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The Crash is coming; how big is not clear, but big. Soon. Keep your calendar clear for early summer [1]

['This Content Is Not Subject To Review Daily Kos Staff Prior To Publication.']

Date: 2025-02-19

Some early estimates of the coming economic crash are in. One educated guess from a BlueSky account says, “It seems almost unavoidable at this point that we are headed for a deep, deep recession,” Jesse Rothstein posted, then continued with the quote above. (His profile says: Economist, public policy wonk, professor at UC Berkeley, faculty director of California Policy Lab & Center for Studies in Higher Education.)

Elsewhere, the economic impact of taking the wheels off the Biden recovery machine got attention at Change My View.

The 3 main economic accomplishments of the Biden administration were actively progressing through the grant award cycle to help fund a diverse array of projects throughout the US.

11/15/21: Bipartisan Infrastructure Law: $1.2 trillion

8/9/22: CHIPS and Science Act: $280 billion

8/16/22: Inflation Reduction Act: $891 billion Massive chip plants receiving funding include TSMC (AZ), Intel (OH, AZ, NM, OR), Samsung (TX), Micron (NY, ID) The Inflation Reduction Act was responsible for dozens of transformational projects in the EV supply chain, most of which were announced in rural southern communities. The Bipartisan Infrastructure Law had awards spanning the entire US electrical grid, local water & sewer systems, transportation networks, and coastal resiliency needs. It takes years to go from grant application > award > engineering > permitting > procurement > construction > production. In all of these steps, there are expenditures going to every private entity that is directly or indirectly part of the process. Blue collar to white collar to mom & pops. With grant awards being stalled, and a nonstop attempt to cancel them, the economic ripple effect through rural communities will be a primary driver of a recession in 2025. Grants that go into these public / private partnerships end up in bank accounts of construction equipment dealers, grading contractors, concrete/asphalt suppliers, quarries, building trades, trucking firms, industrial machinery firms, etc. etc. etc…. These funds then churn through local restaurants & stores, community banks, hotels, car dealerships, etc. etc. etc. Ultimately these are jobs that will not be created, or will be at least meaningfully delayed in the private sector. This is on top of losses in public sector jobs that are dominating the 24/7 news stream. Lets not forget potential job losses and headwinds related to international trade from tariffs. Also bird flu influencing egg and baked goods pricing. Also insurance costs rising dramatically. Also housing affordability issues from private equity buying up single family homes… If there was a setup for a recession, this is it. Not the economy we had a year ago.

That’s at: https://www.reddit.com/r/changemyview/ comments/1irp7u6/cmv_there_will_be_a_us_recession_starting_in_2025/

This is confirmation of our view here and here and here.

The Resistance needs to begin factoring the upcoming crash into its strategy and tactics.

“I told you so,” will not be enough, for one reason because we have NOT told them so. Hakeem Jeffreys and Dem leadership’s picking out inflation for messaging is safe in its way, but it is similar to complaining about the litter after a tornado hits your town.

Of course the scale and depth of the incompetence and corruption are hard to believe. Who knew crazy was available in this volume? Only stupidity or ignorance can think taking a meat cleaver to government and the workforce results in something other than serious economic repercussions Whoever came up with the scheme to fire 200k workers, deport hundreds of thousands more, disassemble the civil service, and call it “savings” should not be given access to sharp objects.

Musk’s smash and grab cannot be undone painlessly, even if he wanted to. Some consolation can be taken from the fact that the mass deportation is proceeding at the pace of the Build the Wall plan. Threats and made-for-MAGA-TV arrests will have some depressing effect, as people tend to stop showing up for work, but there will be no deportation at the scale that was advertised before the election. Trump got the campaign issue he wanted, happily vilified and scapegoated and marginalized millions of good people, and now after election day he wants to forget the whole thing, but the base is watching, so he does a Potemkin deportation.

What very much intrigues this writer is that Wall Street forecasters have not picked up on the recession call. The Fed, of course, is waiting for three months’ data to plug into its hyper-hypothetical models, but you would think an analyst here or there in one of the investment houses would know to look out the window.

Will the stock markets lead or lag the upcoming crash? It is hard to say, and not very important. Stocks are a liquid asset, and liquidity is favored over real assets when times are uncertain, or in this case corrupt and chaotic. So any buoyancy in the stock market should not be taken as evidence of economic health.

The biggest question is this last one: How to game this out for the benefit of a return to democracy and the Constitutional order.

Some suggestions:

Pronounce the words “The crash is coming,” “Trump/Musk are out of control,” This is what you get when the rich take over government.”

Feel free to notice that fascists and plutocrats are fellow travelers in this phase.

Recognize the Trump Coup cannot survive an economic disaster , certainly not on the order of what is coming. No matter how hard he cranks up the scapegoat blender, the fact remains that Republicans are rubber stamping a cabinet of the fringiest of the fringe, hundreds of thousands of people are losing their jobs, and Trump and Musk are actively taking the credit.

, certainly not on the order of what is coming. No matter how hard he cranks up the scapegoat blender, the fact remains that Republicans are rubber stamping a cabinet of the fringiest of the fringe, hundreds of thousands of people are losing their jobs, and Trump and Musk are actively taking the credit. Testify to the truth that Biden had the economy humming, and any recovery from the coming Trump mess will likely need Bidenomics to succeed .

Highlight at every opportunity that this is the consequence of rule by the rich. Further, it follows from the Bush/Obama bank bailouts, after which the rich got much richer and took over, while the victims got to stew in their resentments. It is very much this rich cohort of plutocrats, the ones who got richer coming out of the bank bailouts, that backs Trump and is lining up to grift at the Trump trough. [Subtext: Sorry, MAGA, you’ve been screwed.] The coming crash needs to be synonymous with the plutocracy, because it rule by the rich that needs to end for the democracy and the economy to go forward.

Note: On the point that mainstream forecasters are impeaching themselves by being quiet now, for some contextI wrote up my experience calling (correctly) the 2001 recession, the GFC, and the 2022 recession. [I know, there wasn’t a recession in 2022, but it was universally predicted by the models.] My write-up is not a ‘follow the brilliant economist’ thing, since I cribbed from other economists. Nor do you even have to believe me. It’s more of an ‘in the land of the blind, the one-eyed man is king’ thing. The exercise is instructive in how demand side thinking works and how Neoclassical BS, including Fake Keynsianism, does not work. (Hey, Joan Robinson called it “Bastard Keynesianism.”)

That is coming out in the next week or so, probably before the Trump Incompetence and Corruption Crash hits.

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[1] Url: https://www.dailykos.com/stories/2025/2/19/2304938/-The-Crash-is-coming-how-big-is-not-clear-but-big-Soon-Keep-your-calendar-clear-for-early-summer?pm_campaign=front_page&pm_source=trending&pm_medium=web

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