The Trump recession may already be upon us: it is in Rhode Island
by Max Burns, Daily Kos Contributor
Twenty-two states and Washington, D.C., are experiencing
recessions, while another 13 states are flashing serious economic warning
signs, according to an estimate from economic research firm Moody’s.
Far from ushering in the new “golden age” he promised in January, President Donald Trump’s
scattershot economic policies have pushed the nation to the brink of a
crippling recession in less than a year.
Moody’s finds that both red and blue states are being
dragged into these poor economic circumstances, but those two groups won’t hurt
equally. Contracting red states, like Iowa and West Virginia, are already
struggling to overcome the hangover effects of Trump’s sweeping cuts to federal services. Those states are
now more vulnerable to sudden spikes in community need, such as for food
assistance, which Trump’s government slashed.
MAGA’s tariff and trade policies have also disproportionately harmed swathes of the GOP’s base, threatening the party’s chances in next year’s midterm elections.
A “common feature of recession-affected states is weak farm economies or struggling light manufacturing,” Mint’s Riya R. Alex reports. In other words, Trump’s recessionary policies are targeting many of the Rust Belt states that helped House Speaker Mike Johnson retain his narrow House majority last year.
Trump may not realize his policies have put red-state
colleagues in political danger, but it’s clear someone does.
On Tuesday, the White House rolled out a proposal to blanket
struggling farmers with over $50 billion in direct aid, more than double the $20
billion Trump authorized during his 2018 trade war with China. The payments are
an acknowledgement that Trump’s tariffs and trade restrictions have devastated
American farmers. Now Republicans hope a onetime payoff will keep those
struggling farm families loyal when Trump isn’t on the ballot next year.
There’s just one problem: Trump and congressional
Republicans haven’t actually said where any of that money is coming from, and
his big pledge to fund the program through tariff revenues may be illegal
without formal congressional approval.
Faced with the predictable results of his boss’s
catastrophic economic policies, Treasury Secretary Scott Bessent blamed … former President Joe Biden.
“The Chinese followed through during President Trump’s term
in 2020,” Bessent recently told CNBC. “And then under President Biden, their feet
were not held to the fire for these ag purchases.”
Many red states are also facing the double whammy of reduced
domestic immigration and skyrocketing housing prices, according to Moody’s
chief economist Mark Zandi.
In Georgia, where the economy had been growing under Biden, vaulting home prices have kept new residents away, straining
the state’s goods-producing sectors and driving an unexpectedly sharp downturn.
The Atlanta Journal-Constitution now describes metropolitan Atlanta as little
more than an investment playground for Americans rich enough to buy homes there.
But Trump’s economic mess isn’t hitting red states
alone.
Federal job cuts have devastated the local economies
in Virginia and Maryland. Moody’s also now says that
California and New York, two of the nation’s economic powerhouses, are only
treading water.
The latest edition of the venerable UCLA Anderson Forecast, published on Oct. 1, notes that the
labor market has “deteriorated notably” this year, risking a national recession
in the near future. The forecast also predicts a looming economic contraction
in California despite the state posting better-than-national growth rates since
2000. Over the first seven months of the year, the state’s unemployment rate
rose to over 5%, a red-flag warning sign for economists.
Don’t expect to see the White House handing out economic aid
to struggling blue states, though. Blue states may already be bailing out cash-strapped red states, but Republican
lawmakers largely see economic hardship as a headache that Democratic lawmakers
deserve as payback for their disloyalty to Trump.
That imbalance is pushing some commentators to the breaking
point. Clara Jeffery, the editor-in-chief of Mother Jones, has declared that “It’s Time for Soft Secession,” urging California to use its
economic clout to push back against Trump’s destructive agenda. If Trump won’t
help blue states, the reasoning goes, blue states should band together and help
each other—including through economic and trade agreements that cut out their
red-state rivals.
As the United States careens toward a recession that
Republicans swear isn’t real, it will be the nation’s low-income and working
families who bear the brunt. If the economic situation continues degrading
across the Great Plains and the Rust Belt, the GOP may soon find they have more
than blue states’ “soft secession” to worry about. If our national economy
truly begins to decouple, struggling red states may be eager to join the
growing stampede away from Washington.
So much for the golden age.
