He may be the guardian of net worth that is nearly a quarter of Pakistan’s total foreign exchange reserves. He may boast of a lovely, middle-aged lanky daughter in Ivanka. He may also have been a cracker of a businessman, multiplying his fortune at a rate of knots. However, Mr Donald Trump is sure to go down as one of the most controversial and unworthy presidents in American history. Robbed of the faultless eloquence of his predecessor, Trump, despite being in his glad rags, has little charisma to his credit. His first 100 days in the highest office of the planet have raised a significant clamour. The press has showered his North Korean bickering, Syrian bombings, Mexican wall building rhetoric and above all, his complete indifference towards the domestic economy, with the foulest of flak. I am not losing my ink without purpose as the statistics prove me right.
The US economy does not look promising. Growth in the first three months of 2017 has been the weakest in the past three years, with GDP yielding a depressing 0.7 percent, down from 2.1 percent posted at the end of 2016. These growth figures were pushed lower, courtesy negative consumer sentiment as average household spending rapidly decreased. Interestingly, latest macroeconomic figures suggest that household spending is at its worst since 2009. Furthermore, poor retail sales together with a noticeable slowdown in car financing show that the world’s most stimulating economy is going to the ground. I repeatedly harp on the significance of robust consumption spending, as it has been the lifeblood of the US economy for over five decades.
In the aftermath of the great war that rattled Europe in the 1940s, the US had become the core exporting engine of the globe, with Europe and Russia being the peripheral economies. After the collapse of the Bretton Woods fixed exchange rate regime in 1971, the US switched from being an exporting engine to an importing one. The American consumers were the world’s biggest customers and often dubbed as the real drivers of unprecedented growth levels in emerging markets like China, India, Brazil, Singapore and Central and Southern Africa. As US consumers retreat into the sand, the country’s short-term economic prospects seem on the rack. Trump’s rescuing plans are in fact a recipe for disaster. Recently, through a flurry of press conferences, the paratroopers in Trump’s cabinet announced a spate of turnaround incentives to reboot the economy. Chief amongst them are massive corporate tax cuts to the tune of $2trillion, which, reportedly will benefit households who fall in the top one percent of the US population. Considering an economy that is presently inflicted with weak consumer demand, and a tentative middle class, such economic incentives are sorely irrational and deserve all the condemnation in the world. Trump’s maiden display of statesmanship has failed miserably to the nth degree. However, is the anti-Trump squad being too premature in its roasting of the President’s public reputation? Or is Mr Trump genuinely ripping apart the long preserved narrative of the American dream? Before we jump to conclusions, let us wait another few months to see whether the US consumers manage to retrieve some of their lost groove.
The writer is an alumnus of the University of Cambridge and an economist. He previously worked as a journalist in London and has also played for Pakistan’s junior cricket team. He can be reached at [email protected]