I don't think anyone foresaw that this would be how it happens, but I think we all knew a recession would arrive at some point during the Trump era.
The Trump regime is still engaging in Happy Talk and Treasury Secretary Steve Mnuchin is still saying we won't see a recession, but the world's second largest investment bank, Goldman Sachs, is projecting that the economy will shrink by 5 percent during the second quarter of the year.
The world’s largest economy will shrink 5% in the second quarter after zero gross domestic product growth in the first three months of the year, the firm’s economists wrote in a note Sunday. They cut their full-year forecast to 0.4% growth from 1.2% on expectations for growth of 3% and 4% in the third and fourth quarters and strong gains in early 2021.
“The uncertainty around all of these numbers is much greater than normal,” the Goldman economists wrote. Consumers and businesses will continue to cut travel, entertainment, and restaurant spending, while supply chain disruptions and tightening in financial conditions will further dent growth, they said.
The idea that the economy will grow by 3 and 4 percent respectively at the end of the year seems dubious to me, but I digress.
Some people and especially Trump himself will probably say this is a 'virus recession,' not a 'Trump recession,' and that everything was fine until the virus arrived, but it was Trump's response to the virus that led us to this point. And Trump did not just fail to adequately respond to the virus, he tried to cover it up by hiding infections and telling the public there was nothing to see. Trump has done almost everything a government official could do to make matters worse.
Moreover, Trump severely weakened the underlying structure of the economy with a trade war that began in 2018 and is actually still ongoing today. Even now, as the economy grinds to a halt, Trump's tariffs on about $400 billion in foreign goods are on the books. Lifting those tariffs now may not make a significant difference, but they're not helping, either. Lifting the tariffs may be essential to restarting the economy when this is over, but there's no sign that Trump is considering that. At least not yet.
The market dropped by over 2,200 points this morning which triggered a brief, automatic halt to trading.