Rebel Capitalist podcaster George Gammon explores the logic behind the argument that Trump’s tariffs have caused a recession. While Gammon admits that tariffs have a negative economic impact, he argues that the tariffs could not have caused the recession that we appear to be entering. By looking at interest rate cutting cycles over several decades, he arrives at a very different conclusion from the mainstream narrative.
Gammon’s basic reasoning is as follows: “…[interest] rates are coming down but this doesn’t tell us that the economy is doing well. It tells us that the economy is really struggling and I want to point out they started cutting rates in September of 2024. This is way way way before Donald Trump was elected…”
“Bank lending decreasing…in other words, the low interest rates, are a reflection of a contracting economy…”
“It tells us that the economy is really struggling”
No it doesn’t. Interest rates came down in the ’90s too even after that mild recession ended. The Plan (for better or worse) was always to keep rates high until inflation was conquered and then lower them. Inflation was stickier than predicted and now Trump is turbo-f*(ing the US economy in real time, forcing the fed to keep rates higher for longer. There’s a reason that every major non-American stock index has outperformed America’s this year. The US was already a bubble and Trumpnomics certainly punctured it!
I don’t know why i bother, but it is fascinating that tariffs most of which have not been enacted yet, or those that have for a couple weeks are so magical they can cause recession. What pray tell, is the cause of Canada’s recession which is becoming ever deeper, but has been going on for 7 quarters?
1) Markets are forward looking, unlike you 2) Canada has not been in a recession for 7 quarters
Because I cashed in my empties, I’m rich!
UnMe, replying to yourself over and over must remind you of your sex life?
The markets going down are not a recession. Declining output is.
See, now I’m an econononomist! Expert like!
Declining GDP per capita for 7 quarters. Ok Canada is not technically in a recession, but Canadians sure a F are.
When you remove trillions from government spending, you automatically get a small recession until it works itself out. Canada on the other hand is toast and headed to insolvency. When the bottom falls here, you will have no value in your assets or paper.
The US has not removed any substantial government spending, and is headed towards a debt crisis.
As a famous economist, when I don’t pay my bills, I have more money in my pocket.
That’s how you get rich!
No but Elon Musk and Doge seem to taking more or less that approach. It might be more accurate to say that they are like a company that’s ‘saving’ money by firing accounting.
I Like talking in my Echo Chamber!
Wait a minute. A recession is two consecutive quarters of lower GDP. Six months. How long has Trump been in power? When we were in recession (twice since the pandemic), the Biden administration kept saying we weren’t because the US economy did not shrink for 2 consecutive quarters. Now we’re in recession after 2 months of Donald Trump?
I have a very reliable method for determining econ health. I’m an IT guy, and we’re the last to be hired, first to be fired. If we’re freelance, our projects are cancelled, postponed, etc. Calls from recruiters and number of job posts tell the story, a “leading indicator”.
USA entered into a recession around last June, and as “corrected” (aka “Biden didn’t manipulate data for election) comes out we’ll see that on paper. The recession was partially covered up by the massive “gold bars overboard” spending of our US Govt under Biden as well.
It also showed up in the revised job numbers released earlier this year, correcting the haphazard overestimation of those numbers, that was a practice by the Bidihn regime.
That regime took lying and distortion of everything, to atmospheric levels.
By that degree, yes, the recession started in Q3 2024. That, despite juicing the economy with over $1Trillion in deficit spending.
Imagine, if that extra Trillion wasn’t injected in the economy. It’s like a shot of dopamine, everyone gets addicted to it, until there’s no more dopamine.
To get the house in order, the addiction must be stopped. And yes, there will be withdrawal pain. For the greater, long term good.
Short term pain
Long term gain
Trump train
Short man gain
Long term pain
Carney ville
We have been a recession for the past couple of years, the liberals have been propping up the economy via over spending our tax dollars. We haven’t seen anything yet, I read an article a while ago that said Canadians are defaulting on loans at around 60 percent.