Mises Institute There’s Only One Possible Cause of the Next Recession, and It Isn’t Tariffs
Apr 9, 2025
The discussion delves into how President Trump's tariffs may influence economic conditions but aren't the root cause of impending recessions. Instead, it highlights years of artificial credit expansion as the real culprit behind financial downturns. Historical perspectives on recessions are examined, emphasizing the significance of understanding systemic issues and malinvestment to better navigate future economic challenges.
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Tariffs and Recessions
- Tariffs alone cannot cause a recession, they merely shift wealth.
- They create supply shortages, raising prices for some while benefiting competitors.
Root Cause of Recessions
- Artificial credit expansion is the sole cause of recessions.
- Injecting new dollars into credit markets distorts production and leads to economy-wide corrections.
Credit Expansion and its Beneficiaries
- Central banks like the Federal Reserve drive artificial credit expansion, benefiting a select few.
- This process, while harmful to most, is lucrative for big banks, government officials, and connected businesses.