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This week in Trumponomics: Trump grounds a troubled jet

Rick Newman
Senior Columnist

The Trump-o-meter this week flirted with a BIGLY reading, the second highest. President Trump asserted needed leadership by grounding Boeing’s 737 Max jet—against the plane maker’s objections—after two fatal crashes in five months. He also overruled a waffling Federal Aviation Administration that looked like it was in Boeing’s pocket.

But Trump undermined his own assertiveness with a silly tweet suggesting travelers should be fearful of modern jets. Trump’s no engineer, and he needlessly added confusion to an already troubling situation. That knocked down his Trump-o-meter reading for the week by one notch, to MEDIOCRE.

Source: Yahoo Finance

Trump only grounded the Max after most advanced nations had beat him to it. So in a way, there was little choice. Still, the U.S. action was a definitive declaration that there’s a problem with the plane and Boeing must fix it pronto. Boeing itself insists, unconvincingly, that the plane is “safe,” even though it also says it plans to “make an already safe aircraft even safer.” This gobbledygook suggests a plane can crash and still be safe. Fliers deserve better.

The Max represents a lot of money to Boeing and to its airline customers. Boeing has more than 5,000 orders for the jet, with 350 already delivered. The Max is its most profitable commercial airliner, with an estimated operating profit of at least $12 million per plane, according to Moody’s. When Trump bragged about securing $15.7 billion in new orders for Boeing jets during his February trip to Vietnam, most of those were Max jets.

Boeing has promised a software update to address the problems, perhaps by the end of March. Yet it may take investigators much longer to determine what the actual problem is. Airlines, including Southwest, American and United, are now filling their Max slots with other planes, or consolidating flights. Whatever fix Boeing comes up with must be approved by the FAA and similar agencies in other countries.

Trump sided with fliers when he grounded the jet, but he disserved them with uninformed commentary. “Airplanes are becoming far too complex to fly,” he tweeted on March 12. “I don’t want Albert Einstein to be my pilot. I want great flying professionals that are allowed to easily and quickly take control of a plane.”

Technology advancements have made profound contributions to the safety of air travel in recent years. There’s a legitimate debate among aviators regarding the right balance of automation and human flying. But if you had a choice between boarding an analog plane from the 1970s or a modern computerized jet, choose the computers.

Trump also reportedly said privately at the White House this week that the 737 “sucked,” apparently preferring the longer 757, which Boeing built from 1981 to 2004. Trump might be referring to the 757’s larger cabin. But airlines love the 737 and especially the Max for economic reasons. The plane can now fly long distances more cheaply than other jets, boosting profits for airlines (and Boeing). Trump’s own brief effort to run an airline ended with a bankruptcy filing in 1992.

Economic news was otherwise light this week, but there were a few warning signs that could flare in the near future. New-home sales unexpectedly dropped 7% in January, and industrial production was disappointing. Many economists think economic growth is slowing, and it might be worse than that. Oxford Economics just raised the odds of a recession during the next six months to 45%, up from 31% in its prior estimate. That’s higher than what most other forecasters predict. But it does seem likely the economy will become more of a challenge for Trump during the second half of his term than it was during the first half.

Confidential tip line: rickjnewman@yahoo.com. Click here to get Rick’s stories by email.

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Rick Newman is the author of four books, including “Rebounders: How Winners Pivot from Setback to Succ