As a PhD let’s examine your claims…
- World Trade Volume:
“World trade will continue to face strong headwinds in 2019 and 2020 after growing more slowly than expected in 2018 due to rising trade tensions and increased economic uncertainty. WTO economists expect merchandise trade volume growth to fall to 2.6% in 2019 — down from 3.0% in 2018. Trade growth could then rebound to 3.0% in 2020; however, this is dependent on an easing of trade tensions.”
So world trade volume remains healthy. During 2019 there was some decrease in volume (not dollars) due to “trade tensions”, but most of those have resolved themselves and so world trade volume is expected to rebound in 2020.
2. The global weather thing
The truth is both the fires in California and Australia reflect changing land management practices that have increased the likelihood of serious wild fires. Changes seen by environmentalists to be more “natural” are in fact also causes of increased wild fires… for hundreds of years Native Americans used control burning to reduce wild fires in California… now we stopped the practice… until we develop alternative land management methods to minimize wild fires we will be subject to them. Natural disaster from hurricanes on the eastern coast are largely the fault of Federal Insurance that supports coastal housing… before Federal Insurance programs properties lining the coast were largely throwaway disposable beach cottages… Government needs to revisit how its policies are contributing to natural disasters instead of avoiding them…
3. Stock market prices
The market needs to be compared against the risk free government treasury bond rate to really determine if its overvalued. This comparison is called the CAPE ratio on that basis the stock market is a bit rich. But arguably if you took out a dozen fast growing super stocks like Amazon, Facebook, Apple, Google, etc. the remainder does not look so bad.
4. Jobs, automation, and AI
Capitalism is a wonderful thing… our economy has created so many jobs that we now have more job openings than people looking for jobs. Job creation is in overdrive… rather than worrying about jobs for people displaced, we may need to expand immigration quotas in the near term to relieve labor shortages. Even the labor participation rate is up. We do need improve mid career training programs to prepare people for a more dynamic jobs market.
5. Government intervention in markets whether it is health care, energy, financial services, a “new Green Deal, etc. are major economic risks
Whenever the government tries to “top down” manage an economy it adds a layer of risk, but it is hard to blame Trump’s economy for this. I do agree our health care system needs reform and your article suggests one more reason why “Medicare for All” is a bad idea. A far better idea is for the government to try to address the problems we are having in an incremental way by expanding health care access to those that have know a small percentage of the country and offset those higher costs by imposing price ceilings on health care products and services where lack of competition has resulted in outlier returns. Massive government intervention in a major industry can cause investors to flee that industry triggering material reductions in asset values.
6. Consumer debt
Actually is it down a lot as percent of GDP a better measure of consumer debt than the absolute amount. So credit is less overextended than in the past even as interest rates make supporting such debt less of a problem.
Now here is the strange thing, I agree with you that there is a risk of a steep recession or depression in the future, but for very different reasons. Trump has done a great deal to put the economy on a sounder footing.
Democrats are unlikely to get elected arguing that they intend to continue doing what Trump was doing… and so what you have are a host of politicians who believe we need to raise taxes and increase government spending as well as take control over a larger part of the economy.
Central planning has always been a poor method for managing an economy, but it is appealing and so should we reach a point where enough Americans trust the government to run the economy, then we are likely to experience a great recession or depression. Small recessions are natural for healthy economies as they help to promote a better reallocation of societal capital to where it can produce the most good… but steep recessions and depressions are virtually always the result of crashing asset prices brought about by government mucking up the economy.
