This morning's report that US GDP growth hit an annualized 4.1 percent in Q2, its fastest pace in almost four years, has sent President Trump into paroxysms of joy at his own brilliant economic management. Self-aggrandizement is what Trump does best, of course, but as we are now 18 months into his term in office, it's no longer reasonable for doubters to say that the economy's performance is all thanks to his predecessor.
If only Trump would just stick to the bragging and leave the actual economy alone. Full employment and strong growth require careful economic management in order to ensure that the boom does not trigger rampant inflation. Instead, Trump seems determined to mess things up. His trade war is certain to raise prices, particularly if he carries through his threat to impose tariffs on all imports from China -- at which point Walmart may as well shut up shop.
Similarly, the entirely unnecessary fiscal stimulus provided by the administration's tax cuts will add to demand at a time when the economy is already operating at full capacity. This will not only add to inflationary pressures, attracting the attention of the Federal Reserve, but also boost demand for imports, and we know how Trump is likely to react to that.
In short, his economic program is an incoherent mess that risks jeopardizing a remarkable run of growth. Just for once, we should tolerate Trump's braggadocio and hope that he doesn't get tempted to keep fiddling with the controls.
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