Today’s column veers dangerously into “I told you so” territory. I take neither pleasure nor credit for recognizing that a once-in-a-generation opportunity is slipping away.
In February, I warned that President Donald Trump was repeating his predecessor’s rookie mistakes. In March, I noted that the odds of passing important economic legislation had fallen meaningfully. This missive offers the most dire warning of all, with significant ramifications for equity markets.
Let's begin with the observation that the long-awaited “pivot towards being presidential” hasn't arrived, and by all indications never will. Those of us who harbored hopes for a comprehensive corporate tax reform, for repatriation of trillions of overseas dollars, for an infrastructure plan, and perhaps even for a lowered personal income tax rate, are coming to recognize the folly of our wishful thinking. That window of opportunity now looks like casements in South Florida during hurricane season.
The good news is that the global economy keeps expanding as corporate profits rise and the post-credit-crisis recovery continues apace. Left to its own devices, even as the Federal Reserve normalizes rates, the economy has the potential to grow for several more years before its next cyclical stumble.
The bad news is that the self-inflicted wounds of the most undisciplined presidency in history are increasingly likely to blow its chances of passing any of the aforementioned economic stimulus measures. The trifecta of tax reform, repatriation and infrastructure investment could put the U.S. on very strong footing for the next several decades. Such was the legacy of Ronald Reagan, who oversaw a similar “once in a generation” economic boost that resonated for the next 30 years.
Trump is no Reagan. The current president started with a generational opportunity, in the form of a GOP sweep of the White House and Congress. On November 9, I placed the odds of passing a robust economic legislative agenda at 96 percent. The day Trump took office, cracks in my optimism appeared. By March, I had lowered the odds to a still healthy 75 percent. Now I'm thinking 25 percent, and even that might be optimistic.
Let the weight of that missed opportunity sink in for a minute.
What's astonishing is that every misstep has been an unforced error. The president has served every ball into the net, blown every opportunity, and never encountered a situation that he couldn't make worse. It is incredibly frustrating to witness this sort of gross incompetency.
If only Trump was merely repeating Obama's rookie mistakes. What we have seen since then is much, much worse. Inviting an FBI investigation -- via Twitter! -- that has brought damning testimony from one former FBI chief and a special investigation headed by another. Alienating allies on Capitol Hill for petty reasons. His staffers never know who will be thrown under the bus next. Antagonizing the intelligence community and the entire press corps save Fox News (and even that shows signs of cracking). Demonstrating zero comprehension of the gravitas of the office.
The president is becoming radioactive. He is having problems hiring outside counsel: four top law firms have reportedly turned him down. Resignations are mounting. Diplomats are revolting. Hundreds of key positions have gone unfilled as people increasingly perceive working for Trump as a career killer.