"What Will Come From The Current Recession?"
by John Wilder
"Last week I let on that I thought a recession was coming. I mean, I always think a recession is coming, so that was no big surprise, but it looks like from preliminary data that the economy is actually contracting this quarter, so, if we match it with one more quarter of contraction that’s the textbook definition of a recession. Or maybe the economy is having a baby. I slept through that part of health class.
It is a long-used trick of sitting presidents to treat the economy like a 1980s high school kegger in order to get re-elected. The plan is generally simple: lower interest rates, make great big troughs of money available, and, bada-bing, the economy is bada-booming on election day and the cheerleaders are doing keg stands.
Nixon mastered this with his re-election bid in 1972. Well, add the hangover from Nixon’s economic Everclear™ to the crude oil embargo (thanks, Israel) and the result was the miasma of suck that was the 1970s economy – stagflation. Every president has done some variation of this act since then, with varying degrees of success, but since 2000 or so, each president has tried to avoid all of the consequences of the Boozing. How? Boozing some more. I’m guessing that one can avoid a hangover by staying drunk all the time, though I don’t have personal experience in attempting that strategy. Although it is probably more enjoyable than a hangover, there are always consequences to replacing all of your blood with ethanol.
There is a difference with this current economic hangover that we’re working on because, first, we’ve been drinking soooooo long. Like I said, this has been going on since at least 2000. So, there’s that. But that’s not the only thing impacting the economy right now.Another major factor is Trump. I think, like many people, Trump sees the size of the national debt and knows that this can’t go on. He’s also a guy who has nothing at all to lose. He can shoot the Moon and try to go for all of it. He’s doing exactly that? Tariffs? As I’ve written before, when the United States had tariffs, we were a strong economy with manufacturing. Post WW2, when we went away from tariffs to help the rest of the world rebuild out of the rubble? Not so much.
Trump’s America also (so far) is an America that wants peace. For decades we’ve been shadowboxing against Russia, which is like Hulk Hogan™ attempting to defeat a room full of kittens. I mean, jeez, Hulk®, their eyes aren’t even open yet. Russia is not a threat to the United States. Except for the nukes.
Others want war, though. The neocons and people like Victoria Zoolander want war the in the Ukraine, probably because Russia gave them a wedgie in the 1980s or because they have Raytheon© stock. I saw one Canadian tweet, “Well played, Americans, look at all of the billions of dollars in weapons you won’t get to sell."
To be clear, I’m all in favor of weapons, just ask The Mrs. when I make goo-goo eyes at a .50 cal. I think every father should be given their choice of an M2 or an M60. But to try to mock the United States for not getting profits on weapons that are killing people, right now. That’s...disturbing.
Also as a factor, in Trump’s America government is likely to be D.O.G.E.’d into shrinking for the first time since we demobilized from World War II. When that happened, we transitioned more-or-less seamlessly into the economic boom of the 1950s, but it didn’t hurt that the rest of the world was like Sergeant Hulka: “All blown up, sir
This shrinking government sector will take the heat off of inflation in many things, but tariffs will raise prices. Where it ends up is uncertainty. Who doesn’t like uncertainty? Wall Street®.
The final big factor in this recession is that the insiders who have been putting the Bacardi 151™ into the punch bowl for all these decades don’t want to help Trump. That’s probably a good thing. The more government meddling into the economy, the longer it normally takes to shake itself back into order. I want the recession to be:
• Short.
• Sharp.• Cleansing.
Like hangovers, recessions are painful. They can wreck lives. But they are required to clean out the economy from time to time. And the economy hasn’t been cleaned out in forever. Some areas where it really does need a bit of sprucing up:
• Government.• Banks.
• Real Estate.
• Manufacturing.
• Education.
These spring cleanings will be painful. A lot of people in these industries are out there doing the important work of going to Zoom™ meetings and making PowerPoints©, rather than engaging in useless tasks like growing and making food, or fixing potholes, or picking up the trash.
So, yes, this is probably a recession coming. The Government-Media-Education complex will certainly try to blame Trump, just as they tried to blame him on day two that he hadn’t yet fixed all of Biden’s booby traps. To be clear, Trump will be partially at fault, but if the result is a true cleansing of the economy? It will be worth it. Now, where’s that black coffee?"
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