For the third time in just over three months, the Federal Reserve has cut interest rates. In this instance, it's by a quarter percentage point. If you keep up with Donald Trump's dos and don'ts, then you will know he wants interest rates to be very low—if not at zero, or even below zero. He is convinced that anything but the spectacle of growing economy will cost him the presidency in 2020. The boos he faced at the baseball field this Sunday must have made this impression all the more forceful. There is nothing left for him but the economy he inherited. But will it work? Can low interest rates be efficacious? Keeping the 10-year-old expansion going is a matter of do or die.

NPR states that "falling interest rates have contributed to a modest rebound in the housing market and big-ticket consumer purchases. But they've done little so far to boost business investment." Every economic policy that's in play at this moment is concerned with the stock markets. The idea is that if they keep growing, the whole economy will look good. None of these policies have anything to do with long-term consumer-demand investments. This is about supporting the most phantasmagorical confidence imaginable, that of the speculators.

I now want to define what exactly Trumponomics is. We can now see it clearly as we enter the end of year three. If Abenomics is the realization that inflation is not all bad. And Reaganomics is the belief that the richer rich people get, the better the lives of the poor and working classes become. Trumpenomics is: Low to no interest rates, massive injections of Fed money into equity markets, and tax cuts (in short, recession-period policies) must be employed not after but during a period of economic expansion. Now this is very new, and it's bound to end badly for a Joe the Plumber.

It is interesting to note that what is driving the economy at present is not the tech sector or housing. It is, instead, the healthcare sector.

From CNBC:

Health care stood out as the best-performing sector on Tuesday, lifted by Pfizer, Merck and HCA's earnings beats. Consumer staples and real estate stocks also outperformed. However, growth and more cyclical names — tech, communication services and consumer discretionary — have started to show signs of weakness.

Why is this significant? Because the last huge government public investment occurred in the health sector, with President Barack Obama signing the Affordable Care Act on March 23, 2010. That is it. What one must never get gassed about is the type of economy we actually live in. For the past 70 years, it has been state directed (or state interventionist capitalism). This means the majority of actual business investments are promoted and funded not by the market, but by the government. Now, two things pulled the world economy out of the recession at the end of the last decade. One was Chinese concrete (the Communist Party's massive infrastructure investments), and the other was Obamacare (which amounted to considerable investments in health services). The trillions that went into inflating the stock values of insolvent banks did next to nothing for most humans.

But Trump is banking on the inflation of equity markets (the spectacle of growth). The tax cuts of 2017 injected billions into the stock market, in the form of buybacks (more about that in a moment). He has revived quantitative easing (QE—more about that in a moment), and is exploding an already exploded Fed balance sheet (that is for another post).

From Wall Street Journal article, "The Fed Is Buying Treasurys Again. Just Don’t Call It Quantitative Easing":

The Federal Reserve began buying short-term Treasury debt Tuesday at an initial pace of $60 billion a month, but officials say these purchases are nothing like the bond-buying stimulus campaigns unleashed by the central bank between 2008 and 2014 to support the economy.

And now there is the rapid-fire interest rate cuts. Not one of these policies will grow the economy that matters to most Americans. But it will keep equity markets bubbling. For how long? At present, the market can't do it (grow) itself. Goldman Sachs recently warned that "buybacks are 'plummeting,'" and this would end "a big ['market-based'] source of buying power for the market." (Buybacks come down to a corporation, Boeing, using its profits to buy its own shares for the purpose of raising the value of its own shares.)

But here is the problem that these markets will have to finally face sooner or hardly later. The fact that there has not been a major public investment at the scale of Obamacare in nearly a decade means that the growth in the everyday economy will begin to wind down. It also does not help that Obamacare is under furious attack from the right, and so cannot bear as much fruit (in the form of the multiplier effect) as it would if supported by the present administration and the GOP.

Combine this fact (the long absence of government investment in everyday business) with the fact that we are already in the Minsky's ponzi moment (the end of the end game) for the financial markets. (Treasury Secretary Steven Mnuchin now plans, with Jamie "Whale" Dimon's support, to reduce capital requirements for banks—meaning, institutional speculators can make bets on the market with money that does not exist—watch The Big Short to see how all of this ends.) So what do we get? Trumponomics. Post-crash tools used to keep collapsed stock markets inflated in an economy that's still growing. But what happens when the markets finally crash and all of the usual tools to keep bankers in business are exhausted? Recall that when the last crash occurred, interest rates were at 4.25 percent, far from where they are currently heading, zero.