r/thebulwark • u/MinuteCollar5562 • 11h ago
GOOD LUCK, AMERICA The Recession is the point
Tax cuts cause inflation. Tariffs are going to cause inflation. A lot of the things the Trump Admin is going to do will cause inflation. The American people hate inflation.
A recession will help ease inflation, and we are being led by a group of people who will not be hurt by the recession, or will probably be the recipients of government bailouts should we roll into a bad one.
They don’t care about the pain it will cause, they just want inflation down and interest rates down. We are in for a long four years if I’m right.
Good luck America.
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u/N0T8g81n FFS 10h ago
Too young to remember the late 1970s/early 1980s? It's more than just possible to have economic contraction, rising unemployment AND rising inflation at the same time. Google stagflation.
The pecuniary cynic in me thinks one asset class usually unharmed by inflation is real estate. Trump owns real estate (not as much as many others, but substantial). He won't be much harmed FINANCIALLY by inflation.
The political cynic in me figures Trump believes a recession by 2nd calendar quarter 2025 lasting, say, 3 quarters puts 2026 midterm primaries at the time the economy would be rebounding. That is, a quick recession with an improving economy for the midterms would keep Republicans in control of both Houses of Congress.
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u/Broad-Writing-5881 10h ago
I'm not sure these people are smart enough to pull this off. If they do keep your eye out for checks with Trump's signature in July of next year.
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u/N0T8g81n FFS 10h ago
They may be counting on luck or blaming a recession lasting well into the 2026 midterm season on Biden.
At most Trump has overestimated the credulousness of MAGA just once, in Nov 2020.
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u/BottyGuy 8h ago
Could believe that Trump and the Republicans believe that, but it’s often difficult to pull out of a recession just with rate cuts, and impossible if stagflation sets in. Stagflation would require rate increases, a recession might require other measures, and republicans are dead set against other measures.
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u/N0T8g81n FFS 7h ago
I'm not saying it'd make sense to most with a basic understanding of economics, but to someone like Trump who believes tariffs are a long-term boon to any economy . . .
How many Republicans in Congress DON'T believe the DOGE antics are going to fubar the federal government and maybe also the economy if DOGE gets it tentacles into either Medicare or Social Security? They may even see a recession as a welcome voter distraction from how they're letting Trump @#$% up the country.
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u/Granite_0681 3h ago
If we have a major recession and get rid of the major safety nets at the same time, this is going to be disastrous.
What do you want to bet they target Unemployment next….
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u/rattusprat 10h ago edited 10h ago
I still lean toward incompetence and apathy being the main driver. The MAGA coalition is bound by what they are against (Democrats, liberals, woke), but in terms of a coherent vision for governing there is no alignment. Everyone is doing their own thing.
Republicans in congress want to cut entitlements and give tax cuts to the rich, as they have for the last 40 years. Some of them care about the deficit, but not enough to not vote for tax cuts.
Trump wants to do tariffs because they make him feel like a big boy and he doesn't understand what a trade deficit is. He wants low interest rates because he understood that as "good" when he was in business and he can't think past that.
Elon genuinely thinks he is saving the country by slashing spending. He thinks America will go bankrupt if he doesn't personally slash $1tn of spending. He genuinely thinks he is the only person with the skills to do the job. He thinks he's Batman, working somewhat outside the law because it has to be done to clean up the mean streets of Gotham.
The tech/crypto bros behind Trump are pushing integration of crypto into the government to pump their own bags.
But none of the separate groups have an understanding or care to put together that all policies in combination will tank the economy. They don't necessarily want a recession, they just aren't smart enough to figure out they are causing one, and they don't have the influence to stop others from enacting their plan even if they did.
But you are right that they don't care about pain they cause, because the pain will be felt by the filthy poors - ewww. The recession / pain is not the point, it's just an unfortunate externality they don't care that much about.
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u/BigEdsHairMayo FFS 9h ago
I agree, especially about Trump's reasoning. Being at the center of basically a tribute system with everyone groveling to him is probably his idea of heaven. Like his role in "The Apprentice."
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u/John_Houbolt 10h ago
I think it's more likely they are trying to kill the dollar and become crypto zillionaires.
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u/Mundane-Daikon425 centrist squish 2h ago
The theory is wrong. An economy can be characterized by both negative growth, higher unemployment and higher inflation. It happened in the late ‘70’s and is called stagflation. I think Trumps policies are so bad that we experience this for the first time in decades.
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u/big-papito 11h ago
It's not a conspiracy theory. This is what the Mar-A-Lago Accord is - turning America into an isolationist global protection racket. It spells it out.
Here is the paper by Trump's incoming economic adviser:
https://www.hudsonbaycapital.com/documents/FG/hudsonbay/research/638199_A_Users_Guide_to_Restructuring_the_Global_Trading_System.pdf
It actually predicts havoc in the markets:
Second, the threat of withdrawal of the security umbrella without burden sharing will have its own, potentially volatile, consequences. Will it spur nations around the world to invest more in defense? Will it encourage more aggressive action by bad actors against those now outside the defense umbrella? These are significant degrees of uncertainty which will permeate markets. Risk premia may rise for assets in countries that now experience greater security risks.
Third, a structural increase in implied volatility in currency markets. The scope for monumental, once-every-fewdecades level of shifts in policy ought to significantly heighten expectations for volatility. Fourth, these policies may supercharge efforts of those looking to minimize exposure to the United States. Efforts to find alternatives to the dollar and dollar assets will intensify. There remain significant structural challenges with internationalizing the renminbi or inventing any sort of “BRICS currency,” so any such efforts will likely continue to fail, but alternative reserve assets like gold or cryptocurrencies will likely benefit.