March 28, 2017

Recession ahead?

Now, first let me caveat that the Peterson Institute is largely "Hooverite" in its stance on fiscal issues. Nonetheless, it's nice to see that someone like Adam Posen agrees with me that a recession is likely by the time of the 2018 midterm elections.

He's saying so for the same basic reasons I have — bubblish growth, which was already starting to be the case the last two years of the Obama Administration, will continue for another year plus before a normal business correction takes place.

But, will it be "normal"? After all, none of the Obama Administration's "recovery" trickled down (I see what I did there, neoliberal Democrats, with your neoliberal president who said he loved Reagan) below the top 5 percent of Americans and a fair amount of that stayed with the top 1 percent. "Heterodox" economist Michael Hudson, in this long piece, discusses this rentier recovery. (And much more.)

Can the lower 95-99 percent stand more of a crunch? Will they have that bad of a crunch, less than in past recessions, or worse than past recessions, precisely because of the uneven recovery after the Great Recession even by recent standards.

That said, Republicans, including Donald Trump, his populist hand-waving aside, tilt very much 1 percent, and national-level neolib Democrats pretty much do.

But, as with the failed Ryancare / Trumpcare, before at least Jan. 3, 2019, this recession will be entirely a GOP baby. And, yes, they'll force the 95-99 percent to eat a shit sandwich. That includes YOU, TrumpTrain riders.

In a sense, stepping back inside the duopoly's framework, it will be "nice" to see the GOP deal with a recession on its own watch.

That said, other than head fakes to the 95-99 percent for electoral purposes on Nov. 6, 2018, Democrats won't try to fight the next recession with much more than a "kinder, gentler shit sandwich." (I see what I did there, even if Obama didn't offer express admiration for Poppy Bush.)

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