I think I need to point out that Bloomberg.com is not a liberal site. It hosts such writers as Eli Lake, one of Trump’s biggest apologists, and Ramesh Ponnaru, the rancid, brown-nosing, right-wing writer/personality who pontificates about how if the world really got neo-conservatism right we would be in paradise. The problem is, neo-conservatism has brought us to this place and to say, “but we’ll get it right this time.” is beyond pathetic, but he keeps trying. Bloomberg is primarily a financial analysis site with an accompanying cable network. It calls a lot of balls and strikes on the global economy. They are pretty middle-of-the-road with other commentators like Jared Bernstein, Joe Biden’s former chief-of-staff and left-leaning Margaret Carlson as part of the mix. To summarize, they like numbers over most everything else.
I make this point because Bloomberg.com has a headline article about how the recession is starting in some of the places where Donald Trump got the electoral votes possible to make him President of the United States. Where his promises of milk and honey to all who supported him are turning into many teaspoons of castor oil. The article starts with this:
The moment usually comes during Greg Petras’s commute through the rolling hills and cornfields of southern Wisconsin. Somewhere between his home near Madison and the factory he runs on the edge of the small town of Brodhead, the news will turn to the trade wars and Donald Trump will again claim that China is bearing the cost of his tariffs. That’s when Petras loses it.
“It’s just an outright lie, and he knows it,” says Petras, president of Kuhn North America, which employs some 600 people at its farm-equipment factory in Wisconsin. For Kuhn, Trump’s trade war has produced a toxic mix of rising costs and falling revenues. “You’re slamming your fist on the steering wheel and saying ‘Why would you tell people this?’”
“Recession Already Grips Corners of U.S., Menacing Trump’s 2020 Bid” by Shawn Donnan, Bloomberg.com 9/1/2019
Mr. Kuhn said that he reservedly supported Trump in 2016, but won’t in 2020. He will most likely vote for a Democrat.
I know you want to say, “But we told you he would do this.”, but we should refrain. Over the last two years, his factory was roaring. Up until March, 2018, Kuhn North America was booming. Jobs were plentiful. Weekend shifts were necessary. In other words, overtime pay. A $4 million expansion was being planned before March, 2018. But, that is on hold now. Why am I referencing March, 2018? That is when the Trump tariffs started. There is already a section on Wikipedia devoted to it.
You can look at the chart above and find where March 2018 would be on it. I would avoid looking at the major indices. I would take a look at other ones that you can find on Bloomberg. Take a look at commodity futures, like soy and corn. Look at where they were during the Obama years and then take a look now. Soy prices alone are down over 10% from their highs in 2016. Most will show March 2018 as the starting point of their decline.
What is the worst part for Trump is that the hardest hit places were strongholds for him in 2016.
In 22 states—including electorally important ones like Wisconsin and Pennsylvania—the number of people working in factories actually fell in the first seven months of this year, according to figures compiled by the Economic Innovation Group, a think tank.
“Recession Already Grips Corners of U.S., Menacing Trump’s 2020 Bid” by Shawn Donnan, Bloomberg.com 9/1/2019
A lot of Mr. Kuhn’s products work in the farm economy, especially for soybean farmers harvesting their crop. He must be looking at the future and realizing that his company isn’t going to be what it was the last two years. China is not only not buying our crops, but their finding new partners to buy from. Why do you think the Amazon is burning?
Usually, when a downturn happens it takes a few years to unravel exactly where it started and how it grew into a recession, but here the signs are just too clear.
Take another indicator, The Cass Index.
Find March, 2018
This is a index that measures truck delivery traffic. It’s having some very bad days, lately. Bad days like this mean job loss and company closures. Bad days, indeed.
At this point, even if the Chinese were to finally come to an agreement, the table is now set for a downturn that will most likely lead to a recession. This is outside of the yield curve inversion, the possibility of Brexit and the global nosedive that might accompany it or Germany’s bad quarter or any of the other myriad signs of what Trump is doing to the world, much less the U.S.
Bloomberg has been sharing more articles like this lately, and I don’t believe they would be doing this if there weren’t numbers to back them up. They seem to be implying, as Bette Davis once famously said, “Fasten your seat belts. It’s going to be a bumpy night.”