Jeff Bezos Sours on Biden’s Economy, Says It’s Time to ‘Batten Down the Hatches’

Amazon founder Jeff Bezos at the UK diplomatic residence in New York City, on Sept. 20, 2021. Michael M. Santiago/Pool via Reuters

Amazon founder Jeff Bezos has joined the ranks of corporate leaders who are sounding the alarm on the U.S. economy, warning of turbulence ahead as recession risks rise.

In an Oct. 19 tweet, Bezos shared footage of Goldman Sachs CEO David Solomon predicting more market volatility in the pipeline and warning it’s likely the U.S. economy will tip into a recession.

“Yep, the probabilities in this economy tell you to batten down the hatches,” Bezos wrote, commenting on Solomon’s remarks.

The Goldman Sachs chief told CNBC in an interview on Oct. 18 that as the Fed fights inflation with aggressive rate hikes, the odds of a recession are relatively high.

“I think you have to expect that there’s more volatility on the horizon,” Solomon told the outlet. “Now, that doesn’t mean for sure that we have a really difficult economic scenario. But on the distribution of outcomes, there’s a good chance that we have a recession in the United States.”

Even though the U.S. economy met the informal definition of a recession when it recorded two consecutive quarters of negative gross domestic product (GDP) growth earlier this year, the recession shot-callers at the National Bureau of Economic Research (NBER) have yet to officially declare it as such.

Solomon added that the looming downturn was making the operating environment for businesses more precarious.

“I think it’s a time to be cautious, and I think that if you’re running a risk-based business, it’s a time to think more cautiously about your risk box, your risk appetite,” Solomon said.

Other corporate leaders have also sounded the alarm on the U.S. economy.

JPMorgan Chase CEO Jamie Dimon recently warned that the United States is likely going to fall into a recession in the next six to nine months, adding that the Fed “waited too long and did too little” and is now “clearly catching up.”

An economic model run by Bloomberg Economics recently boosted its estimate for the probability of a U.S. recession in the next 12 months from an earlier projection of 65 percent to a full 100 percent.

The dismal odds stand in sharp contrast to the Biden administration’s upbeat tone on the economy ahead of the midterms.

President Joe Biden, by contrast, has mostly sought to portray the economy in optimistic terms. During a visit to Oregon on Saturday, for example, he talked up the economy, saying it’s “strong as hell.”

Biden also downplayed the cost-of-living crunch bedevilling American households, falsely claiming inflation is “worse off everywhere else than it is in the United States.”

In September, U.S. inflation hit an annual 8.2 percent, a higher figure than in some other advanced economies. Canada (7 percent), Australia (6.1 percent), France (5.6 percent), and Switzerland (3.3 percent) are examples of countries that in September reported lower rates of inflation.

The president has acknowledged, however, that there’s a chance the economy will tumble into a recession, though he believes it’s “very slight.”

“Look, it’s possible. I don’t anticipate it,” Biden told CNN in an interview that aired on Oct. 11.

That view stands in stark contrast to an ominous prediction made by economist Nouriel Roubini, dubbed “Dr. Doom” for his accurate prediction of the market crash during the financial crisis of 2008–09.

Roubini wrote in a recent op-ed in TIME magazine that the idea that a recession will be mild and short-lived is “dangerously naive.”

“There is ample reason to believe the next recession will be marked by a severe stagflationary debt crisis,” Roubini wrote.

Roubini said that high levels of debt make today’s economic environment trickier to navigate than the 2008-09 meltdown, warning of mass bankruptcies and defaults as central banks hike rates to tame soaring inflation.