The widespread notion that a U.S. president can significantly influence the economy is mistaken. In observable fact, the broad cycles that bring us good times and bad, booms and busts, are vastly larger and more powerful than the presidency, too overwhelming to even affect, let alone command. Even the radical economic policies of Roosevelt’s New Deal were insufficient to end a depression that had taken more than a generation to gather force. America’s eventual emergence from those very hard times happened gradually during the administrations of Truman, Eisenhower and Kennedy. Moreover, the post-war rebuilding process that made Europe and Japan America’s best customers arguably would have happened cyclically without a Marshall Plan, and the U.S. financial system would have receded naturally from the fiscal excesses of a war that itself was an uncontrollable cyclical event.
In this view, Kennedy, Clinton, Obama and Biden were simply lucky to have been elected with the economy and the stock market at cyclical lows. For in no way did they cause the upswings that shone on their terms in office, nor the felicitous shifts in the mood of consumers. The bullish cycle had to have been particularly strong to survive the misbegotten policies of Obama, the first president to actively despise American exceptionalism, if not to say America itself.
Surfing the Big Wave
Which brings us to Trump, the president who has come closest to affecting the economy both inside and outside the U.S. Trump inherited a fiscal blowout impelled by the covid hoax, but he has since turned it into a credit and fiscal bonfire that can only end in ashes. Trump has merely extended an especially powerful upswing that he did nothing to cause. It should have ended with the senile Biden and his autopen administration, but Trump’s aggressive economic activism gave the boom new life. It is no ordinary boom, but rather the spectacular finale of a Grand Supercycle that long-wave forecasters date back as far as the 1700s. It was logical and perhaps even inevitable that the coming, severe downturn should have summoned so grandiose a personality as Trump to stage a last hurrah.
His popularity and credibility have already peaked with his all-in bet to give Americans ‘affordability’. This should have been apparent to anyone who watched his relatively short, heavily stuffed speech last week. Trump trotted out charts and tables to show how the cost of eggs, gasoline, poultry and such have begun to fall. Well, whoopee doo. But even if half-price Ozempic for every American were to arrive before midterm elections, the nation will still be dealing with the deeply structural, intractable problems of unaffordable housing, healthcare, insurance, college education and automobiles. Trump’s affordability promise is doomed to failure, and every American senses this. His hubris will put a fitting end to the Grand Supercycle, and it is the reason why the stock market has seemed so dead-tired lately. [For an earful on silver, AI and ‘lunatic-sector’ stocks that have begun to sputter out, click here for my latest rant at HoweStreet.]