“Liberty Day” Has Come!

Posted on April 3, 2025 by Popular Economics Weekly

Financial FAQs

Dow opens 1,200 points lower, S&P 500 and Nasdaq plunge as Trump tariffs roil markets; Apple, Nvidia and Nike slump; dollar and gold dive. U.S. stocks are plunging a day after U.S. President Trump outlined new tariffs aimed at reordering global trade. MarketWatch

AtlantaFedGDPNow

This above graph best portrays what is both sad and terrifying about the result of President Trump’s “liberation day” tariff announcements. The Atlanta Federal Reserve’s GDPNow estimate of first quarter economic growth shows our economy being driven over the cliff.

The MarketWatch headline of the DOW’s 1200 point drop announcing the reaction of US financial markets the next day was just as terrifying.

Trump is so steeped in his delusions of grandeur that he believes bringing back President William McKinley’s tariff policies that were instituted just before the turn of the last century (1890) will make America great again.

But in fact, McKinley’s policies created the Robber Barons and monopolies that led to so much corruption and concentration of power that it ultimately caused the Great Depression and ultimately World War II.

It is a sad time because it confirms one political party is ignorant of not just economic facts but is willfully ignorant of the damage higher tariffs will do to other economies, not just ours.

The US economy was the “envy of the world”, said The Economist when President Biden handed off of the fastest growing economy in the developed world to the Trump administration that had brought the US out of the COVID-19 pandemic.

McKinley era economists were largely ignorant of the economic knowledge learned since then. But Trump and his Republicans’ ignorance of basic economic facts today isn’t excusable. Tariffs are a tax levied on imports, which raises the price of those imports.

There is another effect of increased tariffs that will add to the pain. The trade barriers it sets up will reduce the flow of foreign trade that will create supply shortages as happened during the COVID-19 pandemic. This was the root cause of the inflation surge in 2021 that induced the Federal Reserve to raise interest rates and borrowing costs for consumers, hurting lower-income folks the most.

Last Wednesday President Trump had already announced 10% universal tariffs on all imports to the U.S., which totaled more than $4 trillion last year, according to the Bureau of Economic Analysis, or almost 14% of total economic output.

“He announced more on Chinese goods, adding to the double-digit levies already in affect, plus additional ones for countries that he deems to have excessive barriers to imports from the U.S.,” said MarketWatch.

We will soon have concrete evidence of the inevitable result—actual stagflation. It will firstly appear in higher prices, the (-flation) result that will cause consumers to buy less. This in turn will begin to slow economic growth, the (stag-) component of stagflation.

We shouldn’t forget what happened during William McKinley’s era. It was the first Gilded Age that created the Robber Barons of that day, just as the Oligarchs seated in rows behind Trump during his inauguration, will benefit the most from Trump’s ‘liberation day”.

Harlan Green © 2025

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Republicans Don’t Pay Their Bills

Posted on April 1, 2025 by Popular Economics Weekly

Financial FAQs

“The new law will reduce federal revenues by significant amounts, even after allowing for the impact on economic growth. It will make the distribution of after-tax income more unequal. If it is not financed with concurrent spending cuts or other tax increases, TCJA (Tax Cuts and Jobs Act) will raise federal debt and impose burdens on future generations. If it is financed with spending cuts or other tax increases, TCJA will, under the most plausible scenarios, end up making most households worse off than if it had not been enacted.” Brookings

How times have changed! Republicans during the Eisenhower era paid for the deficits their tax cuts caused. The Brookings Institution analysis of Donald Trump’s 2018 Tax Cut and Jobs Act hasUS households paying for it because it added some $4 trillion to our federal debt even “if it is financed with spending cuts or other tax increases.”

The 90 percent corporate tax rate and 92 percent maximum personal tax rate of the Eisenhower era paid for the “new hires, new equipment, and product research which are deductible from taxable earnings.”

In other words, the higher tax rates made corporations use their profits to finance their own growth, rather than pay Uncle Sam. Whereas today the TCJA tax cuts will mostly finance corporate stock buybacks.

And Trump wants to renew the TCJA when it expires this year, which the Congressional Budget Office says will add at least another $4 trillion to our national debt.

It doesn’t have to be this way. The Clinton/Gore government downsizing of the 1990s created four years of budget surpluses, because they negotiated with congress to make the cuts that were in congressionally mandated programs.

“Unlike the current effort, the cutting didn’t start until they had gone through a six-month study process and developed a blueprint of how to best reinvent the federal government,” said a recent Newsweek article on the subject. “Government agencies were brought into the process to determine the best ways that efficiencies could be realized. In fact, the effort was led by some 250 federal employees that remained on their agency payrolls.”

The federal workforce was reduced by close to 400,000 employees between 1993 and 2000, or about 17 percent of the total. The cuts made the government the smallest it had been since the Eisenhower administration, according to the Newsweek report. 

Who do the Trump tax cuts benefit? Corporations and households in the top 5% — who earn more than $450,000 a year, roughly — are the “biggest winners.” They’d get over 45% of the benefits of extending the Tax Cuts and Jobs Act, according to a July 2024 analysis by the Urban-Brookings Tax Policy Center and would reduce federal tax revenues by $4.4 trillion by 2035.

So why would Republicans want to reduce federal revenues when we have a $36 trillion national budget deficit that is 120 percent of GDP?

It’s because Republicans don’t want to pay their bills rather than provide social services and environmental protection that would benefit all Americans. That’s their history from at least 1980 when President Reagan declared that “government was the problem” and immediately fired the federal air traffic controllers who were striking for higher pay and better working conditions.

We know how that turned out with the latest brouhaha over Musk’s slashing of the already understaffed FAA workforce that regulates airline travel.

President Eisenhower would have turned over in his grave, if he knew this would happen to the Republican Party.

Harlan Green © 2025

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Can We Prevent Stagflation?

Posted on March 31, 2025 by Popular Economics Weekly

Popular Economics Weekly

During the 1973 Arab-Israeli War, Arab members of the Organization of Petroleum Exporting Countries (OPEC) imposed an embargo against the United States in retaliation for the U.S. decision to re-supply the Israeli military and to gain leverage in the post-war peace negotiations…The onset of the embargo contributed to an upward spiral in oil prices with global implications. The price of oil per barrel first doubled, then quadrupled, imposing skyrocketing costs on consumers and structural challenges to the stability of whole national economies. history,state.gov

BEA.gov

The 1970s stagflation, a combination of stagnant growth and high inflation, was not a happy time. It caused then Federal Reserve Chair Paul Volcker to raise the Fed Funds rate to as high as 20 percent to tame the inflation tiger in the 1980s and many bank failures.

It might happen again, but not because of an energy shortage. Friday’s report on the Commerce Department’s Personal Consumption Expenditure Index (PCE) raised alarms that inflation was on the rise, which is one of the two main components of stagflation. Inflation hasn’t been tamed, as it rose 2.5 percent, 2.8 percent without food and energy prices, per the BEA graph.

Stagflation last happened in the 1970s because of the 1973-74 Arab oil embargo that caused gas stations to run out of gas and consumer prices to soar. It ultimately resulted in a 14.8 percent CPI inflation rate in 1980. It was more than a decade before inflation and interest rates dropped back to single digits, and we lived through three recessions in that decade.

This was also the beginning of the Second Gilded Age so well documented by political scientists Jacob Hacker and Paul Pierson in Winner-Take-All Politics: How Washington Made the Rich Richer—and Turned Its Back on the Middle Class that was initiated by President Reagan and supported by the Business Roundtable of corporate CEOs.

It began the huge transfer of wealth from wage earning Americans to the owners of capital with successive tax cuts and restrictions on labor organizing, as well as the massive deregulation of industries such as the airlines and telecommunications.

US Corporations took advantage of the globalization of technologies and began the massive move of factories overseas, along with the blue-collar jobs that had built middle America, to countries with cheaper wages and fewer environmental regulations.

The gutting of rust belt jobs in the Midwest resulted in the red state-blue state split we have today, with right to work laws in those states that restrict the right of unions to collect dues from their members, many with wages still stuck at the national $7.25 per hour minimum wage.

This is while economic growth, the other main element of stagflation, is slowing. Why? Consumers are not happy with the high prices and economic uncertainty caused by Trump’s tariffs and Elon Musk’s DOGE massive job cuts, so they aren’t spending as they did in the past, and consumers are the main driver of economic growth.

The loss of tens of thousands of federal jobs and depopulating the service sector industry, the fastest growing economic sector that depends on undocumented workers, will do the same.

This is reflected in falling consumer confidence. The University of Michigan’s final February survey said: “Consumer sentiment extended its early month decline, sliding nearly 10% from January. The decrease was unanimous across groups by age, income, and wealth. All five index components deteriorated this month, led by a 19% plunge in buying conditions for durables, in large part due to fears that tariff induced price increases are imminent.

All of these factors make a reduction in first quarter economic growth more likely. In fact, the Atlanta Fed’s estimate of first quarter growth declined further into negative territory.

The GDPNow model estimate for real GDP growth (seasonally adjusted annual rate) in the first quarter of 2025 is -2.8 percent on March 28, down from -1.8 percent on March 26. The alternative model forecast, which adjusts for imports and exports of gold as described here, is -0.5 percent.

Can we prevent a recurrence, in which we again have double digit inflation and slow to no economic growth? Trump would have to learn how to negotiate with Congress rather than issue unlawful executive orders and take away Elon Musk’s chainsaw for that to happen.

Harlan Green © 2025

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Too Dumb To Fail?

Posted on March 27, 2025 by Popular Economics Weekly

Financial FAQs

“Anyway, at this point we should assume that the same combination of incompetence and bad intentions that afflicts national security and budget policy applies to everything the Trump administration touches. Incredibly, quite a few investors and journalists still believe that there’s deep thinking underlying the administration’s trade and currency policy. I guarantee you, there isn’t” Paul Krugman Substack

Amazon

I would expand Nobel Laureate Krugman’s surmise of why the Trump administration keeps showing their incompetence and bad intentions not only in national security and budget policy but outright governance—details of the secret Houthi battle plan leaked to the media beforehand, their latest faux pas.

Such incompetence comes from a history of dumbing down the Republican Party itself, a history that spans decades and includes denying the theory of evolution, climate change, scientific knowledge and common sense thinking in general.

Matt Lewis, Daily Beast columnist, in his book, Too Dumb to Fail, said this in 2016:

“This is the dirty little secret of the conservative movement in America today: everyone knows that it has lost its intellectual bearings. Empty-headed talking point reciters, rookie politicians who’ve never managed anything in their lives, media clowns such as Donald Trump, dim bulbs in tight pants or short skirts, professionally outraged shout-fest talking heads, and total political neophytes dominate conservative airwaves and the Right’s political discourse.”

Republicans’ incompetence has allowed an autocrat and con artist like Donald Trump to come to power to their own detriment. He is not at all concerned about their agenda, just his own—whether it is invading Greenland or the Panama Canal, attempting to impoverish Canadians so they will give in to his tariff blackmail, or backing out of NATO to please Vladimir Putin,

Republicans’ ‘empty headedness’ shows when they allow Trump/Musk to dumb down their own constituents by shutting down the Department of Education that supports 80 percent of American students in public education. This will harm Republicans’ red states citizens the most. Nine of the lowest ten states ranked on national education scores are red states, according to Wallet Hub.

Such ignorance breeds conspiracy theories, rumors, and feeds an entire propaganda machine to keep certain voters in line that polls show are the least informed politically.

President Trump lied some 30,573, or 21 times a day during his first term, according to a recent NYTimes article. A con artist must lie to cover up and justify earlier lies, whereas a truth-teller doesn’t have to lie or change his or her story. This is basic common-sense thinking, of course, something anyone can understand, if they choose to.

Donald Trump dazzled Republicans so much so that they allowed him to choose the least-qualified candidates to run his government and carry out their agenda of deregulation, tax cuts and tariffs—so he would maintain the disinformation campaign that supports the red meat issues conservatives have always wanted in some form or another—cutting taxes in order to downsize parts of the government that protect the public sector rather than the pockets of the wealthiest.

Tax cuts always sound good to those who don’t believe in the public good of better healthcare, market rules that punish cheaters, and laws that protect the environment.

Dumbing down their electorate makes it easier for MAGA Republicans to lie about issues that require some degree of education and understanding, but it will ultimately come back to bite them. Trump and Republicans are not only harming their red states, but now the whole country with their cuts in social security and national security agencies that protect our military secrets.

So can Trump deliver what Republicans want? I believe as Paul Krugman does—”we can assume that the same combination of incompetence and bad intentions that afflicts national security and budget policy applies to everything the Trump administration touches.”

Harlan Green © 2025

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You Are Fired!

Posted on March 25, 2025 by Popular Economics Weekly

Answering Kennedy’s Call

“It’s 100 days into the Trump (first) Presidency and looking more and more like President Trump is no more effective at running the country than his business interests. His book, The Art of the Deal was meant to tout his negotiating skills, but the results were never very successful.”

Huffington Post

I wrote this Huffington Post column in April 2017 during President Trump’s first 100 days in office, and the Trump 2.0 administration is showing even more incompetence. We have just learned that they know even less about keeping military plans secret.

Editor-in-chief of The Atlantic, Jeffrey Goldberg, reported that senior members of the Trump administration planned the March 15 U.S. attack on the Houthis in Yemen over Signal, a widely available encrypted app that is not part of the United States national security system.

In any other administration Defense Secretary Pete Hegseth and National Security Advisor Mike Walz would have been immediately fired for disregarding national security protocols, just as Trump liked to fire people on The Apprentice, his TV show.

In fact, Hegseth should follow his own advice given in an interview on Fox News during his Senate hearings: “Anyone breaching national security protocols would be fired and prosecuted on the spot. (sic)”

When asked about the security breach, Trump responded: “I don’t know anything about it, reports Heather Cox Richardson. “I’m not a big fan of The Atlantic. To me, it’s a magazine that’s going out of business. I think it’s not much of a magazine. But I know nothing about it. You’re saying that they had what?”

It’s a sign that the Republican Party and the Trump/Musk administration has doubled down on their extreme incompetence (and naivete), so much so that it threatens our national security.

There is nothing that the administration could say to make the situation better, but this made it worse.As national security specialist Tom Nichols noted: “If the President is telling the truth and no one’s briefed him about this yet, that’s another story in itself. In any other administration, [the chief of staff] would have been in the Oval [Office] within nanoseconds of learning about something like this.”

Nothing ever came of Trump’s first term legislative efforts either; with no repeal of Obamacare, or real tax reform, an immigration ban, new trade policy, and sanctuary city victories because of poorly thought out strategies. Instead, he threatened judges, sanctuary cities, Congress, and even other countries when they didn’t support his various executive orders.

I cited a 2017 Fortune Magazinereport on candidate Trump’s negotiating tactics: “As he campaigns, Trump often touts his skills as a negotiator,” says Fortune. “The analysis shows that lawsuits are one of his primary negotiating tools. He turns to litigation to distance himself from failing projects that relied on the Trump brand to secure investments. As USA TODAY previously reported, he also uses the legal system to haggle over his property tax bills. His companies have been involved in more than 100 tax disputes, and the New York State Department of Finance has obtained liens on Trump properties for unpaid tax bills at least three dozen times.”

Do we expect a different outcome with the peace negotiations over the Ukraine war? Putin wouldn’t accept Trump’s 30-day cease fire offer. It looks like Putin is once again playing him, which seems easy to do.

Americans are already realizing that we are even less safe today. The Conference Board’s Consumer Confidence survey is showing an increasing lack of confidence in their future.

“Consumers’ expectations were especially gloomy, with pessimism about future business conditions deepening and confidence about future employment prospects falling to a 12-year low. Meanwhile, consumers’ optimism about future income—which had held up quite strongly in the past few months—largely vanished, suggesting worries about the economy and labor market have started to spread into consumers’ assessments of their personal situations.”

Isn’t that a definition of insanity—when Republicans keep doing the same things over and over again and expecting a different result?

Harlan Green © 2025

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Why Kill Social Security?

Posted on March 24, 2025 by Popular Economics Weekly

Answering Kennedy’s Call

“Let’s say social security didn’t send out their checks this month. My mother who’s 94, she wouldn’t call and complain. She’d think something got messed up, and she’ll get it next month. A fraudster always makes the loudest noise, screaming, yelling and complaining.” Trump Commerce Secretary Howard Lutnick

It’s a sign of Republican Party and the Trump/Musk administration’s extreme incompetence (and naviete) if they believe Americans will buy Howard Lutnick’s story that only fraudsters would care if our seniors miss a social security payment when a major share of seniors list their monthly social security payment as their major (and only) source of income!

Commerce Secretary Howard Lutnick’s comments thereby reveal why Republicans and Trump want to at least damage it enough that Republicans can privatize it for their Wall Street cronies.

It is an insane attempt to destroy social security in its current form, of course, and a reflection of Republicans’ efforts to dumb down its mostly red state electorate.

Even GW Bush attempted it, to no avail when the profit windfall that brokers would reap for managing it as a private pension fund was revealed ($5Billion at the time), which would come out of taxpayers’ pockets, of course.

Nobel Laureate Paul Krugman in a recent Substack column said why they are so blatant about it: the differences in education and the information media their red stater supporters have access to. Sixty three percent of Republican/Trump voters in 2024 were less than college educated.

Paul Krugman

Krugman also pictured who will be most harmed by his attempt to destroy social security. It will be our elderly and retired with a high school education or less, with 69 percent of their income coming from social security. And these are Republicans’ main red state supporters.

They tried something similar in Trump’s first term with more than 30 attempts to repeal Obamacare. It was a major reason Trump lost to Biden in 2020. It should be the main reason Republicans lose at least the House of Representatives in the upcoming 2026 midterm election.

The only real way to combat this wall of ignorance is with a better information infrastructure, or more effective propaganda machine, if we want to call it that. It will be necessary to expose the blatant ignorance Republicans have historically relied on to maintain their power in the red states and with swing voters that pay less attention to political news, polls have shown.

AOC and Bernie Sanders are having rallies in red and purple states like Arizona and Colorado talking about what makes “common sense” to most American voters, and that have been effective in drawing up to 50,000 member crowds, for starters.

Trump/Musk are blindly rushing ahead with Musk’s so-called DOGE efficiency drive and Trump’s tariff wars that could cause horrendous damage to our economy, when there are much better ways to accomplish their stated goals of lowering regulations and decreasing the budget deficit and national debt.

Such haste is causing irreparable damage to lives and livelihoods; just as Musk’s failure to correct Tesla’s design flaws have killed people. There are better ways, and maybe the SCOTUS 5-4 ruling that Trump can’t indiscriminately fire federal workers without cause can begin to slow down the wholesale destruction enough to prevent a very large economic ‘fire’ and even a major recession, I said last week.

There is a lesson to be learned. The Tesla automobile’s sometimes fatal design flaws seem to be because of his lack of attention to details in his single-minded drive to invent new and better technologies, just as Trump’s pre-occupation with revenge and retribution clouds his thinking, and that of those that are tasked with carrying out his executive orders.

It’s an opening that will combat the Republican Party’s nihilism, not denigrate the less educated, but is common sense to most Americans—not tariffs that boost inflation and make enemies of our allies, or allow measles and bird flu epidemics to run their course rather than vaccinate, and create bipartisan legislation that protects our borders rather than illegal deportations. The list goes on and on.

Common sense policies are something understood by all income groups and social classes that oligarchs and their enablers, the real fraudsters, don’t want Americans to know.

Harlan Green © 2025

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How Long Must We Wait?

Posted on March 20, 2025 by Popular Economics Weekly

The Mortgage Corner

Total existing-home sales[1] – completed transactions that include single-family homes, townhomes, condominiums and co-ops – progressed 4.2% from January to a seasonally adjusted annual rate of 4.26 million in February. Year-over-year, sales slid 1.2% (down from 4.31 million in February 2024).

Calculated Risk

Will home sales pick up at all this year? They should pick up if the Fed Governors get off their duffs. But everyone seems to be waiting to see what President Trump’s grand plan may be.

Housing should be aided by moderating consumer inflation but fixed mortgage rates are still hovering close to 7 percent. Housing construction has picked up to fill the supply void. Homebuilders seem to believe the housing market will improve.

Overall housing starts increased 11.2% in February to a seasonally adjusted annual rate of 1.50 million units, a good number, according to a report from the U.S. Department of Housing and Urban Development and the U.S. Census Bureau.

“Despite elevated interest rates and policy uncertainty, ongoing lean levels of single-family existing home inventory helped to boost single-family production in February,” said Jing Fu, NAHB senior director, forecasting and analysis. “NAHB forecasts that single-family starts will remain effectively flat in 2025 as prospects of a better regulatory business climate are offset by uncertainty on the tariff front.”

NAR Chief Economist Lawrence Yun has said the same. “Mortgage rates have not changed much, but more inventory and choices are releasing pent-up housing demand.”

There are simply not enough homes for sale to attract more buyers. The unsold inventory of existing homes sits at a 3.5-month supply at the current sales pace, identical to January and up from 3.0 months in February 2024. An inventory of 5 to 6 months is more usual, but only when mortgage rates are lower.

Homebuilders and sellers can buy down the interest rate. Lowering the 30-year fixed rate ¼ percent adds just 1 point to the price, and buyers can also choose a lower 5-year fixed adjustable-rate loan and then refinance when 30-year fixed mortgage rates ultimately decline to a more normal level, which they eventually will.

We shouldn’t forget that the Fed is still in a tightening cycle, having dropped its Fed Funds overnight rate just one percent from its high of 5.33 percent to 4.33 percent. It was last this high in 2007 at the start of the Great Recession. Its timing was wrong then (i.e., led to Lehman Bros. bankruptcy, which precipitated GR), and the timing is wrong today.

This is because inflation is already down to 3 percent, so it should be easing further to boost further economic growth, which has slowed and is in danger of going negative in Q1 2025. It would be immensely helpful to the housing market where there is a tremendous pent-up demand with homelessness at a record level since the pandemic.

This uncertainty has affected the financial markets and that affects Americans’ overall wealth and health.

The Conference Board’s Index of Leading Economic Indicators (LEI) that attempts to predict future growth is the latest measure of consumer attitudes. It is also stuck, is the best way to describe it.

“The US LEI fell again in February and continues to point to headwinds ahead,” said Justyna Zabinska-La Monica, Senior Manager, Business Cycle Indicators, at The Conference Board. “Consumers’ expectations of future business conditions turned more pessimistic…given substantial policy uncertainty and the notable pullback in consumer sentiment and spending since the beginning of the year, we currently forecast that real GDP growth in the US will slow to around 2.0% in 2025.”

It would be nice if Trump understood this, so that he wouldn’t be in such a hurry to precipitate a tariff war, which by its nature creates more uncertainty and maybe higher inflation, and which is stopping the Fed from enacting more rate cuts at the moment.

So, Trump has everyone waiting to find out what his grand plan may be, if he has one.

Harlan Green © 2025

Follow Harlan Green on Twitter: https://twitter.com/HarlanGreen

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Incompetence = Recession

Posted on March 19, 2025 by Popular Economics Weekly

Popular Economics Weekly

“Trumpian Incompetence will provoke a counterreaction, which will prove to be an opportunity and rebirth. When that happens people will be ready to hear the truth that Trump will never understand—that when you turn America into a vast extortion machine, you will get some short-term wins as weaker powers bend to your gangsterism, but you will burn the relationships, at and abroad, that are actually the source of American’s long-term might.” David Brooks NY Times

Reuters

I quoted David Brooks last week because people will be ready to hear the truth when they realize that Trump’s “vast extortion machine” won’t lower inflation but raise it, won’t eliminate waste and fraud but slash essential governmental services instead (such as social security), and cut regulations that actually prevent financial markets from crashing.

Treasury Secretary Scott Bessent must therefore find excuses why inflation is still rising and the Trump/Musk administration isn’t finding much fraud, but tearing out the guts of government that make it work.

This is why Treasury Secretary Bessent is hinting at a recession in making excuses for their incompetence, because “The market and the economy have just become hooked, and we’ve become addicted to this government spending, and there’s going to be a detox period. There’s going to be a detox,”

It will take time for people to hear the truth because Trump’s executive orders are an attempt to stay ahead of the law and public media he reviles as they are uncovering his administration’s lawlessness and incompetence.

Trump believes such tactics will make him the autocrat and law unto himself he has always wanted to be; but only if the tariffs cause other countries cave in to his demands without retaliating for which the US will protect them militarily and favor them economically.

It is why Trump keeps repeating that he wants to corral Greenland, the Panama Canal, Canada and even Mexico into his new “extortion machine”.

The craziness of his intentions shows tremendous ignorance of economics and history. We haven’t done very well in protecting anyone militarily since World War Two. Even the Korean War was a stalemate after our strategic withdrawal from the Yalu River when China entered the war.

Vietnam ended with a complete withdrawal. The Afghanistan exit may have been the most humiliating retreat after our 20-year occupation, and the Iraq war ended up strengthening Iran’s influence by eliminating Saddam Hussein, its arch enemy.

Trump’s history also reveals that he has never cared about most of those that voted for him. History Professor Timothy Snyder has said his real constituents that he wants to please are fellow autocrats and dictators like Russia’s Putin and China’s Xi Jinping.

Musk’s incompetence is also damaging our national security. Heather Cox Richardson reports “Sharon LaFraniere, Minho Kim, and Julie Tate of the New York Times reported that cuts to the top secret National Nuclear Security Administration have meant the loss of critical employees—from scientists and engineers through accountants and lawyers—at the agency that manages the nation’s 3,748 nuclear bombs and warheads.”

Musk is damaging our financial security as well. Judd Legum of Popular Information has reported in various interviews that an internal memo from the Social Security Administration, written by acting deputy commissioner Doris Diaz, called for requiring beneficiaries to visit a field office to provide identification if they cannot access the internet to complete verification there.

This is while they are closing Social Security offices. Diaz predicted “service disruption,” “operational strain,” and “budget shortfalls” that would create increased “challenges for vulnerable populations.”

Tariffs won’t balance the budget and take away the need for other taxes (like income taxes) either, because the targeted nations are already retaliating. The modern world is far more complex. President Mckinley’s first Gilded Age that Trump so admires used tariffs because we needed them to protect our young steel and manufacturing industries.

The first Gilded Age ended because massive corruption was unearthed during Teddy Roosevelt’s trust-busting progressive era, which led to creation of the Federal Reserve, income taxes and eventually FDR’s New Deal to protect us from future Robber Barons.

Karl Rove as GW Bush’s campaign manager and Republicans also openly yearned for a return to the McKinley’s Gilded Age. Tariffs have worked in developing new or better industries, which is why the Biden administration used them to protect our computer chip industry, which is a national security priority.

The president’s tariff authority is based on the need to protect our national security, whereas Trump wants to use it to protect his own grandiose ideas.

David Brooks is right. The American public will eventually see the harm his extortion machine will cause Americans as well as our friends and allies. And that by leaving the alliances that protect US—not only NATO, but the World Health Organization that protects against more pandemics, the Paris Accord where nations have agreed to bring down greenhouse gasses—we will be less secure.

Please to God this happens before we must go through another recession, or pandemic, or both.

Harlan Green © 2025

Follow Harlan Green on Twitter: https://twitter.com/HarlanGreen

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It’s the Law of the Jungle

Posted on March 16, 2025 by Popular Economics Weekly

Financial FAQs

“Trumpian Incompetence will provoke a counterreaction, which will prove to be an opportunity and rebirth. When that happens people will be ready to hear the truth that Trump will never understand—that when you turn America into a vast extortion machine, you will get some short-term wins as weaker powers bend to your gangsterism, but you will burn the relationships, at and abroad, that are actually the source of American’s long-term might.” David Brooks NY Times

I wonder what Republicans expected when they allowed Donald Trump to choose the least-qualified candidates to run his government and carry out their agenda of deregulation, tax cuts and tariffs?

Republicans made the same mistake with GW Bush when his tax cuts and deregulation push led to the first $1 trillion budget deficit, liar loans, the housing bubble and Great Recession.

Why has the stock market fallen 10 percent from its post-Biden high, in what is called a “correction”, and in danger of falling further into recession territory? Because it is becoming obvious to Wall Street that the Trump 2.0 administration, once again, doesn’t know what it is doing.

Only this time they are doing it on steroids by adding Elon Musk with his chainsaw into the mix. The result has been the destruction of whole agencies that protect us against diseases and pandemics, climate disasters, and health of the economy, since Trump’s tariffs are making no economic sense.

It is the natural consequence of President Trump wanting to destroy our closest alliances with a trade war and allying himself with the Putins and Kim Jong Un’s of the world that kill their citizens with impunity, where the only law is might makes right.

He is attempting to bring back the Law of the Jungle in installing a government with those that will only obey him, an impossible situation in the modern world that can only precipitate another Great Recession, or even Depression.

President Biden did the right thing with his New, New Deal legislation by working with congress to modernize our infrastructure and manufacturing that has brought back 700,000 manufacturing jobs.

Foreign governments are already retaliating against Trump’s tariffs, creating a trade war that no one can win. The aluminum and steel tariffs will drive a hole in the US auto industry, say their CEOs, when the Great Recession had once before bankrupted them so that President Obama and congress agreed to bail them out.

Trump was able to fool a majority of American voters into a second term because of their wholesale ignorance of the US economy and its position in the world. The US is still the world’s wealthiest country that recovered most quickly from the COVID-19 pandemic yet has also the most unequal wealth and income disparities in the developed world.

The Last Tech Age

When I last wrote about our wealth gap in 2017, the U.S. was in 106th place of the 149 countries in income inequality as ranked by the Gini Index of the CIA’s World Factbook. It is an idex that measures the income indisparities of existing countries.

The U.S. had a Gini inequality index on the level of Peru and Cameroon. Whereas Finland and the Scandinavian countries are at the top of equality rankings, Germany and France are 12th and 20th, respectively. The higher the index, the greater the income gap between the wealthy and poor citizens of a country.

It is why we have such a partisan divide between Democrat-led blue states and Republican-led red states that Republican tax cuts and record budget deficits most harmed.

Donald Trump has always wanted tax cuts because he has barely paid any taxes himself. But this is only because he has extorted, stiffed and lied to so many people and institutions when running the Trump Organization. Why would he behave differently as president?

We are already “hearing the truth” about the havoc his “extortion machine” is wreaking. When will we be ready for “a counterreaction, which will prove to be an opportunity and rebirth ?“

When the damage is so great that Americans become “as mad as hell and are not going to take it anymore.”

Harlan Green © 2025

Follow Harlan Green on Twitter: https://twitter.com/HarlanGreen

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Does Tariff War = Recession?

Posted on March 14, 2025 by Popular Economics Weekly

Popular Economics Weekly

“I don’t see any kind of well-thought-out, comprehensive strategy coming out of the White House,” said Bernard Baumohl, chief global economist at the Economic Outlook Group, a nonpartisan forecasting firm.

What is the White House strategy? Is it based on the campaign promises to bring down inflation on “Day 1”, eliminate waste and fraud, and cut regulations that impede new investments, such as in AI?

The White House to date is attempting to explain why it hasn’t developed a strategy. Treasury Secretary Scott Bessent opined that,

“The market and the economy have just become hooked, and we’ve become addicted to this government spending, and there’s going to be a detox period. There’s going to be a detox,” Bessent, a former hedge-fund manager, said during a CNBC interview.

This description of a “detox” period is alarming, because the term has nothing to do with an economic plan, or anything else, but in fact means the Trump administration is hinting that a recession may be required to wean US off what they deem as too many government services that benefit ordinary Americans rather than the Oligarchs that have jumped onto the Trump/Musk bandwagon.

The wet dream of Republicans and conservatives has historically been to downsize government to little more than military defense. That’s why Trump has targeted USAID and the Department of Education, as well as cuts to social security, Medicare, and Medicaid.

Douglas Holtz-Eakin, a former (Republican) director of the Congressional Budget Office, said it was a fine sentiment for a Treasury secretary to want to reduce government spending but noted that there was no GOP plan in sight to accomplish this goal in any sustainable way, according to MarketWatch.

FREDfederalspending%GDP

Part of the problem in downsizing government is that it’s extremely difficult to bring federal government spending below 20 percent of Gross Domestic Product as portrayed in the above FRED historical graph dating from 2010. Spending surged above that level only twice to aid recoveries from the Great Recession and COVID pandemic.

Part of that surge was the Biden administration’s new, New Deal legislation that has already brought 700,000 manufacturing jobs home in the CHIPS, Infrastructure and Inflation Reduction Acts.

These were public/private investments that resulted in the US having the fastest economic recovery from COVID-19 in the developed world.

Trumps says he also wants to bring manufacturing jobs home with the trade tariffs. But his single-minded emphasis on tariffs against friend or foe without negotiating up front will increase inflation, largely because it will be reciprocated, launching a trade war.

And rather than eliminating waste and fraud, the DOGE firings are downsizing or eliminating departments and agencies that make it work—such as the FAA, Energy Department, VA and even social security—which will do exactly the opposite—make us less safe.

“It all seems to be very capricious,” continued Baumohl, “and I think this has been of great concern, not just to U.S. and foreign investors, but certainly to consumers, and we’ve seen that in the abrupt decline in confidence, which is now showing up in in their spending patterns. Once consumers start to cut back, there is nothing that the government can do to make sure that the economy keeps out of recession, because we’re talking about 70% of all economic activity.”

Will such a strategy, or lack of it, work? American consumers are already starting to give the final word. The University of Michigan’s consumer sentiment survey showed consumers becoming even more pessimistic about their future.

“Consumer sentiment slid another 11% this month, with declines seen consistently across all groups by age, education, income, wealth, political affiliations, and geographic regions. Sentiment has now fallen for three consecutive months and is currently down 22% from December 2024.” said Survey Director Joanne Hsu.

It looks like the Trump/Musk administration doesn’t want Americans to know what they are really up to, and it is leading to the wholesale destruction of the U.S. economy.

It will take more than picketing Tesla factories and dealerships for Americans to prevent what is sure to become a recession from happening.

Harlan Green © 2025

Follow Harlan Green on Twitter: https://twitter.com/HarlanGreen

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