Trumpcession

Amid the chaos obtaining today, as usual, some people are again showing their craftiness by coming up with another word, “Trumpcession.” Referred to as portmanteau, it is a play of words by “blending the sounds and combining the meanings of two others.” A combination of ‘Trump’ and ‘recession’, it might soon find its way into some credible dictionaries just like brunch (for breakfast and lunch), motel (for motor and hotel), smog (for smoke and fog) and podcast (for iPod and broadcast).  Sadly though, while we enjoy using the other portmanteaus, “Trumpcession” will have utterly devastating consequences.

The world is no stranger to recessions. It seems, in fact, that it happens every decade in modern times. When it happens, unemployment will be the worst consequence. Trumpcession will never be any different.

In modern times (after WWII), the first to hit us was the Oil Crisis Recession in November 1973-March 1975 in the decade 1970s. Lasting 16 months, it was brought about by the quadrupling of oil prices. This led to stagflation (a situation in which the inflation rate is high, the economic growth rate slows, and unemployment remains steadily high).

In decade 1980s, we had the Iran/Energy Crisis Recession (July 1981-November 1982).   It was caused by the regime change in Iran, the world’s fourth largest producer of oil then.  Iran’s production cuts forced oil prices to go up. Consequently, both inflation and unemployment rates went up.

In decade 1990s, we had the Gulf War Recession (July 1990-March 1991). Lasting 13 months, this resulted in the spike in oil prices as Iraq invaded Kuwait. As a result, there was a huge decline in manufacturing activities. Thus, unemployment rate rose.

In decade 2000s, the Great Recession (December 2007-June 2009) ensued. It was caused by the housing bubble in the USA which resulted to record foreclosures. Then, a financial crisis flung markets worldwide into a nosedive. This was also the time that oil prices rose to record highs in mid-2008 and then crashed towards the end of the year. As both manufacturing activities and demands for consumer goods in the USA slowed down, unemployment rate throughout the world skyrocketed.

Then, the COVID-19 pandemic induced recession (popularly referred to as the Great Lockdown) started on February, 2020. In the USA, it lasted only for two months (February to April, 2020). According to USA’s National Bureau of Economic Research, it was the deepest but the shortest in US history. Likewise, the rest of the world felt it too within the next seven months from February, 2020. Similarly, the Great Lockdown brought about rapid and high unemployment throughout the globe.

Whether we, Filipinos, go or not on that empirical belief that it is part of a per decade business cycle, we don’t have to deal with that for the time being. Most likely though, we might be experiencing another one this decade. If that happens, it will be the first time in history that a global recession happened twice in the same decade.

Notably though, unlike the USA’s previous trade wars, tariffs aren’t the only issue.  Illegal migration and fentanyl are also thrown into the mix. Worse, it is also wrapped with expansionist rhetoric like making Canada the 51st state, buying Greenland (to taunt Denmark) and renaming Gulf of Mexico to Gulf of America.

While these rhetorics make us cast some doubts on his real motives, the fact remains that imposition of tariffs and the ensuing multiple reciprocal tariffs between the USA and the rest world will consume our day in the weeks or months to come. Every time it is imposed, prices will shoot up further to a point of unaffordability. When that happens, in the absence of demand, businesses will fold up and joblessness will prevail.

We don’t want to sound pessimistic but there is an independent survey that validates this.  Markedly, according to the Conference Board, Inc. (a 501 non-profit business membership and research organization and counts over 1,000 public and private corporations and other organizations as members, encompassing 60 countries), “consumers are the engine of the US economy and confidence levels plummeted last month. Worse, the index covering February registered the “biggest monthly decline in four years.”

Precariously, with Pres. Trump pugilistic tendencies, he might not care about this consumer sentiment at all and just go ahead with his war against all trading partners of the USA.  If he continues, it might lead to a full-blown recession, a “Trumpcession.”