The Last Recession Wasn’t Trump’s Fault. The Next One Will Be—Utterly.

This is still the minority view among such people. But I follow all this enough to be able to tell you that this is a shift. Cooperman, a former Goldman Sachs CEO, cites oil prices that look like they’ll stay elevated for a while. Shilling notes that consumers are nervous—retail spending and consumer confidence are way down.Different people will cite different reasons, I suppose, but there’s really only one reason for all this, and his name is Donald J. Trump. Every decision he makes is the wrong one and makes the situation worse. Take the tariffs. The Tax Foundation keeps track of the economic impact of the tariffs Trump promised would “liberate” us. Short answer? They’ve been a disaster. They increased taxes on the average American household by $1,000 in 2025, will reduce long-run GDP by .4 percent, and more. Let’s check in on the war with Iran. Everybody knows what that conflict has done to gas prices, fertilizer prices, and trade. What’s new is that over the weekend, Trump rejected Iran’s latest offer to return to the table and end the war in seven days. He appears to think he has the Islamic Republic over a barrel—and it is a fact that the Iranian economy is in horrible shape—and can get a better deal by waiting them out. This is one thing that Trump might actually be correct about—emphasis on might. He assumes that the more dire Iran’s economic situation becomes, the more it will soften its terms and be desperate for peace. But one expert told Al Jazeera over the weekend: “The danger is that he is confusing Iranian pain with Iranian willingness to capitulate. Those are not the same thing.”Also, by rejecting the proposal, Trump is walking away from the chance to tell Americans that the war is over before the midterms—and ensuring that gas prices stay high through Election Day. Trump also has been telling aides, according to a report in The Wall Street Journal over the weekend, that he expects to resume bombing after the voting. That will be popular. There’s so much more. Trump promotes AI relentlessly, essentially calling people who oppose data centers idiots and rubes. The U.S. economy is dependent on data-center construction now to an alarming degree. This could all work out. But a) Americans hate them and are trying to block their construction everywhere you look, and b) if productivity and other gains are underwhelming, the AI bubble could burst—and burst hard. A lead economist at Oxford Economics wrote recently: “For there to be a sharp correction in the AI sector, it doesn’t require the technology to prove worthless, only for there to be disappointment relative to the currently elevated expectations.” Trump has placed himself clearly on one side of this debate. If AI doesn’t deliver, that’s one more terrible economic decision by the so-called businessman.Finally, let’s devote a moment to Trump’s announcement over the weekend that he’s rolling back Biden-era auto emissions standards. From a simple-minded, let-the-free-market-roar perspective, this sounds like a good thing, I guess. But it’s horrible. It’s horrible for the planet—because of Trump, Detroit has already mostly stopped moving toward EVs and is betting its future on the internal combustion engine. But it’s awful for the economy, too. Investing in old technologies while new ones are taking over doesn’t usually pan out so well. Auto manufacturers in Europe, Japan, and South Korea are moving toward EVs, and as soon as there’s a new Democratic president, the United States will again, too. So this is a temporary, but costly, disruption: Re-fitting and re-re-fitting assembly plants costs Detroit probably billions of dollars. But hey—real men pollute the atmosphere, dammit.I have no idea whether all this adds up a recession next year. But I do know enough to know this. Trump is wrecking the economy. And he’s wrecking the economy for the same reason that most Republican presidents wreck the economy. The post-Keynes era—the era when the United States broadly speaking switched from following the regulated-market principles of John Maynard Keynes to the unregulated, free-market principles of Milton Friedman—dates to the mid-1970s. That time period has seen six Republican presidents, going back to Gerald Ford (Richard Nixon was a self-professed Keynesian, at least some of the time) and counting Trump twice. Five of them have overseen economic calamities. Only Ronald Reagan did not. There are a lot of reasons why, starting with then-Fed chair Paul Volcker, who ended the inflation of the era by hiking interest rates dramatically. Reagan’s tax cuts did—briefly—spur economic growth (while also starting the country down the path toward massive debt and deficits and the rampant inequality that just keeps getting worse). Also, Reagan wasn’t nearly as doctrinaire on taxes as Republicans are today. He raised different taxes several times, most notably on Social Security.But other than that—terrible. Every single one of them. The reason is that they believe in economic nostrums that are either lies or fairy tales. Lie: that lower taxes can produce revenues equal to or even greater than higher taxes. Fairy tale: that the unregulated free market will unfailingly find solutions to society’s problems. As we’re seeing right now with cryptocurrencies and AI, the unregulated free market of the sort we have in this country now creates more problems than it solves.And so it’s not a coincidence that the last five recessions, and seven of the last eight, have happened under Republican presidents. Look ’em up: December 1969; November 1973; January 1980; July 1981; July 1990; March 2001; December 2007; February 2020. Only the 1980 one happened under a Democrat (Jimmy Carter). In fact, you can go back to 1953 and add four more recessions, all of which happened during GOP presidencies. That’s 10 out of 11 in the postwar era.Trump is responsible for one of them, and admittedly it was not entirely his fault. It was pandemic-driven. But if Leon Cooperman and Gary Shilling are right and he presides over another one, it will be entirely on him. He may have driven the country into the ditch, but at least he will have exploded the “we need a businessman” myth with a force no liberal Democrat could ever hope to.