Liberal economists Paul Krugman and Robert Reich are warning that between tariffs, mass deportations and mass layoffs of federal government workers, President Donald Trump may be laying the groundwork for a long and painful recession. Conservative and libertarian economists are worried as well: the late Milton Friedman, a major influence on today’s right-wing economists, was a vehement critic of tariffs — which he viewed as terrible for both consumers and businesses.
Friedman famously said, ” We call a tariff a protective measure. It does protect. It protects the consumer very well against one thing: It protects the consumer against low prices.”
In an article published by the conservative website The Bulwark on March 24, journalist Jill Lawrence describes some of the economic pain that Trump’s policies may inflict in the months to come — including much higher prices if his tariffs really get going on Wednesday, April 2 as promised (Trump has delayed his 25 percent tariffs on Canada and Mexico more than once) in “Cruelty and Indecision: Trump’s Recipe for Economic Chaos.”
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“Unless Trump changes his mind,” Lawrence explains, “that’s what’s coming April 2 to a mall, supermarket, or car dealership near you: scarcity and higher prices thanks to an aggressive global tariff regime, or maybe a slightly less aggressive one, who knows. Because he’s always changing his mind. The Federal Reserve is projecting higher inflation, higher unemployment, and lower growth as a result of the Trump tariffs. That’s on top of brutal deportations, chaotic federal layoffs, canceled contracts, and disrupted industries, from autos and agriculture to research and tourism.”
Lawrence adds, “‘It’s really hard to know how this is going to work out,’ Fed Chair Jerome Powell said last week. Trump’s initial tariffs are already driving up inflation, he said. Not surprisingly, they are also driving up consumer gloom — and the hardest hits could be yet to come.”
Lawrence notes that layoffs at the U.S. Social Security Administration (SSA) may be another contributor to economic pain in the United States. Martin O’Malley,
“Democrat Martin O’Malley, a former Maryland governor and Social Security administrator, says staffing cuts at the agency have already triggered brief outages and predicts the system will ‘crater’ if thousands more are laid off, as planned,” Lawrence observes. “He told CNBC, on March, 1 that within 30 to 90 days, ‘you’re going to see the system collapse and an interruption of benefits’…. Have we gotten to Medicaid yet? Because major cuts are on the horizon.”
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Commerce Secretary Howard Lutnick is drawing a lot of criticism for recent comments on the possible effects of SSA layoffs. The Trump Administration office remarked, “Let’s say Social Security didn’t send out their checks this month — my mother-in-law, who’s 94, she wouldn’t call and complain. She just wouldn’t. She’d think something got messed up, and she’ll get it next month.”
Lawrence describes Lutnick’s comments as “clueless,” but she isn’t the only one who is attacking Trump’s commerce secretary as painfully out of touch.
“For millions of the not-rich,” Lawerence warns, “it can be a time of trepidation or downright fear. These are people who don’t have the money to pounce on bargains or enough lifetime left to realize gains. Some at the end of their lives cannot even wait out ‘a period of transition’ — billionaire Treasury Secretary Scott Bessent’s euphemism for a possible recession — while Trump pursues screwball economic ideas like destabilizing trade wars against both allies and adversaries. First China, Canada, and Mexico — next, the world.”
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Jill Lawrence’s full article for The Bulwark is available at this link.
