Last week, as part of an all-hands-on-deck effort to rescue stocks following the worst Christmas Eve trading on record and amid the worst December for U.S. equities since the Great Depression, Trump reached deep into the MAGA bench, calling up Kevin Hassett to do some damage control.
There are at least two jokes embedded in what I just said. The first is that calling the administration’s panicked effort to stanch the bleeding an “all-hands-on-deck” effort is a bit misleading because there aren’t that many people left on the ship, so “all” hands is really just “any available hands”. Relatedly, the second joke is that when you talk about Trump reaching “deep” into the MAGA bench, you’re talking about a team that, much like the market they’re trying to rescue, suffers from an acute lack of depth.
Anyway, last Wednesday, Hassett attempted to calm market concerns about Steve Mnuchin and Jerome Powell who, rumor has it, are in Trump’s crosshairs for “allowing” the stock market to sell off.
As luck would have it, stocks rallied the most since 2009 after Hassett promised that Powell is “100% safe”, but correlation doesn’t equal causation – nobody takes Kevin seriously.
Fast forward a week and stocks are in free fall again, this time due to Apple’s guidance cut (which, according to the company, is courtesy of a decelerating Chinese economy and Trump’s trade war) and a horrific ISM miss.
Amid the chaos, Hassett showed up on CNN to ‘splain exactly what is going on in light of his boss’s contention that the recent market rout is merely a “glitch”. Here’s what he had to say about stocks:
That is a man who does not have a good poker face. Also, we would implore you to note that the Trump administration is lying when they say that “nobody thought it was possible” that the U.S. economy could grow 3% in a given quarter. That is one of the more absurd economic narratives Trump and his sycophants have foisted on their supporters.
In any event, Hassett went on to talk about Apple, and for reasons that nobody can explain, he decided to say this:
Got that? Here it is again:
It’s not going to be just Apple. There are a heck of a lot of U.S. companies that have sales in China that are going to be watching their earnings being downgraded next year until we get a deal with China.
You’ve got to love Poppy Harlow’s response: “Yeah!” As in: “Yeah, Kevin, that’s a bad thing.”
Hassett doesn’t see it that way, though.
He’s taking the approach that as corporate profits crater in the U.S., that will force China to the bargaining table. And by the way, the longer this trade war drags on, the more pressure there will be on corporate bottom lines (i.e., as well as top lines) because in addition to the fact that a decelerating Chinese economy means lower revenue prospects for companies that sell into that market, the effects of the tariffs mean higher input costs for some of those same companies, hence crimped margins.
But hey, what do you expect, right? This is an administration that doesn’t understand the inherent absurdity in starting a trade war with China, watching as China stops buying U.S. agricultural products, and then borrowing money from China to pay for subsidies to the farmers who produce those products.
And this is the same Kevin Hassett who, in an October interview with this same CNN, accused Goldman of producing “opposition research” for suggesting that the trade war was ultimately going to dent U.S. corporate profits. Remember that? If not, here’s the clip:
That is the same Poppy Harlow asking the same Kevin Hassett if he’s “worried about dealing a blow to the stock market” on October 2. Kevin then grins at her (and, implicitly, at America) on the way to saying this:
You know, I haven’t read that report, but the Goldman economics team, it almost looks like they’re the Democratic opposition.
Again, that was on October 2. Who’s laughing now, Kevin?
Actually, the worst part is that Kevin is still laughing – or at least chuckling and smirking, as you can clearly see in the clips shown above from Thursday’s interview.
After all, it’s hilarious, isn’t it? What’s funnier than being complicit in an agenda that’s wiping out trillions in global wealth and destroying decades of progress on global cooperation and trade?