When Economic Chaos Doesn’t Have an Endgame

Apparently it might take a recession to detoxify the economy. If so, this will be a beautiful recession, the prelude to a new golden age for American workers — apart from those who lose their jobs, see their savings destroyed or otherwise must grapple with much lower living standards. A few setbacks are only to be expected as the Trump administration builds a backward-looking, tariff-protected, uncompetitive, labor-intensive manufacturing economy to make America great again.

Don’t call this a parody. Treasury Secretary Scott Bessent, responding to stock market turbulence and signs of weakening demand, said a detox period might be necessary. “Could we be seeing this economy that we inherited starting to roll a bit? Sure,” he said. Purging the excessive growth and employment that’s lately been holding the economy back won’t be all plain sailing. Then Trump went further, telling anxious observers that he doesn’t rule out a recession. Of course not: Whatever it takes. Strangely, this lack of concern only made investors more worried.
Disruption is often the price one must pay for economic success. But what’s dawning on investors as Trump’s approach to trade and foreign relations unfolds is that he’s inverting this logic. For political purposes, and to serve his boundless vanity, he sees disruption as a goal in its own right.