As President Donald Trump consolidates power in the White House and dominates the news, it seems unavoidable that he gets credit and blame for the nation’s condition. The President gets credit for avoiding a government shutdown last week, with help from House Republicans and a bipartisan Senate.
While the economy is growing, investors and consumers are nervous about the future. Investors are selling stocks, sinking indexes to correction territory (10 percent decline) and close to bear terrain (20 percent decline). The University of Michigan’s consumer sentiment index dropped for the third straight month, 27 percent below a year ago. The polling averages show the President getting the blame: his overall approval ratings have fallen into negative territory with his economic ratings lower than at any point during his first term.
Despite February inflation that slowed more than expected, it remains at 2.8 percent, higher than would prompt interest rate cuts by the Federal Reserve. Markets and consumers are spooked by President Trump’s on-again-off-again tariff threats to punish allies Canada, Mexico and Europe that prompt retaliation, a classic trade war that no nation has ever really won.
The polls suggest voters view Trump as focused on immigration and shrinking the government workforce while they want inflation and the economy to be his priorities – reflecting the issues most important to his election last November.
President Trump urges patience, saying America’s golden age will come following a transition period. Historically, voters will remain patient only so long. With his approval falling among Democrats and Independents, the President is losing political capital that will be hard to recover without swift action to control prices and calm markets.
It is not as if the Democrats are poised to take advantage. Last week, they launched an internal civil war over the sideshow of a government shutdown.
