Tick, tick, tick...BOOM
Only 1,410 days to go...
“Access to cheap goods is not the essence of the American dream… Across a continuum, I’m not worried about inflation.” ~ Scott Bessent, Treasury Secretary
Sounds a bit tone deaf to me. I looked it up. Scott Bessant was a hedge fund manager and has a net worth valued at least at $521 million, according to his December 28, 2024, financial assets disclosure by the U.S. Office of Government Ethics. According to reports, his “Charleston Pink Palace,” also known as the John Ravenel House, just recently sold for $18,250,000.
I’m not sure this guy really has a handle on what the life of an average American looks like. I wonder if he has ever even set foot in Walmart or Costco. My observation is that most Americans are usually looking for a good deal and are probably not going to be thrilled if and when these tariffs take effect and the cost of consumer goods skyrockets. The typical American family could face higher annual costs of between $1,600 to $2,000 due to the new tariffs, according to a new analysis from the Yale Budget Lab, a nonpartisan public policy research center.
“President Joe Biden, walking fossil or not, handed Trump an economy that was roaring by pretty much every macro metric. The one massive fly in the ointment—the persistent inflation that doomed Democrats last year—posed little risk to the incoming president. After all, voters had already hung it around Biden’s neck. It was clear skies and smooth sailing ahead. The big gripe among Biden-ites, in fact, was that all Trump had to do was sit back, relax, and take the credit as America’s economic Messiah.” ~Andrew Egger
Many of the voters who swung toward Trump were thinking he would “fix the economy,” which was actually not broken. Yes, inflation was high, but it was coming down… until Trump’s economic ineptitude.
“If Trump had done nothing about the economy, we’d be in better shape than we are now. Before he came to power, unemployment was low, inflation was finally coming down, and the stock market was hitting record highs. But he hasn’t done nothing. Trump has started a trade war. The stock market is reeling. Canada and Mexico, our two biggest trading partners, are seething. Trump’s tariffs are a petulant and ill-advised bargaining tactic that will impact every American and could push us into recession.” ~ Dan Rather
The so-called “economic strategy” of the Trump administration has been laid out in living color.
Trump has said so much nonsense about the budget and priorities that it’s difficult to summarize. But the central contradiction is that he has said he wants to do three incompatible things:
Balance the budget
Extend the tax cuts for his first term
Keep Social Security, Medicare, and Medicaid fully funded
Doing all these things simply isn’t possible. You can’t slash revenue by trillions, refuse to cut the biggest items in the budget, and eliminate the deficit. The numbers simply don’t add up. Trump himself has tacitly admitted that his stated priorities are mutually contradictory. He’s endorsed the House budget framework, which extends his first term tax cuts. That plan raises the deficit by $2.8 trillion through 2034. In contrast, the Senate has proposed a balanced bill, putting votes on extending the tax cuts off until later. But, again, Trump prefers the House bill.
Further plans include:
Start trade wars with long time trading partners and friends raising the cost of consumer goods.
Fire thousands of people and put them out of work: How hard have US agencies been hit by Trump and Musk's DOGE layoffs?
The Internal Revenue Service has started the process of firing about 12,000 employees, largely affecting workers hired under the Biden administration as part of an effort to target fraud among taxpayers.
Maryland Attorney General Anthony Brown is leading the coalition of attorneys general in 19 other states in a federal lawsuit that was filed in Maryland, where the state estimates about 10% of households receive wages from the federal government.
“The draconian actions of the Trump-Vance Administration could lead to tens of thousands of jobs lost, hundreds of thousands of lives disrupted, and the cratering of tens of millions of dollars in income here in Maryland.”
Extend the expiring 2017 Tax Cuts and Jobs Act (TCJA). This would decrease federal tax revenue by $4.5 trillion from 2025 through 2034. Long-run GDP would be 1.1 percent higher, offsetting $710 billion, or 16 percent, of the revenue losses. Long-run GNP (a measure of American incomes) would only rise by 0.4 percent, as some of the benefits of the tax cuts and larger economy go to foreigners in the form of higher interest payments on the debt. (source: Tracking the 2025 Trump Tax Cuts)
Stymie growth: The growth outlook for the first quarter has plummeted. Reuters’s Jamie McGeever warned of a recession: “The Atlanta Fed's GDPNow model estimate for annualized growth in the current quarter was a stunning -2.8% on Monday, down from +2.3% last week. A month ago, the model showed that growth in the January-March period was tracking close to +4.0%.”
Set up a bitcoin strategic reserve. “Critics question the wisdom of tying America’s financial future to a purely speculative, highly volatile asset. They argue that the reserve is little more than a scheme to enhance the value of bitcoin, thereby juicing the portfolios of early investors, such as the roughly 30 crypto CEOs who descended on the White House for a meeting with the president on Friday.” (source: A non-crypto person’s guide to the ‘bitcoin strategic reserve’) Trump’s "Crypto Reserve" is a world historical grift
If you have the time, I encourage you to watch this video or read the article. It’s pretty clear that draining and transferring funds from the US Treasury by rewarding friends and family is the Trump “economic strategy.”
“When bad behavior gets normalized it no longer feels like bad behavior….This White House is on the way to being the most corrupt in the history of the country.”
Trump’s Biggest Corruption is Flying Under the Radar
The scale of corruption in Trump’s White House has been stunning and unprecedented. Trump sells access, charging $5 million for corporate CEOs who want to meet with him. Elon Musk cancels contracts for his competitors and awards them to himself. Charges are dropped against corrupt politicians as long as the politicians pledge personal loyalty to Trump. The scope of the graft is without precedent.
President Trump declined to rule out the possibility that his economic policies, including aggressive tariffs against America’s trade partners, would cause a recession. When asked if he was expecting a recession this year, Mr. Trump responded that “I hate to predict things like that” and that there would be “a period of transition,” but that eventually “it should be great for us.” Trump Declines to Rule Out Recession as Economic Policies Take Hold
Stocks slump yet again as fears grow about tariffs — and a recession
Trump’s usual response?
While investors watched in horror as the stock market plunged on Monday as a result of President Donald Trump’s sprawling trade wars, he was busy reposting praise for his administration on Truth Social. The president posted over a hundred times between noon and 6 p.m. on Monday while the Nasdaq fell 4 percent, marking its worst day since 2022. The S&P 500 dropped almost 3 percent. The hashtag “#stockmarketcrash” trended on Musk’s own social media platform, X, as the public reacted to the market’s nosedive.
“When Trump said he would lower costs, we didn’t realize he meant the cost of stocks.” ~Bill Kristol
tick, tick, tick…BOOM
We are now headed for Trumpcession… for those of us who are living on a fixed income, it’s all a bit disturbing…
Thought for the day in honor of his birthday…
“The best teacher is experience and not through someone's distorted point of view.”
~Jack Kerouac
Must Read Articles:
You Cannot Run a Country This Way
But here is Trump’s biggest lie of all his big lies: He claims that he inherited an economy in ruins and that’s why he has to do all of these things. Nonsense. Joe Biden got a lot of things wrong, but by the end of his term, with the help of a wise Federal Reserve, the Biden economy was actually in pretty good shape and trending in the right direction. America certainly did not need global tariff shock therapy.
Corporate and household balance sheets were relatively healthy, oil prices were on the low side, unemployment was around only 4 percent, consumer spending was rising and G.D.P. growth was around 2 percent. We definitely needed to address the trade imbalance with China — Trump has been right about that all along — but that was really the only urgent agenda item, and we could have done that with targeted tariff increases on Beijing, coordinated with our allies doing the same, which is how you get Beijing to move.
Now economists fear that the profound uncertainty Trump is injecting into the economy could drive down interest rates for all the wrong reasons — because of so much investor uncertainty driving down growth, both here and abroad. Or we could get an even worse combination: the combination of stagnant growth and inflation (from so many tariffs) known as stagflation.
Woe to the American consumer. The price of groceries, gas, housing, and other goods and services jumped 0.5 percent from December to January; the cost of car insurance is up 12 percent year over year and the price of eggs is up 53 percent. “On day one, we will end inflation and make America affordable again,” President Donald Trump promised on the campaign trail. That is not happening. Worse, the White House’s early policies are making it more likely that the country’s cost-of-living crisis will endure for years to come.
Quote of the day:
"This is a bigger issue than people realize. Not just jobs lost. But their families losing benefits. Landlords losing tenants. Cities and towns losing revenue. This is how recessions start. Ready Fire Aim is no way to govern."
~Mark Cuban
What I’m reading today…
Trump loves the Gilded Age and its tariffs. It was a great time for the rich but not for the many
Experts on the era say Trump is idealizing a time rife with government and business corruption, social turmoil and inequality. They argue he’s also dramatically overestimating the role tariffs played in stimulating an economy that grew mostly due to factors other than the U.S. raising taxes on imported goods. And Gilded Age policies, they maintain, have virtually nothing to do with how trade works in a globalized, modern economy.
Behind the Curtain: Trump plays with fire — by choice
Trump and his aides are taking risks with eyes wide open — and we're told they're determined to persevere. They think the first 50 days couldn't possibly have gone better. An emboldened Trump is leaning into his instincts on every front. Trump's team cares most about the MAGA base, which is beyond delighted with the pace and scope of his move-fast-and-break-things approach.
Trump's secret power protection plan
Anyone who thinks President Trump's mesmerizing hold over the GOP will slip if his poll numbers slide is missing one of his biggest innovations in American politics:
The creation of a cash-flush political operation that has raked in around a half-billion dollars — about the same amount the GOP's House and Senate campaign arms spent during the entirety of the last midterm campaign.
Why it matters: It's unheard of for a president not running for reelection to raise that kind of money. But the cash is just one piece of a bigger power play that's arguably the most powerful, well-funded political apparatus ever. Two weekends ago, Trump hosted a dinner for major contributors at Mar-a-Lago. Minimum cost of entrance: $1 million. The dinner was attended by Republican mega-donor Miriam Adelson, who spent more than $100 million to bolster Trump last year.
China learned from Trump’s first trade war and changed its tactics when tariffs came again
Beijing, which unlike America’s close partners and neighbors has been locked in a trade and tech war with the U.S. for years, is taking a different approach to Trump in his second term, making it clear that any negotiations should be conducted on equal footing.
China’s leaders say they are open to talks, but they also made preparations for the higher U.S. tariffs, which have risen 20% since Trump took office seven weeks ago. Intent on not being caught off guard as they were during Trump’s first term, the Chinese were ready with retaliatory measures — imposing their own taxes this past week on key U.S. farm imports and more.
The Trump Voters Who Are Losing Patience
Now, it’s true that die-hard Trump fans love this stuff. They’re here for the liberal tears, and I’m confident that Trump will keep his sky-high approval ratings with the Republican base. But among voters who don’t identify as hard partisans, some are confused and downright worried about what’s happening. These are not members of the resistance. They’re all people who voted for Trump—many of them for the first time….The fan service Trump is doing for his base doesn’t get him anywhere with the people on the margins who helped put him in the White House, and who will determine the makeup of Congress in two years. Fixing what people think is wrong with the economy requires governing, something Trump has proved constitutionally incapable of doing. As we keep slogging through our daily politics, don’t be surprised to see Trump’s numbers continue to drop. Trump Boosts Message Telling Americans to ‘Shut Up’ About Egg Prices
Many Canadians are boycotting U.S. products.
While it’s not clear what President Trump’s ever-shifting tariffs attack on Canada might ultimately achieve, it has already done one thing for certain: ticked off a lot of Canadians… Consumer brands are a big part of that conversation…The underlying sentiment isn’t a matter of wonky economics; it’s emotional and visceral, based on a belief among many that the tariffs have nothing to do with border-security demands but are a blunt attempt to damage Canada’s economy, and ultimately absorb the 158-year-old nation...If Canadians are acting like they’ve been betrayed by an old friend, they have good reason to feel that way.
Swedes launch boycott of US goods in response to recent policy shifts
A series of boycott movements emerged in response to the US' recent policy changes, including Washington's decision to halt support to Ukraine and the announcement of tariffs on Europe, in what the followers believe will place some pressure on the US administration. In Sweden, several Facebook groups calling for the boycott of US products have gained a significant number of followers quickly. One group, "Boykot varer fra USA," racked up almost 67,000 members, while another, "Bojkotta varor från USA," has more than 70,000. The groups are urging members to stop buying major US products, including Tesla, McDonald's, Coca-Cola, Nike and Levi's, and stop using services such as Netflix, Google, and Airbnb.
Lawmakers Face Budget Crunches, Tough Decisions to Close Expected Shortfalls
After two years of relative stability, 2025 marks an inflection point for many state budgets…Signs of stress are not just popping up in states with chronic budget challenges. States with comparatively strong recent fiscal records face difficult years too. In Maine, officials project around a $637 million structural deficit in the general fund for the upcoming biennium, two years after forecasts showed a structural surplus. In Colorado, revenue estimates show a $750 million budget gap for fiscal year 2026, just months after lawmakers adopted a mix of spending increases and tax cuts. And in Washington state, revenue estimates are falling below expectations, and a November memo from Pat Sullivan, the director of Washington’s Office of Financial Management, estimated the state’s shortfall for the next two two-year budget cycles at $10 billion to $12 billion.
The definition of chaos is complete disorder and confusion. That defines Trump’s governing style to a T. He said he wanted to be a disrupter. Well, we have to give him that one. But a disrupter to what end? With no discernible endgame, the rules keep changing…. What should the endgame be? Well, if exit polls are anything to go by, the economy, specifically the cost of groceries, is the most important issue facing Americans. The cost of eggs is heading in the wrong direction, along with just about everything else. You know what Trump and his agriculture secretary have recommended to make eggs more affordable? Raising your own chickens.
Tesla for Sale: Buyer’s Remorse Sinks In for Elon Musk’s E.V.-Owning Critics
The buyer’s remorse is playing out at a volatile moment for Tesla, as stocks dropped by double digits in the last week, wiping out most of a post-election surge for Mr. Musk’s company. A recent report showed plummeting sales in Europe, and the company faces increased competition from other E.V. makers eating away at its market share. Recent protests outside Tesla showrooms in the United States and some notable cases of vehicle owners being harassed have also made headlines.
Musk and DOGE try to slash government by cutting out those who answer to voters
For decades, conservatives in Congress have talked about the need to cut government deeply, but they have always pulled back from mandating specific reductions, fearful of voter backlash…The dynamic of cutting government while also cutting out those who answer to voters has alarmed even some fiscal conservatives who have long pushed for Congress to reduce spending through the means laid out in the Constitution: a system of checks and balances that includes lawmakers elected across the country working with the president.
The Thing That Could Be Trump’s Undoing
American voters have been, to my mind, surprisingly comfortable with a felon who pardons other, violent felons and engages in reckless attacks on our rule of law and the global system that we created in 1945 and that has hugely enriched and empowered us… Attacks by Democrats on Trump as undemocratic never got much traction among working-class voters; they cared less about issues at 30,000 feet and more about economic and cultural concerns at three feet. So in a strange way, what may impede Trump and preserve American democracy is not popular revulsion at the historic damage that he is doing to America but rather alarm at the myriad banal impacts on our daily lives because of Trumpian mismanagement.
19 Ways Congressional Tax Action (or Inaction) Could Hit Your Wallet
At the end of February, the House of Representatives passed a budget calling for up to $4.5 trillion in tax cuts over 10 years. Many of the tax cuts from the 2017 tax bill, which passed during President Trump’s first term, are set to expire at the end of this year. He wants them renewed, and Congress has shown little appetite for crossing him. Extending those provisions would eat up most of that $4.5 trillion, and on the campaign trail.
Musk’s Tweet-Fueled Bubble May Be About to Burst
Musk’s business acumen and taste for politics are likely proving to be his undoing. Rather than relying on excellent managers who could help his businesses generate critical cash flow, Mr. Musk dismissed questions about succession even as he grew ever more distracted. Rather than save cash to provide insurance from bad times, he’s plowed it into overhyped schemes like brain implants and hyperloops. Instead of quietly pushing his political agenda from the shadows, he has stepped out in as visible a role as possible, appearing as convinced of his shrewd political instincts as he was of his marketing genius. The resulting cracks in Mr. Musk’s empire are starting to show. Automotive revenues at Tesla in the fourth quarter declined 8 percent from a year earlier, profit in 2024 dropped sharply from the prior year and, 22 years after the company’s founding, it remains unclear if it can ever generate significant free cash flow for shareholders. Tesla appears to be relying more and more on price cuts — a practice that can increase sales in the short term but likely damages how much buyers value a Tesla in the future. The political backlash against Mr. Musk is also now hurting Tesla sales abroad and at home.
Like the businessman who currently occupies the White House, Washington did not always like having to share power with Congress. Its members were headstrong and independent-minded. They rarely did what they were told.
But he realized working with Congress was the only way to create a federal government that really was efficient, with each branch carrying out its defined powers, as the founders intended. Because of the Constitution’s checks and balances, the United States was – and is – a government based on compromise between the three branches. No one, not even the president, is exempt.
What I am listening to…
What I read every day…
