Economists are starting to get pretty worried that the economy is heading for a recession. Paul Krugman does a good job of explaining why.
[A]n “inverted yield curve” — when interest rates on short-term bonds are higher than on long-term bonds — predicted six of the last six recessions. And a plunge in long-term yields, which are now less than half what they were last fall, has inverted the yield curve once again…
He goes on to point out that the short-term “sugar high” of tax cuts aimed at the wealthy has dissipated and, as most of us predicted, “the promised boom in business investment never materialized.” In addition, “the realization that [Trump] really is a Tariff Man is having a serious dampening effect on business spending, partly because nobody knows just how far he’ll go.” In other words, “the smart money thinks Trumponomics is a flop.”
But Catherine Rampell gives us the really bad news.
If things go south, this administration doesn’t have a plan. It never had a plan. And it doesn’t have competent personnel in place to come up with a plan.
Anyone who has been watching Trump over these last three years knows that he doesn’t do “plans.” Instead, when challenges arise, he goes to the old playbook of “lie, distract, and blame.” If the economy actually goes into recession, the president has already teed up a few possibilities for his finger-pointing. One of them is the guy he made chair of the Federal Reserve.
..Spread is way too much as other countries say THANK YOU to clueless Jay Powell and the Federal Reserve. Germany, and many others, are playing the game! CRAZY INVERTED YIELD CURVE! We should easily be reaping big Rewards & Gains, but the Fed is holding us back. We will Win!
— Donald J. Trump (@realDonaldTrump) August 14, 2019
Just in case that doesn’t do the trick, Trump is preparing to point the finger at one of his other favorite targets.
The Fake News Media is doing everything they can to crash the economy because they think that will be bad for me and my re-election. The problem they have is that the economy is way too strong and we will soon be winning big on Trade, and everyone knows that, including China!
— Donald J. Trump (@realDonaldTrump) August 15, 2019
You can rest assured that it won’t be long before the president starts blaming Democrats. Conservative columnist John Podhoretz provided him with a way to do that.
Democrats and liberals now find themselves in the uncomfortable position of secretly wishing the recession would come as quickly as possible so that the American public might blame President Trump for it and kick him out of office.
I expect that we’ll be hearing a lot more of that kind of thing in the coming days because it is how Republicans would respond if the shoe were on the other foot. In other words, they’re projecting. Need I remind you that, in the heart of the Great Recession when we were losing 800,000 jobs a month, Mitch McConnell decided that the best response would be to play political power games and obstruct anything Democrats attempted to do to solve the problem. So when Americans are struggling economically, the standard GOP response has been to play politics with the situation.
Rather than wishing for a recession, Democrats have been trying to sound the alarm bells about the likely effects of Trump’s policies. By now we should have learned that “trickle-down” economics is a scam and that trade wars aren’t “good and easy to win.” So if the economy goes into recession, we’re likely to hear some “I told you so’s” from the left because they’ve been telling us so for a long time. That isn’t a matter of wishing for a recession, but simply noting the facts.
When it comes to facts, here are a few from the New Democratic Network.
3/Median household income has risen by a combined $10,220 under Clinton and Obama, and has actually fallen by a net $3,238 under both Bushes and Trump. pic.twitter.com/dDaLnpN6GN
— NDN (@NDN_NPI) August 15, 2019
Republican economic policies don’t work, which is why Republicans have been reduced to playing political games with the American people in the name of maintaining power. While Democrats aren’t immune to playing politics, they have a record to demonstrate that their policies actually work. To ignore those facts and suggest that “both sides do it” is a lie that promotes finger-pointing, while avoiding a discussion about solutions.