In politics, there is an R-word that every political party that controls the White House fears.
The word is recession.
The last three times Democrats have taken back the presidency, the country has faced an economic crisis. Joe Biden won in 2020 during COVID. Barack Obama won in 2008 during the Great Recession, and Bill Clinton, whose entire campaign was based on the economy, became president in 1992 on the back of a George HW Bush recession.
After taking back power and returning to the Oval Office, Donald Trump embarked on a series of policies that, if he didn’t know better, he might assume were designed to cause a recession.
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Trump has raised prices through wars and tariffs while cutting taxes on the wealthy. A U.S. economy that was fragile took a hit from Trump, and the result is that the United States is more likely to enter a recession.
If oil prices remain high for several more weeks, Mark Zandi, chief economist at Moody’s, predicts that the risk of a recession in the next 12 months is likely to exceed 50%. Economist Mohamed El-Erian raised his forecast of a recession from 25% to 35%, citing possible spillovers from the Iran war, such as an inflationary spiral driven by oil prices.
To stabilize global crude oil prices, trade in the Strait of Hormuz must be resumed. Yet the US economy is resilient; In the past 17 years, the country has only been in recession once, for just two months during the pandemic.
There is a disconnect between the numbers that politicians and economists look at and the reality of how millions of people experience life right now.
Job growth has essentially come to a standstill. Prices have risen. People lose their jobs. Wage increases are not keeping pace with costs, and millions of people have lost or are losing their health care.
The one thing people watching the economy from 10,000 feet miss is that it’s not the “vibes” that make people feel bad about the economy. People feel bad about the economy because the economy is bad for them.
The recession is already here. It’s only a matter of time before the numbers catch up to what people looking for a job, buying food, trying to pay their bills or paying for health insurance already know.
Do you think the country is already in recession? Share your thoughts in the comments below.
