The biggest problem facing the U.S. is not immigration, health care or a trade war.
It is uncertainty.
The inability of business leaders, pension fund managers, foreign government heads, Congress and individuals to count on usual practices and policies has created deep worries.
The stock market is not a reliable measure of all these concerns, but its deep decline reflects that uncertainty. Even its recovery might do little to restore more confidence about the future.
The source of the uncertainty is President Trump. He makes the abrupt changes in policy and disregards others – leaders of Congress, heads of foreign governments, economic chiefs. Decisions are suddenly announced, often via Twitter.
Nowhere is this more evident than in Trump’s approach to the economy. In business, he is accustomed to borrowing money to finance his real estate purchases. He favors low interest for his business interests and has naturally become an advocate of the Federal Reserve keeping interest rates low.
The Fed has gradually raised interest rates from near zero, where they were set during the recession. They remain at historically low levels. But Trump blames falling stock prices on the modest rate increases and wants to fire the Fed chair, his own choice, in the mistaken belief he can change Fed policy.
The law intentionally makes Fed governors independent of political leaders. Until now, no president has ever threatened to fire the Fed chair. Trump’s menace and not the one-quarter-of- one-percent rate increase is a cause of market uncertainty and deep decline.
The partial government shutdown probably has little direct effect. But the president’s insistence that the Democrats help him keep his signature campaign promise to build the Wall on the Mexican border creates uncertainty. He allowed the shutdown when they would not agree to $5 billion for the Wall.
Why the uncertainty? He had previously rejected the Democrats’ proposal of a full $25 billion for the Wall in return for creating a long path to citizenship for the children of illegal immigrants who had been raised in the U.S. The shutdown was caused by uncertainty about just what deal he would accept.
He suddenly announced he would withdraw American troops in Syria. That has thrown the Middle East into turmoil and uncertainty about the future in Syria, because those troops were a check on both ISIS and the Russians. He claimed victory over ISIS, “my only reason for being there during the Trump presidency.”
While he had the right to make the decision, he saw it in personal terms – “my only reason” – and not as a matter of national concern. That decision drove Secretary of Defense Mattis to give notice. More uncertainty.
Then, when the media interpreted Mattis’ resignation letter as a rebuke of Trump, the president abruptly fired him, eliminating the possibility of an orderly transition in this most sensitive position. More uncertainty.
Mattis was the latest in a parade of top Trump appointees to either quit or be fired. Several cabinet agencies now lack confirmed leaders. Trump is looking for his third chief of staff. More uncertainty.
In trade, Trump appropriately took on China, which abuses its economic relationship with the U.S. But he targeted all major American trading partners on the unbelievable grounds that their exports threatened U.S. national security.
His attacks on allies, his failure to consult with them and his support for extreme right wing groups in their countries all create considerable worries in world affairs. He has belittled them, even tossing a couple of pieces of candy to the German Chancellor to show his low regard for her. More uncertainty.
He induced North Korea to suspend nuclear tests and missile launches and declared victory. Meanwhile, the secretive country built more launch facilities and a major nuclear test center. Trump’s declarations of success allowed China and Russia to ignore many of the sanctions on North Korea. In Asia, more danger and uncertainty.
American voters say they want the two parties to cooperate to produce results. The recent criminal justice reform bill proves they can. But the president repeatedly attacks the Democrats in the apparently mistaken belief he can intimidate them into going along with his demands. They won’t. More uncertainty.
Why should the average American care?
Uncertainty threatens the economy. It will discourage investment, resulting in fewer jobs. The worldwide trade war will cause price increases. Government will be increasingly deadlocked. As the stock market falls, pensions will lose value. Risks abroad will increase and the U.S. will have to go it alone.
The only certainty may be the uncertainty Trump creates.
