Donald Trump waxed hyperbolic about the US economy during a hotly-anticipated speech at the Economic Club of New York on Tuesday.
Excerpts from his prepared remarks found the president resorting to bombast and, in some cases, making unverifiable claims.
“We have launched an economic BOOM the likes of which we have never seen before!”, a set of bullet points distributed to the press reads. (Note the all-caps and unnecessary punctuation included in the official handout.)
Some of what’s included there is true, some of it is riddled with spin and some of it is taken totally out of context.
Still, Trump could have fashioned a halfway decent address had he just stuck to those talking points. Of course, he didn’t.
Instead, he veered immediately off script.
Much of the speech was clearly improvised, and the president assailed the Fed early and often, accusing Jerome Powell of being far too slow to cut rates. The Fed, Trump said, has put the US at a disadvantage versus other countries.
As ever, the president couched global trade in terms of zero-sum dynamics. Everything is a competition. There are “winners” and there are “losers”, but there is nothing in between.
Trump openly called for the institution of negative rates in America, something even his own advisors and Fed picks (e.g., Larry Kudlow and Judy Shelton) have consistently decried as counterproductive at best and wholly inadvisable at worst.
“We are actively competing with many nations who openly cut interest rates so that now many are actually getting paid, when they pay off their loan, known as negative interest”, Trump said. “Who ever heard of such a thing?”
“Gimmie some of that”, Trump said, to a smattering of nervous laughter. “Gimmie some of that money. I want some of that money”.
“Our Federal Reserve doesn’t let us do it”, the president continued, shaking his head.
Finally, just as things were getting awkward, sparse applause broke out, much to Trump’s relief. “Thank you, thank you”, he said, visibly irritated. “The smart people are clapping”.
It’s the “smart people”, then, who favor negative rates. By extension, that must mean anyone who suggests negative rates are actually a sign of economic distress and enfeeblement is “stupid”.
Or maybe it’s just that in a world where America’s “competitors” have resorted to negative rates, it’s incumbent upon the Fed to chase down the same rabbit hole, regardless of whether there’s nothing to be had at the bottom.
Or maybe it’s simpler than that. Maybe it’s just that when you’re a real estate developer and have dubbed yourself the “king of debt”, nothing could be better than getting paid to borrow.