Another Civil War?

Posted on September 9, 2025 by Popular Economics Weekly

Popular Economics Weekly

“The President of the United States is threatening to go to war with an American city. This is not a joke. This is not normal. Donald Trump isn’t a strongman, he’s a scared man. Illinois won’t be intimidated by a wannabe dictator.” JB Pritzer, Governor of Illinois

CBS

Historian Heather Cox Richardson has been documenting the irrational talk of President Trump, who seems to be trying to distract the media from the bad economic news and his involvement in the Epstein files in her quote from Governor Pritzer that she cited above.

“Today the social media account of President Donald J. Trump posted an AI-generated image of Trump as if he were Lieutenant Colonel Bill Kilgore from the 1979 film Apocalypse Now in front of the Chicago skyline with military helicopters and flames and the caption “Chipocalypse Now.” Kilgore loved the war in Vietnam in which he was engaged; his most famous line was “I love the smell of napalm in the morning,” said Professor Richardson

I believe it’s worse than that. He seems to want to foment a civil war by threatening to “invade” Chicago and New York as he invaded Los Angeles, using armed red state National Guard troops. The message is clear. Red southern states are finally able to invade blue northern states, something they couldn’t do in the 1860s civil war!

Can it also be a pretext for stopping the vote in upcoming elections by declaring some form of martial law? The courts have stopped his alien invasion rationale to date for rounding up undocumented immigrants and deporting them without due process.

But economic growth keeps being revised downward. In the Labor Department’s latest revisions, the economy created 911,000 fewer jobs in the last months of the Biden presidency and early stages of the Trump administration, indicating the labor market began to weaken far sooner than previously believed.

The updated employment figures from April 2024 to March 2025 could cause the Federal Reserve to lower short-term interest rates even more in September — and beyond. The latest downward revision is the biggest since at least 2000, reports MarketWatch’s Jeffry Bartash.

As a result, the pace of job creation from May through August slowed to 27,000 a month, one of the worst stretches since 2010 if the pandemic era is excluded.

Trump’s desperate attempt to deflect media attention now that the SCOTUS shadow docket has just allowed him to ignore the Fourth Amendment ban on indiscriminate search and seizure, will give Democrats plenty of political ammunition for the upcoming elections. The Supreme Court decision means ICE can stop any Hispanic looking, or Spanish speaking, person who must prove to their satisfaction that they are a US citizen or here legally.

It is an incredible overstretching of authority. And the immigration roundup in general will harm legal immigrants and minorities as well. Will Americans vote for a political party that blatantly breaks the Fourth Amendment, other than the hard line MAGA base that believes anything Trump says?

It is why Trump wants to rename the Defense Department as the Department of War, and Defense Secretary Pete Hegseth is now talking and acting like a White Supremacist to rally Trump’s base.

I believe that Trump will touch a nerve that he hadn’t counted on, Americans’ love of freedom. Trump preaches the opposite, the right to imprison many Americans on almost any pretext.

Harlan Green © 2025

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The Job Losses Begin

Posted on September 6, 2025 by Popular Economics Weekly

Popular Economics Weekly

“Trump’s arbitrary, capricious, and mercurial decisions about tariffs and everything else that affects the economy have made it impossible for employers to make even modest predictions about the future. So they won’t hire.” Robert Reich, Former U.S. Labor Secretary

FREDpayrolls

“Total nonfarm payroll employment changed little in August (+22,000) and has shown little change since April, the U.S. Bureau of Labor Statistics (BLS) reported today. The unemployment rate, at 4.3 percent, also changed little in August. A job gain in health care was partially offset by losses in federal government and in mining, quarrying, and oil and gas extraction. BLS.gov

The Labor Department summary of the August unemployment report was misleading. There were lots of changes. Professor Reich, President Clinton’s former Labor Secretary, was just hinting at the damage Trump’s policies have wreaked since April 2 and the announcement of his tariff war on the rest of the world.

Job growth, for instance, since April has been a disaster. Revisions to past payrolls reveal that June private nonfarm payrolls lost jobs (-13,000) for the first time since the COVID-19 pandemic.

And the 22,000 total of new hires in August means that job growth has stagnated, since job growth is no longer keeping up with population growth, hence higher unemployment to come. The unemployment rate of 4.3% is a four-year high.

The Retail, Transportation, Education & Health, and Leisure/Hospitality sectors added a total of 88,000 jobs, which means that the rest of the economy lost -66,000 jobs, including the federal government (-14,000). It’s further evidence of the damage the DOGE government job cuts have done.

Consumers will be savings more and spending less for the holidays, which is a sign of slowing growth and even a recession, as I’ve been saying in past blogs.

Employers have stopped hiring because of the mostly illegal tariffs that may have to be refunded to importers, say the courts. The immigration raids are draining small businesses of workers, and the DOGE job reductions are cutting off the basic information that businesses need to operate; like weather predictions, medical information (vaccinations for babies and school kids).

There were never enough native-born workers to keep the job market growing. It’s been the average one million per year influx of new immigrants that have filled the void of job vacancies historically.

Trump is also turning into Don Quixote with his irrational dislike of windmills. He is shutting down programs for future wind and solar power endangering future energy sources that AI will need to power the future economy.

There was other news that showed similar job weakness. The ADP, a private payroll processor, showed monthly payroll gain of just 54,000 jobs, down from 106,000 jobs in July.

And the U.S. JOLTS report of job hirings and separations was also negative for the first time since the pandemic. It estimates the actual number of monthly hires and job losses. The number of people hired in July totaled 5.31 million, but the increase was almost entirely offset by 5.29 million “separations” —layoffs, job quitters, retirements, hence to real job growth.

This is while the Biden administration averaged 150,000 per month job increases during its four-year run.

The inflation component of stagflation is already happening, in spite of the Q2 jump in GDP to 3.1% that was mostly due to the drop in imports as the tariff taxes have begun to kick in.

“Trump promised to reduce prices, but prices continue to rise. Blame Trump’s tariffs. Prices for wholesalers rose at the fastest pace in three years in July, and those wholesale prices are now being passed on to retailers and consumers,” continued Professor Reich.

And consumers are also seeing rising inflation. The Personal Consumption Expenditures price index (PCE), the Federal Reserve’s preferred inflation gauge, rose 2.9% annually without volatile food and energy price changes, I said last week. That’s too high for the Fed’s target rate of 2% inflation that prevailed until the COVID-19 pandemic threw a monkey wrench in supply lines that are still recovering for most of the world.

The unemployment report is a huge eyeopener for Republicans who will attempt to explain it away as they did last month when Trump fired the head of the BLS that calculated the unemployment report. Job growth has quickly ground to a halt.

And the American public will soon realize that allowing Trump’s massive tariffs without congressional consent isn’t working. It was a power play to increase his wealth and that of the Oligarchs that support him.

Harlan Green © 2025

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

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Where is Robin Hood?

Posted on September 3, 2025 by Popular Economics Weekly

Financial FAQs

“List and hearken, gentlemen,

     That be of free-born blood,

     I shall you tell of a good yeoman,

     His name was Robin Hood.”

FRED%gdp

Where is a modern Robin Hood when we need him or her, someone who can stop ‘King’ Trump from robbing the poor as the evil King John pillaged his people in medieval times? One legend says it wasn’t until the return of Richard the Lionhearted from the Crusades who usurped King John and brought justice back to the people of his kingdom.

King John impoverished his subjects with prohibitive taxes to support himself and his noblemen, just as ‘King’ Trump is levying excessive tariffs to pay for the tax cuts that are enriching himself, his oligarchs, and ballooning our national debt.

The massive public debt that Trump and his Republicans have deemed a national emergency is really of their own creation; tax cuts that weren’t paid for by successive Republican administrations.

The FRED graph shows the large jump in debt to 120 percent of GDP from successive Republican administrations since 1980 (Reagan), 2000 (GW Bush) and 2016 (Trump I). Gray bars are recessions.

It was the beginning of the domination of big business and globalization of whole industries, as well as the suppression of working Americans’ rights with the breaking up of the labor unions.

It was the very same tax cuts and deregulation that either ignored the laws or evaded them that Republicans have done since Ronald Reagan’s trickle-down schemes in 1980 that gave us the first real national debt ($400 million).

GW Bush continued the tax cuts which added the first $1 billion deficit, President Trump added another $5 billion in debt during his first term and is adding another $4-$5 billion in his just passed big ‘beautiful’ tax cut bill.

Teddy Roosevelt was the first Robin Hood in modern times to root out the Robber Barons of the First Gilded Age by busting their monopolies and prosecuting the lawbreakers. It initiated the Progressive Era that led to FDR’s New Deal for the American people.

The only dip in debt (as percentage of GDP) portrayed in the graph was the Clinton Democratic administration’s four budget surpluses (1996-2000) that would have practically abolished the debt altogether if GW Bush and his Republicans had not pushed through two more tax cut bills that weren’t paid for.

This has resulted in at least $2 trillion transfer in wealth from working class folk that has enriched Big Business and corporate CEOS immeasurably since 1980. Their huge wealth and support made another Trump administration possible.

It’s time for Democrats to find their own Robin Hood who can reverse the theft in the courts and win elections by exposing Trump’s Oligarchs for what they are, Robber Barons.

Harlan Green © 2025

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This Inflation Isn’t Temporary–Part II

Posted on August 29, 2025 by Popular Economics Weekly

Popular Economics Weekly

From the same month one year ago, the PCE price index for July increased 2.6 percent. Excluding food and energy, the PCE price index increased 2.9 percent from one year ago. BLS.gov

BLS.gov

The PCE price index is one of several inflation measures that the Fed will use to determine whether to cut the Fed Funds rate that controls short term interest rates at their September FOMC meeting. The other measures are the unemployment report and Consumer Price Index that will be out before their next meeting.

Fed Chair Powell has recently implied at the Jackson Hole Conference that if the employment picture is as bad as that of the past three months, they might even cut it -0.50%.

That would help borrowers because the Prime Rate would drop to 7.0% (from 7.5%) that lenders use for credit card and car loan rates. Consumer spending would then most likely pick up and elevate prices on top of the higher prices already appearing from the tariff taxes that Trump has levied.

This highlights the incredible stupidity of Republicans that may come to haunt them, who have passed massive tax cuts while allowing Trump to create havoc with his tariff war. They are counting on an increase in economic growth next year from higher capital investment in such as AI to pay for it and keep stagflation from happening.

But the inflation part of stagflation is already happening, in spite of the Q2 jump in GDP to 3.1% that was mostly due to the drop in imports, as the tariff taxes began to kick in.

Consumers are already seeing rising inflation. The Personal Consumption Expenditures price index (PCE), the Federal Reserve’s preferred inflation gauge, rose 2.9% annually without volatile food and energy price changes. That’s too high for the Fed’s target rate of 2% inflation that prevailed until the COVID-19 pandemic threw a monkey wrench in supply lines that are still recovering for most of the world.

It is a huge miscalculation for Republicans to believe that allowing Trump’s massive tariffs without their consent has anything more to do than increasing his wealth, and that of the Oligarchs that support him.

How much of the investments promised by Japan and the EU in their new tariff agreements will materialize, and how will it be spent? How much manufacturing can return to the US that must still compete with cheaper foreign products?

We know how con men operate from experience. Prices weren’t reduced or a Ukraine peace deal negotiated on ‘Day 1” as Trump had promised.

It will mostly be more smoke and mirrors that the White House propaganda machine will use to attempt to convince Americans there is very little inflation and the job market won’t further worsen. Trump already fired the Bureau of Labor Statistics (BLS) head that reported job growth slowed precipitously over the past three months because he didn’t like the numbers.

The above graph pictures how consumers have been behaving this year during the chaos. Their disposable incomes (blue bars) and savings (black line) had been rising faster than spending (outlays) until April when tax returns were due (and Trump’s retaliatory tariffs were first announced). Then it reversed.

The spending rate has been increasing (brown bars) faster than savings since then as consumers are depleting their savings accounts once again. Consumers spent more on cars, car parts and financial services (59%) of their Personal Consumption Expenditures, while gas and energy spending fell 12.1%. Their personal savings rate has hovered around 4% all year.

The PCE is an important indicator because personal savings rise sharply when consumers pocket their incomes if they fear something bad is about to happen, like higher unemployment. If the Fed also sees danger, then they will cut their interest rates.

And if President Trump succeeds in politicizing the Fed by firing Governor Lisa Cook and hiring another BLS head who will cook the job numbers for him, so that he can hide what is really happening in the job market, then all bets are off on just how bad the stagflation that results will be.

Harlan Green © 2025

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“Mr. President, do not come to Chicago.”

Posted on August 28, 2025 by Popular Economics Weekly

Answering Kennedy’s Call

“So in case there was any doubt as to the motivation behind Trump’s military occupations, take note: 13 of the top 20 cities in homicide rate have Republican governors. None of these cities is Chicago. Eight of the top 10 states with the highest homicide rates are led by Republicans. None of those states is Illinois.” CBS News

CBS

President Trump and Republicans have expanded their defacto civil war by invading Democratic blue states, something the original confederacy couldn’t do. He wants to impoverish them just as Republicans have milked their red states for decades.

That’s why Illinois Governor JB Pritzer came out swinging at a press conference when he learned that President Donald Trump was looking at occupying Chicago and Philadelphia next with National Guard troops from some of the red states to combat crime.

“Over the weekend, we learned from the media that Donald Trump has been planning, for quite a while now, to deploy armed military personnel to the streets of Chicago. This is exactly the type of overreach that our country’s founders warned against, and it’s the reason that they established a federal system with a separation of powers built on checks and balances,” said Governor Pritzer

But there’s more to Trump’s actions. Pritzer wanted Americans to realize that Trump and his Republicans are defunding everything the federal government provides to protect Americans from crime to pay for his tax cuts for the wealthiest. The total is $1,166 billion in cuts to public safety and crime prevention programs, as well as grants to local police departments, said Governor Pritzer.

There are good reasons that blue states are more prosperous and do a better job at protecting their citizens. They have higher minimum wages, fewer restrictions to the right to collective bargain and form trade unions, women’s rights, and better health care than the red states.

And what if red staters understood they only get the leftovers, including less disaster aid when they suffer a disproportionate number of hurricanes, floods and tornadoes, such as happened in Kerrville, Texas?

Everyone loves tax cuts, but not when it creates an almost $39 trillion public debt that endangers the full faith and credit of the U.S. Trump wants to pay for the tax cuts with massive tariff hikes by regressing to a century-ago Gilded Age that enriched the few and corrupted many.

It is the reason for the continuing civil war, I said last week, Republicans trumpet there are more individual rights and freedoms with smaller government and lower taxes.

But it is really to maintain control by preserving as much of the vestiges of the agrarian, slaveholding culture as possible.

By depriving red state citizens of adequate health care in the name of lower taxes and smaller government, they become sicker. By restricting union organizing with right to work laws, workers not only have lower incomes, but less time with their families and for leisure.

And attempting to erase DEI mandates from existing laws and educational institutions is their attempt to resuscitate the Jim Crow laws of racial segregation that took a century to redress.

Won’t cutting government research on healthcare and the climate, slashing funding for the FAA and NOAA, make us less safe as well when the President’s primary job is to protect Americans, not harm them?

It looks like a massive dereliction of duty that would fit the definition of a “high crime and misdemeanor.”

Harlan Green © 2025

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It’s Taxation Without Representation

Posted on August 25, 2025 by Popular Economics Weekly

Financial FAQs

“Oh, and as for all these tariffs: Whatever you think of them (and I am not a blanket opponent), they are taxes. They are sales taxes. Where in my copy of the United States Constitution does it say that the president has the power unilaterally to impose whatever sales taxes he wants, on whatever products he wants, at whatever moment? I must have skipped school the day they taught that in civics.” Bret Arends, MarketWatch

Thoughtco.com

I quoted MarketWatch columnist Brett Arends because it was a cause of our Revolutionary War for those that remember the Boston Tea Party. King George III tried to tax American colonists and it didn’t work. Why does ‘King’ Trump believe it will work when he promised he would bring down inflation on “Day 1?”

We are already seeing the result in almost all prices. Walmart and Target have already announced that they will raise some prices because they can no longer absorb the increased cost of their imported goods from the tariffs.

It’s Trump’s attempt to bring back President McKinley’s Gilded Age of robber barons and rampant corruption that prevailed in 1900, until McKinley was assassinated and Vice President Teddy Roosevelt succeeded him and initiated the modern Progressive era of reform.

Britannica has more to say about its history.

“The great burst of industrial activity and corporate growth that characterized the Gilded Age was presided over by a collection of colorful and energetic entrepreneurs who became known alternatively as “captains of industry” and “robber barons.” They grew rich through the monopolies they created in the steel, petroleum, and transportation industries. Among the best known of them were John D. Rockefeller, Andrew Carnegie, Cornelius Vanderbilt, Leland Stanford, and J.P. Morgan”.

The Foreign Trade Court that has jurisdiction on such matters has ruled Trump’s tariffs without congressional approval are illegal. Yet gave Trump the opportunity to continue the tariffs while it was being appealed.

And though Trump agreed to repay the tariff taxes he has already collected if he loses the case on appeal, he continues to levy the tariffs.  Why? They already amount to more than $130 billion the Treasury must repay that it has already collected.

Because he knows our federal debt is unsustainable, and so he must find some way to pay for the tax cuts in his big beautiful tax cut bill that is projected to add $5 trillion to the federal debt.

On May 16, Moody’s Ratings downgraded the U.S. credit rating, citing an “inability of the nation to address large and growing deficits.” This downgrade means that for the first time ever, all three major credit ratings agencies have downgraded U.S. credit below their top AAA rating.

Trump is therefore begging an appeals court to allow the tariffs. It could lead to a “GREAT DEPRESSION” Trump said on social media, with Americans “forced from their homes” that will threaten social security and Medicare.

But what if the higher tariffs lead to stagflation, the combination of slow growth and inflation that caused so much grief in the 1970s? Economists are saying it’s a risk. Higher prices are already affecting consumers that power 70 percent of economic activity, and the retailers.

So what do we need that can stop Trump’s highway robbers from not only milking the American people of their money and social benefits, but reversing the environmental and public health protection that protected Americans until Trump’s big beautiful tax cut bill and DOGE firings eviscerated the federal government?

Do we need another revolution?

Harlan Green © 2025

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Who Won the Civil War?

Posted on August 23, 2025 by Popular Economics Weekly

Answering Kennedy’s Call

“Just more than one week after President Donald Trump unveiled plans to deploy troops from the D.C. National Guard and to federalize the Metropolitan Police Department to tackle crime in Washington, six states have pledged to send in their own National Guard troops to pitch in with the effort.” Fox News

NYTimes

The civil war isn’t over? The Republican Party, envious of the blue states and a federal government that protect the rights of all Americans, has been attempting to take away as many of those protections as possible since Donald Trump returned to power.

Republicans have attacked such basic freedoms as women’s rights (abortion), immigrants’ rights (birth right citizenship), minorities and the poorest (loss of Medicare, Obamacare benefits) and seniors with cutbacks in social security services.

Trump added fuel to the fire when he said the Charlottesville torch carrying parade in 2017 that chanted racist, Nazi and antisemitic slogans had “very fine people on both sides.”

And since the big ugly tax cut bill was passed, Trump has sent National Guard Troops to Los Angeles and the District of Columbia, cities with black mayors (Chicago and Philadelphia may be next). It’s now obvious the Trump’s Republican Party has become the party of White Nationalist Christians, as if Lincoln’s Emancipation Proclamation was a mere blip on the screen of history that Republicans since the Jim Crow era have attempted to erase.

Six red (formerly confederate) states; Ohio, West Virginia, South Carolina, Louisiana, Mississippi and Tennessee; have also sent a contingent of their National Guard to “police” DC with the mission to aid in fighting crime.

Yet three of those red states—South Carolina, Louisiana, and Tennessee, rank in the top ten states with the highest rates of violent crime. Why aren’t they policing their own cities, such as Memphis, Tennessee that has the highest violent crime rate in the country?

Red States don’t have those services for a reason. Generations of control by Republicans haven’t raised minimum wages, have weakened unions’ right to collective bargaining with right to work laws, and provided fewer health care services or environmental protection.

That’s why the minimum wage in Blue states can be more than twice that of Red states (Washington State is $17/hr versus Texas’ $7.25/hr, the national minimum age). When most families are barely earning enough to get by, employers have their pick of distraught, panicked workers willing to work for subsistence wages.

It’s become increasingly clear that Trump’s Republican Party doesn’t want to believe that it lost the civil war.

They have instead chosen to make it a cultural war between the Haves (blue states) and Have-nots (red states) by attacking the human rights and climate protections in blue states that far outclass those in red states and has resulted in the huge economic and cultural divide between them.

Blue states account for about 71 percent of America’s GDP, whereas Red states produce just 29 percent of our income and wealth, according to the Hartman Report, a progressive podcast. The median family income in Blue states is $74,243 vs. $63,553 in the red states. Individual states highlight the disparity: New Jersey’s median income is $89,703, while Mississippi’s is $49,111.

Donald Trump and his Republican-led red states should be wanting to emulate the best parts of blue states, instead of invading them: such as with better environmental protections, higher incomes, lower poverty rates, crime rates, and better health care above all.

But it might result in citizens of the red states wanting those protections as well, and Republicans losing their hold on power over them.

Harlan Green © 2025

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Can We Fix the Housing Shortage?

Posted on August 20, 2025 by Popular Economics Weekly

The Mortgage Corner

“Privately-owned housing starts in July were at a seasonally adjusted annual rate of 1,428,000. This is 5.2 percent above the revised June estimate of 1,358,000 and is 12.9 percent above the July 2024 rate of 1,265,000. Single-family housing starts in July were at a rate of 939,000; this is 2.8 percent above the revised June figure of 913,000.” US Census Bureau

FREDconstruction

The housing shortage is something most of us worry about but are helpless to fix, it seems. There are many culprits—the NIMBY crowd that won’t allow more affordable housing near their single-family homes in cities, too high mortgage rates, but most of all the seeming inability of builders to supply enough new homes due to the shortage of construction workers.

First some history. Originally, much of it was due to the busted housing bubble that led to the Great Recession in 2008. More than one million new homes were built than could be sold, a classic example of oversupply. This resulted in just 600,000 new homes being constructed annually until 2012 when the Fed began its quantitative easing policies under Fed Chair Ben Bernanke that dropped 30-year fixed mortgage rates below 5% for the first time since the 1970s.

This is why I’m using residential housing construction as a good way to measure housing supply in the above FRED graph of housing construction. Starts have hovered around 1.4 million units since 2022 and the end of the COVID-19 pandemic (gray bar).

Construction had soared immediately after the pandemic due to the rock-bottom 30-year fixed mortgage rates, then plateaued to the current 1.4 million. But the Fed raised the rock-bottom rates to combat surging inflation and fixed mortgage rates soared to 7%, making housing purchases almost unaffordable to first-time, entry level buyers.

So, we know high mortgage rates are a major component of the housing shortage. But we can also answer maybe the largest part of the problem, the lack of new homes as highlighted in a recent Forbes Magazine article. Trump’s immigrant sweeps are not only hurting housing construction, but the job market in general.

“Immigrants make up 34% of the construction workforce, according to the Associated General Contractors of America. In states like California, Texas, New Jersey, Florida, Georgia and New York, they account for about half. Construction drives 4.5% of U.S. gross domestic product, making it the country’s tenth largest industry.

“Broaden the view and the impact grows. Residential housing, once you include rent and utility payments, fuels 15 to 18% of GDP, according to the National Association of Home Builders. Add commercial building to the mix and construction rises to the top of the chart.”

The good news what may come out of the housing shortage and homeless scourge. The highly unpopular immigrant sweeps of ICE agents invading homes, public streets, and workplaces.

The sharp drop in nonfarm payrolls in the last three unemployment reports is being blamed on the loss of possibly one million immigrants from our labor force, according to labor economists. This will hurt economic growth, because immigrants have traditionally supplied one million new Americans each year to our rapidly declining population growth rate.

Forbes cites a working paper published this month from the American Enterprise Institute (AEI), a conservative economics policy center, that found the Trump administration’s immigration policy will “likely result in a negative net migration in 2025—something the U.S. has not experienced in decades”—that would shrink labor participation and “put significant downward pressure on growth in the labor force and employment.” 

It’s a very sad tale. Trump’s Republicans have turned their backs on what has been the life blood of American Democracy that we can do little about without another administration.

Harlan Green © 2025

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This Inflation isn’t Temporary

Posted on August 18, 2025 by Popular Economics Weekly

Popular Economics Weekly

The Producer Price Index for final demand rose 0.9 percent in July, seasonally adjusted, the U.S. Bureau of Labor Statistics reported today. Final demand prices were unchanged in June and moved up 0.4 percent in May. BLS.gov

FREDppi

The Trump administration wants Americans to believe the current inflationary surge is temporary. Why? Because it needs the Fed to lower interest rates to keep economic growth from stalling because of the tariffs. And lowering interest rates in what is still a fully-employed economy is inflationary.

It’s the kind of reverse logic that has characterized so much of the MAGA crowd that wants to believe conspiracies (Epstein?) rather than economic realities.

The Producer Price Index of wholesale goods just out is another unwelcome fact that inflation isn’t temporary because of the tariffs. The tariffs paid by American importers at ports of entry are already showing up in the prices of raw materials producers must pay that will ultimately be passed on to American consumers and businesses.

The PPI is showing July wholesale prices (dark red line) have risen much faster than retail prices (light red line) in the above FRED graph—3.3% vs. 2.7% in a year.

Coffee prices are already up 15%, for instance. Could that have to do with the 50% tariff Trump has levied on Brazil, a major coffee grower, because he doesn’t like its socialist government?

So an unfavorable PPI is another measure of inflation the Trump administration will want to ‘cook’ if their choice for a new head of the Bureau of Labor Statistics is confirmed by the Senate.

 It prices the raw materials and services that go into the retail CPI Index that measures the final consumption of finished products and services. That’s no surprise because material input costs have been rising since April 2 and the announcement of the tariff wars, which belies Trump’s lies that the countries exporting to us will bear the cost of those import taxes for the great privilege of selling to US, yet are ultimately paid by Americans!

All eyes are now on what Fed Chair Powell will say at the Kansas Fed’s Jackson Hole conference this week. Will the 12 Fed Governors that vote at the FOMC meetings decide once again that there is little likelihood of an interest rate cut in September?

They may have to, because the biggest rise in wholesale prices was in the service sector that powers almost two-thirds of consumer activities (leisure, travel, dining out, transportation, and construction).

The index for final demand services moved up 1.1 percent in July, the largest advance since rising 1.3 percent in March 2022. It showed importers are also increasing their profit margins and so passing on the increased costs to consumers and businesses.

Over half of the broad-based July increase is attributable to margins for final demand trade services, which jumped 2.0 percent. (Trade indexes measure changes in margins received by wholesalers and retailers.)

And consumers are beginning to notice, according to the University of Michigan’s consumer sentiment survey.

“Consumer sentiment fell back about 5% in August, declining for the first time in four months. This deterioration largely stems from rising worries about inflation. Buying conditions for durables plunged 14%, its lowest reading in a year, on the basis of high prices,” reports survey Director Joanne Hsu.

Though it hasn’t done much damage to retail sales just yet. Retail sales rose 0.5% last month following a nearly 1% increase in June, reports the Census Bureau.

Automobile sales rose for the second month in a row, said MarketWatch’s Jeffry Bartash. Car buyers have been buying vehicles for the past few months to once again avoid anticipated price increases in the coming months as tariffs take full effect.

So the damage is already being done by Donald Trump’s tariffs. Even grocery prices are soaring that depend on what is produced domestically. Now why would grocery prices also be increasing that aren’t taxed by tariffs? Could it be that there are fewer farm workers to harvest the crops this year?? The ICE folks could answer that question!

Harlan Green © 2025

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Who Benefits From America’s IOUs?

Posted on August 15, 2025 by Popular Economics Weekly

Financial FAQs

WASHINGTON (AP) — The U.S. government’s gross national debt has surpassed $37 trillion, a record number that highlights the accelerating debt on America’s balance sheet and increased cost pressures on taxpayers. AP

FREDdebtGDP

Trump and his Republicans’ trade war and big, beautiful tax bill resemble a giant Ponzi scheme in several ways that has created the greatest wealth and income inequality in the developed world.

It is in essence robbing Peter to pay Paul, by using the revenues from the highest tariff rates since the Great Depression, cutting $billions from Medicare, Medicare and Obamacare benefits, Doge-slashing important health and climate research departments as well as foreign aid spending, because Trump must pay down the record national debt that he has declared is a national emergency.

Yet it was generated by generations of mostly Republican tax cuts. President Reagan created the first major national debt in fighting the cold war and Central American contra wars, GW Bush created the first $trillion deficit with his war on terror largely based on fabricated intelligence, and Donald Trump will manage to add some $ 9 trillion to what is now a record $37 trillion from his trade war with almost no understanding or knowledge of foreign trade, as Nobelist Paul Krugman has pointed out several times.

And President Trump just fired the head of the Bureau of Labor Statistics so that he could replace her with someone who will cook the books on inflation and real job numbers.

The history of deficits is portrayed in the above graph of U.S. national debt calculated as a percentage of GDP.

Tump’s original Tax Cuts and Jobs Act (TCJA) had already added $5 trillion to the national debt that peaked at 132.8% as a percentage of GDP in Q1 2020 during the COVID-19 pandemic and it has since dropped to 120% because of the aid bills that the Trump and Biden administrations signed into law boosting economic growth to almost 3% annually.

The White House appeal to the foreign trade court to leave Trump’s tariff war in place is his attempt to keep the Ponzi scheme from imploding, rather than negotiating with congress that has the actual power to make foreign trade agreements.

Executive orders without congressional approval are illegal, unless there is a national emergency. And the soaring national debt could become one, if Trump succeeds in destroying the good faith and credit of the U.S. by renewing the TCJA.

On May 16, Moody’s Ratings downgraded the U.S. credit rating, citing an “inability of the nation to address large and growing deficits.” This downgrade means that for the first time ever, all three major credit ratings agencies have downgraded U.S. credit below their top AAA rating.

Trump is therefore begging an appeals court to allow the tariffs. It could lead to a “GREAT DEPRESSION” Trump said on social media, with Americans “forced from their homes” that will threaten social security and Medicare.

Yet the financial markets aren’t panicking this time, maybe for the wrong reasons, as I said in an earlier column. This is while the Final Demand Producer Price Index has jumped to 3.3% annually, the highest in three years since the COVID-19 induced supply shortages, lessening the chances of Federal Reserve rate cuts.

Wall Street’s over enthusiasm, which was first termed irrational exuberance by Fed Chair Alan Greenspan in the mid-1990s as a warning that stocks were overpriced, has created a new asset bubble much like the dot-com asset bubble, and housing bubble that led to the Great Recession.

And it has led to the greatest income inequality in the developed world which has impoverished Republican-led red states above all, whose citizens are most easily cowed by their policies.

And what will happen when foreign investors, mainly governments, realize a $37 trillion national debt isn’t sustainable indefinitely?

Harlan Green © 2025

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

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