Four months is an eternity in politics. Much of the business community was euphoric when Trump took office. Fewer regulations! Lower (or at least not higher) taxes and less tax enforcement! Full-bore crypto boosterdom! No more DEI finger-wagging and language policing!
Trump’s address to a Joint Session of Congress came as the bloom is coming off many of his roses. A hard-to-ignore indicator is that the S&P 500, just before the speech, had given up all of its gains since the Trump win. But why should they be surprised? Trump campaigned on themes that the commercial community should have recognized might not be in their interest, even if they appealed to their personal sensibilities.
For instance, Trump promised to fight inflation but was thin on ideas as to how to do that. After he got into office, he flailed for a bit trying to get the Saudis to pump more oil so as to lower prices to pressure Russia (and of course ease US inflation pressure), when the Saudis were less than happy with Trump being an even more rabid Israel supporter than Biden. Trump has no idea what to do about the constant reminder of food inflation via ever-levitating egg prices and now egg shortages (funny how eggs were Biden’s Iran hostage crisis, but are as heated an issue under Trump).
It is true that the US has been running very large fiscal deficits, and in a more normal world, reducing them would cool the economy and with it, inflation. But again, as we have been pointing out, via careful research at the Institute of New Economic Thinking, and more recently confirmed by reporting in the Wall Street Journal, the big stimulative spending is now coming from the top 10%. The DOGE rampage (which has cut far fewer costs than claimed) is lowering incomes and employment much further down the food chain. And that damage will compound because many of these Federal programs provided commercial value far in excess of their cost. Think of the National Park Service. Federal parks are huge tourist magnets. The communities nearby gain via lodging fees, restaurant and food sales, even selling park-themed claptrap. What happens when the parks become shabby and even dangerous (think poorly-maintained trails) and visits fall off?
Or as a recent post set forth in detail, the USDA? A substantial part of its work is helping farmer in all sorts of ways be better and more efficient at the business of farming, such as giving free advice on irrigation. From that article:
Terminated employees helped farmers build irrigation systems, battled invasive diseases that could “completely decimate” crops that form whole industries and assisted low-income seniors in rural areas in fixing leaky roofs. That work will now be significantly delayed — perhaps indefinitely — as remaining employees’ workloads grow, the employees said….
Matthew Moscou worked at a lab in Minnesota, where he helped monitor diseases that could wipe out wheat production in the U.S., he said. He spent the past two-and-a-half years learning from a long-tenured employee so institutional knowledge could be passed on, but it’s unlikely that information is retained now, he said.
“They’ve destroyed the institution,” he said.
Without labs like this, crop diseases, such as wheat-killing stem rust, could flourish, he said.
“Either we’re going to have to rethink how we’re doing this whole thing, or we’re going to have a significant collapse in the long run,” Moscou said. “This current push has really cut us off at the knees.”
The post contains other examples of how now-impaired or eliminated USDA initiatives were critical to farmers.
Similarly, as we and many others have discussed, Trump’s comparatively modest tariffs in his first term created an infinitesimal number of new jobs, at very high cost….with the tariff income being used nearly entirely to provide relief to parties harmed by retaliation. For instance, from Wikipedia:
China implemented retaliatory tariffs equivalent to the $34 billion tariff imposed on it by the U.S.[12] In July 2018, the Trump administration announced it would use a Great Depression-era program, the Commodity Credit Corporation (CCC), to pay farmers up to $12 billion, increasing the transfers to farmers to $28 billion in May 2019.[13] The USDA estimated that aid payments constituted more than one-third of total farm income in 2019 and 2020
Needless to say, the brief market swoon with Trump’s first and quickly paused threat to impose 25% tariffs on Mexico and Canada should have been a wake-up call. The already-flagging US auto industry, which employees over 4 million people, will take a body blow. Car production has become a highly integrated activity across the US, Mexico, and Canada, with car components routinely crossing borders multiple times. To put it another way: big vehicle producers were so important to the US economy that they got a bailout during the crisis (the view was that a failure or bankruptcy at the top would blow out many suppliers). My recollection was that the headcount across the industry was estimated then as in the 2 to 3 million range.
Now that the tariffs are on, some are putting pencil to paper and coming up with big-ticket damage estimates. From A potential $110B economic hit: How Trump’s tariffs could mean rising costs for families, strain for states by Professor of Economics Bedassa Tadesse in The Conversation. Note this analysis covers only the Mexico and Canada tariffs, and not the now 20% further increase in China tariffs:
What I found is alarming: The U.S. economy could face an annual loss of US$109.23 billion. This shortfall would mean rising costs of everyday goods for American families and would disproportionately affect certain states. My analysis focused exclusively on the effects of U.S. tariffs, so it didn’t take retaliation from Canada or Mexico into account. If it did, the losses would be even greater.
Imagine your grocery bill surging by 17.5% to 25%, car parts costing hundreds of dollars more, and your favorite local restaurant raising prices as imported ingredients become unaffordable. Because tariffs drive up consumer prices, these scenarios, or others like them, will soon become reality across the U.S.
But not all Americans will be affected equally, I found. States that are deeply connected to North American supply chains will suffer the biggest economic blows. Texas, with its strong trade ties to Mexico and key role in energy, would lose $15.3 billion. California’s diverse economy would take a $10.2 billion hit. Michigan, heavily reliant on auto manufacturing, would face a $6.2 billion blow – over 1% of its gross domestic product.
The biggest losers from the policy on a per-capita basis would be smaller, trade-dependent states that lack the flexibility to absorb such a shock. New Mexico, Kentucky and Indiana would be among the hardest hit, with projected GDP losses ranging from 1.12% to 1.48%. These states rely heavily on manufacturing and specialized industries, making them particularly vulnerable to rising costs and supply chain disruptions….
For example, a family of four in New Mexico would see an estimated $3,288 additional annual costs, equivalent to three months of grocery bills or an entire year’s utility expenses. Families in Kentucky and Indiana would also bear heavy financial burdens, paying an extra $3,120 and $2,836, respectively. Even in wealthier states such as Texas, the added annual costs would reach over $2,000 per household….
My conservative estimate shows that such disruptions could cost the [auto] industry approximately $28.2 billion, putting around 680,000 jobs at risk across manufacturing, parts production and sales operations. And the ripple effects would extend beyond automakers to suppliers, dealerships and local economies.
But the pain wouldn’t stop there. Manufacturing, which plays a critical role in 17 of the top 20 states most affected by tariffs, would also face rising costs and shrinking profit margins. The agricultural sector – vital in at least 10 states – would endure higher input costs and potential retaliatory tariffs from Mexico and Canada. Past trade disputes have shown that American farmers often bear the brunt of such policies, with lost export markets and declining revenues.
Just as UK corporations were reluctant to criticize Brexit out of fear of Tory retaliation, so to there is likely reluctance among executives to openly or sharply criticize the famously vengeful Trump over his hare-brained schemes. So the fact that the business press coverage of the State of the Union address is turning on the Trump economic program is noteworthy. For instance:
The Bloomberg opening paragraph of Trump’s over 100 minute speech, only a comparatively small part of which discussed the economy, zeroed in on the recent wobbles and worries:
President Donald Trump took the lectern Tuesday for his primetime address beset by warning signs about the US economy, and acknowledged to Americans there could be more discomfort ahead.
Trump defended his plan to remake the world’s largest economy through the biggest tariff increases in a century, saying it would raise “trillions and trillions” in revenue and rebalance trading relationships he called unfair. He cast the economic pain the levies are expected to cause in the form of higher prices as a “little disturbance” the nation ought to be able to overcome….
Trump turned to inflation only after a 19-minute opener. He blamed high prices for eggs and other goods on his predecessor, Joe Biden, and offered few new ideas to lower costs.
Some of his proposals at times sounded like magical solutions, including complex energy projects that could take years to complete and using savings from Elon Musk’s cost-cutting campaign, which have amounted to a small fraction of the federal deficit, to help pay down the debt
The Wall Street Journal coverage of the State of the Union included a particularly damaging factoid: that the Trump Federal-program-slashing is going over so badly in quite a few Republican jurisdictions that the party grandees have told Congresscritters to stop holding town halls, no doubt to avoid damaging video clips that would have high odds of going viral:
But by ticking through the catalog of changes he has started or implemented, Trump bet that showing himself to be a leader taking “swift and unrelenting action” would persuade the country that he was on the right path. Trump said he was removing violent undocumented immigrants from the country, was acting to expand energy production and would strip money from schools that allow transgender girls and women to compete in women’s sports—all actions that polling shows to be popular.
His success in working with Congress to pass important parts of his agenda likely depends on whether voters see more progress than pain. The president has retained strong loyalty among Republican lawmakers, but tentative signs of unease are emerging.
Some Republicans worry that Trump, who campaigned on fighting inflation, is adding upward pressure on prices with his tariff program, which could anger voters. Protests at constituent meetings over federal cutbacks and his Ukraine policy have grown so confrontational that senior House leaders urged GOP lawmakers to stop holding in-person town hall meetings.
Trump’s actions so far have surely pleased the 38% of his 2024 voters who told pollsters that even substantial change in how the country is run wouldn’t satisfy them—they wanted complete and total upheaval. But some congressional Republicans need a broader set of voters in order to hold their House and Senate seats.
The not-business-focused Axios led with skepticism about Trump’s economic program:
President Trump wants to will the country back into the “golden age” he promised on the campaign trail, the headlines be damned….He recited the historic number of executive orders, touching every aspect of American life from immigration to sports.
- 🚢 To thunderous applause from his party, Trump announced a new office of shipbuilding in the White House, to help “resurrect the American shipbuilding industry, including commercial shipbuilding and military shipbuilding,” with “special tax incentives to bring this industry home to America, where it belongs.”
- 💰Trump pledged to fulfill his “no tax on tips” campaign trail promise to service-sector workers, and called for car loan interest payments to be tax deductible — if the car was made in America.
- 🕊️ Trump declared peace in Ukraine was closer than ever now that its president, Volodymyr Zelensky, wrote him a letter that said he was ready to negotiate.
Reality check: Trump will have a nearly impossible time balancing the budget, as he promised, and cutting taxes. And the economy shows troubling signs: Trump was unmoored from plummeting stock prices, sagging consumer confidence and the specter of rising prices due to tariffs.
The Financial Times’ chief economics commentator, Martin Wolf, made a key point as to why the Trump policies will never deliver…save short of creating a crash:
As Maurice Obstfeld, former chief economist of the IMF, has noted, the US’s trade deficits are not due to cheating by trading partners, but to the excess of its spending over income: the biggest determinant of America’s trade deficits is its huge federal fiscal deficit, currently at around 6 per cent of GDP. The Republican-controlled Senate’s plan to make Trump’s 2017 tax cuts permanent guarantees that this deficit will persist for at least as long as markets fund it. Given this, attempts to close trade deficits with tariffs are like trying to flatten a fully-filled balloon.
Now admittedly, Michael Pettis just vigorously contested that view, arguing that China has agency and its high savings rate is to blame.
2/14
The US current account deficit is certainly equal to the excess of US spending over US production, but Obstfeld may be confused over the direction of causality implied in macro accounting identities. In fact it can go in either direction.— Michael Pettis (@michaelxpettis) March 5, 2025
But whatever transmission chain you accept, the conclusion is the same; Trump’s tariffs won’t solve the problem:
10/10
I would add that Trump's tariffs will likely have no impact this year on reducing the US deficit, and so will also have no impact on reducing China's surplus. We should consequently expect a lot of confused stories this year about the "resilience" of China's export sector.— Michael Pettis (@michaelxpettis) March 5, 2025
Despite Trump dominating the press since he took office, the public is not returning the love:
And…just minutes after his SOTU address wraps, Trump’s approval is officially underwater. pic.twitter.com/5y8QsgBXYH
— Andrew—New YouTube Channel @LiveFromTheResistance (@AmoneyResists) March 5, 2025
Bizarrely but predictably, instead of focusing on Trump’s obvious Achilles heel, his incoherent and contradictory economic approach, Team Dem and others of the hard-core anti-Trump persuasion focused on his lies, rather than how his approach is doing harm (and then, when appropriate, how his lies are trying to cover for that). For instance:
CNN plays a near 4-minute fact check on Trump's joint address pic.twitter.com/STfzrTL3P6
— FactPost (@factpostnews) March 5, 2025
FACT CHECK! Trump just bragged that he put a freeze on *all* foreign aid.
The Trump administration has approved >$14 billion in military aid and weapons sales to Israel since the beginning of February. pic.twitter.com/QQd05Ru2Ux
— AIPAC Tracker (@TrackAIPAC) March 5, 2025
BREAKING: Trump just said that DOGE has reduced our Debt:
FACT: Our national debt continues to rise at a staggering rate. It has NOT been REDUCED.
He Lied! pic.twitter.com/keVuV7T7PF
— Brian Krassenstein (@krassenstein) March 5, 2025
Now in fairness, some of the more effective Trump opponents zeroed in on the fact that Trump praised Musk as head of DOGE…when due to legal challenges, the Administration had denied that in court. As Newsweek explained:
During his speech to Congress on Tuesday night, President Donald Trump again said that the Department of Government Efficiency (DOGE) is “headed” by billionaire SpaceX CEO Elon Musk….
The White House has recently tried to build some distance between Musk and DOGE after the task force was hit with multiple lawsuits alleging that Musk, as an unelected bureaucrat, ran afoul of federal law by unilaterally shutting down congressionally created agencies and attempting to fire tens of thousands of federal workers.
Newsweek includes entertaining detail about how Judge Theodore Chuang has been unhappy about the Administration’s too-obvious evasiveness when trying to get clear answers about who was in charge of DOGE when.
And the legal response was swift:
Oops! pic.twitter.com/vvAuexdgS8
— KT "Special CIA Operation" (@KremlinTrolls) March 5, 2025
Mind you, even though reality is starting to catch up with real costs of Team Trump’s demolition program, he has built up so much momentum that it will take a while to lose steam under the weight of its own contradictions, as well as Congress, in light of fading Trump personal popularity and constituent unhappiness, failing to support key Trump measures that require legislative approval. So bet on more of the same, likely accompanied by even more strident Trump insistence that what he is doing is perfect, which it surely is for his squiillionaire buddies.
Update 9:00 AM EST: Since I was apparently not explicit enough about what I thought about Team Dems’ response (heckling and stony faces in the gallery are posturing, not action), a just-released Financial Times opinion by Edward Luce will help. Luce was Larry Summers’ speechwriter. While he does write some independent-looking articles from time to time, he regularly publishes pieces that channel or burnish Goodthinking Democrats.
And of course it starts with Trump’s extreme bullshitting, his lack of concern with accuracy, as opposed to the concrete harm that Trump is or may be about to do to ordinary Americans. From the top of the story:
It is Mardi Gras in New Orleans. Yet no parade could match the carnival in Donald Trump’s Tuesday night speech to Congress.
As the US president declared himself author of not only the greatest comeback we have ever seen, but will probably ever see, one could almost hear the remnants of the fact-checking community snap their laptops shut. What purpose would it serve to point out that millions of dead centenarians are not receiving social security cheques, or that America has spent nowhere close to $350bn on Ukraine?
So what if Trump lies incessantly? What is the practical significance of these lies to real people?
As you can see, this is test-taking PMC members dealing with a cheater. How dare he give wrong answers information and face no consequences? Or worse, be applauded because his bogosity sounds plausible or appeals to the prior of key constituents?
And notice, in a proof that the Democrats have learned nothing and forgotten nothing, that his write-up no where mentions either of the issues that were key in the election: inflation and immigration.
Among the “billions and billions” (hat tip Carl Sagan) of non sequiturs in his 5th grade essay speech was his braggo about of getting rid of horrible bureaucrats, which got thunderous applause. Followed (or preceded, I lost track because I was laughing so hard) by his introduction of horrible bureaucrat Musk, which got equally thunderous applause.
I’m hoping the confusion was due to the Republicans laughing as hard as I was — but I doubt it.
CBS News poll, just after Trump’s speech, asked viewers who watched if they approved or disapproved: 76% approved; 23% disapproved (https://www.cbsnews.com/news/trump-speech-joint-address-congress-poll-2025/)
[Sorry, don’t know how to insert link.]
Makes sense since most viewers were probably Trump supporters.
‘ It was incredible. It was unbelievable. Nobody could believe it. Nobody’s ever seen anything like it.’
Hope those phrases weren’t in anyone’s drinking game. / ;)
Trump and the Confederacy declare victory over the Union at long last. Rebel Republicans cheered for the tariff taxation of working class Americans to fund more tax cuts for Musk and friends.
A good Calhounist understood chattel was like cattle, if you took good care of it you could make a lot of money from it.
A Trumpist, or any of our other Techno Feudalists, sees labor as a product of nature, some “thing” out there to be used as feedstock for various processes of converting waste and death into money.
A great step forward from the sentimentality of the Confederates, all the upside without any of the responsibility! Progress marches on! (I hope the sarc is obvious)
Calhoun strenuously objected to tariffs.
You all are forgetting the silver lining in all this Trump failure: Democrats. They will concoct a non policy response like “Dump Trump” (an especially good slogan IMO because it implies wait four yrs so we don’t have do anything now or ever, then vote for us! Because Trump!). BTW can Obama run again 4 years from now? That would solve a lot of problems…for Democrat PMC’s and their MSM echo chamber minions.
Did you read to the end of the post? I did discuss the Democrats’ response, which was scattershot recycling of old tropes.
And what happens four years away won’t help the Democrats much.
This Sucker — the US — Is Going Down. Big time.
In the next thirty months and likely less.
Howard Lutnick is a Wall Street figure, so if they’re watching returns as it were on a daily scorecard,in golf terms this administration is early into the front 9 and it hasn’t started off well. Probably need a mulligan on the tariff approach but I digress. If the economy truly sours as recently indicated from the Atlanta Federal Reserve, well that is a negative input that goes into the machines.
For those uninterested in my golf analogy….A mulligan is a “redo” or freebie second attempt, usually on a tee box but also on the golf putting green if playing a tournament setting. I’m not now or really ever concerned with how the rich are performing in most economic environments.
To paraphrase from the Shining…”things could be better, Lloyd…”
Totally useless comment here but cut to the chase, hats off to any of you that sat through the entire thing and thank you for taking one for the team. Couldn’t listen to any of those before him either so staying the course.
I can only stand to read the transcripts and that’s usually enough damage to the few IQ points I have left.
The fun will be listening to liberal media round tables freaking out over Trump’s speech and the conservatives getting giddy over it.
Thank you for your analysis Yves.
I stayed up and really enjoyed it, despite it starting at 2am UK time! Admittedly I was hoping the leaving NATO rumour was true and wanted to see it announced live if it was.
It was like a parliamentary Prime Minister’s Questions as it used to be before Blair applied control-freakery and Starmer applied Mogadon rather than the po-faced decorum of Congress. Trump was chauvinist. Trump was boastful. Trump was jingostic. Trump was merciless in mocking the democrats (but in essence politely, too). Trump was *funny*. Trump was in *total* control. The Republicans stood up and sat down in ovations every other sentence. The Democrats sat in humourless silence holding little placards of passive-aggressive protest, like ice-skating judges on strike. Plus there was the hokey How-the-West-was-won melodrama of the revivalist preacher or the snake-oil sales pitch, with the crowd laced with the Real Americans whom Trump called out for revelation of his bounties, some more useful than others (West Point place for the upstanding kid, tick; secret service badge for the terminally ill kid, maybe; some sort of reservation named after your murdered daughter, pass).
It may be terrible government but it is brilliant entertainment – and thus brilliant politics.
The start was really gripping by the way: when Al Green protested and Vance gave the order to throw him and any others out, I began to wonder if the cheering Republicans might become a mob and the speech was going to go the full Reichstag…. Instead the Democrats just adopted a rictus of disapproval, glued to their seats.
Say what one might about Trump, but he can sure read people–his enemies as well as his would-be-customers. Dems played exactly the role Trump gave them–which is why they lost and they still aren’t learning.
I’d say he can read fools. Competent people, not so much. Also, look at his total mis-read of Zelenskyy. Someone who was good at reading people would have never pulled that stunt with such an unstable person.
Once again, Trump does well not via skill but by the luck of his enemies.
Trump pulled that stunt deliberately (or rather, chose that scenario when the opportunity presented).
Heads, Zelensky held it together, knuckled under and signed the deal (which Trump.l and Putin will replace with a”better” one)
Tails, Zelensky flipped out, showed his true colours as the corrupt puppet of the war party and enabled Trump to move straight to dealing with Putin.
I actually think the latter was always the preferred outcome. Signing the deal only to “improve” it with Russia would bolster Zekensky’s political capital and burn Trumps whereas this way round Trump is riding high (with Maga and undecideds – who cares about the irrelevant Dems?) and Zelensky looks a heel.
But that’s not what happened. The Ukraine is rallying around Zelenskyy and Russia won’t budge on certain key issue despite what Trump may think. And the EU is so up to its eyeballs on both sides it has no clue what to do. It so very much wants to keep supporting the Ukraine, but is not sure how to do it without US support. People in the US may be turning on Zelenskyy, but that hardly matters.
So while you may be right about why Trump did it, it was still a foolish move. Matters may now worse because the Ukraine hardliners could go rogue and start making unsanctioned attacks on Russia.
I couldn’t watch it because I was at work. I hear it was a 2-hour-long-or-so speech, just like the marathon speeches of Hugo Chavez, Fidel Castro, and other Caudillo figures.
I may or may not block out a 2 hour block to go to my worksite on a day off so I can listen to it on one of the empty-room computers. If you watch it for the entertainment value, it could be entertaining. It could also give a view into the septic tank mind of Trump.
I heard a minute or two of reply from my Senator, the CIA Democrat from Michigan. It seems to me that she did indeed mention how some of the Trump policies will increase prices, degrade government services, etc. Her little talk was not all devoted to ” Trump’s lies” .
Something about “…seriously, but not literally.”
How much is going to be spent on Elon?
Some of the DOGE cuts are possibly putting lives in danger. They are cancelling leases on the data centers that run NOAA’s weather prediction models, which predict hurricanes and while the damage mostly can’t be averted, at least evacuation notices can be broadcast timely:
https://www.axios.com/2025/03/03/doge-noaa-weather-building-leases-trump
Trump has had childishly petulant spats with NOAA before, but the lives in question are those of Trump voters, which makes this all the more puzzling, but then again Elon Musk doesn’t live in fly-over-land and cares little over its denizens.
National Weather Service Marine Forecasts are still in operation for the Sound…”gale warnings in effect from 3PM this afternoon through Thursday morning, seas 8 to 11 feet.” I can’t imagine a fishing boat heading to sea without the NOAA forecasts.
You may recall an article a couple years back that spoke to the Starlink satellites interfering with their weather predicting cousins.
Now, whose that Starlink fellow?
A bit of trivia for your next game of Trivial Pursuit: T’s speech to Congress this year, his first year in office, was not offically a State of the Union address (thought nearly identical).. It was a Joint address to Congress, first done by Reagan in his first year. Next year at the start of T’s second year in office it will be called the State of the Union address.
Why Trump’s joint remarks to Congress won’t be a ‘State of the Union’ address
https://www.pbs.org/newshour/politics/why-trumps-joint-remarks-to-congress-wont-be-a-state-of-the-union-address
It looks like the State of the Union, and will be carried on live television, just like those annual addresses are. But it’s called something else: a joint address to Congress. And it has its origins in the first term of President Ronald Reagan.
…
According to the American Presidency Project, the impacts of these first-year speeches should be considered to have the same heft as the State of the Union addresses that follow in subsequent years. And, just like the State of the Union address, the opposing party to the one that occupies the White House gives a brief speech in response, which, like the president’s remarks, is televised. This year’s will be delivered by Democratic Sen. Elissa Slotkin of Michigan.
Oh, good point, no wonder my Twitter search on SOTU Trump was not as fruitful as I expected.
Just what is the point of these response speeches? Yeah, I know, fairness or something like that, but there was speechifying by The Don … which I turned off after the recitation of the Social Security data base peculiarities … he could not believe what he was saying … if he did he has nothing but contempt for his audience … come to think of it, as a “stable genius” he does. I turned it off. Once upon a time I listened to a response speech and was unimpressed. Did so another time. even less impressed. Gave it up as a waste of time. Nothing ever emerged to contradict that decision. So what is the point? Am I correct in surmising that some of the “stable geniuses” in the opposition party, either one in turn, think points are scored by this ploy? To paraphrase the immortal Bugs Bunny, “what maroons!”
One reason would be to market a shiny new voice of the party to the nation. Introducing Elissa Slotkin, proudly ex-spook, putting paid to any silly notions of team blue swinging to the left policy-wise.
I feel like the Cheney Wing of the GOP would have had a better response if they just replayed Tim Kaine’s response to Shrub years ago instead of whatever that was last night.
The rebuttals can be quit funny. Remember Marco Rubio giving a rebuttal and getting very thirsty? Classic. Trump got a lot of roast comedy out of Thirsty Marco.
Katie Britt’s passionate kitchen performance was also chuckleworthy.
Pettis had said that structural problem in the Chinese economy is too little consumption, and that the government understands this but the measures needed to address it go against their deeply held preferences. And on the US, the structural issue is extreme inequality, and fixing it similarly would offend elite sensibilities.
Whether the US understands this I have my doubts, but measures to address it definitely go against deeply held values of the wealthy. Giving workers a bigger slice is unacceptable even if doing so would make the rich richer.
We have a large BMW plant here in Republican SC. The engines come from Europe and presumably would be subject to tariffs (?) but the company doesn’t sound that worried about it.
https://www.automotivedive.com/news/bmw-north-america-domestic-production-trump-tariffs/733284/
The CEO even thinks their presence here may give them a leg up on some competitors who have plants in Mexico–something that BMW considered but rejected.
Tariffing all those Mexican car plants would be a big a deal and so big one wonders whether it will really happen. Or is all this stll more “art of the deal”? Canada is involved with the auto industry as well.
The Spartanburg BMW plant if part of that area’s Foreign Trade Zone designation https://en.m.wikipedia.org/wiki/Foreign-trade_zones_of_the_United_States can assemble imported parts into vehicles for export while paying no or reduced tariffs on those parts, and production of vehicles for export seems to be what BMW is bragging about, e.g.: https://www.press.bmwgroup.com/global/article/detail/T0409398EN/bmw-manufacturing-is-largest-automotive-exporter-by-value-for-ninth-consecutive-year?language=en
Thanks. Even though the plant is only fifteen miles away and has been there many years I’ve never taken the free tour. It may still be available on Youtube. The line is set up so they can switch from installing left hand to right hand drive as the cars move along and as required by the order list. All very high tech.
Hmm, I don’t believe BMW has resisted manufacturing in Mexico. I was walking past a new looking BMW SUV (in the US, and electric I believe) and was curious where they were made. The VIN began with a “3”, which means it was made in Mexico.
An older model? I don’t believe they are doing it now
BMW de Mexico has two production facilities in Lerma, Toluca, Mexico State.[3] In one, the company manufactures BMW motorcycles, and in the second, the company manufactured the BMW 3 series[4] and BMW 5 series.[5] ending in 2003 when BMW de Mexico ended local assembly.[6] BMW de Mexico was initially set up in 1994 as a joint venture between BMW AG of Germany and a group of Mexican investors to manufacture BMW 3 series vehicles for the local Mexican market as Mexican law at the time required all vehicles sold in the country to be assembled locally. Initially only the 3 series vehicles were manufactured by the joint venture from kits using both Mexican and German components while other vehicles simply used entire kits shipped from Germany.
https://en.wikipedia.org/wiki/BMW_Mexico
Canada can fend for itself, but why punish countries like Mexico and Venezuela, which are the countries where many illegal and other migrants to the U.S. originate?
Elon warned that things may be really unpleasant for a while but then improve. We will see. My retirement account has taken a hit this week. I imagine many older Americans are not happy with Trump-onomics right now. But it is still early days.
I’m happy about about the direction Trump is going on immigration and Russia. Not happy about Israel and my retirement savings. And, does he have a plan for the massive homelessness problem in our cities? To me, the solution for that requires a tough-love approach. Not allowing everyone to camp out wherever they please while local governments wait for some magic to happen.
Isn’t waiting to see if things “get better” after they’ve gutted the social safety net also magical thinking?
Homeless and poor rates will skyrocket if DOGE has its way. And I fail to see how a tough-love approach will resolve the root issues, or be appropriate.
I see the tough love approach as the only thing that CAN work. I realize my view may not be popular on this site, which seems to have a more liberal bent.
Please elaborate on what you mean by “tough love” when in many places up to half the homeless are working people, and many of the rest children?
They can’t be allowed to sleep or camp in public places. It should be prohibited.
Where would you have them go?
We’re all two steps from living in the park.
Around Lake Kaweah were about half a dozen pullouts behind hills along the lake where every night homeless-but not carless people would sleep, maybe they could accommodate 20 cars, that is until last month when gates were put in and no camping overnight signs posted.
And this is in the boonies…
Don’t know what cities you’re witnessing homelessness, but in Los Angeles county (10m, pop.) the latest survey shows over half the homeless have addiction issues. Many others have ‘full-time’ jobs that don’t pay enough to rent an apartment.
Homelessness has many intractable problems: many ‘on the street’ have developed ad hoc social support partners and don’t want to be housed in a setting without them; the social service support sector is fragmented and effective counseling is discontinuous; limited access to a stable indoor environment means getting out of ‘homlessness’ is difficult (without money for rent). So, the descent into despair has become a one-way street.
Many of those affected by DOGE are soon going to discover the free-fall consumes even the fearless.
No matter what Trump says or does, events are marching far ahead of him.
The US economy is in an unrecoverable tail spin. Russia is setting the terms for peace over the US/NATO proxy war against it using Ukraine as cannon fodder. China is well prepared for anything the US might throw at it. BRICS is moving ahead establishing a new multi-polar world order. NATO and the EU are in disarray.
Most worrisome, the middle east is about to explode into full blown war.
Last but not least, major climate change tipping points have been passed and more are rapidly approaching.
Better buckle up, Homo Stupidus is in for a rough ride.
Agreed, Trump appears to be an open version of Cheney et al who claimed they could “make” reality.
“Twice the pride, double the fall”
So we have an American country whose firebrand president sacks masses of government employees, terminates a variety of social services, promotes dubious crypto-coin schemes, raises indirect taxes, implements dogmatic economic and fiscal policies, thus pushing industrial and agricultural firms into bankruptcy, plunging a large part of the population into poverty, and stimulating extractive and financial activities over productive ones.
I mean Argentina. And there, after more than a year of chainsaw policies, no angry voters rioting in the streets — on the contrary: people are of the opinion that the ordeal is a necessary uncomfortable phase to endure before the policies take effect and the good times come.
The possibility that the USA follow a comparable course cannot be excluded, and I do not believe it is negligible either. In that case, the Democrats will sit on the sidelines, dumbfounded by the patience of the deplorables.
But perhaps somebody has a good argument why things should evolve in the USA so very differently than in Argentina?
“But perhaps somebody has a good argument why things should evolve in the USA so very differently than in Argentina?”
Engagement with politics similarities…sure.
But, economically, (and these considerations don’t necessarily mean it will all work out for the better and more consequences for the world with the global elite’s fascination with the USA):
All of the military involvements all over the world adds additional considerations.
Size of economy adds additional considerations
I think someone mentioned somewhere that Argentinians are actually almost uniquely capable of giving new governments an chance because they’ve been through like five or six major shakeups over several decades. Might explain their extraordinary patience and willingness to tough it out. Not really so for the Americans. Which I could find the link.
re: “So we have an American country whose firebrand president sacks masses of government employees”
I see part of this move as a way for T to undercut the PMC voting base and financial power of the Dem party. Sort of like the 3rd Way neoliberal Dems were happy to undercut the New Deal Dems labor voting base and financial power by offshoring manufacturing. Maybe I’m wrong about this being a consideration. It is ruthless, to be sure. Politics ain’t beanbag. / my 2 cents.
( I hope Thomas Frank writes a book about this one day.)
Re: The cost of Tarriff study, it does say its a conservative estimate, but I am unsure if it considers inelasticity in commodities – the US is now a food importer, and many countries consider food (and other commodities, like Titanium, a national security issue and are unwilling to export if it leads to domestic stress.