The stock market experienced a sharp drop last week and earlier this week after President Trump announced he was implementing a number of new tariffs that were higher than most market analysts had been expecting. The dramatic sell-off led many politicians, pundits, and financial firms to declare it more likely than not that a recession will kick off this year.

Some of the president’s supporters countered by pointing out, correctly, that the stock market does not necessarily represent the economy as a whole. But most senior figures in the administration and high-profile defenders of Trump’s agenda concede that their trade policy could indeed cause a period of economic pain. They argue that it is necessary for the president to lead the country through a period of short-term pain if we are ever going to see meaningful structural improvements in our economy.

That is a remarkably and refreshingly honest position for a presidential administration to have. And it’s true. Unfortunately, the president’s team has adopted this position to justify their dramatic raising of import taxes—which is not necessary to meaningfully fix our economy and only stands to bring unending economic pain…..

There is only one thing that can cause the kind of all-encompassing economic slowdown experienced across the entire economy that defines a recession: artificial credit expansion…….

That distinction between the trigger and cause is important because, as nasty as those market crashes, tariffs, and speculative bubbles were, they would not have brought about an entire recession without all the malinvestment created by artificial credit expansion. It’s like the difference between tossing a lit match on an empty pad of damp concrete versus a windblown field of dry, flammable grass.

All the malinvestment spawned by the Fed’s years of recent artificial credit expansion has locked in a major and painful correction at some point. If we’re ever going to truly escape our recurring nightmare of permanent price inflation and unending recessions, we need an administration and a public that understands the true cause, and that has the resilience and discipline to push through the short-term economic pain that actually fixing this problem for good requires.