every day, without him seeming to recognize the source of this pain, is the President’s trade policies and his infatuation with tariffs. “Trade wars are easy to win”, our President has said. Hmmm. The President seems oblivious to the consequences of imposing tariffs unilaterally both on the trading partner and on his own economy ( that is, higher taxes for US citizens and less spending pwoer). Talking tough is easy, acting smart seems beyond the President’s reach.
The world economy expands for some period and then contracts. Think about cars. There are just so many cars people can buy and at some point people decide to wait a year or two before replacing the car they own now. As a recession begins, people cut back on all sorts of spending “a little”. Traditionally, government stimulates the economy (lower taxes, lower interest rates, and sometimes increased government spending) and gently slows the recession. Where are the tools for President Trump?
Tariffs have spooked many businesses and caused their executives (globally) to be caution on new investment and spending. As the global economy contracts, sooner or later so will the US. But what will our President do? My bet is he is preparing a list of others to blame.
Wharton may not be seriously considering withdraw Trump’s degree. But they should. In the process they could release his college academic record and the rest of us could see what a weak student he was. That might explain why President Trump has made so many bone headed economic decisions.