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Yes, recession. I know this is one of those moments when people imagine the rules of economics have been suspended. The stock market races endlessly upward. Help-wanted signs paper shop windows. Economies around the world are in a rare period of simultaneous growth, and tax cuts have brightened corporate boardrooms from Portland, Maine, to Portland, Ore.
But a downward turn lies somewhere ahead, be it a recession, slump or, God forbid, crash. A necessary part of the energy of economic cycles comes from the ebbing of each wave.
History suggests that the next recession is not far off. The current expansion, though relatively weak, has been steady since June 2009, making this the third-longest upward climb on record. Juiced by the tax cut, the United States is on track to record 107 months without a recession in April, passing the boom of the 1960s in duration. That will leave only the decade-long, 120-month run in the 1990s — when the end of the Cold War met the rise of the Internet to create a Golden Age for the U.S. economy — to be beaten.
In other words, just when the 2020 election begins to warm up, in spring 2019, the economy (if it isn’t already in recession) will break the existing record and begin testing the outer limits of the cycle. It’s not hard to imagine shocks that could trigger a drop. Democrats could win control of the House and ignite an impeachment crisis. Mueller’s investigation could take an unsettling turn. The Federal Reserve could raise interest rates faster than the economy can digest them. Or the opposite: The Fed could move too slowly and smoldering inflation could catch fire. China’s debt bubble could burst. North Korea could erupt. Or the very real threat, dreaded by Trump’s own economic advisers: The president could deliver on his trade war threats.
As the saying goes, it only takes one pin to burst a balloon.
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