It’s not a question of if, it’s a question of when. It’s not like economists have somehow solved the boom-bust cycle. If history is any guide, the longer it takes for the next recession, the deeper and longer it will be. Trump has been pouring sugar on the economy in the form of tax cuts and massive deregulation in the desperate hope of keeping the recession away for the next 15 months.
Worse, most of the tools for getting out of a recession are being used up. Trump is bullying the Fed to lower interest rates and he signed a massive spending bill with an assist from Democrats. With the deficit so high already, further stimulus will be very difficult.
The sooner the recession happens, the softer the landing will be. With the yield curve inverting today, now is the time for Democrats to pounce. Every Democratic from candidates for president to paid pundits on television should repeat this phrase over and over again: “A recession is coming!”.
This will do three things:
1) It takes the luster off of Trump’s economic argument. He won the 2016 election largely by convincing people that the economy was bad even though it was good. It’s amazing how much Republicans have controlled the narrative on the economy. In 2016, they had Hillary Clinton actually saying that things weren’t that great in the presidential debate, and right after the election, every pundit on television was talking about how great the economy was and how Trump should get credit for it.
2) It inoculates the next Democratic president when the recession finally hits. This is a Trump recession. He caused it. Republicans made this. Only Democrats can solve the mess they made (again).
3) The more people know about the upcoming recession, the sooner it will hit. Decreased confidence => decreased demand => higher unemployment => decreased confidence. It’s better for everyone if it hits in 9 months and not 18 months.
I’m not saying that I like the idea of a lot of people out of work, but a softer landing will help a lot more people in the long run.
So keep repeating it until it becomes the CW everywhere:
A RECESSION IS COMING!
A RECESSION IS COMING!
A RECESSION IS COMING!