Add to this that economists have greatly increased their probability for a recession and there will be even less revenue collected since revenue drops when GDP declines.
This means that deficits will rise and so will unemployment and the debt/GDP ratio, although a large amount of inflation would give the nominal number a boost, it will be unlikely to do the trick.
Half of the increase in the deficit in FY 2009 was due to lost revenue from the collapse itself (abt 600 billion including emergency tax cuts) and most of the rest was TARP (passed under Bush).
All of this will dwarf cuts made by Musk which is minimal as a percentage of spending while being extremely damaging to our nation and its future.
There will far fewer purchases of imports or domestic goods in a downturn and likely fewer exports, as well, since this downturn will likely be global and all goods more expensive, as well.
The idea that these tariffs will protect our industries or inspire domestic production when there is less demand or consumption of goods is more than far-fetched.
There is nothing to pull us out of a self-imposed slump or possibly worse, another depression.
Nothing to inspire this imaginary domestic growth or investment they are assuming will occur.
There is actually an agenda - the Chaos. It is there to keep people from seeing the theft and grift from the Whitehouse and the Oligarchs. But seriously, I can't imagine the corporate types sinking money into new manufacturing capacity in a Country headed into a depression. Who is going to buy their products? Nobody overseas because we have attacked them and nobody here because no one will have money for anything but necessities.
AND trump is doing what putin wants to see - as much destruction of all things American as possible ! THAT he is dong - and of course putin is loving it. trump is owned by putin, that was made very clear at Helsinki (and by the cocky Russians in the Oval office in the first couple of days of trump's first term !!!), and most people seem to have totally forgotten that but I have not - THAT told me what the facts were more clearly than anything else ! So - trump is committing the equivalent of domestic TREASON and nobody seems to care !!!
You might also mention we are now at a time of nearly full employment, it will take years to design, get permits, secure financing and THEN build a new obsolete factory and begin to hire workers.
That's maybe the silliest, scariest thing about what they seem to be thinking, that new domestic manufacturing, on a scale sufficient to really make a difference, will just spring up overnight in response to the tariffs. Modern factories take years, and millions or billions of corporate investments, to design, plan, and build. What sane board or executive will make that leap of faith in a climate of chaotic uncertainty and probable recession and inflation at the least? And making tangible things is rapidly becoming a process dominated by robotics and automation, so there's no likelihood of a big surge of well-paid factory jobs once those factories open years from now.
As the professor says, it's madness without method.
tRump just loves to wind up his audiences, both domestic and international...yuuge buildup, TruthSocial posts, everybody hanging on his latest outburst, waiting for the Great Reveal, or "Which of the three doors will he open?"
It's all about theatre and entertainment, and we're the captive, passive participants.
I've been thinking for some time that the entertainment aspect of trump is what it's all about & how he has been able to be as successful as he has been in getting re-elected. I read a saying recently that summed it up perfectly along the lines of americans wanting to be entertained, not led. I think that's right for a large portion of the population & why we've got here now.
I agree. Chaos is the agenda. At least, for trump it is a feature not a bug.
Chaos can lead to social unrest that would give trump the opening to use the powers of the executive to "restore order". And he doesn't have to invoke martial law. (not that I put that past him. ) The more social unrest the more the courts are inclined to give the executive branch leeway to curtail rights and freedoms.
Trump seems to not care about negative public opinion, in fact, he seems to be inviting it. The more he disregards public opinion the more I fear he will move to intimidate opponents, terrorize citizen dissenters and rig/cancel elections.
He cares about MAGA types as long as he is their pied piper. And not at all about any devastating consequences on them. They are like his soldiers. If they suffer, they are "suckers & losers".
Stephen Brady, I totally agree with you. The theft and the greed for enrichment and power from trump and all his oligarchs is the plan. It was never to serve and work for the American People. trump never cared for his fellow Americans and never will. It’s not in him , is what he thinks all the time: : me, myself, and I.
Countries overseas no longer see America as an allí or friend since the USA is guilty of causing harm to their countries. Also, as you said Americans will not have much in extra cash to spend and will even struggle with the day to day necessities due to what the new trump government in power is doing to their own people , and being in the Oval Office is the vehicle which they wanted in order to fulfill their plan —- becoming powerful and enriching their pockets with the American money and institutions while leaving Americans in the dust.
We're hanging onto some form of democracy by a hair. None of what they're doing by our Constitutional standards is legal (hence the lawsuits that clog the system). magas in the house and senate aren't passing bills. It's not their job anymore.
What musk and his bosses have done is created a new play in the fascist or authoritarian playbook (Applebaum and/or Ghiat have said this).
This could be another attempt to push a confrontation so he can call for martial law. The likelihood my state’s law enforcement and national guard would allow DOGE to inspect our voting system and rolls approaches nil.
I've wondered about Musk's thugs. If it follows that people retain personal security proportional to their wealth--and I think it does--how much personal security does the by-far richest guy on the planet have, and does it amount to a militia?
The United States Marshals Service occupies a uniquely central position in the federal justice system. It is the enforcement arm of the federal courts and is involved in virtually every federal law enforcement initiative.
The duties of the U.S. Marshals Service include protecting the federal judiciary, apprehending federal fugitives, managing and selling seized assets acquired by criminals through illegal activities, housing and transporting federal prisoners and operating the Witness Security Program."
Note that nowhere does it say anything about enforcing the whims of an unelected non-official. In other words, the order is to commit illegal search and seizure.
Then I would have them met by other men in uniform equipped with firearms. Bet you Musk and his Teen Twat Troop wouldn't be eager to show up there again.
I think it’s obvious why Trump is so bullish on tariffs—it’s the only power in foreign policy he controls outright. Because of a weak law that lets him declare unilaterally when tariffs are needed, he has a free hand. Other foreign policy levers, like military interventions, funding decisions, etc are constrained by other actors, e.g. congress.
He sees that tariffs and/or the threat of tariffs can be a powerful lever to manipulate other countries. It gives him unilateral power so he can do his trademark “win-lose” bargaining (read: bullying) and alter the political environment.
Because tariffs are widely understood to be foolish he has to launch a PR campaign to justify them to the ignorant MAGA types; hence his idolizing of Wm McKinley, invention that they will bring in great sums, and lies about whether US consumers will pay for them. He doesn’t have a specific trade policy—his policy is to aggrandize as much unilateral power as he can.
Clinton ran a surplus and Obama got the deficit to 3% of GDP. Trump is the one that spiked the deficit in 2019 with his tax cuts even before Covid. Biden would have had the deficit to 3% by 2026 once Fed rates fall to around 2%.
Hi Paul, what about the theory that there is somehow a systemic plan to collapse the U.S. economy - to force a Depression - so that Trump’s billionaires and venture capitalists can buy discounted assets such as companies and real estate including public lands and parks that become privatized because the U.S. is forced to sell them off due to debt? For instance Peter Thiel will get $4 billion tax free from his Roth IRA in two years and if the U.S. has crashed he will be able to buy anything he wants. Naomi Klein has the idea of “disaster capitalism,” that the transnational oligarchic elite like to use or create disasters so they can centralize wealth and control. After the fall of the USSR, we pressured Russia and other countries to quickly privatize their public assets and then wealthy people from America and Europe were able to increase their fortunes. It seems obvious these conspiratorial forces are now seeking to do the same to the U.S. and the way to understand that is to consider who could really benefit from the collapse of the U.S. This also could go with the plan to transform the U.S. fully into a serf society ruled by tech / AI. You need to destroy the middle class to have a pliant population. So actually I think you are wrong and this is a real plan. I write about these topics in my substack also: danielpinchbeck.substack.com .
Much the same thing happened after the Great Recession when real estate companies bought up foreclosed properties, mine included, for pennies on the dollar and converted them into rentals which are very unlikely ever to return to the market, unless they are sold.to other landlords. The vastly increased percentage of landlord owned single.family homes is a significant factor in the spike in home prices this century.
Thank you, yes. I find it frustrating that liberal economists don’t really dig deeper here. It is left over NY Times nonsense to me where we now need to move into critical analysis that is accurate so we can focus a movement properly. To say there is no plan when there obviously is a plan is just a mistake at this point. Is the problem that we ultimately have to admit that the more far Left analysis is more accurate? That this really is about class struggle in a very real sense? It already was under the phony Democrats but now it is so overt and obvious. We need everyone who isn’t part of the billionaire class to see the class analysis so we can unify.
Don’t ascribe to malice what is a logical consequence of directly-observable incompetence.
That said, malice is also at work in the Trumpist government. There are people influential there who seriously want to be part of the ruling cabal of a fascist mafia state, and who manipulate Trump as their useful idiot to move things in their desired direction.
I think your and Krugman’s analysis is too shallow. See the response I just made. Chaos and uncertainty harm the middle class. You can’t have a totally compliant country with a free thinking and well educated middle class. Krugman needs to dig deeper here.
We need to watch out of conspiratorial thinking. Ignorance and arrogance can be all the explanation there is.
I don't totally discount what you say. There are people out there talking about just what you're saying...but still, we shouldn't become like the magas who are certain the Dems are bringing in illegals by the hundreds of thousands to vote for them.
Sharon, you are correct. This requires mental discipline. We must stick to observing actual statements and actions. They are loud and proud and appear to be shameless. We will have more than enough to go on from what they actually say and do. We do not need conspiracy theories and speculation about "what they are really thinking".
while demonstrating that "government" can't run things like social security and medicare, so the private sector should take over. Investment bankers and the like have been wanting to run social security for a long time - GW Bush proposed something, but it went nowhere. Imagine taking the standard cut of 1 or 2% of the assets of social security... Nice business if you can get it.
What Bush proposed was dumb…but we do need to supplement SS with a private retirement account. All you would need to do is deposit $1000 into an account for every baby and invest it in an S&P index fund to grow tax free and don’t allow it to be touched until the individual turns 65 years old. Tax it on the back end in a progressive manner and it can pay for Medicare premiums!
I can’t speak for Paul Krugman, but I doubt you are presenting anything he hasn’t already heard. Whatever master plan these people believe in, there are undoubtedly some major surprises for them. Chaos isn’t a precision strike.
I don’t know why liberal economists don’t see this more clearly. Everything Trump is doing makes total sense if you want to turn the U.S. into a country with a weak or destroyed middle class, where everything is controlled by a handful of wealthy people and corporations. You don’t want people getting an education that isn’t ideologically controlled to indoctrinate people. You want ultimately something like North Korea where the average poor person is so broken and indoctrinated that they can’t even imagine the Leader is just a normal human and think of them as a kind of God. To do that you have to destroy the middle class, destroy free education, destroy centers of independence like free media and legal institutions etc. Everything exactly as Trump and his conspirators are doing.
Of course it's not Trump, who cares only for power and revenge and jerking people around on an hourly basis to show that he's the boss - but the Project 2025 people are definitely on this kind of path, it's in the book (though they probably don't actually use the word "serf".)
Get rid of all the immigrants doing work in the fields, or cleaning kitchens or hotel rooms, and destroy government jobs, and you've got a perfect situation for slavery.
If anyone has to do any manual field work (I grew up on a small farm) for their living, they'll realize that with the pay you get for this kind of work, it is serfdom or at least on the edge of serfdom.
You begin with a set thesis and are trying to bend circumstances to support it. Handy for you, as well, to piggyback on this blog and garner more clicks for yourself, especially while using divisive "us and them" language. While the oligarchs may welcome a breakdown so they can privatize and scoop up distressed assets, you have yet to show evidence. And while Thiel and others might actually want to do this, Trump is just so fucking stupid and vain that I don't think it's his plan. It could be that those around him are thinking of this, though.
Peter Thiel clearly has a plan and Trump and Musk are his instruments I would argue. I do have a thesis but it is open to alteration at any moment and it is based on much reading and ongoing reflection. Thiel is aligned with Yarvin and what they offer is similar or basically identical to the political theory of Carl Schmitt, the main political philosopher of Naziism and the sovereign. Tariffs - particularly when applied erratically - have a destabilizing effect on global supply chains. This further squeezes the middle class. People in manufacturing, small business and farming have to deal with more uncertainty, inflation and a shrinking margin of survival - they have less time and energy to reflect and organize against fascism. The super wealthy and monopolies can ride out the uncertainty and then buy out the distressed assets and bankrupt farms, etc. This is a plan and Krugman is wrong - that is my thesis. What’s yours?
Look at all the evangelicals who think trump has been chosen by god. It doesn't matter what he says or does, it is okay with them. Of course trump encourages that. He wants to be called "dear leader."
The problem is that you can’t fight an enemy you don’t understand, and if Krugman thinks there is no method or ideology behind this and that’s what he is telling his mainstream followers, then people are totally under-prepared. When you see the method, it should spur you into the mode of organizing and activism. If you think it is just chaos, you may feel passive and assume it will end at some point. It won’t end without a mass movement to stop it. We’ve already waited far too long to oppose it.
Lemme say that I love reading Paul Krugman's posts. Krugman's posts and cutting barbs are a balm in these crazy times. So to be a fair reader, I made myself read Pinchbeck's full post at https://danielpinchbeck.substack.com/p/paul-krugman-is-wrong. The link to it was in my email feed. I almost never read comments, so I didn't see it as a link in these comments until I came here to check if Krugman had seen the post.
If I'd read only Pinchbeck's condensed reply post (which sounded more rant-like), I don't think I would have clicked through to his full post, either. However, having clicked to it from a different source, and read it, the full post is more measured and composed. I cannot speak to any of Pinchbeck's other writings, just this one https://danielpinchbeck.substack.com/p/paul-krugman-is-wrong It's worth considering what Pinchbeck points out:
"After the fall of the USSR, America pressured Russia and other former Soviet republics to quickly privatize their public assets, allowing wealthy individuals from America and Europe to dramatically increase their fortunes. It seems evident that similar conspiratorial forces are now seeking to do the same to the United States, Shock Doctrine-style."
Although I don't believe there's a conspiracy, there are definitely individuals pushing for privatization and consolidation of American assets (I would include public services in there) in ways that are destructive to anyone who isn't an oligarch. It serves us well to examine who is positioned to benefit when things come crashing down and who might be positioning for that, unintended or intended consequences be damned. Pinchbeck's post did make me pause to reflect on that, so I give him credit for that.
I think you have a point in referencing when the oligarchs took over with the collapse of the Soviet Union. I wish some of our more in depth historians would cover the parallels. I remember visiting St. Petersburg at the time and seeing all the elderly begging on the streets because they no longer received the pensions they were promised their whole working lives. All the houses along the Neva were being bought for a song by the very wealthy.
I don't buy it. Even if it was something that was actually workable, Trump doesn't have loyalty to any friends or cronies to help them out like that at the expense of his own popularity, and doesn't have any philosophical interest in privatisation as an economic direction.
You keep saying it “seems obvious,” but looking through the lens of a “theory” where suddenly everything has an explanation that “fits” is very different than providing evidence for an hypothesis.
Of course this is the plan. I agree that it feels naive to continue thinking Trump actually thinks tariffs will help people —other than the oligarchs in on a grander plan. The New Yorker article in February probably comes closest to what may actually happen. The author noted that Japan tried a version of techno-fascism before WWII. It failed but left a vacuum for an authoritarian regime. In the US, when the techno-feudal fantasy fails, as it most likely will, the Trumpists and Project 2025 folks will have a clear path to fully implement their white Christian Nationalist theocracy. Several historians have been talking about this (Cox Richardson, Snyder, Ben-Ghiat). Snyder noted the plan is to make us drones. After using biopolitical interventions to decimate the unwanted population, it will be all set up for them to rule. Desperate people obey. I know it sounds nuts, but show me evidence that proves otherwise. I agree with this comment. This is absolutely coherent. The plan is destruction.
Now, what I wonder about is if/how the Mar a Lago Accord fits into the plans?? Again totally nuts. Time will tell.
Maybe, but it seems more sensible to rely on Occam’s razor — you know, the simplest explanation in accordance with observable facts, etc. Which is, these bozos don’t know what they’re doing!
Similar to how a rogue wave is made up of individual waves reaching a crescendo I think your theory is a critical piece of the puzzle but not the only piece. Is it a coincidence that the rise of fascism occurs at the same time humanity is reaching peak oil? I think not. If next year you only had access to half the energy you previously had and you were an egotistical person who didn't care about other people what would you do? Would you lower your standards of living or would you take from someone else? The nurturing individual would happily lower their standards but the exploiter does not care about other people so the system self selects for exploiters to keep on taking. So yes, the system will self select for those willing to take it all but they are only taking because there isn't much left to take (per capita).
“For now, Goldman Sachs thinks the average tariff rate will rise to 15 percent, which means that the historical timeline will look like this:”
Haven’t we been repeatedly told that Wall St “titans” wanted Trump presumably because they would get more respect and have more influence? Isn’t one of “their own” Treasury Secretary. How do they not know???? And - for the record - my retirement portfolios have NEVER done better with Republican administrations. Every single time Republicans tank the economy. How is this lost on people? What am I missing ?
I’ve noticed this pattern too. I compared my returns on my retirement during Trump 1 and Biden. Did much better under Biden even with covid. Much better. This go round, I’ve moved most of my savings into cash with a bit invested internationally. I’ve lost about 6% of my total since the start of this adminitration but think it would have been much worse if I left my investments alone - oh how I miss those regular “new highs” from a few months ago.
I just moved my old 401k funds (sitting there doing basically NOTHING but still collecting admin fees & gradually LOSING their value) into a 3.9% savings acct with NO fees - Barclays Bank ! Suddenly decided to try & up the ante - already earned $31 in interest after just a few days ! I had just assumed there would be nobody else offering any real interest so it was not worth the bother of moving the money - I have been so wrong ! What an idiot !
Went all-cash by last December 31st on advice of our investment chap...merciful jaysus! He also cautions that "never" is the best time to re-enter the equities markets...that is, until tRump is either gone, or his "policies", whichever comes first.
The problem with Wall St. titans is that they conflate expertise in finance with expertise in economics. In their minds, the stock market >is< the economy. They're blind to the rest of it.
I should have done the same. I’m blessed with pension, so maybe I’m not as diligent. But honestly - the GOP is a disaster for the economy. The ONLY thing the GOP excels at is propaganda.
And I collect enough SSec to actually live on because I waited until I was 72 to collect - and now I am scared of trump/musk 's threatening behavior. It's not an exaggeration to say I wish the very worst for both of them & ASAP !!!
Unfortunately they suffered from actual Trump Derangement Syndrome, which is the complete inability to actually just see what Trump is and wants to do. It's a common condition among softer Trump supporters where they don't like all the things he says he's going to do, but they deluded themselves into believing that the things they dislike are actually just for show and he's not serious about them, while the things they do like are what will really happen and his real goal.
It's notable that in many cases, the things they believe he's serious about are things he never even expressed any support or interest in, but they're sure they know what's really going on there. It's also important to note that the things that are "for show" or "just a negotiation tactic", and the things he's serious about and committed to vary entirely depending on the person, in ways that are blatantly contradictory to each other.
My IQ is closer to Trump’s than Professor Krugman’s is, so let me try to explain what he might be thinking:
A trade war may be a lose-lose proposition, but since our trading partners stand to lose more than we will, they will come groveling to Trump for relief. This will give him the ability to demand concessions, including perhaps the sale of Greenland and the annexation of Canada.
He believes this scheme will work since Republicans in Congress have given him the impression that humans are inherently spineless and easily bullied.
I agree that this appears to be his/their thinking. (Also, I think it's counterproductive of Prof. Krugman to suggest that they think fentanyl dealers will pay tariffs.) One problem with their "theory", if they truly hold to this, is that it might work in a 1v1 contest, but quickly falls apart when you choose to take on all comers at once. Instead of caving, I suspect the rest of the world will just implement reciprocal tariffs and form new trade deals that cut us out, i.e. basically what they've said they would do. IMHO, the most likely outcome is that Trump quickly backs off and claims some sort of manufactured victory that 40% of the country will gleefully swallow.
Prof Krugman suggested that "they" think that fentanyl dealers will pay tariffs only because it was part of Trump's rant that he published. It's clearly lunacy, and in any event the tariff on the 20 lbs of fentanyl brought in from Canada in a year will not replace a lot of taxes.
Thank you! I was completely unaware of that. I guess Trump fell below my already extremely low expectations again. I withdraw my minor criticism (and I admit I chuckled at that line when I read it.)
Edited: Now I see it in Trump’s screed. I generally don’t read those closely, because that way lies madness.
I agree--I think the rest of the world will just tariff the heck out of us and wait for our own economy to collapse. There is literally no incentive for them to do otherwise. China is already making deals with other countries, and the UK, Canada, and EU are looking to each other.
Meanwhile, Germany is preparing for war with Russia, and China seems ready to strike Taiwan. What a mess the US pull-back is creating!!!
I’m hoping he will be forced to reduce/eliminate the tariffs. And of course, just as Roy Cohn taught him, he’ll never admit defeat (always be selling) and double down on his lies, to the applause of the sea of sycophants surrounding him.
As a Canadian, I can tell you that agreeing to annexation is a non-starter. It's one of the few things all our major political parties agree on, even the Trump-like Conservatives.
This is a very popular theory, but the problem is that there doesn't really seem to be anything Trump particularly wants more than he just wants tariffs. This theory would at least be internally consistent (although still definitely crazy) if Trump asked Canada or Mexico or the EU for something specific, and then started slapping on tariffs when he didn't get his way.
Instead he's just opening with the tariffs, with no stated off-ramp for what they can do to reverse them. The only thing he's offered Canada to undo them is annexation, so best case you can argue that he's using it to leverage a takeover of Canada, but if so then that's obviously still insane, and Canada is not going to join together and become a single 51st state just to avoid tariffs.
I wonder if he just enjoys other world leaders grovelling at his feet? I find it embarrassing to be associated, no matter how unwillingly, with such action.
It focuses the attention on him, which he loves.
It diverts attention away from Musk and all the illegal assaults going on domestically.
Are they grovelling at his feet though? The business world was following his election, but I can't think of too many world leaders who have thought that was a winning strategy for them, except maybe Kier Starmer, who is also very unpopular at home. The more common thing from leaders seems to be making statements about how the US can't be relied upon like it used to be.
Ordinarily, the US president demands an incredibly high level of deference just by default. Most world leaders will meet with a US president any time if they are asked, just because the US is such an important trading partner and military force. You don't need tariffs to get other leaders to come to you and make big public displays of respect.
“Such analyses will be a waste of time, because there’s nothing to explain. I’m not saying that the Trump team’s thinking is unsound. I don’t see any thinking at all.”
I think Ryan Zinke, Trump’s former Interior Secretary, said it best: “Trump likes tariffs because he can control them with limited congressional input. In other words, he gets to pick winners and losers based on their loyalty, and fealty to “Dear Leader!”
Additionally, I agree professor; there isn’t a rhyme or reason to Trump’s madness, except for complete and utter control, which besides money, fame and admiration; is what he covets most. Unless, of course, you include his gaudy taste in 14 Karat gold plated furnishings.
That said, my instincts tell me his tariffs will be more deliberate, and he will have many carve outs; expect Tesla to walk away with the keys to the kingdom; as well as many of his obedient corporate lapdogs.
Bottom line: his Rose Garden soirée will be nothing more than another shameless spectacle, in which all the usuals suspects, I mean Affirmative Hire sycophants praise “Dear Leader,” while he tells his fawning admirers, how he is cutting fraud, waste, and the radical liberal agenda, at a record pace.
Of course, no fraud was found, and we’ve already lost more than $500 billion in tax revenue thanks to DOGE’s cuts to the IRS. We will lose hundreds of billions more, thanks to his immigration policies, and we will experience high inflation, and job loss because of his utter stupidity, and intransigence: starting a trade war with allies just because he can.
Furthermore, the US imports approximately $4.1 trillion in goods and services a year. Tack on a 25% tariff and you’ve raised $1 trillion in additional revenue; if demand doesn’t shrink and retaliatory tariffs don’t have an impact either (highly unlikely). So we only need another $4 trillion to cover the budget.
And finally, expect volatile equity markets, thanks to his recklessness and impulsiveness; creating uncertainty and instability in the markets.
I'm quite sure trump has plans to 'persuade' those funds to find their way into his personal accounts - after all he has some big fines to pay & he sure as hell will not pay them with his own cash if there is another way !
We’ll also lose lives and productivity with impacts from cuts to the CDC, FDA and other HHS programs. I read a report last night that included several examples of people whose jobs had been cut. One was a microbiologist working on syphilis. We can look forward to a resurgence of venereal disease as well as childhood diseases.
From a lifetime of observing, it’s pretty clear that it’s hard enough for government officials to be successful at managing the economy when their intentions are well-meaning and well-informed. It’s hard to imagine how much damage someone can do when their intentions are outright sabotage.
Why is it that people still believe the lie that exporting countries pay the tariffs? They are paid by the importer here in the US. For example, the duties on imported clothes you buy at WalMart are paid by WalMart. The duties on imported oil will be paid by American oil companies. Etc. Why is this not being explained in plain English to the American public.
Ha, exactly. Even if it were explained in plain English, I’m convinced 40% of the country would STILL not believe it. That 40% will follow him to and through the gates of Hell, which at the moment looks like that’s where we’re headed. The fascist regime got 45% of the vote in the Wisconsin Supreme Court race yesterday, and that was after the billionaire thug carmaker/rocket exploder got on stage wearing a foam cheese head “hat”. And we dare to call ourselves exceptional…..
It has been explained and many people who aren’t MAGA cultists know it. But you can’t educate a MAGA cultist to accept something that contradicts Dear Leader.
It is, but the mainsstream media are terrified of Trump (the ones who are not by his side), so don't make much of a point of it, compared to the torrent of rubbish from Trump.
And appalling numbers of people get their "information" from Fox and worse...
I was in the room when supply-side economics, known then as the Reagan "Rosy Scenario," was introduced to the budget process in 1981. Supply-side displaced more serious Republican economic thinking, which has never recovered.
At a meeting with the Senate budget chair and House minority budget leader, Larry Kudlow, the chief "economist" for David Stockman's OMB, spun his supply-side tale, citing all sorts of nonsensical "statistics." The then economist for the Senate Budget Committee, a reputable Republican economist, objected to the nonsense but was eventually told by her boss, "Enough."
Why? The Republicans needed to rationalize reducing income taxes on the wealthy, with a side order of "starve the beast " or cutting federal spending. They never achieved the spending cuts, the deficit doubled, and the debt tripled. Every Republican president, starting with Reagan, campaigned against "waste, fraud, and abuse," but never came up with the savings to match their deficit-driving tax cuts.
The tariff nonsense is on the same arc but likely worse.
The Reagan Tax Cuts were actually reduced…the Bush Tax Cuts were actually made bigger in 2003 and they were massive. Nobody should even care about the Reagan Tax Cuts in light of Bush’s because Bush’s were massive and counterproductive flooding a dysfunctional economy with money just to juice the economy in 2004.
One reason to care about the Reagan tax cuts is that Republicans took the lesson that they could call themselves fiscal conservatives while running up big deficits.
As Dick Cheney put it, "Reagan proved that deficits don't matter." It became a habit for them. It's happening again now.
To understand the economics of "thuggery" it might be worth looking at the biological equivalent. Viruses and cancer cells do not take over control of biological systems for the benefit of the host.
Wisconsin has brought in the first results. Americans are really, really pissed. They want a government that will help them. They want a government they can be proud of. They do not want to be trapped on Trump/Musk's retribution, inflationary, imperial, ethnic cleansing crazy train.
2026 midterms will be a GOP Armageddon. By then, 70% of voters will be struggling in a failing economy because of GOP policies. Trump has already burned up $4.5 trillion of value in our stock markets. And he keeps pushing new ways to drive us towards bankruptcy while his Treasury Secretary explains that Americans don't want cheap goods from overseas. They are longing for expensive domestic goods. Or his Secretary of Commerce tells us Americans will understand if they miss one or two months of Social Security payments because Musk is breaking the system to get rid of fraud. Or his Trade Rep Navarro says that cost increases due to new tariffs are really just tax cuts🤯. WOW. Who knew $4000 more for a new car was actually a tax cut.
Everyone!!! Get out to a protest march on April 5. Dave America.
Reading that Trump utterance, it definitely has the qualities of dementia. I realize that that word gets "weaponized", to be used against anyone who disagrees with a partisan's stance, but having had family members who died with or from dementia, the patterns of confabulation and paranoia are eerily similar. "We're in deep trouble. We have to go over to the neighbor's house. I think that my wife is over there. When is she coming home? I'm thirsty. I have to go outside." Then, he'd open the door to a closet, and try to go outside. Trump is not quite that incoherent yet, but he's sounding more and more like someone who has advanced dementia: confused, but so absolutely certain of what they're thinking about, that no-one can convince them that they're making it all up.
So how do we explain the 10s of millions of voters who like what he says? They don’t all have dementia. I’ve listened to some of them (and Reagan voters earlier) explain why they like him, and it comes down to “he’s entertaining and talks the way I like”, but why would a 20-something enjoy listening to someone with dementia?
Many 20 somethings are more comfortable with informality and vulgarity than they are with decorum and manners. I caught flak for writing that young men liked the Arnold Palmer references. But, many of them did. Subtlety and nuance are anathemas to insecure young men. They don't have the social skills, or the critical thinking ability to discern fine details, and so the "bull in a China shop" approach that 47 uses probably makes them feel better about themselves. If POTUS can ignore details, and charge ahead, and still be the President, then I don't need to be bothered with such concerns. Absolute certainty is appealing to teenagers and young adults who are still finding their way in the world. Dementia patients are absolutely certain that their confabulations are real, and that their predictions are 100% accurate. Trump started out with a fairly polished demagoguery, but the example Prof. Krugman gives is the first one I've seen, that forcefully reminded me of my demented relatives. I'm not a Doctor; it's just an impression based on personal experience.
My latest for the Richmond Fed looks at how proposed trade measures could raise the average U.S. tariff rate to levels not seen in decades—hitting autos, electronics, and metals hardest.
Maybe “shock and awe" to get countries to “grovel and cut a deal” won’t work in the international trade world, but it seems to work fine with US law firms.
Add to this that economists have greatly increased their probability for a recession and there will be even less revenue collected since revenue drops when GDP declines.
This means that deficits will rise and so will unemployment and the debt/GDP ratio, although a large amount of inflation would give the nominal number a boost, it will be unlikely to do the trick.
Half of the increase in the deficit in FY 2009 was due to lost revenue from the collapse itself (abt 600 billion including emergency tax cuts) and most of the rest was TARP (passed under Bush).
All of this will dwarf cuts made by Musk which is minimal as a percentage of spending while being extremely damaging to our nation and its future.
There will far fewer purchases of imports or domestic goods in a downturn and likely fewer exports, as well, since this downturn will likely be global and all goods more expensive, as well.
The idea that these tariffs will protect our industries or inspire domestic production when there is less demand or consumption of goods is more than far-fetched.
There is nothing to pull us out of a self-imposed slump or possibly worse, another depression.
Nothing to inspire this imaginary domestic growth or investment they are assuming will occur.
There is actually an agenda - the Chaos. It is there to keep people from seeing the theft and grift from the Whitehouse and the Oligarchs. But seriously, I can't imagine the corporate types sinking money into new manufacturing capacity in a Country headed into a depression. Who is going to buy their products? Nobody overseas because we have attacked them and nobody here because no one will have money for anything but necessities.
AND trump is doing what putin wants to see - as much destruction of all things American as possible ! THAT he is dong - and of course putin is loving it. trump is owned by putin, that was made very clear at Helsinki (and by the cocky Russians in the Oval office in the first couple of days of trump's first term !!!), and most people seem to have totally forgotten that but I have not - THAT told me what the facts were more clearly than anything else ! So - trump is committing the equivalent of domestic TREASON and nobody seems to care !!!
I think too few are able to see what you describe not so much that they don't care, except the brainwashed Maggots care only about dear Leader
As well as the intended chaos with Trump, Putin got the unexpected bonus of a dramatic drop in US support for Ukraine.
how can he be removed, prosecuted for all his crimes, he is a domestic enemy of the constitution -
More like "Kaos".
And unlike Agent 86, tRump will never say “Sorry about that!”
Missed it by THAT much!
How about KKKaos
Fits like a glove.
You might also mention we are now at a time of nearly full employment, it will take years to design, get permits, secure financing and THEN build a new obsolete factory and begin to hire workers.
That's maybe the silliest, scariest thing about what they seem to be thinking, that new domestic manufacturing, on a scale sufficient to really make a difference, will just spring up overnight in response to the tariffs. Modern factories take years, and millions or billions of corporate investments, to design, plan, and build. What sane board or executive will make that leap of faith in a climate of chaotic uncertainty and probable recession and inflation at the least? And making tangible things is rapidly becoming a process dominated by robotics and automation, so there's no likelihood of a big surge of well-paid factory jobs once those factories open years from now.
As the professor says, it's madness without method.
tRump just loves to wind up his audiences, both domestic and international...yuuge buildup, TruthSocial posts, everybody hanging on his latest outburst, waiting for the Great Reveal, or "Which of the three doors will he open?"
It's all about theatre and entertainment, and we're the captive, passive participants.
I've been thinking for some time that the entertainment aspect of trump is what it's all about & how he has been able to be as successful as he has been in getting re-elected. I read a saying recently that summed it up perfectly along the lines of americans wanting to be entertained, not led. I think that's right for a large portion of the population & why we've got here now.
I agree. Chaos is the agenda. At least, for trump it is a feature not a bug.
Chaos can lead to social unrest that would give trump the opening to use the powers of the executive to "restore order". And he doesn't have to invoke martial law. (not that I put that past him. ) The more social unrest the more the courts are inclined to give the executive branch leeway to curtail rights and freedoms.
Trump seems to not care about negative public opinion, in fact, he seems to be inviting it. The more he disregards public opinion the more I fear he will move to intimidate opponents, terrorize citizen dissenters and rig/cancel elections.
He only cares about the diehard MAGA types.
He cares about MAGA types as long as he is their pied piper. And not at all about any devastating consequences on them. They are like his soldiers. If they suffer, they are "suckers & losers".
Stephen Brady, I totally agree with you. The theft and the greed for enrichment and power from trump and all his oligarchs is the plan. It was never to serve and work for the American People. trump never cared for his fellow Americans and never will. It’s not in him , is what he thinks all the time: : me, myself, and I.
Countries overseas no longer see America as an allí or friend since the USA is guilty of causing harm to their countries. Also, as you said Americans will not have much in extra cash to spend and will even struggle with the day to day necessities due to what the new trump government in power is doing to their own people , and being in the Oval Office is the vehicle which they wanted in order to fulfill their plan —- becoming powerful and enriching their pockets with the American money and institutions while leaving Americans in the dust.
Continued...
I'd also like to recommend:
Sharon McMahon's substack "the Preamble" today.
Apr 02, 2025 called:
The Order That Could Block Millions From Voting
Apparently, Trump singed an executive order for Musk and his DOGE to inspect state voting equipment and voter registrations, etc.
We seem to be on the verge of losing our democracy very quickly.
A federal/presidential executive order should have no power at all over state election systems. States should legally be able to ignore it.
But Musk tends to show up at the door with a bunch of thugs in uniform and barge right in...
We're hanging onto some form of democracy by a hair. None of what they're doing by our Constitutional standards is legal (hence the lawsuits that clog the system). magas in the house and senate aren't passing bills. It's not their job anymore.
What musk and his bosses have done is created a new play in the fascist or authoritarian playbook (Applebaum and/or Ghiat have said this).
That is today's American Tragedy.
This could be another attempt to push a confrontation so he can call for martial law. The likelihood my state’s law enforcement and national guard would allow DOGE to inspect our voting system and rolls approaches nil.
I've wondered about Musk's thugs. If it follows that people retain personal security proportional to their wealth--and I think it does--how much personal security does the by-far richest guy on the planet have, and does it amount to a militia?
The US Marshal Service has already been ordered to be at Musk's disposal.
From the US Marshal's Service website, https://www.usmarshals.gov/what-we-do:
"What We Do
The United States Marshals Service occupies a uniquely central position in the federal justice system. It is the enforcement arm of the federal courts and is involved in virtually every federal law enforcement initiative.
The duties of the U.S. Marshals Service include protecting the federal judiciary, apprehending federal fugitives, managing and selling seized assets acquired by criminals through illegal activities, housing and transporting federal prisoners and operating the Witness Security Program."
Note that nowhere does it say anything about enforcing the whims of an unelected non-official. In other words, the order is to commit illegal search and seizure.
"...enforcement arm of the federal courts...." Hence, not an executive branch agency.
Absent a court order, can the Orangeutang order a judicial branch agency to act?
In addition to personal security.
Then I would have them met by other men in uniform equipped with firearms. Bet you Musk and his Teen Twat Troop wouldn't be eager to show up there again.
Not to mention bagfuls of cash.
It's "bagsful"
Wiktionary disagrees:
They're actually both correct.
https://en.wiktionary.org/wiki/bagfuls
"...Trump singed an executive order...."
The typo that tells all!
Trump is burnin' down the house.
This is related to a MAGA obsession with the idea of illegal migrants voting.
Indeed. Invisible migrants on the voter's list.
Musk tried interferance in the Wisconson election and it backfired. I suspect that it will be the usual result at the state level.
They won't be satisfied until there are bodies on the streets!
That’s the goal.
I think it’s obvious why Trump is so bullish on tariffs—it’s the only power in foreign policy he controls outright. Because of a weak law that lets him declare unilaterally when tariffs are needed, he has a free hand. Other foreign policy levers, like military interventions, funding decisions, etc are constrained by other actors, e.g. congress.
He sees that tariffs and/or the threat of tariffs can be a powerful lever to manipulate other countries. It gives him unilateral power so he can do his trademark “win-lose” bargaining (read: bullying) and alter the political environment.
Because tariffs are widely understood to be foolish he has to launch a PR campaign to justify them to the ignorant MAGA types; hence his idolizing of Wm McKinley, invention that they will bring in great sums, and lies about whether US consumers will pay for them. He doesn’t have a specific trade policy—his policy is to aggrandize as much unilateral power as he can.
Trump's illusary "power", but it satisfied his chest-thumping, like any self-important gorilla.
Ruining the US economy is an unexpected bonus, showing that he really has influence. (Positive or negative, who cares ?)
Clinton ran a surplus and Obama got the deficit to 3% of GDP. Trump is the one that spiked the deficit in 2019 with his tax cuts even before Covid. Biden would have had the deficit to 3% by 2026 once Fed rates fall to around 2%.
Making Stagflation Great Again!!! That's why he's throwing tariffs on Ford!!!
That's the SECRET plan.*
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.
.
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*Makes as much sense as anything the Trump admin is saying.
Add to this that Musk didn't make any cuts.
Hi Paul, what about the theory that there is somehow a systemic plan to collapse the U.S. economy - to force a Depression - so that Trump’s billionaires and venture capitalists can buy discounted assets such as companies and real estate including public lands and parks that become privatized because the U.S. is forced to sell them off due to debt? For instance Peter Thiel will get $4 billion tax free from his Roth IRA in two years and if the U.S. has crashed he will be able to buy anything he wants. Naomi Klein has the idea of “disaster capitalism,” that the transnational oligarchic elite like to use or create disasters so they can centralize wealth and control. After the fall of the USSR, we pressured Russia and other countries to quickly privatize their public assets and then wealthy people from America and Europe were able to increase their fortunes. It seems obvious these conspiratorial forces are now seeking to do the same to the U.S. and the way to understand that is to consider who could really benefit from the collapse of the U.S. This also could go with the plan to transform the U.S. fully into a serf society ruled by tech / AI. You need to destroy the middle class to have a pliant population. So actually I think you are wrong and this is a real plan. I write about these topics in my substack also: danielpinchbeck.substack.com .
Much the same thing happened after the Great Recession when real estate companies bought up foreclosed properties, mine included, for pennies on the dollar and converted them into rentals which are very unlikely ever to return to the market, unless they are sold.to other landlords. The vastly increased percentage of landlord owned single.family homes is a significant factor in the spike in home prices this century.
Thank you, yes. I find it frustrating that liberal economists don’t really dig deeper here. It is left over NY Times nonsense to me where we now need to move into critical analysis that is accurate so we can focus a movement properly. To say there is no plan when there obviously is a plan is just a mistake at this point. Is the problem that we ultimately have to admit that the more far Left analysis is more accurate? That this really is about class struggle in a very real sense? It already was under the phony Democrats but now it is so overt and obvious. We need everyone who isn’t part of the billionaire class to see the class analysis so we can unify.
Don’t ascribe to malice what is a logical consequence of directly-observable incompetence.
That said, malice is also at work in the Trumpist government. There are people influential there who seriously want to be part of the ruling cabal of a fascist mafia state, and who manipulate Trump as their useful idiot to move things in their desired direction.
I think your and Krugman’s analysis is too shallow. See the response I just made. Chaos and uncertainty harm the middle class. You can’t have a totally compliant country with a free thinking and well educated middle class. Krugman needs to dig deeper here.
We need to watch out of conspiratorial thinking. Ignorance and arrogance can be all the explanation there is.
I don't totally discount what you say. There are people out there talking about just what you're saying...but still, we shouldn't become like the magas who are certain the Dems are bringing in illegals by the hundreds of thousands to vote for them.
Sharon, you are correct. This requires mental discipline. We must stick to observing actual statements and actions. They are loud and proud and appear to be shameless. We will have more than enough to go on from what they actually say and do. We do not need conspiracy theories and speculation about "what they are really thinking".
Well, and that reluctance to look things in the face for fear of being called delusional is what is doing for the US right now.
while demonstrating that "government" can't run things like social security and medicare, so the private sector should take over. Investment bankers and the like have been wanting to run social security for a long time - GW Bush proposed something, but it went nowhere. Imagine taking the standard cut of 1 or 2% of the assets of social security... Nice business if you can get it.
What Bush proposed was dumb…but we do need to supplement SS with a private retirement account. All you would need to do is deposit $1000 into an account for every baby and invest it in an S&P index fund to grow tax free and don’t allow it to be touched until the individual turns 65 years old. Tax it on the back end in a progressive manner and it can pay for Medicare premiums!
Like Mr. Potter trying to get his hands on the savings and loan in It’s a Wonderful Life.
Or like Neil Bush walking away from Silverado S&L with a cool $3,000,000 in taxpayers money.
Neil Bush has also been on China’s payroll for over 20 years…he’s very open about his relationship with China.
Exactly - nice analogy
May I suggest an exchange of opinions with Europeans?
Mario Draghi is on Substack. Why not to invite him for a discussion, assuming he doesn’t have political constraints…?
Here are two of my essays considering this idea that the transnational oligarchy wants to collapse the US economy as the strategy:
https://danielpinchbeck.substack.com/p/burnout-america
https://danielpinchbeck.substack.com/p/we-are-all-precariat-now
Here is a fascinating video which presents this analysis:
https://m.youtube.com/watch?v=kE7UwSc_Z6s&t=1911s
It is surprising to me that liberal economists like Paul don’t see or can’t conceive of the obvious method to the madness
I can’t speak for Paul Krugman, but I doubt you are presenting anything he hasn’t already heard. Whatever master plan these people believe in, there are undoubtedly some major surprises for them. Chaos isn’t a precision strike.
I don’t know why liberal economists don’t see this more clearly. Everything Trump is doing makes total sense if you want to turn the U.S. into a country with a weak or destroyed middle class, where everything is controlled by a handful of wealthy people and corporations. You don’t want people getting an education that isn’t ideologically controlled to indoctrinate people. You want ultimately something like North Korea where the average poor person is so broken and indoctrinated that they can’t even imagine the Leader is just a normal human and think of them as a kind of God. To do that you have to destroy the middle class, destroy free education, destroy centers of independence like free media and legal institutions etc. Everything exactly as Trump and his conspirators are doing.
Of course it's not Trump, who cares only for power and revenge and jerking people around on an hourly basis to show that he's the boss - but the Project 2025 people are definitely on this kind of path, it's in the book (though they probably don't actually use the word "serf".)
It's not only Trumpkopf, but he's in on it up to his orange ears. I'll bet they do use the word "serf", but only in private conversation.
Get rid of all the immigrants doing work in the fields, or cleaning kitchens or hotel rooms, and destroy government jobs, and you've got a perfect situation for slavery.
If anyone has to do any manual field work (I grew up on a small farm) for their living, they'll realize that with the pay you get for this kind of work, it is serfdom or at least on the edge of serfdom.
You begin with a set thesis and are trying to bend circumstances to support it. Handy for you, as well, to piggyback on this blog and garner more clicks for yourself, especially while using divisive "us and them" language. While the oligarchs may welcome a breakdown so they can privatize and scoop up distressed assets, you have yet to show evidence. And while Thiel and others might actually want to do this, Trump is just so fucking stupid and vain that I don't think it's his plan. It could be that those around him are thinking of this, though.
Peter Thiel clearly has a plan and Trump and Musk are his instruments I would argue. I do have a thesis but it is open to alteration at any moment and it is based on much reading and ongoing reflection. Thiel is aligned with Yarvin and what they offer is similar or basically identical to the political theory of Carl Schmitt, the main political philosopher of Naziism and the sovereign. Tariffs - particularly when applied erratically - have a destabilizing effect on global supply chains. This further squeezes the middle class. People in manufacturing, small business and farming have to deal with more uncertainty, inflation and a shrinking margin of survival - they have less time and energy to reflect and organize against fascism. The super wealthy and monopolies can ride out the uncertainty and then buy out the distressed assets and bankrupt farms, etc. This is a plan and Krugman is wrong - that is my thesis. What’s yours?
"Handy for you, as well, to piggyback on this blog and garner more clicks for yourself,"
The 'Clicks' you cite, actually go to Krugman.
Look at all the evangelicals who think trump has been chosen by god. It doesn't matter what he says or does, it is okay with them. Of course trump encourages that. He wants to be called "dear leader."
The problem is that you can’t fight an enemy you don’t understand, and if Krugman thinks there is no method or ideology behind this and that’s what he is telling his mainstream followers, then people are totally under-prepared. When you see the method, it should spur you into the mode of organizing and activism. If you think it is just chaos, you may feel passive and assume it will end at some point. It won’t end without a mass movement to stop it. We’ve already waited far too long to oppose it.
The possibility that it's mere thoughtless Kaos is no excuse to not take action. Urgent action and activism is called for here regardless.
//
//
On that note, this is a good place to plug action and activism, April 5 folks, be there or be square: https://handsoff2025.com
Also noteworthy: https://generalstrikeus.com/strikecard
Always remember the law of unintended consequences. Chaos Theory does not discriminate.
I’m hoping the entire administration bleeds out from contracting Ebola
Lemme say that I love reading Paul Krugman's posts. Krugman's posts and cutting barbs are a balm in these crazy times. So to be a fair reader, I made myself read Pinchbeck's full post at https://danielpinchbeck.substack.com/p/paul-krugman-is-wrong. The link to it was in my email feed. I almost never read comments, so I didn't see it as a link in these comments until I came here to check if Krugman had seen the post.
If I'd read only Pinchbeck's condensed reply post (which sounded more rant-like), I don't think I would have clicked through to his full post, either. However, having clicked to it from a different source, and read it, the full post is more measured and composed. I cannot speak to any of Pinchbeck's other writings, just this one https://danielpinchbeck.substack.com/p/paul-krugman-is-wrong It's worth considering what Pinchbeck points out:
"After the fall of the USSR, America pressured Russia and other former Soviet republics to quickly privatize their public assets, allowing wealthy individuals from America and Europe to dramatically increase their fortunes. It seems evident that similar conspiratorial forces are now seeking to do the same to the United States, Shock Doctrine-style."
Although I don't believe there's a conspiracy, there are definitely individuals pushing for privatization and consolidation of American assets (I would include public services in there) in ways that are destructive to anyone who isn't an oligarch. It serves us well to examine who is positioned to benefit when things come crashing down and who might be positioning for that, unintended or intended consequences be damned. Pinchbeck's post did make me pause to reflect on that, so I give him credit for that.
Naomi Klein take is correct.
I think you have a point in referencing when the oligarchs took over with the collapse of the Soviet Union. I wish some of our more in depth historians would cover the parallels. I remember visiting St. Petersburg at the time and seeing all the elderly begging on the streets because they no longer received the pensions they were promised their whole working lives. All the houses along the Neva were being bought for a song by the very wealthy.
I’ve been thinking this also. Fire sale, and the only ones with money left? Billionaires….
I don't buy it. Even if it was something that was actually workable, Trump doesn't have loyalty to any friends or cronies to help them out like that at the expense of his own popularity, and doesn't have any philosophical interest in privatisation as an economic direction.
You keep saying it “seems obvious,” but looking through the lens of a “theory” where suddenly everything has an explanation that “fits” is very different than providing evidence for an hypothesis.
Of course this is the plan. I agree that it feels naive to continue thinking Trump actually thinks tariffs will help people —other than the oligarchs in on a grander plan. The New Yorker article in February probably comes closest to what may actually happen. The author noted that Japan tried a version of techno-fascism before WWII. It failed but left a vacuum for an authoritarian regime. In the US, when the techno-feudal fantasy fails, as it most likely will, the Trumpists and Project 2025 folks will have a clear path to fully implement their white Christian Nationalist theocracy. Several historians have been talking about this (Cox Richardson, Snyder, Ben-Ghiat). Snyder noted the plan is to make us drones. After using biopolitical interventions to decimate the unwanted population, it will be all set up for them to rule. Desperate people obey. I know it sounds nuts, but show me evidence that proves otherwise. I agree with this comment. This is absolutely coherent. The plan is destruction.
Now, what I wonder about is if/how the Mar a Lago Accord fits into the plans?? Again totally nuts. Time will tell.
Maybe, but it seems more sensible to rely on Occam’s razor — you know, the simplest explanation in accordance with observable facts, etc. Which is, these bozos don’t know what they’re doing!
Either way the majority gets screwed
Similar to how a rogue wave is made up of individual waves reaching a crescendo I think your theory is a critical piece of the puzzle but not the only piece. Is it a coincidence that the rise of fascism occurs at the same time humanity is reaching peak oil? I think not. If next year you only had access to half the energy you previously had and you were an egotistical person who didn't care about other people what would you do? Would you lower your standards of living or would you take from someone else? The nurturing individual would happily lower their standards but the exploiter does not care about other people so the system self selects for exploiters to keep on taking. So yes, the system will self select for those willing to take it all but they are only taking because there isn't much left to take (per capita).
You might be onto something there.
Thanks let’s get to work thinking this through.
That might be the plan of some of Trump's handlers, but Trump doesn't care, as long as he is "important".
“For now, Goldman Sachs thinks the average tariff rate will rise to 15 percent, which means that the historical timeline will look like this:”
Haven’t we been repeatedly told that Wall St “titans” wanted Trump presumably because they would get more respect and have more influence? Isn’t one of “their own” Treasury Secretary. How do they not know???? And - for the record - my retirement portfolios have NEVER done better with Republican administrations. Every single time Republicans tank the economy. How is this lost on people? What am I missing ?
I’ve noticed this pattern too. I compared my returns on my retirement during Trump 1 and Biden. Did much better under Biden even with covid. Much better. This go round, I’ve moved most of my savings into cash with a bit invested internationally. I’ve lost about 6% of my total since the start of this adminitration but think it would have been much worse if I left my investments alone - oh how I miss those regular “new highs” from a few months ago.
That means you're not super rich. The super rich do much better under GOP control. Everyone else gets screwed. Kind of like the VP's couch.
I just moved my old 401k funds (sitting there doing basically NOTHING but still collecting admin fees & gradually LOSING their value) into a 3.9% savings acct with NO fees - Barclays Bank ! Suddenly decided to try & up the ante - already earned $31 in interest after just a few days ! I had just assumed there would be nobody else offering any real interest so it was not worth the bother of moving the money - I have been so wrong ! What an idiot !
Went all-cash by last December 31st on advice of our investment chap...merciful jaysus! He also cautions that "never" is the best time to re-enter the equities markets...that is, until tRump is either gone, or his "policies", whichever comes first.
The problem with Wall St. titans is that they conflate expertise in finance with expertise in economics. In their minds, the stock market >is< the economy. They're blind to the rest of it.
Correct!
I should have done the same. I’m blessed with pension, so maybe I’m not as diligent. But honestly - the GOP is a disaster for the economy. The ONLY thing the GOP excels at is propaganda.
Pension funds are at risk, too.
And I collect enough SSec to actually live on because I waited until I was 72 to collect - and now I am scared of trump/musk 's threatening behavior. It's not an exaggeration to say I wish the very worst for both of them & ASAP !!!
True. I just don’t have any control over that.
Unfortunately they suffered from actual Trump Derangement Syndrome, which is the complete inability to actually just see what Trump is and wants to do. It's a common condition among softer Trump supporters where they don't like all the things he says he's going to do, but they deluded themselves into believing that the things they dislike are actually just for show and he's not serious about them, while the things they do like are what will really happen and his real goal.
It's notable that in many cases, the things they believe he's serious about are things he never even expressed any support or interest in, but they're sure they know what's really going on there. It's also important to note that the things that are "for show" or "just a negotiation tactic", and the things he's serious about and committed to vary entirely depending on the person, in ways that are blatantly contradictory to each other.
Robert Duval not Brando.
Thank God a different pedant made this point to save me from putting my head above the parapet! Thank you sir!
Thank you -- had the exact same thought.
Correct -
I wonder who coined the phrase
“ We had to destroy the Veterans Administration in order to save it “ ?
Correct:
https://www.youtube.com/watch?v=nx5N-4JvVyk
My IQ is closer to Trump’s than Professor Krugman’s is, so let me try to explain what he might be thinking:
A trade war may be a lose-lose proposition, but since our trading partners stand to lose more than we will, they will come groveling to Trump for relief. This will give him the ability to demand concessions, including perhaps the sale of Greenland and the annexation of Canada.
He believes this scheme will work since Republicans in Congress have given him the impression that humans are inherently spineless and easily bullied.
He is, I hope, mistaken in this.
I agree that this appears to be his/their thinking. (Also, I think it's counterproductive of Prof. Krugman to suggest that they think fentanyl dealers will pay tariffs.) One problem with their "theory", if they truly hold to this, is that it might work in a 1v1 contest, but quickly falls apart when you choose to take on all comers at once. Instead of caving, I suspect the rest of the world will just implement reciprocal tariffs and form new trade deals that cut us out, i.e. basically what they've said they would do. IMHO, the most likely outcome is that Trump quickly backs off and claims some sort of manufactured victory that 40% of the country will gleefully swallow.
Prof Krugman suggested that "they" think that fentanyl dealers will pay tariffs only because it was part of Trump's rant that he published. It's clearly lunacy, and in any event the tariff on the 20 lbs of fentanyl brought in from Canada in a year will not replace a lot of taxes.
Thank you! I was completely unaware of that. I guess Trump fell below my already extremely low expectations again. I withdraw my minor criticism (and I admit I chuckled at that line when I read it.)
Edited: Now I see it in Trump’s screed. I generally don’t read those closely, because that way lies madness.
I agree--I think the rest of the world will just tariff the heck out of us and wait for our own economy to collapse. There is literally no incentive for them to do otherwise. China is already making deals with other countries, and the UK, Canada, and EU are looking to each other.
Meanwhile, Germany is preparing for war with Russia, and China seems ready to strike Taiwan. What a mess the US pull-back is creating!!!
I’m hoping he will be forced to reduce/eliminate the tariffs. And of course, just as Roy Cohn taught him, he’ll never admit defeat (always be selling) and double down on his lies, to the applause of the sea of sycophants surrounding him.
That would be a best case scenario - aside from the people taking back our country that is.
As a Canadian, I can tell you that agreeing to annexation is a non-starter. It's one of the few things all our major political parties agree on, even the Trump-like Conservatives.
Does The Orange Scourge have a measurable IQ?
It’s an imaginary number.
That makes sense, sqrt(-1) seems to fit perfectly.
It could be an irrational number but
then we would need to apologize to
the likes of the square root of 5 and such for the comparison to t-Rump .
Like many things these days - it's "virtual" (but actually illusory!)
It’s a negative number.
I thought it was imaginary, sqrt(-1).
This is a very popular theory, but the problem is that there doesn't really seem to be anything Trump particularly wants more than he just wants tariffs. This theory would at least be internally consistent (although still definitely crazy) if Trump asked Canada or Mexico or the EU for something specific, and then started slapping on tariffs when he didn't get his way.
Instead he's just opening with the tariffs, with no stated off-ramp for what they can do to reverse them. The only thing he's offered Canada to undo them is annexation, so best case you can argue that he's using it to leverage a takeover of Canada, but if so then that's obviously still insane, and Canada is not going to join together and become a single 51st state just to avoid tariffs.
I wonder if he just enjoys other world leaders grovelling at his feet? I find it embarrassing to be associated, no matter how unwillingly, with such action.
It focuses the attention on him, which he loves.
It diverts attention away from Musk and all the illegal assaults going on domestically.
Not only grovelling, but buying him off with untraceable crypto payments. Both world and industry leaders.
Are they grovelling at his feet though? The business world was following his election, but I can't think of too many world leaders who have thought that was a winning strategy for them, except maybe Kier Starmer, who is also very unpopular at home. The more common thing from leaders seems to be making statements about how the US can't be relied upon like it used to be.
Ordinarily, the US president demands an incredibly high level of deference just by default. Most world leaders will meet with a US president any time if they are asked, just because the US is such an important trading partner and military force. You don't need tariffs to get other leaders to come to you and make big public displays of respect.
Tariffs are a source of revenue. He has to pay for the tax cuts somehow.
He'll pay for it with more debt, like he's always done. Tariffs and DOGE cuts won't come close to covering the proposed tax cuts.
I know but he’s fixated on tariffs.
“Such analyses will be a waste of time, because there’s nothing to explain. I’m not saying that the Trump team’s thinking is unsound. I don’t see any thinking at all.”
I think Ryan Zinke, Trump’s former Interior Secretary, said it best: “Trump likes tariffs because he can control them with limited congressional input. In other words, he gets to pick winners and losers based on their loyalty, and fealty to “Dear Leader!”
Additionally, I agree professor; there isn’t a rhyme or reason to Trump’s madness, except for complete and utter control, which besides money, fame and admiration; is what he covets most. Unless, of course, you include his gaudy taste in 14 Karat gold plated furnishings.
That said, my instincts tell me his tariffs will be more deliberate, and he will have many carve outs; expect Tesla to walk away with the keys to the kingdom; as well as many of his obedient corporate lapdogs.
Bottom line: his Rose Garden soirée will be nothing more than another shameless spectacle, in which all the usuals suspects, I mean Affirmative Hire sycophants praise “Dear Leader,” while he tells his fawning admirers, how he is cutting fraud, waste, and the radical liberal agenda, at a record pace.
Of course, no fraud was found, and we’ve already lost more than $500 billion in tax revenue thanks to DOGE’s cuts to the IRS. We will lose hundreds of billions more, thanks to his immigration policies, and we will experience high inflation, and job loss because of his utter stupidity, and intransigence: starting a trade war with allies just because he can.
Furthermore, the US imports approximately $4.1 trillion in goods and services a year. Tack on a 25% tariff and you’ve raised $1 trillion in additional revenue; if demand doesn’t shrink and retaliatory tariffs don’t have an impact either (highly unlikely). So we only need another $4 trillion to cover the budget.
And finally, expect volatile equity markets, thanks to his recklessness and impulsiveness; creating uncertainty and instability in the markets.
Praise the Lord, I mean anointed one! IMHO…:)
Himmler operated a slush fund into which corporations desiring to do business in Germany contributed. It financed the SS.
I'm quite sure trump has plans to 'persuade' those funds to find their way into his personal accounts - after all he has some big fines to pay & he sure as hell will not pay them with his own cash if there is another way !
We’ll also lose lives and productivity with impacts from cuts to the CDC, FDA and other HHS programs. I read a report last night that included several examples of people whose jobs had been cut. One was a microbiologist working on syphilis. We can look forward to a resurgence of venereal disease as well as childhood diseases.
From a lifetime of observing, it’s pretty clear that it’s hard enough for government officials to be successful at managing the economy when their intentions are well-meaning and well-informed. It’s hard to imagine how much damage someone can do when their intentions are outright sabotage.
Why is it that people still believe the lie that exporting countries pay the tariffs? They are paid by the importer here in the US. For example, the duties on imported clothes you buy at WalMart are paid by WalMart. The duties on imported oil will be paid by American oil companies. Etc. Why is this not being explained in plain English to the American public.
Trump believes, or says he believes, that foreign companies will eat the tariff and not raise prices. Donate all their profit margins.
At least the rest of the world is fighting only Americans while the Americans fight everyone.
Ha, exactly. Even if it were explained in plain English, I’m convinced 40% of the country would STILL not believe it. That 40% will follow him to and through the gates of Hell, which at the moment looks like that’s where we’re headed. The fascist regime got 45% of the vote in the Wisconsin Supreme Court race yesterday, and that was after the billionaire thug carmaker/rocket exploder got on stage wearing a foam cheese head “hat”. And we dare to call ourselves exceptional…..
You are and let's hope ot stays an exception in the world
It has been explained and many people who aren’t MAGA cultists know it. But you can’t educate a MAGA cultist to accept something that contradicts Dear Leader.
You can bring them to facts, but you can't make them think.
They say he’s playing 4-D chess. Simple folks can’t understand it.
It is, but the mainsstream media are terrified of Trump (the ones who are not by his side), so don't make much of a point of it, compared to the torrent of rubbish from Trump.
And appalling numbers of people get their "information" from Fox and worse...
Because it depends on the "elasticity" of consumers and producers demand and supply curves.
Great line from the movie Porklips Now (which you can probably find on YouTube):
Mertz: “Do you find my method acting unsound?”
Dullard: “I don’t see any acting at all.”
Except in this case it's nothing but acting - and pretty bad acting at that.
I was in the room when supply-side economics, known then as the Reagan "Rosy Scenario," was introduced to the budget process in 1981. Supply-side displaced more serious Republican economic thinking, which has never recovered.
At a meeting with the Senate budget chair and House minority budget leader, Larry Kudlow, the chief "economist" for David Stockman's OMB, spun his supply-side tale, citing all sorts of nonsensical "statistics." The then economist for the Senate Budget Committee, a reputable Republican economist, objected to the nonsense but was eventually told by her boss, "Enough."
Why? The Republicans needed to rationalize reducing income taxes on the wealthy, with a side order of "starve the beast " or cutting federal spending. They never achieved the spending cuts, the deficit doubled, and the debt tripled. Every Republican president, starting with Reagan, campaigned against "waste, fraud, and abuse," but never came up with the savings to match their deficit-driving tax cuts.
The tariff nonsense is on the same arc but likely worse.
The Reagan Tax Cuts were actually reduced…the Bush Tax Cuts were actually made bigger in 2003 and they were massive. Nobody should even care about the Reagan Tax Cuts in light of Bush’s because Bush’s were massive and counterproductive flooding a dysfunctional economy with money just to juice the economy in 2004.
One reason to care about the Reagan tax cuts is that Republicans took the lesson that they could call themselves fiscal conservatives while running up big deficits.
As Dick Cheney put it, "Reagan proved that deficits don't matter." It became a habit for them. It's happening again now.
To understand the economics of "thuggery" it might be worth looking at the biological equivalent. Viruses and cancer cells do not take over control of biological systems for the benefit of the host.
Wisconsin has brought in the first results. Americans are really, really pissed. They want a government that will help them. They want a government they can be proud of. They do not want to be trapped on Trump/Musk's retribution, inflationary, imperial, ethnic cleansing crazy train.
2026 midterms will be a GOP Armageddon. By then, 70% of voters will be struggling in a failing economy because of GOP policies. Trump has already burned up $4.5 trillion of value in our stock markets. And he keeps pushing new ways to drive us towards bankruptcy while his Treasury Secretary explains that Americans don't want cheap goods from overseas. They are longing for expensive domestic goods. Or his Secretary of Commerce tells us Americans will understand if they miss one or two months of Social Security payments because Musk is breaking the system to get rid of fraud. Or his Trade Rep Navarro says that cost increases due to new tariffs are really just tax cuts🤯. WOW. Who knew $4000 more for a new car was actually a tax cut.
Everyone!!! Get out to a protest march on April 5. Dave America.
What is the strategy to ensure that by the time of the 2026 midterms, the US is still a somewhat democratic country?
Reading that Trump utterance, it definitely has the qualities of dementia. I realize that that word gets "weaponized", to be used against anyone who disagrees with a partisan's stance, but having had family members who died with or from dementia, the patterns of confabulation and paranoia are eerily similar. "We're in deep trouble. We have to go over to the neighbor's house. I think that my wife is over there. When is she coming home? I'm thirsty. I have to go outside." Then, he'd open the door to a closet, and try to go outside. Trump is not quite that incoherent yet, but he's sounding more and more like someone who has advanced dementia: confused, but so absolutely certain of what they're thinking about, that no-one can convince them that they're making it all up.
So how do we explain the 10s of millions of voters who like what he says? They don’t all have dementia. I’ve listened to some of them (and Reagan voters earlier) explain why they like him, and it comes down to “he’s entertaining and talks the way I like”, but why would a 20-something enjoy listening to someone with dementia?
Many 20 somethings are more comfortable with informality and vulgarity than they are with decorum and manners. I caught flak for writing that young men liked the Arnold Palmer references. But, many of them did. Subtlety and nuance are anathemas to insecure young men. They don't have the social skills, or the critical thinking ability to discern fine details, and so the "bull in a China shop" approach that 47 uses probably makes them feel better about themselves. If POTUS can ignore details, and charge ahead, and still be the President, then I don't need to be bothered with such concerns. Absolute certainty is appealing to teenagers and young adults who are still finding their way in the world. Dementia patients are absolutely certain that their confabulations are real, and that their predictions are 100% accurate. Trump started out with a fairly polished demagoguery, but the example Prof. Krugman gives is the first one I've seen, that forcefully reminded me of my demented relatives. I'm not a Doctor; it's just an impression based on personal experience.
My latest for the Richmond Fed looks at how proposed trade measures could raise the average U.S. tariff rate to levels not seen in decades—hitting autos, electronics, and metals hardest.
I have estimates of AETR by industry and region!
https://www.richmondfed.org/publications/research/economic_brief/2025/eb_25-12
Great study thanks
I think it was Robert Duvall, as Kilgore, who loved the smell of napalm in the morning.
Paul doesn’t miss much
Maybe “shock and awe" to get countries to “grovel and cut a deal” won’t work in the international trade world, but it seems to work fine with US law firms.