The Tariff Wars–Part III

Posted on February 11, 2025 by Popular Economics Weekly

Popular Economics Weekly

“It is inconceivable that other countries won’t retaliate, even if some of the governments might not want to retaliate, their citizens will demand that you can’t allow yourself to be beaten up. When you make like a gorilla thumping on his chest, are countries just going to say, ‘Are we chopped liver?’ Their politics will demand that they do something.” Nobelist Joseph Stiglitz

Krugman/Substack/Bloomberg

The real tariff wars have now begun. Not only has Trump announced 25 percent tariffs on all steel and aluminum imports but will soon instigate so-called reciprocal tariffs on those that impose tariffs in response.

Such blanket tariffs do not make economic sense, and it counters the advice of Trump’s own chief tariff negotiator, Robert E. Lighthizer.

Lighthizer, just wrote in a NYTimes Op-ed that “Countries with Democratic governments and mostly free economies should come together and create a new trade regime.”

Yet the just announced tariffs fall on our most democratic and free economic allies—Canada, Brazil, Mexico, South Korea, Japan, and Germany with which we already have trade regimes.

He has justified his tariffs with an outright lie; that foreign governments or export entities pay the tariffs when it is in fact a tax on the importer, or consumers when it’s passed on to the users of said imports.

Then why the lie, that Trump has maintained since his first term that didn’t work out so well for Americans? U.S. farmers, for instance, had to be reimbursed with taxpayer funds for the lost soybean and wheat exports that China would no longer buy.

Lighthizer all but admitted in a recent 60 Minutes interview why Trump has maintained the lie. The import taxes collected will help to finance the tax cuts that Trump wants, which benefit his wealthiest supporters, already immensely wealthy oligarchs, many sitting behind him during his inauguration.

And he cannot finance those tax cuts without a new budget agreement, because even his Republican supporters won’t tolerate a larger budget deficit with total federal debt now 120 percent of Gross Domestic Product, the highest since World War Two.

Does Trump really listen to his chief tariff negotiator when he has essentially abandoned just such existing trade regimes as NAFTA, the EU’s, or Obama’s Transpacific Trade Agreement? The 11 Asian countries left in the PTT agreement; Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, and Vietnam; went ahead and created their own trade regime when Trump abandoned it to keep from taxing each other’s imports.

The financial markets are reacting as they did when Trump first announced tariffs on Mexico and Canada, then quickly rescinded for 30 days—all indexes are plunging and interest rates continuing to rise in the expectation of higher inflation due to the rising prices that will follow.

And this at a time when the Federal Reserve must decide whether the inflation bogey man is back. Why wouldn’t those countries affected by Trump tariffs raise their tariffs in response, less they look weak to their citizens when Trump’s gorilla is thumping on their chests?

There is also the fact that higher taxes will mean slower growth, and so in wanting to appear strong, Trump will in fact be weakening the economies and alliances that have kept the U.S. strong.

Harlan Green © 2025

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

Posted in Consumers, COVID-19, Economy, Politics, Weekly Financial News | Tagged , , , , , , , , | Leave a comment

Was It a Good Employment Report??

Posted on February 8, 2025 by Popular Economics Weekly

Popular Economics Weekly

Total nonfarm payroll employment rose by 143,000 in January, and the unemployment rate edged down to 4.0 percent, the U.S. Bureau of Labor Statistics reported today. Job gains occurred in health care, retail trade, and social assistance. Employment declined in the mining, quarrying, and oil and gas extraction industry.

FREDunemploymentrate

The economy added just 143,000 new jobs in January as massive California wildfires and a cold snap in much of the country acted as a drag on hiring. The details of the employment report point to a robust labor market that gained strength at the end of 2024. The economy averaged 233,000 new jobs from November to January, well above the 180,000

One economist determined that most of the new jobs were in the service sector, as I’ve been reporting, hence favored immigrants who tend to fill the lowest paying jobs that native Americans don’t want.

But it’s not just more wildfires we will have to worry about this year as world temperatures rise, but more hurricanes and floods, such as hit the east coast.

So what does that mean for 2025? It depends on what tariffs are enacted, what the Federal Reserve does with interest rates, and how many immigrants are deported, for starters. Then we still must worry about the effects of continuing wars and more climate disasters.

It would be nice if consumers continued to shop, in spite of what’s happening, which means they remain somewhat optimistic about their future.

However, the latest University of Michigan sentiment survey was a downer. Its gauge of consumer sentiment fell to 67.8 in a preliminary February reading, down from 71.1 in the prior month and the lowest reading since July.

Inflation was still their biggest worry. Americans’ expectations for overall inflation over the next year jumped to 4.3% in February from 3.3% in the prior month, according to the survey. That’s the highest level since November 2023, and it is only the fifth time in 14 years that there has been a one-month gain of that size.

It’s really how American consumers react that determines economic growth and hence the job market. The Los Angeles fires were one reason the January nonfarm payroll total was low. The recent hurricanes also punched another hole in employment. Forbes Magazine reported last October that Hurricane Helene was expected to cause a reduction of 40,000 to 50,000 payroll jobs with Hurricane Milton adding to the total.

And I won’t even try to predict when the Gaza and Ukraine conflicts will be resolved, or what it might do to the world economy with energy prices soaring.

The bottom line seems to be that the U.S. economy is escaping much of the damage because the Fed has been proactive over the inflation danger, and has been saying it wants to lower interest rates further to support the job market.

President Biden’s massive new, New Deal investments with the infrastructure, CHIPS, climate change, and healthcare legislation will also be benefiting U.S. economic growth for years to come.

Economists are also estimating that the 3 million new immigrants added to the workforce over the past two years has made such growth possible. Will that continue if our worker shortage worsens?

“The flood of fresh labor eased a worker shortage after the pandemic and allowed the economy to add more jobs without driving up wages and inflation. Normally, rapid job creation tends to exacerbate inflation,” says MarketWatch’s Jeffry Bartash.

Did the influx of new immigrants hurt American workers? Economist Wendy Edelberg, director of the Hamilton Project at the Brookings Institution, estimates the labor force is about 172.6 million strong, instead of a reported 169.6 million at the end of 2024. Edelberg said the newly revised figures should show employment for native-born workers also rose in 2024.

So what are consumers to do? It is really too early to know what the 2025 job market will look like.

Harlan Green © 2025

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

Posted in Consumers, COVID-19, Economy, Politics, Weekly Financial News | Tagged , , , , , , , , | Leave a comment

Q4 Economic Growth Continues

Posted on February 6, 2025 by Popular Economics Weekly

Popular Economics Weekly

Real gross domestic product (GDP) increased at an annual rate of 2.3 percent in the fourth quarter of 2024 (October, November, and December), according to the advance estimate released by the U.S. Bureau of Economic Analysis. In the third quarter, real GDP increased 3.1 percent.

BEA.gov/Q4gdp

Economic growth is still looking good in the fourth quarter of 2024, with real (inflation adjusted) GDP increasing at 2.3 percent. It was mostly due to consumer spending over the holidays that rose 4.2 percent, largely because December retail sales soared, I reported earlier.

Consumers are not quitting their shopping habits, in other words, and it contributes some 70 percent to the GDP, while corporate profits are growing at a multi-decade high, which is why workers are still fully employed.

So, economists are now looking at the New Year predictions for economic growth. The Atlanta Federal Reserve’s GDPNow prediction for Q1 2025 has been all over the place.

It now says real GDP growth is 2.9 percent on February 5, down from 3.9 percent on February 3. “…after recent releases from the Institute for Supply Management, the US Bureau of Economic Analysis, and the US Census Bureau, of lower “first-quarter real personal consumption expenditures growth and real gross private domestic investment growth.”

But inflation is still coming down, a good thing, since the tariffs to come will push prices higher on the taxed imports. It is especially true with the important Personal Consumption Expenditure Index the Fed likes to use to measure inflation.

“The price index for gross domestic purchases increased 2.3 percent in 2024, compared with an increase of 3.3 percent in 2023. The PCE price index increased 2.5 percent, compared with an increase of 3.8 percent. Excluding food and energy prices, the PCE price index increased 2.8 percent, compared with an increase of 4.1 percent.

Why so much fluctuation? It’s because of the presidential election, of course. There is tremendous confusion over what the Trump administration wants for economic growth. Reducing the budget deficit means finding budget cuts, which could slow down more business investment. Especially when Trump wants it to be in more fossil fuel production when we already have a surplus of oil and natural gas.

So in spite of concerns over their jobs that is showing up in consumer sentiment surveys, consumers keep spending according to the University of Michigan survey.

“Consumer sentiment confirmed its early-month reading, rising for the fifth consecutive month and reaching its highest value since April 2024. Buying conditions exhibited a particularly strong 32% improvement, primarily due to a surge in consumers expecting future price increases for large purchases. The expectations index continued the post-election re-calibration that began last month, climbing for Republicans and declining for Democrats in December,” said Survey Director Joanne Hsu.

And what will Friday’s unemployment report look like. MarketWatch’s Jeffry Bartash reports that weekly initial jobless claims are back to normal, with the effect of the LA fires diminished. New jobless claims, a proxy for layoffs, increased by 11,000 to 219,000 in the seven days that ended Feb. 1, the government said, which is in the normal range.

We could still have a very good 2025 year, in other words. Both the service and manufacturing sectors are growing, with manufacturing expanding after a years-long slump.

The Manufacturing PMI® rose to 50.9 percent in January, 1.7 percentage points higher compared to the seasonally adjusted 49.2 percent recorded in December. It was the 57th month of expansion after one month of contraction in April 2020, per Timothy Fiore, Chair of the survey committee.

And lastly, private payrolls company ADP said U.S. businesses created a solid 183,000 new jobs in January, and wages rose 4.8 percent, which showed the labor market was still growing.

This is why financial market indexes are at record levels, despite the looming uncertainties. It looks like some irrational exuberance is motivating investors who rely more on rumors than research, while corporate profits as a percentage of GDP are rising 11 percent these days, according to one analyst, Deutsche Bank strategist Jim Reid, and as cited by MarketWatch’s William Watts.

So irrational exuberance will be the norm this year, which in general means either follow the herd, or hunker down and wait out the chaos.

Harlan Green © 2025

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

Posted in Consumers, COVID-19, Economy, Weekly Financial News | Tagged , , , , , , , | Leave a comment

Coup Attempt by Donald Trump-Elon Musk

Posted on February 5, 2025 by Popular Economics Weekly

A couple dozen young men go from government office to government office, dressed in civilian clothes and armed only with zip drives. Using technical jargon and vague references to orders from on high, they gain access to the basic computer systems of the federal government. Having done so, they proceed to grant their Supreme Leader access to information and the power to start and stop all government payments.

That coup is, in fact, happening. And if we do not recognize it for what it is, it could succeed.

In the third decade of the twenty first century, power is more digital than physical. The buildings and the human beings are there to protect the workings of the computers, and thus the workings of the government as a whole, in our case an (in principle) democratic government which is organized and bounded by a notion of individual rights.

The ongoing actions by Musk and his followers are a coup because the individuals seizing power have no right to it. Elon Musk was elected to no office and there is no office that would give him the authority to do what he is doing. It is all illegal. It is also a coup in its intended effects: to undo democratic practice and violate human rights.

Timothy Snyder, Author of On Tyranny

do

Posted in Politics, Uncategorized | Tagged , , , , , , , | Leave a comment

Fewer Jobs Available

Posted on February 4, 2025 by Popular Economics Weekly

Financial FAQs

“It’s gotten harder for the unemployed to find work: Job openings in the U.S. fell at the end of 2024 to the second lowest level since the end of the pandemic.” MarketWatch

FREDjobopenings

Job vacancies reported by the Bureau of Labor Statistics have dropped from 8.2 million to 7.6 million openings in just one month. And this is becoming worrisome with the financial markets’ uncertainty over the effects of the federal government efficiency drive that President Trump is promising.

“It’s also taking people who lose a job a lot longer to find one. The number of people collecting unemployment benefits has risen to the highest level since 2018 if the pandemic years are omitted,” said Marketwatch.

This is having an impact on consumer confidence, needless to say, since consumers tend to become more cautious in their spending ways at such times. The Conference Board’s Confidence survey wasn’t upbeat.

“All five components of the Index deteriorated but consumers’ assessments of the present situation experienced the largest decline. Notably, views of current labor market conditions fell for the first time since September, while assessments of business conditions weakened for the second month in a row,” said its Chief Economist, Dana Peterson.

Why the doubts when the just elected Republicans are touting they can cure the budget deficit with a tariff war, which the Wall Street Journal just headlined was “The Dumbest Trade War in History.”

None of this is supposed to happen under the U.S.-Mexico-Canada trade agreement that Mr. Trump negotiated and signed in his first term, according to WSJ’s Editorial Board.

“The U.S. willingness to ignore its treaty obligations, even with friends, won’t make other countries eager to do deals. Maybe Mr. Trump will claim victory and pull back if he wins some token concessions. But if a North American trade war persists, it will qualify as one of the dumbest in history,” says the WSJ.

Then there are the ongoing deportations which will hurt service industries like leisure, transportation, healthcare, and construction which employ a majority of immigrants, especially in the smaller businesses.

The number of job vacancies reported by companies was lowest after the 2008 Great Recession and began the steady climb to 7 million just before the COVID-19 pandemic 7.6 million job openings has stabilized over the past several months, indicating that the job market and so the unemployment report hasn’t changed. There were 5.5 million hires and 5.3 million separations (i.e., left their jobs), indicating that some 200,000 new jobs were created, which will be confirmed in Friday’s official unemployment report.

All three major stock market indexes have been seesawing since Trump enacted, then suspended the Mexican and Canadian tariffs, but not the Chinese 10% tariff. So, it is really up to the new administration to calm the markets, if they don’t want more investors to head for the exits.

And how will the threatened firing of FBI agents calm the waters? Who will then protect us from domestic and foreign terrorists?

Harlan Green © 2025

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

Posted in Consumers, COVID-19, Economy, Politics, Weekly Financial News | Tagged , , , , | Leave a comment

The Tariff Wars–Part II

Posted on February 3, 2025 by Popular Economics Weekly

Financial FAQs

“Trump has called “tariff” the fourth most beautiful word in the dictionary behind “God”, “love” and “religion.” CNN

FREDdebt/GDP

On Saturday, President Trump, just 11 days into his second term, said he will impose a 25 percent tariff on Canadian and Mexican imports, and 10 percent on Chinese imports.

He has said it will raise revenue to correct the large trade imbalances with those countries, as well as induce Mexico and Canada to halt the flow of fentanyl into the U.S., as well as illegal immigration.

But immigration flows are already down to levels before even the Obama administration, while Mexico and Canada have already said they will work with Trump to stem the flow of illegal drugs.

So why is he doing what will badly harm the U.S. economy and that of our two best neighbors and trading partners? His real motivation is pure greed. He and his oligarch friends must decrease the massive budget deficit that has mushroomed to 121 percent of Gross Domestic Product (see graph), so that he can prolong the tax cuts that have transferred so much wealth from working adults to his wealthiest supporters and added $5 trillion to the national debt.

He must cut the huge budget deficit that has resulted because it is alarming bond investors and budget hawks.

Hedge fund manager Ray Dalio, founder of Bridgewater Associates, once the world’s largest hedge fund, has been sounding the alarm mostly recently in a Barron’s Magazine interview, in which he said our current budget deficit could give the world a “financial heart attack.”

“Think of the credit flow like the blood flow that carries nutrients through the system to the body. Credit creates debt that builds up like plaque in those arteries, and like plaque, it grows and crowds out the nutrients because debt service crowds out other spending,” , said Dalio

“When does the heart attack come? When the constriction is enough that it squeezes out other spending, which in increasingly happening, or when investors see that happening, which leads them to sell bonds,” said Dalio.

Tariffs had become Trump’s way of paying down the deficit by taxing imports. He has said collecting what he believes will be “billions” in taxes from the tariffs on imports will help pay down the huge budget deficit that he helped to generate from the 2017 tax cut bill (Tax Cuts and Jobs Act) in his first term.

But that tax cut was just the latest by Republican administrations that have caused the massive national debt, which is expressed as a ratio of debt-to-gdp in the above FRED graph dating from 1980, when Republicans first began increasing the budget deficit.

It has been Republicans’ huge tax cuts since President Reagan in 1980 that have created the largest national debt since World War Two, and the trickle-down economy ever since. And renewing Trump’s 2007 Tax Cuts and Jobs Act when it expires this year could add another $5 trillion to the budget deficit, according to non-partisan analysts.

So who will be hurt most by the tariffs? Workers in all countries at a time when inflation is still too high, and preventing the Fed from making fewer rate cuts this year due to higher inflation.

The NAFTA trade agree between Mexico and Canada has made North America the largest trade-free zone outside of the Eurozone, enabling each country to produce what it does best, such as autos where many auto parts are manufactured more cheaply and shipped into the U.S. where they are assembled.

Trump has repeatedly (and incorrectly) said that “the tariff sheriff” former President William McKinley, ushered in an era of American prosperity at the end of the 19th century by going all-in in tariffs, as cited by CNN.

No, it was the result of the industries created in the first Gilded Age by the Robber Barons of that era—the oil, railroad, and banking magnates of that era. And Trump, a convicted felon, believes he can become another Robber Baron in this Gilded Age.

Harlan Green © 2025

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

Posted in Consumers, COVID-19, Economy, Politics, Weekly Financial News | Tagged , , , , , , , | Leave a comment

Why Inflation Still a Problem?

Posted on January 31, 2025 by Popular Economics Weekly

Financial FAQs

The Fed’s preferred inflation gauge, Personal Consumption Expenditures Index (PCE) isn’t declining because consumers continue to spend more than they earn. Why?

BEA.gov

Such spending gave a boost to retail sales and so made holiday shoppers happier. But it also highlighted the underlying problem, inflation is still too high.

The June to December BEA graph shows the difference between income (blue bar) and spending, or outlays (orange bar). It has been this way for at least one year. The declining black line in the graph measures consumers’ personal savings rate, which is back down to 3.8 percent from almost 5 percent in June 2024 because of it.

Why do consumers keep spending more than they make? One clue is that most of the spending is for housing, utilities, transportation and gasoline—necessities. It must be that consumers are not earning enough to keep up with rising prices for their basic needs.

But it also shows a bit if irrational exuberance—a form of excessive optimism that former Fed Chair Greenspan warned about in the ‘90s—and is happening in the financial markets today, which are at record highs.

“The numbers look good. Maybe even surprisingly good—and that’s not a word I throw around willy nilly,” said Barron’s Magazine’s Jack Hough recently about the financial markets.

Stubborn inflation tells us why it became the backbreaker for Democrats in this election cycle. It confirms the most basic of economic laws—the Law of Supply and Demand. The American economy as well as imports are not supplying enough goods and services to satisfy the demand for them.

Most of the inflation surge was in the service sector, as I said, and consumers want more and better services most of all. Hence personal expenditures (blue line in second graph) is hovering around 2.8 percent—too high for the Fed that wants 2 percent inflation.

Inflation in the Fed’s PCE price index for December increased 2.6 percent in one year. Excluding food and energy, the PCE price index increased 2.8 percent from one year ago.

This picture tells us the real problem—the slow recovery from the COVID-19 pandemic isn’t producing enough. World supply has not caught up with the world demand for goods and services. It is also due to so much geopolitical unrest, including the Mideast and Ukraine conflicts.

And the Trump administration wants to deport those undocumented immigrants that mostly work in the services industries, which means more worker shortages; as well as raise tariffs on many countries, which could cut GDP growth by some 1 percent, according to the Peterson Institute, a non-partisan research organization.

It will make everything that American consumers want even more expensive. And that might keep the Federal Reserve from dropping interest rates further, as they hinted in their just concluded January FOMC meeting. How about that?

There was also some good news. The U.S. economy grew at a mild 2.3% annual pace in the final three months of 2024, and the details of the report showed an economy on strong footing that was being handed over to the Trump administration. GDP grew at 3% and 3.1% in the two prior quarters.

It’s still not a good time for excessive optimism, in my opinion.

Harlan Green © 2025

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

Posted in Consumers, COVID-19, Economy, Politics, Weekly Financial News | Tagged , , , , , , , | Leave a comment

The Housing Recovery–Part II

Posted on January 30, 2025 by Popular Economics Weekly

The Mortgage Corner

Existing-home sales rose 2.2% in December to a seasonally adjusted annual rate of 4.24 million, the strongest pace since February 2024 (4.38 million).

FREDexistinghomesales

The huge jump in existing-home sales on still very high mortgage rates illustrates the enormous pent-up demand for rental or owner-occupied housing, I said last month. Demand is now exceeding the existing home inventory with just a 3.8 months’ supply vs. the 8-month supply of new homes for sale that is only partially filling the housing supply shortage. Realtors believe the strong demand will continue.

“Home sales momentum is building,” said NAR Chief Economist Lawrence Yun. “More buyers have entered the market as the economy continues to add jobs, housing inventory grows compared to a year ago, and consumers get used to a new normal of mortgage rates between 6% and 7%.”

It remains to be seen how long consumers will tolerate such high mortgage rates. The 2001 Dot-com recession was the last time conforming 30-year fixed rate mortgages were above 7 percent, before the long decline in interest rates. It all led to the 2007 housing bubble and Great Recession.

If such demand continues, could we see another era of irrational exuberance as happened then? That’s grist for another column!

Existing-home inventory registered at the end of November was 1.33 million units, down 2.9% from October but up 17.7% from one year ago (1.13 million). Unsold inventory sits at a 3.8-month supply at the current sales pace, down from 4.2 months in October but up from 3.5 months in November 2023.

This is why building more new homes is so important. It is why builders have built up an 8-month inventory. And it is why sales of newly single-family houses in December 2024 were also so high, at a seasonally adjusted annual rate of 698,000, according to estimates released jointly today by the U.S. Census Bureau and the Department of Housing and Urban Development, above the December 2023 estimate of 654,000.

Even pending home sales jumped, another sign of an incipient housing recovery, Pending sales help to predict closings 30 to 60 days out. Pending home sales gained 2.2% in November – the fourth consecutive month of increases and the highest level since February 2023 – according to the National Association of REALTORS®.

“Consumers appeared to have recalibrated expectations regarding mortgage rates and are taking advantage of more available inventory,” said NAR Chief Economist Lawrence Yun. “Mortgage rates have averaged above 6% for the past 24 months. Buyers are no longer waiting for or expecting mortgage rates to fall substantially. Furthermore, buyers are in a better position to negotiate as the market shifts away from a seller’s market.”

Builders blame “unnecessary regulations” for much of the housing shortage. However, most of the ‘unnecessary regulations’ are at the state and local levels, such as restrictive zoning, state environmental laws, and even banking regulations.

It’s difficult to see how the outcome of national elections can affect such local changes. California is one such state that has taken on the NIMBYs (Not in my backyard) crowd as well as putting aside loan subsidies for affordable housing. That’s where the changes need to be to make up for the current housing shortage.

It’s hard for me to see that we will have another 7-million-unit sales year as happened during the housing bubble, however, no matter the mortgage rates. It was a different era, for those that can remember, since we have an ongoing labor shortage and higher construction costs (tariffs?) today.

Harlan Green © 2025

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

Posted in Consumers, COVID-19, Economy, Housing, housing market, Weekly Financial News | Tagged , , , , , , , , , | Leave a comment

Trump, the Lucky Loser

Posted on January 28, 2025 by Popular Economics Weekly

Answering Kennedy’s Call

“Born to a rich father who made him the beneficiary of his own highly lucrative investments, Trump received the equivalent of more than $500 million today via means that required no business expertise whatsoever.”

Random House

In just Donald Trump’s first week in office, it’s becoming obvious that the illusions he lives under will be no different than during his first term as president. He is counting on the American electorate to not believe what they are seeing.

For instance:

Climate change—”drill baby drill” for more fossil fuels when we are experiencing the worst climate disasters in history due to global warming—e.g., horrific wildfires, tornadoes and hurricanes.

Healthcare—Leaving WHOrg responsible that monitors worldwide pandemics, and censoring the CDC and other government healthcare watchdogs’ research while releasing their results only after they have been vetted by his political appointees.

Military preparedness—now allowing military service members not to be vaccinated for COVID-19 and reinstating service members with full pay who were discharged for refusing vaccines.

Immigration—Saying he will deport millions of undocumented immigrants, when it will reduce badly needed workers in low-paying jobs that American citizens aren’t taking.

Tariffs—Asserting he would raise tariffs as high as 50 percent on nations with huge trade imbalances viz the U.S., when economists are saying it will be inflationary, and in Nobel Laureate Paul Krugman’s words, “make us poorer.”

Public education—Wants to abolish Department of Education that supports the 80 percent of students in public schools.

Tax cuts—Just extending his first term tax cut beyond 2025 when it is scheduled to expire and could add as much as $5trillion to the already bloated federal budget deficit, which could cause investors to lose faith in the US Dollar.

President Trump’s real intentions are already becoming clear in his second presidential term in office. He and his Oligarchs want to steal the US Government blind, as I said last week, by keeping Americans and the media as blind as possible to what he intends.

Why does Trump continue policies that will only harm more Americans while enriching himself and his oligarch supporters?

This was highlighted in Pulitzer Prize-winners Russ Buettner and Susanne Craig’s just released book, Lucky Loser that raises a bigger question in a Washington Post review by Bethany McLean about the ‘fake it ‘til you make it’ ethos of modern America. In a world that conflates the ‘trappings of wealth with expertise and ability,’ where ‘fame, detached from any other marketable talent or skill,’ is ‘a highly compensated vocation,’ does it even matter if you never actually make it?”

The outright distrust of truth is a propaganda tool used by autocrats that public media has normalized. This probably tells us best why he was able to take over the Republican Party that has drifted so far from conservative values and was once the environmental party when Republican President Nixon signed the U.S. Environmental Protection Agency into law in 1970.

So will he be more successful in passing his promises in his second term? We should ignore some of his most nonsensical executive orders, such as attempting to amend the 14th Amendment by decree that guarantees citizenship for anyone born in the U.S. 50 states and territories, which he knows can’t be done by decree or executive order.

But the furor that it and the immediate release of 1500 January 6 Capital attackers from prison, mostly convicted felons, will generate enough attention that it will cloak his real intention; reduce or eliminate as many government programs as possible that make life better for ordinary Americans, such as Medicaid, in order to fund more tax cuts.

He has already rescinded the Biden executive order to cap Medicaid spending on drugs that would save Medicaid $billions in costs.

“In reversing the executive order Biden signed in 2022, Trump halted an effort to cap the copayment for generic medications at $2 for Medicare beneficiaries, along with another program that would see Medicare pay less for drugs that receive accelerated approval from the Food and Drug Administration,” according to MarketWatch’s Jessica Hall.

And there is also the question of what Trump will do with regard to the prescription-drug provisions in the Inflation Reduction Act, which would be substantially more consequential. Under the Inflation Reduction Act, Medicare can negotiate the prices of certain prescription drugs with the aim of making drugs more affordable for older adults and people with disabilities.

He continues to throw bombs at the public media by announcing he will seek retribution from those prosecutors that sought his indictment for the various crimes he committed during his first term, such as January 6, withholding Top Secret documents at Mar-a-Lago and elsewhere, while hoping to erase some of the Grand Jury indictments.

And he will eventually have to settle the $500 million in awards won by women he defamed. So it’s no wonder he will use his immense power that is meant to protect U.S. citizens to protect himself instead, at their expense.

Harlan Green © 2025

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

Posted in Macro Economics, Politics, Weekly Financial News | Tagged , , , , , , , , , , | Leave a comment

No Art of the Deal – Part II

Posted on January 24, 2025 by Popular Economics Weekly

Answering Kennedy’s Call

“It’s 100 days into the Trump 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 piece for Huffington Post in 2017, after President Trump’s first 100 days as president.

“And neither are his legislative efforts; with no repeal of Obamacare, or tax reform, an immigration ban, new trade policy, and sanctuary city victories in the offing anytime soon because of poorly thought out strategies. Instead, he threatens judges, sanctuary cities, Congress, and even other countries when they don’t support his various executive orders,” I said then.

President Trump’s real intentions are becoming clear on just his second day of his second term in office. He and his Oligarchs want to steal the US Government blind, as the saying goes, by keeping Americans and the media as blind as possible to what he intends.

Will he be more successful in passing his promises in his second term? We should ignore some of his most nonsensical executive orders, such as attempting to amend the 14th Amendment by decree that guarantees citizenship for anyone born in the U.S. 50 states and territories, which he knows can’t be done by decree or executive order.

But the furor that it and the immediate release of 1500 January 6 Capital attackers from prison, mostly convicted felons, will generate enough attention that it will cloak his real intention; reduce or eliminate as many government programs as possible that make life better for ordinary Americans, such as Medicaid, in order to fund more tax cuts.

He has already rescinded the Biden executive order to cap Medicaid spending on drugs that would save Medicaid $billions in costs.

“In reversing the executive order Biden signed in 2022, Trump halted an effort to cap the copayment for generic medications at $2 for Medicare beneficiaries, along with another program that would see Medicare pay less for drugs that receive accelerated approval from the Food and Drug Administration,” according to MarketWatch’s Jessica Hall.

And there is also the question of what Trump will do with regard to the prescription-drug provisions in the Inflation Reduction Act, which would be substantially more consequential. Under the Inflation Reduction Act, Medicare can negotiate the prices of certain prescription drugs with the aim of making drugs more affordable for older adults and people with disabilities.

We can’t blame it just on Trump. Republicans have been trying to deprive Americans of affordable healthcare managed by the government for years. The efforts became serious in the more than 30 unsuccessful attempts to repeal Obamacare since it was passed during President Obama’s first two years in office. It became an obsession in Trump’s first term that I wrote about in Huffington Post at the time.

“What if conservatives succeeded in repealing Obamacare (ACA)? “Republicans’ Obamacare repeal bill would leave 17 million more people uninsured next year, and 32 million more in 2026, the Congressional Budget Office said in an estimate Wednesday. It also said premiums would double by 2026. …By 2026, three quarters of the population would live in areas with no insurers participating in the non-group market, due to upward pressure on premiums and downward pressure on enrollment, the report found.”

The accrued savings in health care spending relative to their projected growth prior to the ACA are substantial: Medicare alone is now projected to spend $1 trillion less between 2010 and 2020.

The lobbies behind the Obamacare repeal effort have not succeeded in making more Americans ill. I don’t even want to imagine what the results would be if he and Republicas succeed in downsizing Medicaid benefits as well.

Harlan Green © 2025

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

Posted in Consumers, COVID-19, Politics, Weekly Financial News | Tagged , , , , , , , | Leave a comment