JPMorgan just raised the probability of a global recession to 60% due to the most aggressive tariffs since President Hoover deepened the Great Depression with his tariffs and extended it by a decade. The crashing stock market is putting the odds even higher. Even Trump admits his tariffs can lead to a recession.
Worse, for the following reasons, Trump could mismanage a recession into another depression:
First: It was international cooperation with other countries that prevented the Great Recession of 2008 from becoming another depression. There will be none of that this time. Trump has alienated our trading partners with his tariffs. And his allegiance to Putin threatens all of Europe. So, they don’t trust him, and the cooperation he’ll need won’t be there. Moreover, Trump’s not one to compromise – only his opinions have any value.
Second: It was Presidents Bush’s and Obama’s cabinets and advisors, who helped save us from a depression in 2008. They were expert and experienced in international economic and monetary policy. Trump’s cabinet has no such expertise or experience. They are more like school children planning mischief, and they are there only to condone Trump’s every decision.
Federal Reserve Chair Jerome Powell is he only expert available to advise Trump (because Trump can’t fire him). Powell wouldn’t accommodate Trump by lowering interest rates to boost the economy because it would also boost inflation. Quite predictably, Trump tore into him. Just hours after Powell announced the Fed would pause interest rate cuts, Trump absurdly posted on Truth Social, “If the Fed had spent less time on DEI, gender ideology, “green” energy, and fake climate change, inflation would never have been a problem.”
Third: Congressional Republicans lack the courage to push back on Trump’s dangerous decisions. They’re afraid that they’ll lose their seats to a primary challenger backed by Trump and financed by Elon Musk (they’ll be more likely to lose their seats to a primary candidate not afraid of Trump or to a Democrat). So they don’t dare oppose him.
Fourth: When 1929 depression hit, the US was a large creditor nation. We’re now a large debtor nation, having reached our debt ceiling of $31.4 trillion. The US will have a much tougher time borrowing to spend itself out of a recession, and the higher risk of a default will increase interest costs.
A default on U.S. Treasury debt remains unlikely only if you assume: a rational President that follows decision-making protocol and prioritizes good national and global outcomes, a Republican party that has the courage to remove a president if necessary, and if you assume a qualified cabinet that will push back on a president’s dangerous decisions. Sadly, none of those luxuries exist today.
But no worries, Trump will assure us that the any depression is “going to disappear. It’s like a miracle — it will disappear.”
Fifth: The root cause of the high likelihood of a recession that can lead to a depression is that we turned an emotionally and psychologically dysfunctional president loose in the White House. Trump checks all the boxes psychologists use to diagnose sociopaths and a narcissists, including:
- excessive self-focus,
- feelings of entitlement,
- a constant need for admiration,
- lack of empathy, incapable of experiencing guilt, shame, remorse,
- conscious decisions to harm others,
- verbally attacks and insults their critics,
- never admit mistakes
- intimidate and threaten others to maintain control
- disregard social norms, rules, protocols and laws,
- can’t control impulses,
- their fantasies are their realities.
It’s urgent that the Congressional Republicans who helped put him there and who confirmed the most unqualified and dangerous cabinet in our history, recognize – or admit – that Trump is dysfunctional and dangerous, and that they remove him, including by impeachment if necessary, before we suffer a depression and other irreparable catastrophes.
