Bankruptcies Hit Great Recession–Era Levels

Bankruptcies are going up, up, up. According to The Washington Post, US corporate bankruptcies surged in 2025 levels, higher levels than at any point since the Great Recession. It's driven by inflation, high interest rates and the high tariffs, higher tariffs than we've had in many, many decades. Data from S and P Global Market Intelligence shows 717 companies filed bankruptcy, and that's just through November. That doesn't count the last month and a half of the year. And it comes in the categories of manufacturing, construction, transportation, consumer discretionary firms are hit the hardest. Big Internet companies, big tech companies. They're doing fine. Now, economists say that trade policy is meant to revive industry instead of squeeze margins. It's weakened demand and pushed already fragile businesses over the edge. Now, folks, I don't have to remind you, the new administration when they came in said, we're the business people, we know about business. We're going to make business run well like we did in the private sector. Turns out that's true. Because lest we all forget, Donald Trump has done more for bankruptcies, bankrupting casinos and hotels than he is for really his financial acumen. So I guess he has kept that promise of bringing his know how from the from the private sector into government because bankruptcy is spreading. Now, to be fair, the economy is not in horrible shape. We're not in a recession. Unemployment is not at dangerously high levels. It's certainly below 5%. Inflation is not at anywhere near historic levels. So I'm here as a sane, sensible centrist giving you accurate information. I'm not trying to spin anything one way or the other, but it is a concern to a lot of people that bankruptcies are up. It's up 14% compared with 2024. Again, highest bankruptcy total since 2010. Manufacturing lost 70,000 jobs in the last year. Oops. Trust turned out. All those terrorists. Maybe they didn't put the world into the economy, into a massive recession the way some liberal and conservative economists predicted. But it certainly didn't bring back manufacturing jobs. There were 17 mega bankruptcies in the first half of 2025. More about that. That's typically defined as firms with more than $1 billion in assets. Now, it's harder to get accurate statistics on inflation these days. I've seen everything from 2.7% in November to 3.1. Inflation certainly has not skyrocketed during this administration, nor has it gone down to zero or certainly we have not rolled back prices to where they were four, four and a half years ago, which was the stated goal of the administration to roll prices back, which would actually be deflation. That, of course, has not happened. And that's pretty much impossible for anyone to do, regardless of political party, unless you have an absolute complete economic financial meltdown. Now, U.S. according to the Post, U.S. solar duties cost 70 million dollar million monthly. Tariffs added another 1800 dollars annually per household. In terms of a tariff tax, that's the impact on people. According to Jeffrey Sonnenfeld of the Yale Management those with pricing power will pass on the cost over time. Others will fold. Well, those who folded are the ones who've gone bankrupt because their cost went up. Here's what so many people don't understand. It sounds good. It sounds easy to talk tough. We're Americans, America first. Let's put an import on all these foreigners selling stuff to our country. And what most people don't realize is that so much of what comes into our country are materials then built by our manufacturing sector to make the final product. So if your inputs are higher for the product you're selling on the world market or just to the US Market, your prices are going to be higher. And if you can't pass those prices on to consumers, you can go bankrupt. That's in part the theory of what's happening to our economy. According to KPMG senior economist Megan Martin Schoenberger. We have an economy that looks strong on paper, but not in every to be fair. I don't know that every industry always looks fair in any economy, but it is a bit concerning to see bankruptcies going up so quickly and so high at a time when we're not in a great recession. I mean, it's kind of understandable 2009, 2010 to see a lot of bankruptcies. What's the reason? Now we can guess. We can really only guess. We can deduce and reason based on what serious economies economists put out. So one theory, of course, is that tariffs function as hidden taxes, disproportionately hurting workers and consumers. But that of course, then ultimately hurts companies that rely on consumers and don't have ultimate pricing power. If you're Facebook, if you're Google, it doesn't really hit you very hard. You're dealing with digital stuff, bits, zeros and ones for your ads. And there's always going to be another advertiser somewhere. So those companies are a bit immune. Amazon certainly seems like they can pass on the cost to any customers. They are the, you know, they're essentially the logistics company in all of this. They don't seem to be here. No one's suspecting that Amazon's going to go out of business anytime soon. But smaller companies, mom and pop companies, are in fact going out of business. Because, you know, if your margins are 10% and you're selling, I don't know, let's say a million dollars a year of product, let's say 2 million, your margins are 10% and you're making a couple hundred thousand dollars for you and a couple of people, all of a sudden your inputs have tariffs at 18% even. Well, boom, you're now trying to support four or five people off of maybe $20,000 a year. It doesn't work, you go bankrupt. That is what's happening again and again and again. So here's the big problem. We're so used to a political discussion where liberals and Democrats and so called progressives, the Chuck Schumers of the world, are attacking what President Trump has done with his tariffs as anti consumer, not good for the left, progressive viewpoint. What doesn't get enough attention is how everything Trump is doing regarding tariffs, managing our economy is antithetical to what conservatives believe. It's big tax. A tariff tax is a tax. They might not call it a tax, but a tariff is just another fancy word. It's what fancy insiders use to cover up the fact that it's a tax and it does slow down economic growth. As we're seeing it, the government is picking economic winners and losers and it's favoring certain sectors like AI, big tech. They're not getting their taxes increase. Oh no, they're doing fine. And when you saw the big boys, and it was boys sitting behind Trump at the inauguration, the ones who had often given him hundreds of millions of dollars, like Elon Musk, and collectively all the funds from Google and Amazon and Facebook, they're not crying now, they're not hurting. Things are looking pretty good for those guys. It's the smaller mom and pop companies that this administration picked and said, okay, we're going to try to use our brilliance to manage the economy to say that this country's bad because we don't like their products. This country's good because they're letting us build a hotel or something. This country's bad. So we're going to tax them a lot because they said they don't like me. This country's good because they like me and they want to have one of my golf courses. So that's not free market economies. That's not capitalism, it's feudalism. It is socialism. It is authoritarianism. It's version, it's little Bits and pieces of all of those things. The one thing it's not, it's free market capitalism. And you don't have to be some libertarian, pure market purist to have a problem with what's going on now with so many decisions about our economy and being Decided by Washington D.C. now, trade wars historically fail to revive broad based manufacturing employment. Look it up. Don't take my word for it. Do some research. They haven't worked in the past, they're not working now. It is true that many of the naysayers said when all these tariffs were imposed, it's going to put us into a massive, massive worldwide recession. That hasn't happened. Many economists believe we would be in a recession if it weren't for the massive, massive AI spending boom that's perhaps bailing out the economy right now. The other thing's going on is our economic growth is skewed now toward affluent households. Almost all of the spending in our economy right now is done by the wealthiest 10%, bottom 90% are like we're just trying to pay for groceries. We're just trying to keep a roof over our heads. So the economy does seem to be extraordinarily fragile. What that means is businesses that sell to the bottom 90% are often the ones going bankrupt. I'm not seeing a lot of Mercedes Benz or BMW dealerships going bankrupt in America. They're doing fine because wealthy people are doing fine. And perhaps you're doing fine, I'm doing fine. But a lot of companies depend on a lot of customers, business and money where they were never counting on my business, maybe not counting on yours and they are going bankrupt. This is a big big problem. Now let's look at some other issue. Bankruptcy cycles often lag inflationary shocks by 12 to 24 months. Similar post policy collapses follow the Smoot Hawley tariffs which most, not all, but most economists believe that's what caused the Great Depression. High interest rates historically expose weak debt balance sheets. Consumer retrenchment signals late cycle economic stress and we are seeing consumers retrench. So is it time to panic? No. But it is interesting that the consumer sentiment right now is lower than at almost any point since the end of the Carter administration, beginning of the Ronald Reagan administration When inflation forget 3%, it was like 13, 14%. Unemployment was high, stagflation was horrible. That's really the last time we've had consumers so down on the economy. And news like this bankruptcy statistics being higher than at any point since the Great Recession, it doesn't help what is the solution. Anyone who tells you they know exactly what's going to create economic nirvana, you should be skeptical of. But there is an old saying that if you're in a ditch, stop digging. These tariffs certainly appear to be a ditch, and it's time to stop the digging.