- - Wednesday, August 21, 2019

ANALYSIS/OPINION:

Credit the comedian and HBO talk show host Bill Maher for being blunt. He has a gift for making text what is otherwise subtext.

It’s no secret that the Democratic party and its allies in the media are salivating to defeat President Donald Trump next year. And they know that their best shot will be if the economy — which has been going gangbusters for the past several years — starts to slow. Incumbent presidents often have a tough time earning re-election in tough economic conditions.

Many of the president’s opponents, in other are words, are rooting for a recession — though they can’t say so out loud. It harkens back to the old Communist revolutionary adage: “The worse, the better.”

Enter Mr. Maher. On his Friday night variety show a few weeks back, the long time host said it outright: “I really do [want a recession],” he declared. “We have survived many recessions. We can’t survive another Donald Trump term.”

A recession is only the latest contrivance that the Democrats and the media have ginned up, hoping to take down the president. In a town hall meeting with his staff earlier this month, Dean Baquet, the executive editor of The New York Times, explained that a prior plot had unfortunately failed to pan out.



The plan, Mr. Baquet suggested, was to milk the “Russia collusion” story for all it was worth. The story about President Trump “went from being a story about whether the Trump campaign had colluded with Russia and obstruction of justice to being a more head-on story about the president’s character,” he said. “We built our newsroom to cover one story, and we did it truly well. Now we have to regroup, and shift resources and emphasis to take on a different story.” (We owe a debt of gratitude to the journalist Ashley Feinberg, who obtained the transcript to what was ostensibly a closed-door confab.)

With Mr. Trump having been granted a clean bill of health on matters Russian, the story will now be Mr. Trump’s supposed racism. “[Mr. Trump’s character] is a story that requires deep investigation into people who peddle hatred, but it is also a story that requires imaginative use of all our muscles to write about race and class in a deeper way than we have in years,” editor Baquet said. “In the coming weeks, we’ll be assigning some new people to politics who can offer different ways of looking at the world. We’ll also ask reporters to write more deeply about the country, race, and other divisions.”

And should painting Mr. Trump a “racist” or “white supremacist” fail, it’ll be all “recession” all the time. This could become a self fulfilling prophecy, in so far as a media drumbeat about a “recession” could cause American consumers to pull back.

The only trouble? The economy still appears to be in rude health. Unemployment is below 4 percent — essentially full employment. GDP growth is plodding along steadily. Wages are rising. Consumer spending is strong.

The recession fears, instead, are being hung on the data point that briefly last week U.S. bonds showed an inverted yield curve. That means that yields were lower for ten year bonds than two year bonds. That’s unusual and, it’s true, has in the past predicted an oncoming recession. Naturally, the inverted yield curve was the subject of a story on the front page of a recent issue of The New York Times.

There are real questions, though, as to whether the inverted yield curve still possesses such predictive power, especially in an environment when all other economic indicators are so strong. Tom Porcelli for instance, the chief economist at RBC Capital Markets argues that the brief inversion was more a reflection of slowing economic growth and low interest rates in markets besides the United States. “No, we are not on recession watch because of this dynamic,” Mr. Porcelli wrote in a research note.

President Trump, with an instinctive sense of what his political enemies are aiming for, tweeted on Wednesday that, “The Fake News LameStream Media is doing everything possible the ‘create’ a U.S. recession, even though the numbers & facts are working totally in the opposite direction. They would be willing to hurt many people, but that doesn’t matter to them.”

The invective was juvenile and unbecoming a president — but he had a point.

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