Tag Archives: President George H.W. Bush

Beware The Pseudo-Recession

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On Thursday, Victor Davis Hanson posted an article at American Greatness about the danger of a coming ‘pseudo-recession.’

The article notes:

As the 1992 campaign approached, incumbent president George H.W. Bush was seen as a shoo-in for reelection.

The First Gulf War ended in 1991 with a spectacular U.S. victory at the head of a coalition that had expelled Saddam Hussein from Kuwait with few losses.

For much of 1991, Bush’s approval ratings hovered between 90 and 70 percent.

By February 1992, an obscure Arkansas governor, Bill Clinton, emerged as the favorite Democratic nominee. But he was written off as having little chance to knock off the popular Republican incumbent president with far more foreign affairs experience.

Bush, however, had just lost his brilliant 1988 campaign manager, Lee Atwater, to cancer. And third-party prairie-fire candidate Ross Perot had entered the race, drawing off conservative Bush support.

Most importantly, in 1990, the U.S. economy had experienced a mild recession that had bottomed out in early 1991.

By the 1992 election, the U.S. was headed to full recovery.

The article notes that the economy was rapidly improving, but the Clinton campaign ignored that and used the slogan, “It’s the economy, stupid!” The Bush campaign dropped the ball with their response. Americans believed what Clinton and the media told them, Ross Perot entered the race, and Clinton won.

The article concludes:

The pseudo-recession of 1992 should remind the Trump people not to repeat the same mistake in the 2026 midterms.

Trump’s first ten months of foreign policy achievements are almost as impressive as Bush’s entire four years.

He neutered the feared Iranian nuclear bomb project. He ensured Israel could devastate the terrorist cabals of Hezbollah, Hamas, and the Houthis, as well as their sponsor, theocratic Iran.

Instead of a trade war, increased tariff revenue and fair trade agreements were signed.

The border was closed shut.

Military recruitment rebounded to near record levels.

NATO was strengthened, and the intractable Ukraine war may end in a ceasefire.

Compared to the prior moribund Biden economy, Trump’s has set new precedents: record energy production and falling gas prices; inflation now below the three percent he inherited; and third-quarter GDP growth at a remarkable 4.3%.

…Yet, the left, like the Clinton campaign of old, is talking nonstop bout “affordability”—both ignoring the Democrats’ own dismal 2021-2025 economic record and claiming Trump, like Bush, cares more about those overseas than at home.

Whether the pseudo-recession of 2025-2026 works as well as the fake 1992 recession now hinges on whether the Trump campaign learns from the past and from now on fixates on the economy.

This has been a remarkable year.

We Have Seen This Play Before

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The American economy is based on consumerism. Americans buy things and the economy continues. It is a rather delicate balance that can be manipulated for political purposes. We are currently watching an attempt to manipulate that economy for political purposes–President Trump’s strongest positive for re-election is the impact his administration has had on the economy. If the Democrats can ruin the economy, they might have a chance to win the presidency in 2020. After watching their behavior for the past two years, I am not surprised by any tactic they might use. So how are the Democrats and their friends in the media attempting to impact the economy?

The Associated Press reported today:

The threat of a recession doesn’t seem so remote anymore for investors in financial markets.

The yield on the closely watched 10-year Treasury fell so low Wednesday that, for the first time since 2007, it briefly crossed a threshold that has correctly predicted many past recessions. Weak economic data from Germany and China added to recent signals of a global slowdown.

That spooked investors, who responded by dumping stocks, sending the Dow Jones Industrial Average into an 800-point skid, its biggest drop of the year. The S&P 500 index dropped nearly 3% as the market erased all of its gains from a rally the day before. Tech stocks and banks led the broad sell-off. Retailers came under especially heavy selling pressure after Macy’s issued a dismal earnings report and cut its full-year forecast.

The article goes on to list things that the writer is convinced are evidence of an imminent recession. But let’s step back a minute. The American economy is cyclical. We have been in a growth spike for the past two years due to tax cuts and deregulation. Those factors are not changing. Unemployment is at historic lows. There are more jobs than workers. There is no evidence of that changing. We might be due for a correction in the stock market, but it’s not time to panic.

This tactic has been used before. In 1990, President George H.W. Bush agreed to a tax bill with the Democrats. The agreement broke his pledge of ‘no new taxes’, but it also did something else. The tax increase on luxury items worked its way through the economy causing a recession. Workers in industries making ‘luxury items’ lost their jobs are sales of these items decreased due to the tax increases. As those workers lost their jobs, they stopped going out to dinner, traveling, and doing the things that people do when economic times are good. People in service industries and tourism lost their jobs. The impact trickled through the economy, and we were in a recession. We were coming out of the recession during the campaign, but the media failed to note that.

In the coming days, watch for a media narrative of ‘the sky is falling’. That narrative will be in play for the next year in order to convince American voters to vote Democrat.

The only way to crash this economy is to panic the public. Large investors in the market with a political agenda can begin that process. The media can fan the flames.

The fundamentals of the American economy are strong. If Americans refuse to play along with a media-created financial panic, all will be well.