It sure looks like it’s possible
Business is pulling back on capital expenditures because Donald Trump has created the most unstable economy (unstable world!) that anyone can remember with his capricious, decision making and Elon Musk’s chainsaw. Nobody can predict anything but chaos going forward and business is betting that taking any risk right now isn’t worth it. I don’t blame them.
Economist Mark Zandi told NY Magazine’s Benjamin Hart that he has raised his expectation of a recession this year from 5% to 35% based upon Trump’s actions on tariffs, DOGE and all the chaos:
Despite all of this uncertainty, the recent data on inflation and unemployment is pretty solid. I was reading Justin Wolfers’s arguments on why recession fears may be overblown. He wrote that “the hard numbers tell us that the economy is in very good shape.” Do you agree? And do you expect that to last in the next couple of months? Because obviously we’re just beginning to understand the effects of all these haphazard policies.
The economy came into the year performing exceptionally and growing strongly. GDP last year was almost 3 percent, and growth was almost 3 percent. That’s a really good year. We created 2 million jobs. That’s a lot of jobs. Unemployment was 4 percent across every demographic. That’s very low. And it’s been there now for three years, which is just extraordinary. We have our problems, but the top-line performance of the economy arguably couldn’t be better coming into the year, so it would take a lot to diminish and derail it. But that’s what’s happening.I can’t think of another example like this of somebody coming in and just single-handedly creating such a bad economic situation.
Yeah, recession by design. It will take a lot to push the economy off the rails, but if the president follows through on all the tariffs he’s discussed and articulated, most importantly the reciprocal tariffs, then holds them there — not on again, off again, but says, “Okay, here are the tariffs and we’re sticking to them” — other countries will retaliate. They already are. Once they realize that these tariffs are going to be around for a while, they’re going to respond in kind. Forget about all the other economic policies and everything else going on, that would be enough to push the economy into recession later this year.
I will be shocked if he pulls back the tariffs, although anything is possible. He believes in them like a religion and thinks they will magically force all manufacturing to immediately move to America and basically end trade altogether. It’s stupid and simplistic but that’s what he thinks. With the way his dementia is progressing into even more grandiose delusions, I don’t think reality is going to have much influence on him.
It was nice to hear someone say this:
Do you lay any of the blame for this current situation on Joe Biden’s policies? Or is this all sort of self-inflicted, this new uncertainty?
This is all self-inflicted. Again, the economy had its issues. There are always issues. But coming into the year, it was performing exceptionally well. It was far and away the strongest economy on the planet.The envy of the world.
The envy of the world. So it’s hard — impossible in my mind — to lay any of this at the feet of President Biden.
And yet, new polling shows that views of Biden are, as Philip Bump wryly pointed out on BlueSky, “just a tad better than Adolph Hitler.” Sadly, that’s not much of an exaggeration.