Consumer Confidence Declines: Why Trump’s Plan May be to Tank the Economy

Pix4free.org

 Anxiety over the economy is brewing among Americans given the chaos Trump has unleashed in his first month in office, seeking to fire hundreds of thousands federal employees, threatening and implementing tariffs, and proposing huge tax increases for the wealthy that promise to balloon the nation’s deficit debt and bring inflationary pressures to bear on American households.

The questions is, does Trump care about the impact of his policies and other actions on already struggling American families, or could it be that tanking the economy is actually a key part of his plan to consolidate power in his autocratic stronghold?

As we explore this line of inquiry, let’s start by fleshing out the context of America’s growing economic angst. 

You may have noticed that the Conference Board, a business research group, reported earlier this week that consumer confidence declined seven points in February, from 105.3 to 98.3, constituting the steepest decline since August 2021 and signaling that individual Americans and businesses are bracing for and expecting economic troubles ahead.

From homebuilders to small businesses to individuals, worries are abounding given the growing uncertainties and instability Trump’s pronouncements and policies regarding tariffs and taxes are generating.

Those who responded to the board’s survey cited elevating concerns over inflation as well as over Trump’s handling of trade and tariffs going forward.  According the group,  “Views of current labor market conditions weakened. Consumers became pessimistic about future business conditions and less optimistic about future income. Pessimism about future employment prospects worsened and reached a ten-month high.”

According to Justin Wolfers, University of Michigan professor of economics, “The fact that consumers don’t feel like it’s smooth sailing — you’ve got one very obvious suspect. That’s the White House, which is sowing uncertainty just about everywhere, whether it comes to trade policy or foreign policy.”

Wolfers  added, “I genuinely understand why consumers are nervous and I hope this doesn’t turn out to be a self-inflicted own goal.” 

Wolfers’ comments, particularly this last one, are interesting, as he seems to assume the White House has only good intentions for the economy and the well-being of Americans and may be unintentionally engaging in self-inflicting injurious behavior.

On one level, we certainly have to question any suggestion that Trump does not understand the negative impact his statements, policies, and actions have on the economic lives of America’s working families. It’s no great secret that key characteristics of a healthy economy and a fertile environment for business and growth are stability and certainty. So, if the Trump White House is “sowing uncertainty just about everywhere,” odds are they are acting intentionally, with an eye toward disrupting the smooth running of the economy and, of course, people’s lives and livelihoods. The aim and intent here of the Trump administration seems to be, I’d like to suggest, to disempower people and put them in the utmost positions of vulnerability. This is how they control people.

Just as Trump and Musk have been acting to take over the Treasury payment system and have been cutting off payments already promised through federal grants and halting payments ot organizations such USAID, similarly do they want to bring Americans as a whole to heel–and what better way than controlling them economically and making them utterly dependent on one man’s whims.

After all, let’s not forget that sixteen Nobel prize-winning economists made clear prior to the 2024 presidential election that Trump’s proposed economic policies would entail domestic and global economic suffering. They wrote at the time,

"While each of us has different views on the particulars of various economic policies, we all agree that Joe Biden's economic agenda is vastly superior to Donald Trump. We believe that a second Trump term would have a negative impact on the U.S.'s economic standing in the world, and a destabilizing effect on the U.S.'s domestic economy."

And let’s also remember that Elon Musk promised that Trump’s presidency would bring hardship for Americans, a potential stock market crash, and severe economic turmoil before prosperity would come.

As Brett Arends wrote just days before last November’s election for the investment platform Morningstar (hardly a liberal rag!), Musk’s projection of economic disruption and pain for Americans struck a strange campaign note–one we should analyze–especially given what he characterized as an economy that was humming along. He wrote at the time,

Musk's shocking austerity message is an unusual one to send voters a week before what is likely to be a close election.

Especially when America is booming.

The job market is growing so strongly it has wrong-footed the Federal Reserve, which got worried a month ago and slashed interest rates to prevent a slowdown that didn't happen. Third-quarter economic growth was a thumping 3%. The latest inflation figures, while higher than expected, nonetheless show a dramatic fall from the postpandemic peak. Average weekly wages, after adjusting for inflation, are now (slightly) higher than before COVID-19.

Meanwhile, investors in the S&P 500 SPX have gained 54%, including dividends, since the start of the Biden administration - or 30% after deducting inflation. And the International Monetary Fund says the U.S. has the best major economy in the world.

This is not the usual picture when a politician and his campaign promise austerity, hardship, deep budget cuts, a likely economic "overreaction" and a slump in the stock market. You usually hear those things proposed during a deep crisis, when desperate times supposedly demand desperate measures.

So, Trump and Musk managed to convince American voters that the economy was horrible, contrary to a lot of evidence, and that they would somehow turn it around.

And this turnaround would somehow require crashing the stock market, bringing on a recession, and causing Americans economic pain.

They are certainly off and running, with the GOP-controlled house passing a budget blueprint with $4.5 trillion dollar in new deficits due largely to tax cuts for the wealthiest.

And Republicans don’t even bother to tell the lie anymore that these tax cuts for the wealthy pay for themselves, as they may entail cuts to “mandatory” federal spending on such programs as Medicaid, Medicare, and nutritional assistance plans.

So, in the end, Trump’s tax cuts take away key programs that provide essential services to Americans in order to transfer more of the nation’s wealth American workers have produced to corporations and the wealthiest among us.

The attack on American working families is real, and that attack is taking place through Trump’s efforts to undermine the economic well-being of Americans by destroying the economy and starving the government programs that provide vital services and safety nets for us all. 

Trump wants America–and Americans–in his economic stranglehold. What can make people more dependent and powerless than completely immiserating them?

Trump wants power at any cost and has shown he cares little for the damage he does to American lives.  Tanking the economy will actually advance his efforts to consolidate power and make people toe his MAGA line.