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We are already in Trumpcession territory, after just two months, sheesh! [1]

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Date: 2025-03-19

The 2008 Great Financial Crisis and the Great Recession was a victory of the rich over the rest of us, including our government.

The 2020 Covid Collapse was a shock (Covid-19) bungled into an economic and health care disaster.

In the 2025 Trumpcession we have a combination of both: (1) a shock in the form of a chainsaw slashing through government, the rule of law, trade relations and military alliances, and (2) Rule by the rich, who are now ripping the carcass and screwing up the economy for profit.

And what do the oligarchs want? Like all feudal lords, they want untrammeled power and insecure, obedient serfs—and for this, the vast social services operation that is the US federal government must be cut back, along with the professional classes who form the modern core of the Democratic Party. The words of Andrew Mellon (as recalled by Herbert Hoover) come to mind: “Liquidate labor, liquidate stocks, liquidate the farmers, liquidate real estate. Purge the rottenness out of the system.… enterprising people will pick up the wrecks from less competent people.” The problem the oligarchs face, and possibly do not understand, is that they cannot do this, any more now than then, without bringing the economy to ruin—from which recovery will be possible only with the competent government they are now working to destroy.

- James K. Galbraith (Nation, March 5, 2025)

A month ago I said we were headed for a recession, it would be soon and it would be deep. Today, I contend, we are in that recession already. The Atlanta Fed’s GDP Now is hopping along at minus 2. To be clear, a recession won’t be called until at least two months of negative data come in. That’s at least three months calendar time, minimum. But then the start date will be backdated to this week

Some of the elements that led to that earlier call are changed. The hundreds of thousands fired by Musk and RIF’d when grants were cancelled and contracts ended are now, by court findings that the actions were illegal, possibly a lot fewer. We may not get to the minus 240,000 in the April 4 BLS jobs number that I anticipated. That’s good.

Bad is the manifest disruption of services. It will be weeks if not months before the things are normalized, even granting the (unlikely) adherence to the law by this rogue administration. Bad also are the tariffs and bad blood between us and our former trading partners and allies. US arms manufacturers are losing big orders, since buyers need assurances that the supply of parts and updates and compatible weapons will not be interrupted by a presidential whim. [Two weeks ago, the US suspended intelligence-sharing and paused military aid to Ukraine. Russia used the interregnum to precisely attack Ukrainian positions in the Kursk region of Russia it occupied.] At the same time, adverse public reaction in Europe, Canada and the Pacific is cutting demand for US products, notably whisky and Teslas.

Bad also is that consumer confidence is shattered. MAGA itself is reelling. They voted for lower prices and brown people in detention camps. Instead they got sweetheart deals with Putin, talk of invading Canada and Panama and Gaza and Greenland, and the conversion of the FBI into the SS. Understand, the promised lower prices and deportation at scale were never going to happen, but a lot of MAGA feels like it was bait and switch. (I mean, Canada?)

Why will this recession be at least two Covid Collapses deep? Because there is no clean-up crew in the offing. W’s GFC had Obama to come in and at least stabilize things. (Granted the remedy involved a giveaway to the rich, who actually made money on the calamity that ruined millions of households. The wounds on that are still not closed. But at least there was stability under Obama, and he did deliver the Affordable Care Act, an economic positive for many. In 2020, Trump’s bungling Covid into an economic collapse was mitigated by a Democratic Congress and then a skillful recovery operation by incoming Joe Biden. Recovery both from the pandemic and the crash.

In 2025 there is no clean-up crew on the horizon. We have to learn again that Republicans cannot govern, and have to have that lesson driven into us for two more years. Remember, the American economy was humming on January 19. Two months ago. Those WERE the good old days.

We have effectively rule by the rich today, if not fully installed, a kleptocratic autocracy. As James K. Galbraith says (quoted above), this cannot work, so it will not work. There is even a 50% chance of a debt meltdown – in corporate debt this time – that could replicate some of the features of the crash of 2008. This time it will likely be further into the recession than then, when the debt meltdown was a Great Crash of 1929 clone. All the while our former allies look on with little sympathy. (Two months!)

Trump’s lackeys are sent out to express confidence in “the plan.” There is no plan, not even a secret plan. The plan is an excuse for the failure. Trump cannot keep his base if he admits a failure, so instead of failure, there is a “plan.”

The actual outline of action for the Trump GOP, a form of plan, is to cut Medicaid, Social Security, IRS enforcement, the VA, etc., etc., and deliver another huge tax cut on top of, not instead of, the expiring tax cuts for the rich. That is the opposite of a plan for recovery.

Here’s Bernie’s calculus of how the tax cuts shake out.

Trumpcession Drivers: Expect consumers to shut down their demand by a lot just in the practice of prudence and perhaps more in targeted boycotts. Expect businesses to reduce productive investment to zero. Expect markets for American products to dwindle. Expect tariffs to do exactly what they did in the 1920s. Expect there to be no effective change of course for two years. And if Trump shuts down the data agencies like the Bureau of Labor Statistics, expect an additional loss in the markets on top fo the recession losses.

That’s grim.

Let me pivot here to some gratuitous politics. Specifically, MAGA is stuck. They backed a guy who turned his back on them and his own campaign rhetoric the moment the vote was counted. A good number in MAGA feel abandoned and betrayed. Because they were. It is becoming apparent that Trump now has only three constituents: Elon Musk, Vladimir Putin, and himself.

All appearances to the contrary, MAGA is not fundamentally stupid or fascist. In other work I am doing, I look into the whys of MAGA loyalty to Trump. For here I just want to say that they are stuck in a shame reaction and Trump’s mastery of the con makes him the master shame whisperer.

Here is a list of our stories here on Kos over the past two months, some history, some reflections, some practical – maybe even tactical – economics.

Trump will crash the economy, like the last three GOP administrations have done, (Jan. 27)

Gaming the Pending Trump Economic Crash, (Feb. 10)

How do you know the economy will fail? Because Trump is doing the exact opposite of what Biden did. (Feb 14)

The Crash is coming; how big is not clear, but big. Soon. Keep your calendar clear for early summer, (Feb. 19)

2025 Economic Crash Status March 1: Data is trickling in and economists are bouncing off the couch, (March 1)

How to weaponize the coming economic slump against the oligarchs (March 16)

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