Why I Think A Recession Is Coming

The Dow is up again, there might be another rate cut from the Federal Reserve, and Donald Trump (below) assures us that there won't be a recession.

But I think that a recession, which is the only thing that could solidly sink Trump's re-election chances, is still coming.  I could write a six-thousand word explanation, but as it's been said that one picture is worth a thousand words, I am instead showing you six pictures, all of which I took myself this year.

This is a 2007 Volkswagen Jetta.

Here's another Volkswagen, a 2002 Passat.

And here's a 2003 Dodge Neon.

Here's a nice, though slightly banged up, 1999 Saturn SL2.

 And how about this sleek 1997 Lincoln Mark VIII?

And - wait for it! - a 1995 Ford Taurus - first-generation model! 

In case you haven't figured it out yet, here's what these six cars have in common.  All of them over over a decade old, a couple of them even more than two decades old.  One of them is even from a brand that no longer exists.

I've been seeing cars ten or more years old on the road almost daily, and many of them have license plates that were issued only recently.  Part of the reason for this may be that many people don't like any of the new sport utility vehicles and crossovers and prefer to keep their old coupes, sedans and hatchbacks, but I suspect that a bigger reason may be that new cars are simply too damn expensive for the average buyer.  Many of the new jobs created in Trump's economy are the same old dead-end jobs that barely helps a beleaguered American middle class make ends meet.  Meanwhile,  automotive journalists have suggested a theory - which I happen to agree with - that the reason cars have become too expensive is because of all the high-tech gadgetry in them that most people don't want or need.  Even entry-level brands such as Chevrolet and Toyota are filling their cars with so many unnecessary high-tech features, you might as well buy a Cadillac or a Lexus.

This all means that people are either holding on to their cars longer or buying used cars that other people held on to for long.  I have a friend who owned a 2006 Volvo that he traded in for another car only recently.  He got a 2016 Volvo in its place, and as an owner of a late-model used car, he's one of the lucky ones!    

The health of the American auto market - not just domestic automakers but of all of them - has long been a barometer for the U.S. economy.  Car sales - sales of all cars, sedans and SUVs alike - are slowing, and the Web site Insider Car News reports that there are still plenty of 2018 models available as the 2019 model year comes to a close.  The Jeep Wrangler Unlimited is the 2018 model with the largest surplus of unsold units, followed by the base Wrangler.  Most of the other 2018 models available in surplus are SUVs as well, despite the fact SUVs account for more than half of new vehicles actually sold.  This news comes on the heels of factory closures and layoffs from General Motors back in late 2018.  You call this a robust economy?

I have been looking at the possibility of getting a new Golf before Volkswagen of America decides not to offer the standard Golf model here anymore, as my own 2012 Golf has stalled repeatedly over the past few months.  But I've also been looking at used Golfs for purchase, because I'm no better off financially than most people.   After yet another repair, I think I may have finally had my stalling problem licked, so I may yet be able to keep my Golf like I've wanted to.  And I have a feeling others will continue to buy or hold onto cars older than mine.  If you hang around a polling place on Election Day 2020, and you see a lot of cars from the 1990s and 2000s - some of which may be from Pontiac, Oldsmobile, and other since-shuttered brands - pull into the parking lot, count on Trump to lose his bid for a second term.  Even if some of those vehicles are Suburbans and Explorers of similar vintage.