Even the consistently pessimistic investors known as perma-bears cannot deny how the economy has revved up under President Donald Trump. Job growth is surging, the economy is expanding at an immense rate, wages are climbing, and the stock market – up until recently – was posting records. For the Republicans, good times are here again. For the left, the champagne flowing from the heavens is because of former President Barack Obama, or perhaps just a prelude to economic collapse.
After eight years of ignoring poor economic management under Obama, the media is finally starting to wake up to the intrinsic problems in the country’s finances – just in time to blame Trump if anything does start to go wrong.
Media About-Face
Coverage of the economy by the non-financial news media has been interesting to say the least. Under the former president, the press continually gave Obama credit for ending the recession and omitted the negatives. Under Trump, the economy is either ignored – the cable news networks have concentrated just 14 minutes on the topic – or entirely dismissed as a short-term anomaly.
It is true that the economy did recover from the Great Recession under the previous administration, but it was at an anemic rate, leaving economists to describe it as the worst recovery in modern U.S. history.
Obama had everything in his favor – trillions of dollars of newly printed money, record-low interest rates, skyrocketing debt, and ballooning budget deficits – but he was unable to deliver a single year of 3% economic growth, becoming the first president ever to have such a blemish on his record. During his eight-year reign, Obama averaged an annual real gross domestic product (RGDP) growth rate of 1.55%, the fourth worst economic record, behind Herbert Hoover (-5.65%), Andrew Johnson (-0.7%), and Theodore Roosevelt (1.41%).
While there were and still are many signs that the fundamentals of the U.S. and global economies are unsound, the left-leaning press scoffed at any allusions about Obama’s policy as sour grapes or paranoia, fearing that it would shine a negative light on the administration. Today, the mainstream media, as always, has changed its tune and is beginning to focus on these very same indicators that were ignored over the last decade.
Media Wakes Up
Suddenly, the press is telling us that international debt levels are becoming a grave concern, U.S. government borrowing is worrisome, interest payments could wreak havoc on the nation, and the next recession will metastasize into a depression.
Just take a gander at these headlines from the last few months:
The Washington Post: “It’s time to plan for the next financial crisis.”
CNN: “America's debt crisis is coming -- interest payments will hit a trillion dollars a year.”
CBS News: “The skyrocketing interest payments on U.S. debt.”
Nobody is disputing these headlines, but the timing of them is convenient and hilarious. It is obvious that they are using these issues as ammunition to go after Trump. With the midterm elections weeks away and the presidential contest already taking place in a couple of years, you can expect the media to ramp up the attacks by embracing the old political slogan of “it’s the economy, stupid.”
Unlike hypocritical media habits, these financial facts should not be ignored by Republicans or conservatives out of political expediency. They are just as concerning now as they have been for years.
Financial Armageddon
Global debt levels have spiked to an all-time high of $247 trillion, the U.S. government will soon spend $1 trillion every year to service the debt, the U.S. stock market is overvalued and will inevitably endure a monumental correction, and there is a bubble in nearly every asset class.
It’s only a matter of time until a recession does happen because bull markets cannot linger forever, and the Federal Reserve has manipulated the economy so much that it needs to reset. Washington cannot do anything to stop it: The government has borrowed too much, the central bank is out of bullets, another round of bailouts is unfeasible, and the private sector is tapped out.
And this is why it is dangerous for President Trump to take credit for everything that is going well in the United States. Should the economy crumble, then, logically, he would be the fall guy – not occupants inside the Eccles Building or the politicians who have long been reckless with taxpayer dollars.
But all these things were warned about under Obama, as well as former President George W. Bush. If the corporate press cared so much about debt and deficits, then where were these outlets between 2009 and 2017? Instead, the cable networks harrassed Tea Party demonstrators, newspapers championed raising the debt ceiling, and journalists dismissed economic concerns as “pessimism porn.”
Mirroring the iconic wails from Tippi Hedren in 1963’s The Birds, the media is shouting, “It’s coming! It’s coming!” After years of lamenting those who sounded the alarm on America’s finances and the myriad bubbles in the market, the press has conveniently awakened from its slumber. And, like the film’s ending, the press will still be ignorant of what caused the crash and what will cure the world’s financial ailments.
Do you think a recession is coming? Let us know in the comments section!
