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'A Very Dark Picture': IMF Warns Trump's Iran War Could Unleash Global Recession
One expert called the new IMF forecast "extremely concerning for the global economy," noting that "the most dire impacts of our economic situation will be felt by the poor and the vulnerable."
Apr 14, 2026
The International Monetary Fund warned Tuesday that the US-Israeli war on Iran could slow global economic growth, stoke inflation, and increase the possibility of a worldwide recession and energy crisis.
The illegal war of choice on Iran being waged by US President Donald Trump and the government of fugitive Israeli Prime Minister Benjamin Netanyahu has already had wide-ranging negative impacts on the global economy, from soaring fuel prices caused by the closure of the Strait of Hormuz to supply chain disruptions and financial market volatility.
However, a major global economic crisis has thus far been averted. That could soon change.
"Despite major trade disruptions and policy uncertainty, last year ended on an upbeat note," International Monetary Fund director of research Pierre-Olivier Gourinchas wrote in an analysis of the IMF's latest World Economic Outlook report. "The private sector adapted to a changing business environment, while powerful offsets came from lower US tariffs than originally announced, some fiscal support, and favorable financial conditions coupled with strong productivity gains and a tech boom."
"Despite some downside risks, the momentum was expected to carry over into 2026, lifting the pre-conflict global growth forecast to 3.4%," Gourinchas continued. "War in the Middle East has halted this momentum. The closing of the Strait of Hormuz and serious damage to critical facilities in a region central to global hydrocarbon supply raise the prospect of a major energy crisis should hostilities continue."
The IMF said that even if the war ends quickly, lasting damage to the world's economy will still happen.
According to the IMF report:
Under the assumption of a limited conflict, global growth is projected at 3.1% in 2026 and 3.2% in 2027, below recent outcomes and well under pre-pandemic averages. Global inflation is expected to tick up in 2026 and resume its decline in 2027. Pressures are concentrated in emerging market and developing economies, especially commodity importers with preexisting vulnerabilities. Risks are decisively on the downside. A prolonged conflict, deeper geopolitical fragmentation, disappointment over [artificial intelligence]-driven productivity, or renewed trade tensions could weaken growth and unsettle markets. High public debt and eroded policy buffers add vulnerability. Policies should foster adaptability, enhance credibility, and reinforce international cooperation.
The IMF said that "the shock’s ultimate magnitude will depend on the conflict’s duration and scale—and how quickly energy production and shipment normalize once hostilities end," and that effects will vary by location.
"Countries will feel the impact differently," Gourinchas wrote. "As in past commodity-price surges, importers are highly exposed. Low-income and developing economies—especially those with vulnerabilities and limited buffers—are likely to be hit hardest. Gulf energy exporters will face economic fallout from damaged infrastructure, production disruptions, export constraints, and weaker tourism and business activity. Remittances will fall in countries that supply migrant workers to the region."
Eric LeCompte, executive director of the religious development group Jubilee USA Network and a United Nations finance expert, called the new IMF forecast "extremely concerning for the global economy," lamenting that "the most dire impacts of our economic situation will be felt by the poor and the vulnerable."
The new report comes as the IMF's annual Spring Meetings are underway in Washington, DC.
“World leaders coming to Washington are receiving a very dark picture of the global economy,” said LeCompte. “The war is causing greater poverty and increases in our fuel and food costs."
Other groups have also warned of the adverse economic effects of the US-Israeli war on Iran.
Ben May, Bridget Payne, and Paul Moroz of Oxford Economics recently published a report warning that a longer war in Iran "could tip the global economy into recession."
In such a situation, "the Gulf states suffer most acutely—GDP down over 8% in 2026—before rebounding sharply as production recovers," they wrote. "Advanced Asian economies, which are especially reliant on Gulf oil, take a heavy blow from energy import cost surges and supply chain disruption."
"Europe faces a painful squeeze on gas and electricity," the trio added. "The US fares somewhat better given its domestic energy production, but an equity market decline of nearly 20% weighs heavily on consumer spending."
Some US-based organizations have focused on the war's domestic economic impacts.
Dean Baker, a senior fellow at the Center for Economic Policy Research, published an analysis earlier this month asserting that "making enemies makes us poorer."
"Secretary of Defense (or War) Pete Hegseth seems to be having a really great time killing people in Iran, but his live action video games come at a big cost—not just in lives, but in budget dollars," Baker wrote. "To be clear, the main reason to oppose this pointless war is its impact on the people of Iran and elsewhere in the region. But it also has a huge economic cost that is seriously underappreciated."
"In addition to reducing our security and jeopardizing the well-being of people around the world, Donald Trump’s belligerence will cost us a huge amount of money," he said. Focusing on US military spending, Baker noted that "Trump wants the country to spend 5% of GDP, or $1.5 trillion a year, on the military. This comes to $12,000 per household."
Trump and his Republican Party are seeking to offset some of their record military spending with devastating cuts to social programs upon which tens of millions of Americans rely. Already reeling from the biggest cuts to Medicaid and Supplemental Nutrition Assistance Program spending in those programs' histories, Trump’s budget request for fiscal year 2027 contains $73 billion in total reductions in nondefense spending.
"It is striking to see that Congress might be willing to quickly cough up this money," said Baker, referring to military funding, "when it has refused far smaller sums that could have made a huge difference in the lives of tens of millions of people."
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How the Iran War Could Lead to a Crash Worse Than 2008
It’s too late to prevent the inflation of an AI bubble or to advise against a US attack on Tehran. At this point, the most we can do is to hope for a quick end to the war and for some improvisational brilliance among the world’s leaders of government and finance.
Mar 21, 2026
Several commentators have remarked that the United States’ war on Iran carries echoes of 2008. I’ll argue here that a potential financial crash this year could actually be much worse.
The Global Financial Crisis (GFC) of 2008 was the biggest economic crunch since the Great Depression. Unemployment surged, topping 10% in the US. Global stocks lost trillions of dollars in value. Major brokerage houses collapsed. The US auto industry only survived thanks to enormous government bailouts. How could another crash top that?
Consider the causes. The 2008 Great Recession resulted from a confluence of three factors:
- Failed US wars in the Middle East, in that instance against Iraq and Afghanistan. Many economists argue the Iraq and Afghanistan Wars contributed to the GFC by fueling massive American budget deficits and worsening trade imbalances, and by creating a “capital flow bonanza” that triggered the US credit boom. While not the sole cause, the war compounded the vulnerability of the US economy.
- Soaring oil prices, following the plateauing of world conventional oil production in 2005. Oil demand continued to rise but the global supply of oil did not follow suit. On July 11, 2008, crude prices hit $147 per barrel, their all-time high. Since the economy runs on energy and oil is the world’s most important energy source, oil prices have a way of impacting all industries. Financial markets crashed three months after the oil-price peak.
- A bursting financial bubble inflated by subprime mortgages in the US and financial derivatives traded worldwide. The mortgage bubble involved $1.3 trillion to $1.5 trillion in high-risk loans issued during the 2000-2006 housing boom. It was a house of cards waiting to tumble.
The resulting unwinding of debt and derivatives came within a hair’s breadth of turning into a massive bank run and general economic collapse. Governments (led by the US) bailed out industries and banks, lowered interest rates to zero, purchased large tranches of financial securities, and instituted enormous fiscal stimulus programs and tax cuts. Even with these rapid and maximum-scale efforts totaling hundreds of billions of dollars, the GFC led to widespread housing foreclosures, a near-40% downturn in the S&P 500, and a substantial increase in the poverty rate.
Now consider the following:
- Today’s AI financial bubble is four times bigger than the subprime mortgage bubble of 2008 and 17 times bigger than the dot-com bubble of 2000.
- The Iran war, though so far not involving US ground troops, could possibly end up being more problematic than the Iraq invasion of 2003, if only from the standpoint of flows of energy and international trade. The war is likely to result in real oil shortages and prices potentially even higher than those seen in 2008. Additionally, more of the Middle East is now involved in hostilities, and oil and gas production and shipment infrastructure is being damaged or destroyed, thereby undermining the long-term economic prospects of the region, as well as destabilizing its politics. No one knows how this will end.
- For the US economy, warning signs were already flashing before the war: Stubbornly high inflation, a bad jobs picture, and worsening consumer sentiment were indicators of a looming recession.
- The final factor can be stated as a question: Would today’s US Treasury head be as successful at averting financial doom as was Henry Paulson in 2008? Then, the US was able to enlist government and business leaders from the world’s key countries in cooperating to fashion a collective survival strategy. Would current US Treasury Secretary Scott Bessent have similar success, given the recent global collapse of trust in US leadership?
In view of the possibly catastrophic consequences of the attack on Iran, many people wonder what motives could have justified it. Logan McMillen argues in Foreign Policy in Focus that the so-called “Donroe Doctrine” intends to freeze China out of the Western Hemisphere and to deprive it of cheap energy:
The strategy is entirely zero-sum. By turning the Middle East and the Caribbean into militarized chokepoints, the United States is suffocating China’s independent oil supply lines, starving its industrial capacity while guaranteeing temporary windfall profits for Western supermajors. Concurrently, from the lithium flats of Bolivia to the ports of Peru, Washington is deploying right-wing proxies and military coercion to systematically dispossess Chinese capital in Latin America, re-colonizing the Andes to secure the supply chains of the 21st century.
Other commentators see the war as being spearheaded by members of the Christian Zionist movement, which desires a fulfillment of biblical prophecies of the battle of Armageddon and the return of Jesus.
Even if McMillen’s analysis is sound and there is an arguably rational motive behind the war, that doesn’t mean the campaign will go according to plan or that it will achieve its aims. Many analysts see it already careening off the rails.
It’s too late to prevent the inflation of an AI bubble or to advise against a US attack on Tehran. At this point, the most we can do is to hope for a quick end to the war and for some improvisational brilliance among the world’s leaders of government and finance.
Meanwhile, it would be smart to make whatever preparations you can. For folks in the Northern Hemisphere, it’s time to start planning this spring’s food garden. You might want to plant a few more rows of beans than you do most years, so you have enough to share with neighbors.
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When Will the Contented Class Revolt Against Trump?
When will these contented ones collectively start saying, “Enough is enough” and it’s time to say to Donald Trump, “You’re Fired”?
Nov 16, 2025
The reason the famous and prolific Harvard economist, John Kenneth Galbraith, is often referred to as a political economist can be seen in the continuing relevance of his book The Culture of Contentment (1992). His thesis explains in significant part why President Donald Trump’s wrecking of America has not more significantly collapsed his support, now below 39% approval.
In the US, the contented classes hail from both parties. They are not a majority of the population by any means, given that half of all Americans are “poor” or “near poor.” They are a majority of the politically and economically influential people who support policies that maintain their comfort at the expense of the necessities of the “functional underclass” left behind in poverty. The contented classes include the super rich, of course, but also the managerial, professional, and wealthier working classes. In addition, they vote at a higher percentage than the poor.
Before Trump, this contented class, which includes members of Congress, was doing well, so much so that they stood in the way of increasing the federal minimum wage, frozen at $7.25 per hour, or increasing Social Security benefits, frozen for over 40 years. These changes could have been paid for by hiking Social Security taxes on, you guessed it, the contented classes. Despite public opinion polls favoring expanding the social safety net, the contented class wants the status quo of no paid sick leave, no paid family or maternal leave, no subsidized childcare, and no universal paid vacations. Western European countries all have a more robust social safety net than the US.
When you crank in the damage done by Trump and his Trumpsters in Washington, DC, members of the contented classes are largely unaffected. The costs of universally damaging programs cutting preparedness for climate violence, pandemics, huge expansions in the police state against immigrants, and the military-industrial complex are not felt where the contented classes live, work, and raise their families.
Trump’s tyrannies and treacheries; his open flouting of the laws (the establishment likes such flouting to be discreet); and his revolting, foul-mouthed defamations tower over Richard Nixon’s transgressions.
We can make a list of the terrible closedowns or strip-mining of federal agencies’ law enforcement and regulatory initiatives. Very few exclusively impact the contented classes. Some may actually benefit.
Other Trump moves, many of them illegal and unauthorized by Congress, delight these people. They support lower taxes on upper-income people and businesses, large or small. The Internal Revenue Service is now going further with its unauthorized dilutions of the 15% minimum tax on corporate profits. The rising stock market adds to the complacency of the contented classes.
The most cruel and vicious actions by Trump—abolishing the US Agency for International Development, medical, water, food assistance to desperate millions abroad—cuts to Meals on Wheels, Head Start, Medicaid, Supplemental Nutrition Assistance Program (SNAP) impact the masses—tens of millions of them directly and daily. They do not reach the contented class members of our population.
This is not to say that millions of these contented persons do not care what is happening to their fellow citizens. But normative caring is not viscerally feeling the pain and suffering, the anxiety, dread, and fear of losing healthcare coverage; tomorrow’s meal; the brunt of chronic indebtedness; or abandoning the disabled, the sick, and the casualties of the workplace.
Galbraith wrote that living in their contented culture leads to short-term thinking, underinvestment in public goods, and ignoring the widening inequality between the “haves” and the “have-nots.” Inequality also stems from making money from money—a source of wealth denied to people living paycheck to paycheck.
The capture of the Democratic Party by this complacent class has become so pronounced that the blue-collar working-class members have broken away from their unions and parents or grandparents’ devotion to the FDR-like New Deal politics and fallen prey to the rhetorical seduction of the corporatist GOP.
What could Trump do to alienate large portions of this contented class, which Galbraith argues has been the only force that can disrupt the status quo? When will these contented ones collectively start saying, “Enough is enough” and it’s time to say to Donald Trump, “You’re Fired”?
When the following come together—serious recession, serious inflation, with destabilizing (to their businesses) tariff-driven surging prices; a reckless foreign war quagmire; plunging stock markets; daily spreading chaos; and the media-exposed sickening stench of raw corruption flowing from the White House throughout the upper realms of the executive branch—the contented classes should join the resistance to the Trump madness.
Back in 1974, the Republican establishment decided it was time for Richard Nixon to go, despite his having won reelection in 49 of 50 states in 1972, with a 60% approval in the polls. He was not considered “useful” to the power brokers anymore.
Trump’s tyrannies and treacheries; his open flouting of the laws (the establishment likes such flouting to be discreet); and his revolting, foul-mouthed defamations tower over Richard Nixon’s transgressions.
History instructs that latent revulsions and fears by the power elites are often launched onto the public stage by some specific outrage, decadence, or bullying. Stay tuned. With Dictator Donald (he regularly intones, “This is only the beginning”), THE WORST IS YET TO COME.
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GOP Ripped for 'Holding US Economy Hostage' as Nearly Half of States Face Recession
"At a time when costs are rising and tariffs are wreaking havoc on people's pocketbooks, Republicans are doubling down on their agenda of raising healthcare costs on millions of Americans."
Oct 20, 2025
US states accounting for roughly a third of the nation's gross domestic product are currently in recession or on the verge of one as the federal government shutdown enters its fourth week, with congressional Republicans and President Donald Trump refusing to support an extension of key healthcare subsidies that are set to lapse at the end of the year.
A recent analysis by Moody's Analytics chief economist Mark Zandi estimates that 22 states are experiencing an economic downturn or are at serious risk of recession, a nascent crisis fueled by Trump's tariffs, mass deportations, and sweeping attack on the federal workforce—an assault that has intensified since the federal government shut down at the beginning of October.
States currently in or on the brink of recession include Maine, Oregon, Washington, Illinois, and Georgia. Among the states “treading water” are California and New York, according to Zandi, whose analysis was based on figures that predated the government shutdown.
Leor Tal, campaign director at the progressive advocacy coalition Unrig Our Economy, said Monday in response to the analysis that "Republicans in Congress are holding the US economy hostage, and working families are paying the price."
"At a time when costs are rising and tariffs are wreaking havoc on people's pocketbooks, Republicans are doubling down on their agenda of raising healthcare costs on millions of Americans," said Tal. "It's time for congressional Republicans to reopen the government, extend the healthcare tax credits, and start lowering costs for working families."
The shutdown, which Trump has embraced and exploited to advance his far-right agenda, began at a time when the country's economy was already on uneasy footing, with food prices continuing to rise despite the president's campaign promises, GOP Medicaid cuts causing chaos across the nation, and the labor market flashing signs of distress.
With no end to the shutdown in sight, The Associated Press noted Sunday that the "the U.S. Travel Association said the travel economy is expected to lose $1 billion a week as travelers change plans to visit national parks, historic sites, and the nation's capital, where many facilities such as Smithsonian Institution museums and the National Zoo are now closed to visitors."
If the government remains shut down in November, tens of millions of Americans could see cuts to Supplemental Nutrition Assistance Program (SNAP) benefits—which boost the economy while reducing hunger—and other aid.
Meanwhile, even as the Trump administration withholds federal labor market data amid the shutdown, economists say private and state-level figures signal escalating pain for workers that is sure to intensify the longer the closure persists.
"The fingerprints of Trump policy decisions are most clearly found in the distinct rise in federal [unemployment insurance] claims—claims filed specifically by workers laid off from federal agencies," Elise Gould and Joe Fast of the Economic Policy Institute wrote last week. "However, we are also seeing troubling trends in UI claims in regular state programs, particularly in the Washington, DC metropolitan area."
"The shutdown (and potentially the attempted politicization of key government data-collection agencies) could leave policymakers flying blind just as the economy encounters real turbulence," they cautioned.
John Diamond, director of the Center for Public Finance at Rice University's Baker Institute, warned earlier this month that the shutdown "could be a tipping point to recession."
"If it is resolved quickly, the costs will be small," Diamond argued, "but if it drags on, it could send the US economy into a tailspin."
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'Red Flag': Analysts Sound Major Alarms As AI Bubble Now 'Bigger' Than Subprime
"I wouldn't touch this stuff now," warned one financial analyst about the AI industry.
Oct 03, 2025
Several analysts are sounding alarms about the artificial intelligence industry being a major financial bubble that could potentially tip the global economy into a severe recession.
MarketWatch reported on Friday that the MacroStrategy Partnership, an independent research firm, has published a new note claiming that the bubble generated by AI is now 17 times larger than the dot-com bubble in the late 1990s, and four times bigger than the global real-estate bubble that crashed the economy in 2008.
The note was written by a team of analysts, including Julien Garran, who previously led the commodities strategy team at multinational investment bank UBS.
Garran contends that companies have vastly overhyped the capabilities of AI large language models (LLMs), and he pointed to data showing that the adoption rate of LLMs among large businesses has already started to decline. He also thinks that flagship LLM ChatGPT may have "hit a wall" with its latest release, which he said hasn't delivered noticeably better performance than previous releases, despite costing 10 times as much.
The consequences for the economy, he warns, could be dire.
"The danger is not only that this pushes us into a zone 4 deflationary bust on our investment clock, but that it also makes it hard for the Fed and the Trump administration to stimulate the economy out of it," he writes in the investment note.
Garran isn't the only analyst expressing extreme anxiety about the potential for an AI bubble to bring down the economy.
In a Friday interview with Axios, Dario Perkins, managing director of global macro at TS Lombard, said that tech companies are increasingly taking on massive debts in their race to build out AI data centers in a way that is reminiscent of the debts held by companies during the dot-com and subprime mortgage bubbles.
Perkins told Axios that he's particularly wary because the big tech companies are claiming "they don't care whether the investment has any return, because they're in a race."
"Surely that in itself is a red flag," he added.
CNBC reported on Friday that Goldman Sachs SEO David Solomon told an audience at the Italian Tech Week conference that he expected a "drawdown" in the stock market over the next year or two given that so much money has been pumped into AI ventures in such a short time.
"I think that there will be a lot of capital that’s deployed that will turn out to not deliver returns, and when that happens, people won’t feel good," he said.
Solomon wouldn't go so far as to definitively declare AI to be a bubble, but he did say some investors are "out on the risk curve because they’re excited," which is a telltale sign of a financial bubble.
According to CNBC, Amazon CEO Jeff Bezos, who was also attending Italian Tech Week, said on Friday that there was a bubble in the AI industry, although he insisted that the technology would be a major benefit for humanity.
"Investors have a hard time in the middle of this excitement, distinguishing between the good ideas and the bad ideas," Bezos said of the AI industry. "And that’s also probably happening today."
Perkins made no predictions about when the AI bubble will pop, but he argued that it's definitely much closer to the end of the cycle than the beginning.
"I wouldn't touch this stuff now," he told Axios. "We're much closer to 2000 than 1995."
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'Business Continues to Be Severely Depressed': New Reports Paint Dark Picture of Trump Economy
"The addition of the derivative steel and aluminum tariffs in the middle of the month... was devastating," said one manufacturing executive.
Oct 01, 2025
Two reports released Wednesday paint an increasingly dark picture of the American economy under US President Donald Trump, matching predictions that his tax policy and chaotic tariffs would ultimately harm workers and put a drag on the nation's financial outlook.
First, processing firm ADP estimated in its latest monthly report that the US economy lost 32,000 jobs in September, with contractions in employment happening across multiple industries.
The leisure and hospitality industry was hardest hit, as ADP estimated it lost 19,000 jobs last month, followed by professional and business services, which lost an estimated 13,000 jobs, and financial activities, which lost an estimated 9,000 jobs.
Small businesses took the biggest hit, as they shed 40,000 employees on the month, ADP estimated.
Nela Richardson, chief economist at ADP, said these latest numbers validate "what we've been seeing in the labor market, that US employers have been cautious with hiring."
The ADP report is not seen as reliable as the monthly jobs report issued by the Bureau of Labor Statistics, although that report will not be released on Friday as previously scheduled due to the current shutdown of the federal government.
In addition to the ADP survey, the latest ISM Manufacturing PMI Report revealed that the "manufacturing sector contracted in September for the seventh consecutive month" amid uncertainty caused in large part by Trump's tariffs.
Comments made by executives in the new ISM survey point to a dire situation facing many US manufacturers.
"Business continues to be severely depressed," said one respondent. "Profits are down and extreme taxes (tariffs) are being shouldered by all companies in our space. We have increased price pressures both to our inputs and customer outputs as companies are starting to pass on tariffs via surcharges, raising prices up to 20 percent."
This executive, who works for a transportation equipment firm, added that "the addition of the derivative steel and aluminum tariffs in the middle of the month—with no announcement—was devastating."
An executive at an electrical equipment supplier, meanwhile, said that "customer orders are depressed for heavy machinery because tariffs are so impactful to high-end capital equipment." The executive said their company's revenue projections were flat for the rest of the year, with "no outlook to improve in 2026."
Another manufacturing executive simply said, "Steel tariffs are killing us."
This gloomy sentiment isn't just shared by business executives, but also US consumers. The Conference Board on Tuesday released its Consumer Confidence Index showing a "sharp deterioration in consumers’ views of the current economic situation" in the US.
Stephanie Guichard, senior economist at The Conference Board, noted that consumer confidence numbers are now the lowest they've been since April 2025, when Trump sent shockwaves through the economy by announcing his so-called "Liberation Day" tariffs that he partially backed away from in the face of a cratering stock market.
"Consumers’ assessment of business conditions was much less positive than in recent months, while their appraisal of current job availability fell for the ninth straight month to reach a new multiyear low," Guichard explained. "This is consistent with the decline in job openings."
The Conference Board also found that consumers' short-term outlook for income, business, and labor market conditions was once again below the threshold that "typically signals a recession ahead."
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As Trump Recession Looms, New WSJ Poll Backs Call for Democrats to Embrace Economic Populism
"It feels like it's on the brink, it's on the precipice of this recession," one economist said this week.
Sep 02, 2025
A new poll from The Wall Street Journal released Tuesday is sparking calls on more Democrats to embrace economic populism, as it shows that Americans are still feeling gloomy about their financial prospects.
According to the poll, a record-low 25% of Americans now say they have a good chance at improving their standard of living, while almost 70% said they no longer believe that merely working hard is enough to get ahead.
On top of all this, more than 75% lack confidence that future generations will be better off than they are today.
The poll shows that US President Donald Trump is facing problems similar to the ones that former President Joe Biden faced over his last year in office, in that economic pessimism appears high even as the unemployment rate and the rate of inflation appear low by historical standards.
One major issue that appears to be weighing down economic sentiment is the cost of housing, as The Wall Street Journal writes that "fewer than one-quarter of respondents said they were very confident they could buy a home if they wanted to," while "some 56% said they had little or no confidence they could do so."
Democratic pollster John Anzalone took stock of the poll in a post on X and said that it "shows how important it is for Dems to get a strong economic message" given that "70% of people said they believe the American dream no longer holds true."
Democratic media operative Dan Ancona zeroed in on a question in the poll showing that a majority of Americans agreed with the statement that Trump and the GOP "are trying to scare and divide Americans so they can cut their own taxes and keep wealth flowing to the very rich."
In fact, roughly 27% of respondents who voted for Trump in the 2024 presidential election either somewhat or strongly agreed with that statement. Given this, Ancona called the populist economic framing "a pretty good starting point."
Rep. Ro Khanna (D-Calif.) also jumped at the findings of the WSJ poll and said that stamping out economic inequality in the US needed to be Democrats' priority.
"We must tackle the economic divides tearing our nation apart and make the economic independence of every family and community our highest mission," he declared. "I call it a new economic patriotism."
The WSJ poll showing Americans' sour economic mood comes as more economic forecasters have been raising the odds of a recession hitting the US economy.
Fortune reported on Tuesday that investment bank UBS believes the probability of a recession occurring in the near future has grown significantly in recent months, although it notes there is still a great deal of uncertainty over what the economy will look like in six months.
"The key message is the US economy, by these hard data measures, is locked in a prolonged phase of stagnation or slow contraction, warranting caution even as outright collapse has not yet materialized," wrote Fortune. "This aligns with other analysts' warnings that, even if a recession doesn't materialize, the economy is headed for a bout of 1970s-style 'stagflation,' a combination of a stagnating economy and rising inflation."
Moody's Analytics chief economist Mark Zandi has also been sounding the alarm about the state of the American economy, and he believes state-level data are already showing the US "on the edge of recession," according to Newsweek.
As Zandi explained this week, both California and New York, which together account for over 20% of American gross domestic product, are essentially flat at the moment, while southern states that have been the strongest in terms of economic growth in recent years have been slowing down.
"I don't think the economy is in a recession, at least not at this point," Zandi said in an interview with Newsweek. "But it feels like it's on the brink, it's on the precipice of this recession."
Along with a potential impending recession, former Labor Secretary Robert Reich pointed out that Americans are well aware of structural inequalities.
"CEO pay is up 1,085% since 1978, while worker pay is up just 24%. Millions live paycheck to paycheck as they struggle to afford basic goods," said Reich. "Is it any wonder why 70% of people said they believe the American dream no longer holds true or never did?"
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Experts Warn Fed Remarks Show Trump Policies Brewing 'Perfect Storm for a Recession'
"Donald Trump's tariffs mean you could suffer higher prices and lose your job AT THE SAME TIME," said Sen. Elizabeth Warren.
May 07, 2025
Alex Jacquez from the progressive think tank Groundwork Collaborative issued a stark warning to the U.S. public on Wednesday in response to a statement from the Federal Reserve committee that sets interest rates.
The new statement from the Federal Open Market Committee (FOMC) "provides further evidence that a perfect storm for a recession is brewing" under U.S. President Donald Trump, said Jacquez, Groundwork's chief of policy and advocacy. "Barely 100 days into Trump's second term, working families are already being crushed by sticky inflation and slowing growth."
"A Trump-engineered recession will devastate working families, but the president refuses to stand down on his failed trade war, no matter the cost," added Jacquez, who previously advised former President Barack Obama and Sen. Bernie Sanders (I-Vt.).
The FOMC said Wednesday that "the risks of higher unemployment and higher inflation have risen," and opted to keep the federal funds rate at 4.25-4.5%. The committee has maintained the rate for the past three meetings, following a series of cuts last year.
Trump on Sunday pushed for a rate cut, and though he has backed off a threat to try to oust Fed Chair Jerome Powell, the president "could reconsider if the economy stumbles in the coming months," The Associated Press reported Wednesday.
According to the AP:
Asked at the press conference whether Trump's calls for lower rates [have] any influence on the Fed, Powell said, "[It] doesn’t affect doing our job at all. We're always going to consider only the economic data, the outlook, the balance of risks, and that's it."
If the Fed were to cut rates, it could lower other borrowing costs, such as for mortgages, auto loans, and credit cards, though that is not guaranteed.
Addressing Trump's evolving tariff policy, Powell said Wednesday that "if the large increases in tariffs that have been announced are sustained, they're likely to generate a rise in inflation, a slowdown in economic growth, and a rise in unemployment."
Sharing a video of his remarks on social media, Sen. Elizabeth Warren (D-Mass.) stressed that Trump's tariffs mean higher prices.
Donald Trump's tariffs mean you could suffer higher prices and lose your job AT THE SAME TIME. Forget dolls, families will be forced to make impossible choices between necessities like food, housing, and health care.
[image or embed]
— Elizabeth Warren ( @warren.senate.gov) May 7, 2025 at 3:13 PM
In a Wednesday blog post, former Labor Secretary Robert Reichwrote: "Recall that last November, the single biggest reason voters gave in exit polls for choosing Trump was that he'd bring prices down... Although Trump has scaled back some tariffs and paused others as he seeks trade deals with foreign nations, his tariffs are already eating into household budgets."
Reich highlighted comments about price hikes from companies whose products include everything from baby supplies and laundry detergent to paper towels and tools. He also emphasized that "tariffs will particularly hurt small businesses."
"This bodes ill for American workers, since 80% of U.S. employment comes from small businesses with fewer than 500 workers. The likely result: higher unemployment," he explained, projecting price hikes and job losses this month. "But here's the question: Will consumers and workers realize Trump is the cause? And if they do, will they remember this by the November 2026 midterm elections?"
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Trump’s Budget Breaks His Campaign Promise to Help Those Struggling to Make Ends Meet
His partial budget fails to propose a serious agenda for the U.S. economy or for people who haven’t been included enough in the country’s overall prosperity.
May 03, 2025
The Trump administration’s partial budget plan released Friday is just its latest repudiation of the Trump campaign’s promises to help people struggling at the margins of the economy—an economy that President Donald Trump’s misguided tariff policies are threatening to tank.
This partial budget does not discuss the president’s intended tax breaks—tilted to the well off—or policies he will include (like those he supports as part of the reconciliation bill) to take food assistance and health coverage away from people who need them to meet their basic needs and to make college more expensive. The full budget will come later. But while the administration’s partial plan is limited to the part of the budget that Congress funds through the annual appropriations process, its proposal to cut that funding by nearly one-quarter is plenty bad enough, harming people, communities, and the economy.
During the campaign, President Trump said, “As soon as I get to office, we will make housing much more affordable.” But his budget proposes a devastating cut to rental assistance—which makes rent affordable for 10 million people—reducing funding by $27 billion below the amount provided in 2025 across five programs. This would cause millions of people to lose assistance they need to pay the rent each month, placing them at risk of eviction and homelessness.
Policymakers of both parties in Congress need to see this budget, and this entire agenda, for what it is—a direct assault on people, communities, and the economy.
These cuts would likely grow even deeper over time, since the budget would also consolidate multiple rental assistance programs into to a block grant that would be more vulnerable to cuts in the future. The budget also would impose a two-year time limit on rental assistance (apparently except for seniors and people with disabilities), a policy that would abruptly evict or end assistance for many low-paid workers and others who aren’t able to afford market rents after that period.
In addition, the budget proposes severe cuts to other housing programs, such as sharply reducing funding for housing and other services for people experiencing homelessness, cutting housing resources for Indigenous people, and eliminating funding for local agencies protecting people from housing discrimination and other fair housing violations, and block grants that fund affordable housing and community development at the local level.
The president also said “your heating and air conditioning, electricity, gasoline—all can be cut down in half,” but this budget eliminates LIHEAP, the program that helps low-income households afford to heat and cool their homes; reduces availability of the most affordable sources of energy—solar and wind—by cutting efforts to bring these sources online and make them available in low-income communities; and cuts programs that reduce energy waste.
As the President’s ill-conceived trade policies threaten to tip the country into a recession later this year, the budget disinvests from key sources of long-run economic growth. The budget cuts the National Science Foundation (NSF) by more than half and the National Institutes of Health (NIH) by about 40%. This is short-sighted: NSF and NIH funding supports foundational research that spurs innovation, leading to greater economic growth. The private sector will not support this work because there is no financial incentive to do so.
The budget also disinvests from America’s future workers, cutting $4.5 billion from K-12 education despite the Trump campaign’s statement that “we are going to keep spending our money” on education.
Most fundamentally, the budget fails to propose a serious agenda for the U.S. economy or for people who haven’t been included enough in the country’s overall prosperity. The budget presents no agenda for addressing housing or childcare affordability, improving educational outcomes for those our education system doesn’t serve well, maintaining and strengthening innovation, or broadening opportunity.
And today’s funding request again breaks President Trump’s repeated promises to protect Social Security, including “Save Social Security. Don’t destroy it.” On paper, the administration provides the same amount of funding next year as this year, but this is not enough to keep up with inflation, fixed expenses, and growing demand as the number of Social Security recipients grows as the population ages. The administration has already pushed out 7,000 Social Security Administration staff despite having the money to pay them, and it has already made it harder for seniors and people with disabilities to get the Social Security benefits they’ve earned. This is not what Congress intended when it passed this year’s budget.
The administration is claiming these massive cuts are necessary under the guise of fiscal responsibility, but the proposed $2.5 billion cut to Internal Revenue Service (IRS) funding—primarily for tax enforcement—reveals that any commitment to fiscal responsibility is limited. Funding for IRS enforcement pays for itself multiple times over: It provides the staff and technology to catch wealthy tax cheats and encourage everyone to pay the taxes they legally owe.
The administration justifies many cuts by saying that states are better positioned to cover the costs of various public services and infrastructure needs. This ignores the federal government’s important role in ensuring adequate investment nationwide, including in states and communities that face more economic challenges. The problems would be compounded by potentially large cost shifts in Medicaid and SNAP being considered in Congress. States would face even greater challenges—and the impacts on people and communities would grow—in a recession when state revenues fall but they still have to balance their budgets.
The president’s budget counts on funding in the emerging tax and budget bill for immigration enforcement. With that, it continues to prioritize a mass deportation apparatus that has gone too far already by disappearing people without due process and ending lawful immigration status for hundreds of thousands of people.
Since taking office, the Trump administration, often acting through DOGE, has unilaterally frozen congressionally approved funding, implemented large-scale staffing reductions that are harming public services, and threatened the security of people’s personal information. Having frozen funding in contradiction to enacted funding laws, the president’s budget now asks Congress to codify and continue these unilateral cuts next year, including through the proposed cuts to NIH, NSF, and the Department of Education. Codifying these cuts would make congressional supporters accomplices in this administration’s endeavor to make government less effective in finding cures for diseases, maintaining American technological leadership, and getting a good education.
The president’s harmful agenda goes well beyond what was released today. The president and his congressional allies are moving forward on a budget and tax bill that deeply cuts health coverage through Medicaid, food assistance through SNAP, and college aid to partially pay for expensive tax cuts skewed to the wealthy.
At the same time, the president’s chaotic, indiscriminate, and steep tariffs have sharply increased the risk of recession, which could lead to a rise in unemployment and the number of people who need help to afford the basics, just as those supports are slated for cuts.
Policymakers of both parties in Congress need to see this budget, and this entire agenda, for what it is—a direct assault on people, communities, and the economy—and plan a better course for the country.
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In First 100 Days, Trump Waged 'Relentless Assault on Working People'
"We are either patriots fighting the regime, or we are complicit in its tyranny," wrote former U.S. Labor Secretary Robert Reich. "There is no middle ground."
Apr 29, 2025
Tuesday is the 100th day of U.S. President Donald Trump's second term, which so far has featured plummeting public opinion poll numbers and mobilizations against his billionaire inner circle's mounting attacks on working people.
"Since Franklin D. Roosevelt's earthshaking first 100 days in office, no president has matched the sheer drama and disruption of that 15-week sprint in 1933, which rewrote the relationship between Americans and their government. At least until now," Naftali Bendavid wrote Monday for The Washington Post.
"Roosevelt's onslaught, in the depths of the Great Depression, was aimed at expanding the federal government's presence in Americans' lives. Trump's crusade is aimed largely at dismantling it," Bendavid added, noting that while FDR's agenda was enacted by Congress, the current president "has governed largely by unilateral executive action."
Ahead of nationwide protests planned for later this week, many Trump critics marked the 100-day milestone by chronicling how the president's policies are making life harder for the working class, from cutting federal employees and funding to pursuing mass deportations and economically devastating tariffs.
"The cruelty is unnerving, the disregard for the Constitution and rule of law is reckless, and the day-to-day pain can never be justified."
"It is a fallacy to argue that we must choose between fighting for a fair economy and protecting our democracy," the watchdog Accountable.US said in a Monday memo. "Trump's first 100 days, which will be marked this week, clearly show that the two are interconnected, and he's failed Americans on both."
"What we have seen over the past 100 days is a president who has flouted the law, gutted checks and balances, and consolidated power for himself," the memo continues. "He has also, with the help of Elon Musk and allies in Congress, done catastrophic damage to our economy, injecting chaos and uncertainty for small businesses and investors, undermining workers' rights, tanking consumer confidence, and increasing the likelihood of a recession."
The Conference Board said Tuesday that its Consumer Confidence Index dropped 7.9 points this month to 86—meaning "consumer confidence declined for a fifth consecutive month in April, falling to levels not seen since the onset of the Covid pandemic," according to Stephanie Guichard, a senior economist at the think tank.
Calling those numbers "sobering" and a "signal that we are plunging headfirst into a recession," Groundwork Collaborative executive director Lindsay Owens said that "if this is the level of pain the president is willing to inflict on Americans in just a few short months, it's no wonder that consumers and businesses are bracing themselves for a long, dark road ahead."
"This is a man-made crisis," Owens declared. "In his first 100 days, Trump did all he could to engineer a recession."
Donald Trump promised to end inflation and lower costs on his first day in office. Instead, Americans are paying a higher price on groceries, cars, utilities, and housing — with the looming fear of a recession. He's crashing our economy and leaving you with the bill.
— Governor JB Pritzker (@govpritzker.illinois.gov) April 29, 2025 at 2:31 PM
The Economic Policy Institute (EPI) last week compiled a list of "100 ways Trump has hurt workers in his first 100 days," which includes terminating grants to fight forced and child labor, nominating Crystal Casey to be general counsel at the National Labor Relations Board, and leaving the Federal Mediation and Conciliation Service with what one employee recently told Common Dreams is "a very skeletal crew."
In addition to detailing Trump administration actions to degrade wages and working conditions, the think tank's report lays out Trump's attacks on anti-discrimination protections, immigrant workers, public education, and more.
"During the campaign, Trump promised to put working people first, lower rising costs on groceries and gas, and preserve our earned benefits and healthcare," American Federation of State, County, and Municipal Employees (AFSCME) president Lee Saunders noted Monday. "Instead, the first 100 days of this billionaire-run administration have been fueled by lies, broken promises, and a relentless assault on working people and unions."
"He has handed over the reins of government to billionaires—appointing the wealthiest Cabinet in American history, kicking off a trade war that is raising prices on everyday goods, attacking Social Security and Medicaid, cutting wages for workers, and stripping collective bargaining rights from more than 1 million federal employees," the union leader said. "The White House claimed it had nothing to do with Project 2025, yet it has already implemented over one-third of the anti-worker agenda, often sidestepping Congress and the courts to do so."
Saunders stressed that "the fallout has been immediate. Retirees are left wondering how to navigate Social Security as staff are laid off, offices are closed, and services are cut. People are watching their retirement savings shrink. Lifesaving health and safety regulations have been put on hold. Students with disabilities are losing vital support from the Department of Education. The Department of Health and Human Services is clawing back funding from states, cities, and towns to fight infectious diseases as measles is on the rise, and it's just the beginning."
AFSCME and the American Federation of Teachers are challenging some of Trump's moves in court. AFT president Randi Weingarten on Tuesday condemned a similar list of Trump actions, including cuts to "research grants to colleges and universities that fund cancer, diabetes, and Alzheimer's research," and said that "it's no wonder his public approval is tanking."
"The cruelty is unnerving, the disregard for the Constitution and rule of law is reckless, and the day-to-day pain can never be justified," Weingarten added. "That's why our members are fighting back."
Some of the actions highlighted by union leaders are also included in First Focus on Children's Monday timeline for what the advocacy group called the Trump administration's "systematic war on the nation's children."
"I'm not sure we've ever seen an administration so laser-focused on targeting the nation's children for harm," said the group's president, Bruce Lesley. He called out Trump, his appointees, and the GOP-controlled Congress for planning to cut children's healthcare by $880 billion, shutter the Education Department, and "steal the lunch money of the nation's poorest kids."
"Babies have been singled out for special punishment with the proposed revocation of birthright citizenship and deportation of U.S. citizen children. This administration is also promoting tax policies that penalize families for having newborns," Lesley continued, also pointing to the "decimation" of the United States Agency for International Development. "The president has left children overseas to die of AIDS, malaria, and starvation by the millions."
“'100 Days of Destruction': Top Historian on Trump's Presidency So Far” Writing for Zeteo, Princeton's @zelizer.bsky.social explains how past US presidents used their first 100 days to build, while Trump has used his to dismantle, intimidate, and destroy. Read/share/subscribe:
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— Mehdi Hasan (@mehdirhasan.bsky.social) April 29, 2025 at 7:53 AM
Trying to end birthright citizenship is one of several ways Trump is attacking immigrants. The advocacy group America's Voice this week published a fact sheet titled, High Costs, No Benefits: 100 Days Of Trump's Immigration Agenda.
"Let this sink in: Our government is deporting American kids, including kids with cancer, and is now trying to defend and excuse their choices on national television," said the organization's executive director, Vanessa Cárdenas. "Their actions embody the cruelty, chaotic, and harmful nature of their agenda the past 100 days, and what they want from the next 100 weeks and beyond."
"As Americans see the cruelty and overreach in action," Cárdenas noted, "a growing majority is expressing disapproval, connecting it to broader concerns regarding the rule of law, the tanking economy, cuts to Americans' healthcare, and overall chaos and extremism."
The Trump administration's anti-immigrant agenda is featured in several of the items on a new Human Rights Watch (HRW) list of actions "that pose significant risks to the human rights of people living in the United States and around the world."
Tanya Greene, U.S. program director at HRW, said that the administration has already "inflicted enormous damage to human rights" and "we are deeply concerned that these attacks on fundamental freedoms will continue unabated."
Item 51 on HRW's list warns that "people in the United States risk seeing their democratic power weakened by a politically motivated effort to skew long-standing U.S. Census Bureau policies and methods aimed at ensuring accurate population counts that determine how presidents, members of Congress, and others are elected and how federal funding is allocated to states and localities."
All Voting Is Local executive director Hannah Fried said in a Tuesday statement that "these first 100 days have been a five-alarm fire for the freedom to vote," citing Trump's executive order on elections, the Safeguard American Voter Eligibility (SAVE) Act, "and copycat bills in Ohio and Michigan that would require voters to show a passport or birth certificate to vote."
"The voting rights assaults during this time specifically hurt Black, Brown, Native American, and other historically marginalized communities," she emphasized. "They also set a tone for further efforts to erode voting rights and consolidate power at all levels of government in the lead-up to next year's midterm elections."
A growing number of public figures and watchdogs are sounding the alarm about the consolidation of power under Trump. Sen. Bernie Sanders (I-Vt.) has been crisscrossing the country for his Fighting Oligarchy Tour, and the advocacy group Public Citizen this week put out a list of highlights from the president's first "100 days of oligarchy and conflicts of interest."
Public Citizen's resource outlines how Trump "is handing people with clear corporate conflicts of interest—like stakes in Big Oil companies, long corporate lobbying careers, and seats on major company boards—the power to regulate and oversee corporations," dismantling the Consumer Financial Protection Bureau, and ridding the government of inspectors general, among other actions that enrich him and his allies at the expense of the public.
"People aren't fooled. They see what's going on. It's why millions took the streets on April 5th to protest Trump and Musk's attacks on working families."
The organization Issue One also has a new report—Unchecked Exec—about how "Trump's first 100 days have been focused on consolidating power and sidestepping anti-corruption safeguards."
"The Founders were deeply concerned about concentrating too much power in the presidency," said Issue One CEO Nick Penniman. "The Founders fought a revolution to get rid of concentrated executive authority, and they placed 'We, the People'—and Congress—at the center of the Constitution."
"A hundred days into this administration, it's clear the White House is intent on pushing the limits of its power to the point where it risks violating the Constitution and eroding the freedoms of every American," Penniman added. "This is a time for total vigilance, before the America we were living in 101 days ago begins to disappear."
The public is already fighting back in the form of protest. Maurice Mitchell, national director of the Working Families Party, said Tuesday that "calling Trump's first 100 days a dumpster fire would be an insult to dumpster fires."
"In less than four months, Trump has destroyed jobs, brought the economy to the brink of ruin, and done absolutely nothing to lower costs," he continued. "People aren't fooled. They see what's going on. It's why millions took the streets on April 5th to protest Trump and Musk's attacks on working families. It's why more and more people are joining community organizations or stepping up to run for office."
"Trump and his billionaire friends want us to fight against each other, so they can take an even larger share of the pie," he added. "But we're not playing their game. Instead, we're going to bring working people together, from every background and geography, to stop Trump and his MAGA cronies in their tracks."
A national day of action is planned for Thursday, recognized globally as May Day. There are more than 1,100 rallies scheduled—including one at Philadelphia City Hall, where Sanders is set to join the city's AFL-CIO chapter under the banner, "For the Workers, Not the Billionaires."
While Sanders and those who have joined him on tour, such as Rep. Alexandria Ocasio-Cortez (D-N.Y.), have been praised for their response to the second Trump administration, constituents across the United States are calling on many members of Congress to do more.
Although Republicans control both chambers of Congress, recent polling shows rising support for impeaching Trump a historic third time, and Congressman Shri Thanedar (D-Mich.) on Monday filed seven articles of impeachment against the president. Thursday will feature some actions focused on pressuring lawmakers to pursue impeachment.
Given Congress' current makeup, Christina Harvey, executive director of the progressive advocacy group Stand Up America, is specifically calling on Republican lawmakers who "aided and abetted" Trump to instead fight back against his "relentless assault on our democracy, our freedoms, and the basic services hardworking Americans depend on to survive."
"What more will it take for Republicans in Congress to find the courage to stand up for their constituents?" she asked Tuesday. "The president is not a king, and Congress is meant to be a co-equal branch of government. We can't afford to wait another 100 days for them to finally remember that."
Over the first 100 days, we @sddfund.bsky.social have taken 100 actions challenging the Trump admin’s lawlessness—incl. repping conservatives opposing his foreign abductions We’ll keep fighting in the courts of law & public opinion. I discussed @msnbc.com
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— Norm Eisen (@normeisen.bsky.social) April 29, 2025 at 11:57 AM
Opponents of the president's agenda are also fighting in the courts. In a 100-day roundup, the ACLU said that "Trump has tested every limit, abused every power, and exploited every loophole to silence dissent, disenfranchise marginalized communities, and erode our rule of law."
"These are deliberate tactics designed to enforce compliance through fear, force, and censorship. But we aren't backing down. If the Trump administration wants to go after people's rights and freedoms, they'll have to go through us first. And we were ready for this fight," declared the group, which so far has filed 107 legal actions.
In a Monday blog post, former U.S. Labor Secretary Robert Reich argued that everyone must fight to save a nation that "is tottering on the edge of dictatorship."
"We are no longer Democrats or Republicans. We are either patriots fighting the regime, or we are complicit in its tyranny. There is no middle ground," Reich wrote. "Soon, I fear, the regime will openly defy the Supreme Court."
"Americans must be mobilized into such a huge wave of anger and disgust that members of the House are compelled to impeach Trump (for the third time) and enough senators are moved to finally convict him," he added. "Then this shameful chapter of American history will end."
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