March 10: We are very definitely headed into a tariff induced recession characterized by stagflation. Taxes (what tariffs are) cannot result in prosperity. Instead, they will cause reduced economic activity in all trade related industries. Moreover, retaliatory tariffs will reduce our exports and increase unemployment in our more efficient exporting industries. The higher tariffs on imports will result in higher prices paid by consumers, who will in turn, fund our government’s tariff revenue. Higher prices and higher unemployment comprise stagflation.

Because consumers tend to vote with their wallets, this recession and associated inflation will last only until the next election. Effectively, the next election is how we will transition out of the recession. The short-run payoff to any domestic production increases in inefficient import-competing industries will limit any investment or job creation and so there will be little or no transition in that manner. Instead, we will suffer only higher prices and higher unemployment caused by the current administration’s tariff policies until the next election arrives.

For those wanting to risk investment during the insuring recession, consider the following stocks for growth: PGR, ATNI, ULCC, TCBX, CRDO, MEC, MD, and EAT. For dividends and growth, consider: CALM, BIP, BMO, CRGY, PR, and SU. The only two ETFs eking out positive growth over the previous three months were XLV and VHT. Here comes the recession, so good luck!