A few years ago, Democrats in Washington were circulating a chart showing that the economy always does better when they’re in charge and worse when Republicans hold the White House. This is statistically true — at least in the past few decades — but mostly irrelevant. And that’s because economic cycles and presidencies are sort of like shifting tectonic plates: They overlap, but they almost never perfectly align. Presidents don’t actually create the economies that attach to their names. They only react to them, ably or not.
There are a couple of reasons for this. The first is that economic upheavals are generally underway long before people feel them, and it takes years for the data to catch up. In 1992, when George H.W. Bush was running for reelection, the economy was estimated to have grown, quarter by quarter, at rates between 1.4 and 2.7 percent — evidence of the recession that helped Bill Clinton roll to victory. Years later, though, revised numbers showed that growth rates, while flat, had actually been solidly above four percent and that the recovery was already underway. (By the end of Clinton’s first year, the economy was growing at 5.6 percent.) You could run this same exercise for other presidents, and the basic lesson would be the same: Presidencies are always shaped by the underlying trends they inherit, even if they’re not visible at the time.
The second reason is that economies are subject to external shocks that have nothing to do with a president’s domestic policy. The Iranian revolution in 1979 sharply worsened an energy crisis that predated the Carter administration. The terrorist attacks of 2001 paralysed George W. Bush’s economy, and the onset of the Covid pandemic in 2020 did the same to Donald Trump’s first term. All of these presidents confronted painful recessions, but they had about as much control over the events that triggered those recessions as they might have had over an asteroid hurtling toward Earth.
At least that’s how it was before Trump’s second term, which in this way — as in so many other ways that it’s become almost cliché to say it — marks a departure from everything we’ve seen before. Unlike any president since at least Woodrow Wilson a century ago, Trump actually has created his very own economic hellscape, by embarking on a series of radical steps that no one asked for and that only the most boneheaded ideologues would have advised. Trump is the only president in our lifetimes to be placed at the helm of a fundamentally seaworthy economy and immediately chart a course for the nearest field of icebergs.
Remember that by the time Trump recaptured the White House in 2024, the economy was finally rebounding from its pandemic-era lows, with growth and employment numbers steadily rising. The fear you heard most often then among Democrats was that Trump was poised to reap all of the benefit from Biden’s recovery and make it look like his own. “He had a good economy,” Rob Shapiro, an economist who worked in the Clinton administration, told me recently. “All he had to do was not fuck it up.” Turns out no one should have worried about that.
THE VERY FIRST THING Trump did was start a trade war — not just with China this time, but with the entire world. His vast tariff regime might have made for an interesting experiment were it not for the fact that inflation — caused mainly by supply-chain disruptions and exacerbated by massive government outlays — was already persistently high. Trump knew this, having talked endlessly about it during his campaign, but apparently no one could make him understand that tariffs were sure to make a temporary problem more permanent, by raising the cost of imports and manufacturing. (I’m not trying to pass myself off as some kind of Nobel laureate here, by the way — this is so basic that anyone who’s played Monopoly ought to be able to understand it. Even the Star Wars version.)
As the endless trade wars escalated, Trump decided to tack on an actual war with Iran, because the ayatollahs were brutally repressing their people, or maybe because they were on the brink of building a nuclear bomb, or possibly because Israel was starting a war and Trump had wicked FOMO — all of these explanations were offered at various times, so who knows? What we do know is that Trump’s war of choice, while achieving very little militarily, has been an economic disaster, choking off the flow of oil to Asia and Europe and leading to soaring energy prices at home. Like Jimmy Carter, Trump now finds his economy held hostage by Iranian hard-liners. Unlike Carter, Trump actually plunged himself into the crisis, as if the electorate had been clamouring for it.
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Either of those two policy decisions on its own would likely have been enough to imperil a still-fragile recovery. But consider, too, that job growth, which had been brisk during Biden’s last year in office, slowed to a virtual standstill in 2025 — in no small part because of Trump’s draconian crackdown on immigration, which made it harder for small businesses to find labour, both skilled and unskilled. And then there’s the federal debt, which was a pressing issue long before Trump came along, but which becomes a hell of a lot more pressing when interest rates are rising again. Interest payments on the public debt have soared to an all-time high (about 18 percent of national revenues, compared with something like 11 percent before the pandemic), and Trump’s erratic foreign policy raises the risk that foreign investors might not want to keep snapping up America’s debt.
For decades, a small cadre of budget alarmists in Washington have warned of a doomsday scenario when rising debt and interest rates would lead to a dark period of forced austerity and prolonged recession. Leave it to Trump to make doomsday seem like next week.
FEW PRESIDENTS QUALIFY as deep thinkers in economics, but generally they come to office with some kind of broad, consistent idea of what they believe — supply-side or pro-growth, monetarist or Keynesian. Trump, the business-mogul president, manages to be all over the place. He’s as vehemently against taxes and regulation as any arch-conservative, as protectionist as any pro-labor leftist, as jazzed about controlling industries — insisting that the government take an ownership stake in private companies — as any Soviet collectivist. The only through line in Trump’s economic policies, as with the rest of his presidency, is cultural retribution. Career bureaucrats, immigrants, academia, progressive governments, multinational coalitions — all of these are enemies in Trump’s world, and putting a boot on their necks is his only real domestic agenda. He proclaims this good for the economy, and any data to the contrary is dismissed as more lies from the educated elite.
In fact, economists will tell you that the underlying “fundamentals” — they love that word — remain pretty solid in Trump’s second year back in office; we’re still growing at a decent clip. But his erratic mismanagement has made two existing problems far worse. One is that more Americans feel like they’re drowning, even if the economy itself isn’t; with slowing wage growth, higher prices, and more expensive debt, the financial equation that makes life possible for most families isn’t adding up as it should. (This while Trump and his family have made billions off the presidency, much of it from foreign investors in Trump’s burgeoning crypto empire.) And the other is that the economy is way more susceptible to the calamity we don’t see coming. When inflation is already a problem and your debt payments are eating up a larger share of revenue, government can’t really spend a ton more money in the event of a sudden, dramatic slowdown — like, say, another pandemic.
The conservative economist Douglas Holtz-Eakin told me that he thinks of Trump’s economy as the “yes but” economy. As in: “Yes, we’re doing great, but tariffs. Yes, things are great, but now he wants a war with Iran. He can’t get out of his own way.” This strikes me as too kind, though, because it makes Trump’s missteps sound bumbling and accidental, when in fact they’re willful and reckless. Trump isn’t getting in his own way; he’s doing precisely what he intends to do, consequences be damned. What we’re living through is the “self-own economy.” The more Trump tries to dominate his adversaries, the more damage he does to the rest of us — and to his legacy.
The economy can be fixed, if at a painful cost. Trump’s presidency, probably not. As I write this, voters haven’t yet delivered their verdict in the midterm elections; it’s possible, if unlikely, that Trump could defy most of our expectations and hold down his losses, as Biden did in 2022. (And if he doesn’t, it’s a pretty good bet he’ll try to negate the results anyway.) Either way, though, voters have made their feelings about Trump’s economic judgment clear. In a New York Times poll published in mid-September, a stunning 14 percent of voters — and only 29 percent of Republicans — said the economy was better now than it was a year ago. The contest among Republicans to succeed Trump begins now, and you can expect to see more Republican lawmakers and governors running like monster-movie extras from Trump’s tariffs and war in the months ahead, for fear of what will happen to the party in 2028 if they don’t. We saw a preview in September, when Utah Sen. John Curtis, a solid Republican, called for an investigation into Donald Trump Jr.’s ties to the Russian oligarch who paid for his post-wedding reception on a private island in the Bahamas.
This will enrage Trump, of course, but when he goes looking for enemies this time, he really ought to find a mirror. Unlike every other president of the modern era, he’s gotten exactly the economy — and the failed presidency — he deserves.
From Rolling Stone US
