Who Gets the Blame for the Upcoming Recession?
03/12/2025 • Mises Wire • Connor O'Keeffe • CC BY-NC-ND 4.0
Over the weekend, President Trump made headlines for refusing, on two occasions, to rule out the possibility that the US will experience a recession this year. The comments came days after the Atlanta Fed announced it now projects GDP to fall by nearly three percent in the first quarter of this year.
Those developments, paired with the recent stock market decline set off by the market’s reaction to Trump’s tariff plans, have many political opponents of the president joining figures in the establishment media to fearmonger about a looming “Trumpcession.”
It is often tempting to look back at the last few decades of government interventions in the economy and characterize the Washington political establishment as subscribing to some school of economic thought. They might be Keynesians or Monetarists, Chicago School neoliberals or budding believers of Modern Monetary Theory.
In truth, the political establishment has no consistent economic philosophy. They have no single coherent explanation for why things like inflation or recessions occur. And by not committing to a coherent explanation for why we’re sometimes hit by these economic disasters, establishment figures are then able to use whatever possible explanation they find to be most useful at the moment things start to fall apart.
The Great Depression is blamed on Herbert Hoover mindlessly trying to balance the budget in the face of a severe downturn. The Great Recession in 2008, we’re told, happened because of a lack of adequate government regulations in the financial sector. And the covid recession in 2020 occurred because Donald Trump did not crack down hard enough on our liberties to stave off the pandemic nor print and spend enough money to keep the economy going as usual.
None of these accounts come even close to explaining how the entire economy retracted at once. But they do all back up the case for giving the government more money and power, so they come to dominate the official narrative.
It is still too early to tell whether the official metrics will say we’re currently in a recession. But the reaction over the weekend to the possibility of one kicking off revealed the narrative that the political establishment clearly intends to push whenever the recession is officially declared.
They’ll say that everything was going great after Biden came in and “empowered” the federal government to rescue the economy from Trump’s terrible first term. They’ll point to the official measures of economic and job growth that were reported under Biden and celebrate the attainment of a “historically strong economy”—even if, as we were told at the time, the people actually living through it were too dumb to understand how good they had it.
Then, Donald Trump returned and unleashed chaos with heartless DOGE cuts and crippling tariffs. And, in a reckless effort to make his rich friends a little richer, he crashed the entire American economy.
This past weekend showed us that the establishment media is ready to aggressively push this narrative whenever the official recession threshold is breached.
The lesson will again be that the economy crashed because some rogue politicians did some specific things the political establishment doesn’t like. But just as with the establishment’s account of previous recessions, this, too, will be nonsense.
Cutting government programs is, by design, a very difficult thing to do without causing some economic chaos. And tariffs really are economically destructive taxes that are bad for just about everybody in the country. But neither of these can generate the kind of all-encompassing economic slowdown experienced across the entire economy that defines a recession.
There is only one thing that can cause that—artificial credit expansion.
When new loanable funds that are not based on actual savings enter the economy, the entire structure of production is warped in a way that spurs new projects that cannot be finished with available resources and that are out of line with what consumers actually want. Production is boosted beyond what can realistically be accomplished, which necessitates an eventual economy-wide correction. That is a recession.
This is done most effectively and extensively by banking cartels—also known as central banks. It’s a process that benefits the big banks, government officials, and politically-connected businesses at the expense of nearly everyone else in the economy. And it’s a cycle that the American political class has been carrying out for decades through their central bank, the Federal Reserve.
Whenever the next recession hits—assuming it hasn’t actually already been here for years—it will be because of the massive amount of credit expansion that took place since the Great Recession under Obama, Trump, and Biden.
That doesn’t fall neatly into the simplistic partisan blame game the establishment prefers us to stay mired in whenever something bad happens in the economy. But it’s the truth.
Don’t fall for it when the people who’ve been in power for decades try to spin the next recession as a consequence, yet again, of them not yet having enough power.
The above post is shared under the Mises Institute Creative Commons license. HIVE Payout has been declined. Image credit: Original article
I argue the "Biden boom" has been accounting fraud masquerading as economic analysis. Trump deserves were inflationary and short-sighted, but Biden's administration gets all the blame I can muster for profligate spending and economic destruction. When before has the media had to relentlessly remind us how great we have it when we point out we're struggling?
I expect Trump to be treated as the fall guy no matter what happens, because criticism of Trump is based on the fact that he's Trump, and not anything he actually does or deserves, when it comes to social and legacy media outlets.
The rewards earned on this comment will go directly to the people( @blkchn ) sharing the post on Reddit as long as they are registered with @poshtoken. Sign up at https://hiveposh.com. Otherwise, rewards go to the author of the blog post.
I enjoyed reading that, why decline payout?
Because except for the comments at the end, I didn't write it.
Lol, I am a tit and totally didn't get that 🤣
why Downvote me ?
ok,i see ,i just will checking it
You commented as another member of the Bilpcoin spam team. Did you forget which account you were using?
ok,ban it
omg today
No remorse for what you have done, only for getting caught?
This account could have been your pattern for behavior instead of the others becoming a toxic festering wound in our community.
Why?
Gresham's Law
Original Sin of a Closed Market!
Then what does it mean to be an enforcer? Using one's own authority! What if Justin Sun comes back one day?
Are you trying to butter me up now that another of your sock puppets is revealed, Bilpcoin dude? Spewing some random econ terms and citing Justin Sun still isn't engagement, but at least you aren't ranting about Marky.
Nice read!!! Thanks for sharing, and definitely good stuff to think about... BB🐝
!HOPE
!INDEED
All of us. We've allowed deficit spending, and military adventurism for most of the past three decades.
I disagree with blaming the victims. Government is not "us."
We get the Government we deserve.
During the elections I phone-banked, knocked doors and volunteered at early voting.
I and some others formed a coalition and were able to defeat three candidates supported by a somewhat corrupt local PAC. The fourth candidate from that slate is now in prison for felony extortion.
The volunteering process destroyed any illusion I had about participation.
Approximately 0.15% of the 161,495 registered voters in my county were willing to volunteer. People are largely indifferent until they are materially impacted in some way.
In March of 2026 we will have Primaries we will have 34,000 voters +- 1,500 or approximately 32% of registered voters. The magic number for a Republican Candidate to win the nomination for a County-wide race will be approximately 10,000 , for a Democrat Candidate it will be 5,000. Our County skews Democrat.
I'm trying hard to like our incumbent Congressman, I spoke with him at the County Convention this past Thursday. I told our County Chair to pass it our Congressman didn't support some significant spending cuts, I'd do my best to make him spend several extra $100,000 in his Primary. I don't know if I could beat him without an incredibly talented candidate but, I can make it cost.
I have the list and addresses of voters who participated in the 2024 Primary in our County, this is about 90% to 92% predicative of who will vote in the 2026 Primary. My goal will be to knock on 2,000 doors.
This is what it takes to shift politics. Focused work and some understanding of the local mechanics.
I want a good Government, first at the local level and then expanding outwards to the extent it can be influence. I'm willing to work for it.
"Good government" is an oxymoron like "benevolent mafia." There is no representation in either form of organized crime, but at least the latter is honest about its intent to be racketeers and extortionists. Society came before the State, and real progress happens outside the sphere of politics.
Coming from a small rural area, I appreciate this sentiment directly. I am old enough to recall a time when we came together and got things done.
Political engagement is actually a start to that. People have to be reconditioned to come together and do things again. These habits have been lost. It still exists in small Churches, and other domains of volunteerism, but volunteerism as a whole has substantially declined.
Self-agency has declined. Most of our neighbors are captured by devices and easy entertainment. Something has to bridge that gap.
I agree on building community. However, partisan politics inevitably drives wedges as people vie for power in a zero-sum game. There's a reason divisiveness escalates in each election cycle.
That's the problem, but if they are personally affected, then they are also easy victims for demagogues and populists like Trump and Musk.
Is it really that simple?
The goverment is and was voted by the people. If not, how became Trump president?
What percentage of the total population voted for Trump? How does an election confer legitimate authority even if he actually won a majority of the public as a whole? I know we're taught it does, but it's just the bandwagon fallacy and a false choice fallacy claiming authority over strangers no one can give.
USA dominated the world for a century, but the world is changing. Do Americans really believe it's better to go their way without friendly states on the side?
Trump is breaking with many countries like Canada, Mexico, Europe, ... Does he or the USA really think they are better off without these allies?