Trump Take Egg¹

As of February 20 Trump had signed more than 70 executive orders, according to NBC News. While an executive order can’t write a new law, it can instruct federal agencies how to implement existing laws. The sheer volume of executive orders, and the language used to frame the issues addressed have evoked parallels to the disinformation technique of “firehosing,” in which the public is barraged with information from many sources. It is a side-effect of the orders themselves, but there is an element of resilience-targeting as the administration seeks to overwhelm communities and keep them vulnerable.

Meanwhile, the analysts at ABC’s 538 website show Trump’s disapproval increasing nearly 6% since inauguration. Political website DailyKos  reported on five Trump voters who are at least beginning to regret their choice as they themselves are affected by policies they assumed would only affect others.

• A former US Fish and Wildlife Service employee voted for Trump expecting him to improve the economy and strengthen the southern border; he did not expect that so-called DOGE “efficiencies” would cost him and more than a dozen colleagues their forestry jobs.
• A disabled veteran working for FEMA in northern Virginia who voted for Trump learned that he would lose his job because of “performance,” despite his disability, military service, and positive performance reviews. “I recognize there are a lot of cuts that need to be made,” his wife told WTOP news, “but this is not the one that you think will happen to your family.”
• “I thought that someone with [Trump’s] business acumen would have come in with a fine-tooth comb … instead of coming in with a wrecking ball and destroying people’s lives for no reason,” a former Philadelphia IRS employee told the local NBC affiliate. Approximately 400 IRS employees in Philadelphia were laid off on February 20.
• A former USAID employee in Illinois wrote a long letter to his local paper recounting how he voted for Trump, but “what I have experienced, and what thousands of other federal employees are going through, is far from great.” In the letter he seemingly struggles to reconcile his belief that “our country’s spending is out of control” with his unceremonious firing despite having accepted an offer to resign that appeared initially to offer a severance package that did not materialize.
• A MAGA forum poster described his cousin’s daughter’s successful treatment for a malignant brain tumor as part of an NIH-funded clinical trial whose future was called into question by the Trump freeze.

The so-called backlash has elicited a range of responses from Democratic-aligned commentators. Writing in the New York Times, Democratic strategist James Carville called for a “strategic political retreat,” that would “allow the Republicans to crumble beneath their own weight.” Political journalist John Stoehr disagreed, writing that “in the olden days” we might have been justified in expecting the president to change course in response to a decline in popular support, but not at present. “We do not live in a time of conventional politics,” he writes. “Trump is untroubled by public opinion,” says Stoehr, “except when he is,” in which case Trump is not moved to change his policies so as not to hurt people but to “figur[e] out ways, legal and not, to get people to shut up.”

But for Trump – who struggles to project the image of a great businessman – and the Republican party – which boasted 70% of US top business executives among its members in 2022 – it’s the economic news and reactions of investors, business people, and economists that may be the greatest cause for concern. On February 21, the day after the one-month mark of Trump’s second administration, the Dow Jones industrial average lost 700 points, capping the largest weekly drop since October 25, 2024. The declining market indexes appeared to reflect similarly declining consumer sentiment measured by a University of Michigan report issued the same day, which showed a 10% drop since January, reaching the lowest 3-month moving average since April-June of 2023.

A CNN poll published a day earlier showed similar pessimism, largely related to concerns that Trumpian tariffs will lead to higher prices and inflation. The nonprofit Conference Board’s February Consumer Confidence Index declined by 7 points in February – the largest monthly decline since August 2021. Expectations of average 12-month inflation also increased at a level that the Conference Board’s Stephanie Guichard termed a “surge,” reflecting factors such as the price of eggs and expectation of increased inflation, among others. “Most notably,” Guichard observed, “comments on the current Administration and its policies dominated the responses.”

The Wall Street Journal had been voicing skepticism, or at least caution, for some time. A February 10 article cited “conflicting” Trump policies. On the one hand, the so-called “national energy emergency” Trump declared on January 20 empowered his administration to ignore environmental regulations in expediting the approval process for energy projects (conveniently omitting wind and solar power from the definition of energy). But combined with the announced tariffs, deportation plans, and firings of federal employees, the result was what the Journal termed “intense uncertainty.” Ethan Karp, of Cleveland manufacturing management consultants Magnet told the Journal “There is so much turmoil. People don’t know what is going to land. Even though there is potential long term benefit … the immediate things that are happening is just turmoil.”

“Does President Trump understand money?” the Journal editors asked on February 13, replying to their own question that “… the answer would appear to be no.” The immediate stimulus for the WSJ critique was Trump’s social media post in response to reports of rising inflation, in which he called for interest rates to be cut, saying they would go “hand in hand with upcoming tariffs.” “The layers of intellectual confusion are hard to parse,” the WSJ editors wrote, repeating the intro-economics course mantra that rising inflation calls for caution in cutting interest rates. “He has the analysis backwards,” they added.

On February 21, prominent hedge fund CEO Steve Cohen told attendees of the Future Investment Initiative conference that the combination of Trump’s advocacy of tariffs, immigration crackdown, and cost-cutting by so-called DOGE had led him to expect higher inflation and lower consumer spending. “Tariffs cannot be positive, okay? I mean, it’s a tax,” he said, adding that slowing immigration would limit the growth of the labor force compared to the last five years. Similarly Cohen expects DOGE’s touted $2 trillion trimming of federal spending to have a negative effect on the economy.

A study of five decades of economic data from 150 countries published in the Journal of Policy Modeling in 2020 found that “tariff increases are associated with an economically and statistically sizeable and persistent decline in output growth.” The study found that even small tariffs (less than 4%) reduced economic growth, with the effect increasing over time.

But as Edward Alden of the Council on Foreign Relations noted recently, the negative effects are not limited to the economic realm, but include the diplomatic. In his February 2 analysis Alden referred to the “sense of betrayal” that what he labeled “broken trade norms” should be expected to bring, especially in Canada and Mexico. And the use of tariffs as what Alden calls an “all-purpose club” is likely to bring “unprecedented” uncertainty in the global economy.

As reported by the nonpartisan EconoFact organization at Tuft’s Fletcher School, Trump’s 2018 tariffs on Chinese goods “had a net negative effect on manufacturing jobs as well overall U.S. employment.” According to the Federal Reserve Board, the tariffs caused a 1.4% reduction in manufacturing employment. The limited benefit to domestic producers was more than offset by increased costs of using steel, and the effect of retaliatory tariffs. According to Oxford Economics the tariffs resulting in a loss of approximately 245,000 jobs.

Creon Butler, director of the Global Policy and Economics program at UK policy institute Chatham House, warned in early February that the real risk in Trump’s presidency is a “loss of confidence in US governance.” Recapping Trump’s campaign promises to cut taxes, impose tariffs, deport millions of undocumented immigrants, reduce government regulations on commerce and industry, and reform the federal bureaucracy, Butler noted that Trump appeared to be on a path to implement what he had outlined. What remains unclear, Butler suggests, is what Trump “actually wants in each policy area,” and “how he will respond when faced with resistance at home and abroad.” For instance, Trump initially agreed to pause the threatened tariffs on Canada and Mexico (although they are now scheduled to go into effect March 4). With regard to federal expenditures. Butler notes that the areas available for achieving significant savings are quite limited. 80% are “either mandatory or untouchable politically” – social security, Medicare, defense, debt interest, and transfers to states – with the likely result that public debt increases relative to GDP. Butler speculates that deregulation might be an area where Trump could accomplish more of his promised actions, but suggests that states like California and New York might fill in the regulatory gap (i.e. state-level regulations equivalent to discontinued federal rules could become de facto national regulations). As for migration, although many in Trump’s base claim to oppose all immigration, “many of his tech and corporate backers want a ready supply of high-skilled migrants facilitated through the H1-B visa program.”

The most profound effect of Trump’s announced policies, if implemented, in Butler’s view, though, would be what he terms “economic, political, and even military ‘decoupling.’” A possible result, in Butler’s view, might be the creation of “a non-US global trade and investment space where trade rules continue to be respected,” – possibly by linking the EU with the Comprehensive and Progressive Agreement for Trans-Pacific Partnership led by the UK and Japan – and/or financial deregulation excluding the US to insulate non-US markets from US policies.

The economic costs to the US of these developments will grow over time and range from distortions in public policy at home to a wider loss of private-sector confidence in the US economy abroad. They are hard to quantify. But they will likely far exceed the short-term effects of Trump’s economic policies.

¹A meme of economic frustration that appeared on social media site Bluesky.