Recession by Someday

"Thou shalt not bear false witness against thy neighbor."

Lies beget other lies, and with them come anger and division.  That's what has been happening ever since Donald Trump was elected: false witness against the president.  The latest is the charge that Trump's policies will bring economic ruin to the country.  He's setting us up for economic Armageddon worse than the Great Depression and all that preceded and followed it.  Hard to believe that one man could cause such havoc, but that's the Left's contention.

There was talk during the 2016 campaign of an economic meltdown should Trump be elected, but we can dismiss that as political chatter.  The really nasty stuff came after Trump entered office.  Even well respected economists such as Yale's Robert Schiller seemed to join in.  Schiller told CNBC in March that there was a "greater than average chance of a recession in the next eighteen months."  That would put the recession just ahead of the 2020 presidential election.  How convenient.

To his credit, Professor Schiller is more circumspect than most economic commentators on the Left.  Everyone from Joseph Stiglitz in the New York Times to Shane Croucher at Newsweek and Joe Scarborough at MSNBC has been breathlessly awaiting a recession, fearful at the same time that it won't happen in time.  Croucher quoted two bearish economists, one of whom predicted a 40% chance of recession in 2020, before turning to Janet Yellen, former chair of the Federal Reserve, who concluded that "the odds have clearly risen" for a recession, though one may not be imminent.  Don't get your hopes up, Newsweek.

On Aug. 19, MSNBC's Morning Joe reported that "signs of a possible recession" were worrying the president (adding the non sequitur that "some of the things the president has said are racist").  Mika Brzezinski and Joe Scarborough quoted the AP, the New York Times, and other familiar sources on the Left, interspersing their gloomy economic forecasts with more charges of racism.

From what the Left has to say, you'd think the economy had already collapsed.  It's hard to reconcile that view with what's happening in the real economy.  Retail sales are booming, restaurants are crowded with diners, and services are so much in demand that providers are stretched.  Walmart is predicting a strong Christmas sales season.  Seven million job positions are unfilled for lack of workers.

According to the American Institute for Economic Research, economic growth in the U.S. "rebounded sharply in the second quarter," rising at 4.1%, even as consumer prices slowed.  That, by any measure, is an indication of a booming economy.  AIER concludes that "the very solid report suggests the U. S. economic expansion remains healthy."  Although residential housing fell slightly, overall business and residential investment grew by 5.4% — hardly the sign of an imminent downturn.  Surprisingly, perhaps, exports grew by 9.3% despite the impression that Trump's tariff policy has restricted trade.  AIER sees "continued economic expansion in the months and quarters ahead."  The chances of a recession before November 2020 continue to decline.

Still, liberals can't pass up the opportunity to bear false witness.  No recession in 2017, 2018, or 2019 — there's always 2020...or 2021.  It's obvious that liberals are eager for a recession or worse — anything to prevent Trump's re-election.

Something on the magnitude of the Great Depression would be especially helpful.  After all, it wouldn't harm those tenured academics at Harvard and Yale, or those high up in the media and the political elite.  They always land on their feet.  It's the ordinary American who would suffer, but the Left shows no interest in extending the Trump bonanza that has benefited American workers for the past two and a half years.  They're deplorables, anyway.  They deserve to be hunted for sport.

The problem is that the economy just keeps getting better and better, despite the necessity of forcing China into a fair trade deal and Pelosi's foot-dragging on the USMCA trade deal already agreed to, one that would benefit American workers across the economy.  The Left has launched a full-out media assault intended to talk down business and consumer confidence and bring about a recession that otherwise would not happen. 

Now it appears that a recession before the election is less and less likely.  President Trump is probably going to be able to run on full employment, higher wages, and an expanding economy.  But can he promise there won't be a recession sometime in 2021 or at any time in his second term?  As ludicrous as it sounds, that is the new liberal talking point.  The Trump recession that liberals have been predicting ever since the summer of 2016 has now been deferred until after 2020, and Trump is supposed to take responsibility for it.

According to recent polling by the National Association of Business Economics, there is some confidence among economists surveyed that a recession will arrive "by the end of 2021."  Just a few months ago, it was "by the end of 2020."  Which is it?  Or is it 2024 or 2028?  The "dismal science" seems even more dismal, and less of a science, when applied to the Trump presidency.         

Economists have cited a number of factors supporting their prediction of an impending recession, among them the dreaded inversion of the yield curve.  What's not discussed is the fact that the recent yield curve inversion is minimal and not sustained — along with the fact that the average lag time between inversions and recessions, should they occur, is 22 months. 

America has never experienced a significant economic pullback without a decline in employment, and yet employment figures just keep getting better and better.  What with 7 million jobs going begging, wages are rising at a faster pace than at any time in a decade.

The truth is that there is no way to predict the start of an economic recession.  A recession is coming, someday, but no one can say exactly when — especially those who allow their political views to interfere with their judgment.  Another word for that kind of economic forecasting is false witness, and false witness is not a very flattering quality, not even for a liberal.

Jeffrey Folks is the author of many books and articles on American culture including Heartland of the Imagination (2011).

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