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Odds of U.S. Economic Recession Increase; Trump’s Trade War to Blame

The U.S. economy seems well and truly on its way to sink into recession in 2020, making Donald Trump the first president since Jimmy Carter to face this re-election killing outcome.

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Arthur J. Villasanta – Fourth Estate Contributor

Washington, DC, United States (4E) – The U.S. economy seems well and truly on its way to sink into recession in 2020, making Donald Trump the first president since Jimmy Carter to face this re-election killing outcome.

Economists project growth to slow progressively from 2019 onwards as fiscal stimulus from lower taxes and higher spending wanes. Many predict the economy will fall into recession by 2020.

“A strong dollar, weaker growth abroad, mounting corporate debt, a slowdown in housing and the ongoing havoc that tariffs are wreaking on global supply chains are each taking a toll,” said Diane Swonk, chief economist for Grant Thornton LLP. “No one knows for sure which straw will break the camel’s back, only that they are piling up.”

She’s accelerated to the first half of 2020 her previous estimate for a recession. She earlier predicted this for the second half.

A previous and similarly gloomy forecast in October saw the National Association for Business Economics (NABE) report that two-thirds of forecasters it surveyed expect a recession by the end of Trump’s re-election year.

That outcome will represent a historically rare event – and a dangerous, if not fatal one, for Trump’s chances for re-election.

Economists and historians alike agree that an economic recession usually presages the defeat of an incumbent president. They pointed out that Dwight Eisenhower, Richard Nixon, Ronald Reagan and George W. Bush all saw recessions begin in the first year of their tenures. These recessions, however, ended by the close of their second year in office. Each was re-elected.

It will be different for Trump, however. His fate should parallel Jimmy Carter, the last president weighted down with a recession as he sought a second term. The results were disastrous for Carter and his Democratic Party.

Carter lost in a landslide to Ronald Reagan, who won 44 of 50 states. Republicans have since derided Carter as a symbol of economic weakness. That symbol will now be passed on to Trump.

Trump could avoid a recession, however. But his trade war with the rest of the world and its harsh tariffs are stoking business uncertainty at a time when the economy is experiencing strong growth.

A new survey from NABE this week revealed three-fourths of forecasters said uncertainty tilts toward downside risks. The group also projects 2.7 percent growth in 2019.

NABE survey head Gregory Daco of Oxford Economics estimates the odds of recession by 2020 at 35 percent.

Trump faces two massive downsides that limit his chances of forestalling the inevitable recession: his persistently low approval rating and the upcoming report from Special Counsel Robert Mueller.

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Politics

North Korea Threatens to Cancel Denuclearization Talks over Latest Sanctions

North Korea angrily blasted the latest United States sanctions, saying this move by the Trump administration could “block the path to denuclearization on the Korean peninsula forever.”

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Arthur J. Villasanta – Fourth Estate Contributor

Pyongyang, North Korea (4E) – North Korea angrily blasted the latest United States sanctions, saying this move by the Trump administration could “block the path to denuclearization on the Korean peninsula forever.”

North Korea denounced the latest U.S. sanctions, which Washington imposed on three top Noorth Korean officials for serious human rights abuses and censorship. It expressed “shock and indignation” at the new U.S. sanctions while accusing Trump of being “bent on bringing… relations back to the status of last year which was marked by exchanges of fire.”

Pyongyang noted Trump’s policy of “maximum pressure” will be his “greatest miscalculation.”It urged Trump to return to the confidence building that was hoped for following the summit in Singapore last June between Trump and Kim Jong-un.

Washington said it imposed the sanctions after a U.S. Department of State report revealed human rights abuses committed by the men. The U.S. Department of Treasury named those sanctioned as Ryong Hae Choe, an aide close to Kim, who leads the Workers’ Party of Korea Organization and Guidance Department. Also sanctioned was State Security Minister Kyong Thaek Jong sand Propaganda and Agitation Department head Kwang Ho Pak.

The sanctions freeze any assets the three North Koreans might have under U.S. jurisdiction. It also generally prevents them from making transactions with anyone in the United States. The sanctions were announced as the State Department released a report on North Korean human rights and other abuses.

The State Department report said human rights abuses in North Korea “remain among the worst in the world and include extrajudicial killings, forced labor, torture, prolonged arbitrary detention, rape, forced abortions, and other sexual violence.

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Chris Matthews Predicts Trump Might Resign “in the Coming Weeks”

Liberal pundit Chris Matthews, who hosts the talk show, “Hardball with Chris Matthews” on MSNBC, told his TV audience about his hunch Donald Trump might resign in the coming weeks as part of a deal with Special Counsel Robert Mueller.

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Arthur J. Villasanta – Fourth Estate Contributor

New York, NY, United States (4E) – Liberal pundit Chris Matthews, who hosts the talk show, “Hardball with Chris Matthews” on MSNBC, told his TV audience about his hunch Donald Trump might resign in the coming weeks as part of a deal with Special Counsel Robert Mueller.

Matthews also said Donald Trump Jr. and Ivanka Trump could be the “next dominoes to fall” in the Mueller investigation. Trump’s children might face prosecution and possible prison time for their roles related to Russian meddling in the 2016 presidential elections.

“But what if the prosecutor were to offer the president an alternative,” asked Matthews. “What if he were to say he would let the children walk if the old man does the same? That would mean giving up the presidency in exchange for acquittals all around — not just for himself, but for all his kids.”

He said Trump might have to emulate former Vice President Spiro Agnew, who resigned in 1973 as part of a deal with prosecutors to avoid prison time in a tax evasion case.

“Leverage the office while you still have it,” said Matthews in a piece of advice to Trump.

“So let’s watch the probable events of the coming weeks bring all this to a breaking point,” he said. “It is going to be historic.”

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US Senate Passes Criminal Justice Reform

The U.S. Senate on Tuesday overwhelmingly approved legislation to decrease America’s substantial prison population by lowering some mandatory federal sentences, giving inmates added opportunities to earn reductions in jail time, and encouraging prisoners to better themselves so they are less likely to return to crime upon release.

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Washington, DC, United States (VOA) – The U.S. Senate on Tuesday overwhelmingly approved legislation to decrease America’s substantial prison population by lowering some mandatory federal sentences, giving inmates added opportunities to earn reductions in jail time, and encouraging prisoners to better themselves so they are less likely to return to crime upon release.

Passing 87-12, the First Step Act was hailed by proponents as a long-overdue retooling of the federal criminal justice system, an effort that drew resounding support from both Republican and Democratic lawmakers as well as President Donald Trump.

“Congratulations to the Senate on the bipartisan passing of a historic Criminal Justice Reform Bill,” Trump tweeted shortly after the vote. “I look forward to signing this into law!”

“The bill makes smart changes to our criminal justice system in ways that will make it fairer, more humane, and more just,” Senate Democratic Leader Chuck Schumer of New York said.

“This legislation is proof that we can be tough on crime and more compassionate to those who deserve a second chance,” Mississippi Republican Roger Wicker said in a statement.

The bill retroactively ends the discrepancy in federal sentences for drug offenses involving crack and the powder form of cocaine, which would reduce jail time for thousands of prisoners convicted of crack offenses.

The legislation also reduces some mandatory sentences, gives federal judges more flexibility to make exceptions to mandatory prison terms, and allow inmates to earn greater sentence reductions through good behavior and vocational training.

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