I was taking the dogs out and looked in the mirror

I noticed that I was wearing dark wrap around sunglasses and a flat brim baseball hat.  My skin is dark and my face unshaven.  I wondered if I should grab my wallet.  What if ICE stopped me and I didn't have documentation on my person proving that I was a US citizen. Would I be disappeared to a prison in El Salvador for the rest of my life?  I know that fear sounds crazy, BUT its a heck of a lot less crazy to think that under Trump.  His administration is grabbing people off the street and holding them in US detention centers or deporting them to foreign prisons.  You don't get to call a lawyer or appeal in court.  You are held incommunicado.  That is beyond crazy; it is frightening.

Would it be more understandable if we were at war?  Yes.  Would I take my wallet (and maybe a flak jacket) if I lived in a hot war zone?  For sure.  Is that the world we are living in right now?  Absolutely not.  The only real danger out there is currently our own government grabbing folks off the street and tossing them in prison--please also remember that less than 1% of crime is committed by illegal immigrants.

Another fun crazy fact.  ABC news settled with Trump for a defamation suit Trump brought against ABC news because George Stephanopoulos said Trump was found civilly liable for rape.  That was incorrect, he was found civilly liable of sexual assault.  This is splitting hairs, BUT ABC news agreed to pay $15 million to his library and $1 million to cover his legal fees and apologize.

Abrego Garcia has been accused by the Trump administration of being a member of MS-13 and being a vicious gangster, and a terrorist because he was wearing a Chicago Bulls hat and has tattoos, and some drunk disgraced cop said he might be a member of MS 13 in an area that has no MS 13 presence.  With zero evidence presented in court that Garcia is dangerous (but a long history in the US of no criminal arrests little less convictions) he has been deported to a prison in El Salvador possibly for the rest of his life.  The US Supreme Court has ordered his return and when President Trump met with the President of El Salvador they both had the hutzpah to tell reporters that neither of them had the power to return Garcia.

If the pain and suffering and damage to character that Trump experienced due to Stephanopoulos mischaracterizing his legal finding as rape vs sexual assault, what should be the compensation for Garcia for being mischaracterized as a gang member, terrorist, human trafficker, who has been imprisoned against a court order, and held against a court order.  Will DJT apologize and write him a check (personally because it shouldn't come from US taxpayers) for hundreds of millions of dollars?  Me thinks not.  This is the America we live in during the reign of Trump.  Do you feel safer?  I don't but I might start bringing my wallet with me everywhere.

its all about the cats and the dogs

Donald J Trump lies.  He lies about everything all the time.  His super power is that he doesn't feel any issues about lying.  He isn't bound by normal human mores that would cause some hesitation or pause when lying.  He has some belief, and then he creates facts and stories to fit the story he has in his head.

We saw this around his businesses where he lied about the size of his assets or liabilities to suit his needs (his assets are huge for getting loans from banks and much less valuable when the tax man asked).  He lies about the whereabouts of top secret files he has stolen from the government.  He lies about the results of an election.  He lies about American being at war and being invaded by Venezuelan gangs.  He lies about, well everything.

An area DJT loves to lie about to fit his narrative is violence in America and in particular who is committing that violence.  According to President Trump we are living in American carnage.  Rape and murder is everywhere, and its mostly the result of illegal immigrants and their woke Democratic overlords.  In Trump's mind when immigrants aren't eating Fido and Garfield they are raping American women and murdering our grandparents and grandchildren.  During his single debate with Kamala Harris he repeated a known lie that immigrants are eating the dogs and cats of Americans in Springfield OH.  Except of course they weren't, and that FACT was known.  Yet in Trump's mind immigrants must be eating dogs and cats because that is the kind of stuff immigrants do.

In Trump's mind immigrants are also rapping and murdering Americans when they take a break from eating domestic animals.  Except they aren't.  In the past couple of years the percentage of rapes and murders committed by illegal immigrants is under 0.3%.  For example in 2023 there were 29 illegal immigrants convicted of murder, out of 19,252 murders.  Is murder or rape by an American citizen somehow not so bad, but one committed by an illegal immigrant 1000Xs worse?  I am pretty sure of the 127k people raped in 2023 stopping the 284 committed by illegals would be nice, but spending that money stopping the other 127k rapes is much more important.

And that brings us to Kilmar Garcia.  Team Trump paints a picture of a violent gang leader.  The courts and the facts are entirely different.  Not only has Garcia not been convicted of any crime in the decade plus he has lived in the US, he hasn't even been accused of any crime.  There are no court cases or accusations against him.  Yes he wore a hoodie, and a bulls hat.  Is that a crime?  Should a brown man in a bulls baseball cap be sent to jail for life in a foreign prison?  Team Trump thinks so.  Is this really a power we want a President to have?  While no President should (or even does) have this authority, its particularly dangers in a man who is untethered from reality.  The ability to disappear anyone he doesn't like.  That is the power of a despot, not a President.  If that doesn't make you want to take to the streets in protest then any true understanding of freedom and democracy must have died in you.

Trump---the problem is the mouth

 The one thing that is certain about Trump is all kinds of crap will spew from his mouth hole.  From COVID won't be a problem, to drink bleach to cure COVID.  Or there are good guys on both sides (yes the crusader in chief against antisemitism on college campuses doesn't have a problem with guys with tiki torches chanting 'jews will not replace us' in Charlottesville).  

Specifically with tariffs, the rules change by the hour.  The rational for tariffs change by the minute.  Team Trump claims he is just a flexible negagioter but he isn't.  He just spews constant crap.  But of course much of what comes out of the President of the United States isn't crap, and even if it is its impactful crap.  We ignore him at our risk.  He said he loves tariffs and he has started a tariff war.  He has said he will do whatever it takes to deport people he finds threatening and he has ignored habeas and the rule of law to do just that.  

What is remarkable about the verbal diarrhea that spouts from the Presidents mouth is not just the crazy uncertainty around positions, but the positions themselves.  If we were to go back to college statistics class and look at the potential distribution of stuff a president might say or propose it would look like a bell curve and the distribution of positions would bounce around a bit but around a certain central core of what political scientists would call 'norms'.  Like maybe we try to raises taxes a bit or cut taxes on investment a bit but not lets eliminate the IRS.

President Trump has no norms.  There is no center.  There is no bell curve distribution of comments and views.  A quick list of things to consider:

1. He pardoned violent insurrectionists who attacked the capital to prevent the peaceful transfer of power

2.  He talks about staying in office beyond two terms

3.  He parrots Russian talking points about who started the Ukraine war (hint its Russia)

4.  He proposes turning Gaza into a Trump resort

5.  He proposes making Canada the 51st state

6.  He proposes taking over Greenland--from our NATO ally

7.  He launches a meme coin

8.  He has a publicly traded stock

9.  He refuses court orders to bring back someone he illegally deported (too bad not so sad)

10.  He threatens to pull Harvard's tax exempt status if they don't agree to .....well lets put it in Trump speak, 'be his bitch'.  Now I could point out that many evangelical churches have become much more explicitly political than Harvard supporting Trump from the pulpit but that is not the point---the point is you either obey the most powerful man in the world or he will hurt you.

The center point for all past presidents bell curve of thoughts was around democracy, the center point for Trump is around personal power---and that is autocracy pure and simple.   

Trump---the Art of the ....screw up

 I have a confession to make.  Karoline Leavitt owns me (ie owns the libs).  The verbal diarrhea that spews from her mouth is so voluminous and noxious I find myself crying, screaming and shaking in disbelief all at once.

And when she, and the rest of the cabinet all talk about DJT as the greatest dealmaker of all time, all I can say is NO.  No fucking way.

Why?  Well to be a good deal maker you need

1. a plan or goal

2.  people to believe your word

3.  some level of expertise

What Trump doesn't have is a goal for his tariffs.  And for sure no one believes him.  He changes his actual tariff policies multiple times a day.  He screws up the rates he is charging (China 125% or 145% who the heck knows---the Trump administration for sure doesn't).  There will be no pause or there will be a 30 day pause or there will be a 90 day pause and there will be no exceptions or there will be exceptions for electronics wait no there won't be exceptions for electronics.  The only thing efficient about any of this is they are not bothering to publish it in the Federal Register saving us taxpayers money (and of course not making any of these tariff announcements legally binding but then again who cares if they are legal).

Some bottom line of stuff to know:

1.  Prior to Trump Tariff Tantrum (TTT) our average tariff rate was 2.5% that we paid on average on imported goods (when we were getting raped a pillaged by everyone including penguins).  Now even after the 90 day pause on the liberation day tariffs the average rate on imported goods is 25%.  

2.  The world used to trust us to be a pretty honest country for both security guarantees and economics/business. Why?  Well we fought and bled for Europe in WW2 and then airlifted food, material and spent money on ensuring European freedom.  We spent a ton of money on defense to protect our neighbors.  And if the cost of massive free trade growth allowing our economy to outpace all others was a 2.5% tariff we paid it.  In less than 100 days Trump has destroyed all that.  Other countries are going to arm (including nuclear arm) themselves because America can't be trusted.  Our ability to compete on the global economic stage will be severely hampered.  For what reason?  To bring back some manufacturing jobs?  To raise a tariff/ tax on American consumers?  To make socks and shoes in Alabama?  

3.  And that ain't even the half of it---Team Trump has stopped counting stuff so we won't even see the country get less healthy, unable to access social security, students doing worse, life span contracting.  The only constant is the enrichment of Trump and the adulation from his courtiers.  and for $12 you can buy your gold plated Trump lapel pin to show your loyalty just like his staff does.

forget about tariffs --Trump top 10 list of stuff that sucks that you are not thinking about enough

 For old folks out there who remember David Letterman top 10 lists

10.  Abortion ---getting pregnant puts women at risk for jail time,---A woman was charge in Georgia  charged for having a miscarriage

9.  National Security--yes we all heard about Singalgate but did you know that the head of National Intelligence (Mike Waltz) has had at least 20 signal group chats?  Covering everything from the war in Ukraine, to Iran to China.  And the Sec Def (Pete Hegseth) is being reviewed for his additional use of signal.  And DOGE sent data about recent CIA hires in an unencrypted email.  And we all know about Trumps inability to keep a secret.  How do you think our recruitment of spies is going?  How about the willingness of 5 eyes to share intel with us.

8.  Its not just measles.  Team Trump with a heavy assist from RFKjr and Musk are doing all they can to make America less healthy.  Not just throwing shade at established medical practices like vaccines but also decimating our research labs, researchers, doctors, and data collectors.  While it will take awhile for the full impact of the US government turning away from science the long term consequences will be dire.

7.  Social security---seems Team Trump's plan to save social security is to make it near impossible to receive your benefits.  First DOGE fires lots of people, then DOGE screws up the website (its is crashing all the time) and then they require you to go into the office.  So yes you have a benefit, you just can't receive the benefit.  And that uncertainty will hit the economy.  About 67 million people receive benefits from SSA or 20% of the population.

6.  Other benefits going away---Medicaid.  How many people does that hit? About 25% of all Americans or 80 million people.  If you don't think that will hurt the economy, revisit any basic econ class, if your money is all going to healthcare consumption drops.

5.  Team Trump hates our vets.  Many of the DOGE firings have been vets.  The VA is being decimated with 80k firings.  If you are a vet and you want the aid the government owes you, good luck getting it.

4.  Do more guns make you more safe?  NO.  How about more nuclear armed countries?  NO.  The US ranks number 1 in gun ownership and is 9th in murder rates by per capita.  Yes we are safer than Jamaica, Haiti, Honduras and El Salvador, but we are many magnitudes less safe than any other developed country.  Clearly lots of guns doesn't stop gun violence.  How about nuclear weapons.  There has been a concerted global effort to limit the number of countries with nuclear weapons based on the belief that more nukes increases the likelihood of said weapons being used.  As the US pulls away from NATO its forcing countries who sheltered under our nuclear umbrella to question that commitment.  If you don't think a handful of NATO countries plus Austria, S Korea, New Zealand, and Japan aren't thinking about adding a nuclear deterrent to their arsenal your living in a make believe world.  

3.  Team Trump blackmail.  I gotta admit lawyers are not my favorite group of people.  But Trump threatening law firms with loss of government access if they defend or hire people he doesn't like is not good for business or democracy.  That is how dictatorships work not democracies.  What is next?  If a news organization asks questions or publishes stories Trump does like they loose access to government officials?  Well that has already happened, just ask AP re the Gulf of Americo.  Even more powerfully will be the threat of losing FCC an license if an organization publishes stuff Trump doesn't like.

2.  Laura Looooomer telling Trump to fire the head of the NSA and the number 2 at the NSA.  These are apolitical people who have done a great job.  And now because of a wack job they are out of a job.  He has also canned 17 inspectors General, a crap ton of FBI and CIA officers, a huge number of DOJ lawyers,  Vice Admiral Chaterfield, Admiral Lisa Franchetti, CQ Brown, General James Slife, and Air Force Lt General Jennifer Short.  For those of you who don't know who all these officers are they are heavy hitters, from head of the Navy to head of the Joint Chiefs, to top NATO commanders.  You go to war not with the army you want but the army you got, and the army, navy air force etc the US has is moving in a hurry from top tier to middle tier at best.  But at least our Sec Def can do a bunch of pushups and toss a lot of emojiis in a principals meeting.  Awesome.  

1.  You fill in the blank---so much to choose from.  I have to run.  There are some ICE officials at the door telling me I just won an all expense paid trip to El Salvador.  Gotta grab a swimsuit and some sun screen.

 

Trump Tariffs --Keeping it simple

 Team Trump argues that a trade deficit is BAD.  A trade deficit is neither good nor bad, it just means that America imports more goods and services from a country than we export to them.  That is neither good nor bad, its just an accounting of trade flows.

For example, the US had a $123.5 billion trade deficit with Vietnam in 2024.  That is because lots of companies (including US ones like Nike and LuLu ) have chosen to make their products in Vietnam because its less expensive to make shoes in Vietnam than in America.  How much less expensive?  The average wage Vietnam is about $1.80 an hour.  Please let that sink in.  Even more crazy, people in Vietnam can actually live on that wage---food and housing and everything else is much less expensive--for example a hair cut is between $2-$5.  

While America is busy importing goods from a Vietnam, what does Vietnam import from America.  The answer is not much, because stuff from America is relatively expensive.  Most of the $13 billion or so of stuff they import are things like raw cotton and mechanical appliances used to make Nike shoes and LuLu leggings.  Vietnam is not going to be importing lots of expensive goods from America any time soon because they can't afford to.

Vietnam has indicated in response to Trumps tariffs of 46% they will cut their approximately 9% tariffs to ZERO.  Will full free trade with Vietnam reduce or eliminate the trade deficit with Vietnam?  Absolutely not.  Will cutting off US businesses and consumers from a source of inexpensive manufacturing raise prices for Nikes and LuLu leggings a lot.  For sure.    

At this point my brain starts to hurt.  Team Trump starts to stay stuff like, we need to bring these 'good jobs' back to America.  Which good jobs are they referring to.  Textile work paying $1.80 like Vietnamese workers are getting paid?  Do Americans want to pay $250 for a pair of Nikes made in America vs $60 for a pair made in Vietnam?  Do Americans want to work for $1.80 an hour?  Does Team Trump want to put Nike out of business?  

The one thing I do hear mumbled about in the background from some GOPers is that Americans need to buy less stuff and raising the cost of everything will achieve that.  This is obviously not an argument that wealthy Trump supports and Republicans want to make out loud in public but for a long time there has been a number of wealthy Republicans who think that joe six pack should just buy less stuff and we should have better manufacturing jobs here at America and that will Make America Great Again.  This argument makes me glitch.  First off, rich people telling poor people that they need to save more money and buy less stuff so that we can have a more robust manufacturing base is an ugly patriarchal approach to telling Americans what is good for them, and flys in the face of capitalism sounding much more like a command and control Marist economy.  Even worse, technology will displace those 'good' jobs.  Fully automating making Nikes doesn't make sense when you can get labor at $1.80 an hour in Vietnam, but might when you are talking about $50 an hour (including benefits)  for US based production.  What happens next?  Does the government tell Nike they can't use machines to make shoes in the US because it destroys those 'good' jobs?  

Capitalism is simple and works well when there is limited sand in the gears (in this case trade barriers).  Building walls will just raise costs and reduce competition thereby raising costs more.  Once again I will point to N Korea.  This is not a model America should want to emulate.  Global trade has been a huge benefit to America, it makes our companies more efficient, provides lower cost good to Americans and reduces the chance of war as countries become more intertwined.  Trump is trying to blow all that up so that he can collect bribes from individual companies to get better terms.  That might sounds crazy, but its the most rational explanation I can come up with. And he is already doing that with law firms that he is extorting for tens and even hundreds of millions of dollars.

I am done with Trump tariff talk.  There really isn't anything more to say.

Tariffs (4) Supply Chain Management Major

 As many of you know I own a ski rack business Gravirax  We manufacture near Kansas City, with materials that are almost all made in the USA.  However, we really don't reach into our suppliers to demand that they source from America, they source from the lowest cost provider.  Our manufacturing process seems pretty straight forward and simple, but I am sure some parts of our powder coating machine come from overseas, some of our hardware or the materials in the hardware might also sometimes come from non American suppliers.  Supply chain management is complicated.  

I sold a rack to a family in December and the father proudly introduced me to his son who is majoring in ....Supply Chain Management.  Yes you can get a degree in Supply Chain management from over 100 universities.  This wasn't the case in the late 1800 and early 1900s.  Someone please tell President Trump things have changed.  The world has become one big market place, and sourcing materials from all over the globe is one of the reasons the standard of living has improved everywhere while inflation rates have fallen.  From 1990 to today US inflation was at all time lows, while from the 1960 to the early 2020s the average size of a home in America is up 50%.  A huge reason for that is global trade.

No company thinks, jeez I want to source parts from all over the globe from thousands of manufactures because it will be fun.  No 19 year old college student thinks, jeez I really want to major in supply chain management because its fascinating or cool.  Elaborate supply chains exist because capitalism drives companies to become more efficient, and leveraging global labor, economies of scale, concentrations of expertise all help to drive down costs.  Take a look at TVs or desk top computers.  Absolute costs are way down and what you get for your buck is so much better.  Why can you buy a TV that is 500% better for half the cost of what you would have paid 10 years ago?  Global trade.  Why can you get avocados in NYC, global trade.

Why is team Trump determined to end global trade as we know it?  That is the trillion $$$ question.  I will address that next, but lets just say there doesn't seem to be a true capitalist in the Trump MAGA Project 2025 team.  Kind of ironic when MAGA accuses everyone who disagrees with them of being a Marxist, Communist Socialist that they are starting a trade war which will hurt American consumers and businesses profits all to protect some American manufacturing jobs that they deem 'good'.  

Tariffs (3) Trump MAGA reasons

The Trump administration officials keeps talking 3 types of BS to justify their tariff policy

1. Tariffs will bring ‘good’ jobs back home ---this would indicate 
   1. Tariffs will stay in place
   2. will create inflation because manufacturing goods will use expensive US labor as opposed to cheap foreign labor
   3. Or other countries will drop subsidizes or barriers which will make domestic businesses more competitive (total BS)
2. Tariffs will generate tax revenue to help offset tax cuts and pay down debt 
   1. This means tariffs stay in place
   2. This assumes that we continue to import a lot of goods
   3. This assumes the global economy doesn’t take a digger
   4. That there isn’t a better way to raise revenue (like hiking taxes on the rich and a higher global corporate tax rate)
3. Tariffs are all part of the deal to get better trade deals
1. Trump is a notoriously bad deal maker---almost no bank would lend money to him prior to 2016
2. The best way to negotiate to start with consequences and work back from there (it isn't)
3. Seems to show the administration has zero understanding of other countries policies like VAT (will the world let Trump dictate their domestic tax policy—me thinks NOT)

I think many in the administration have talked themselves into believing some version of the above, but its all BS. What are these tariffs good for? Trump based grift. Each company can/should/will go and give Trump something to get relief. This isn’t about revenue or ‘better jobs’ or making the US economy more competitive (its going to make it less competitive per Monday's blog) ---it’s about Trump grift pure and simple. I also read someplace---I think the Economist that this will result in like 2.6 million new individual tariffs---with no government employees left post DOGEing who the heck is going to track and enforce this mess. But the opportunities for grift will be huge as will the attention afforded to Trump.  Tariffs are a win for Trump and a loss for USA and the world.

Tariffs (2) yea they are inflationary

 to paraphrase Milton Friedman ' tariffs are always and everywhere inflationary'.  

Why?  First there is the 1 time hit of raising prices by the amount of the tariff.  Cars cost X today and 1.25X after a 25% tariff.  Many in the Trump administration are of course idiots and are trying to position this as a one time hit to prices (things costing 25% more), and then no more inflation due to tariffs.  They also claim that the 25% hit will be paid for by foreign companies or governments and be used to pay off the deficit.  This is wrongheaded in so many ways it makes me glitch---but that is an argument for another day.  Regarding the inflationary impact of tariffs, per yesterdays blog post, tariffs will protect businesses from competition and that is what will increase long term rates of inflation.  Protecting companies from global competitors will increase inflation.  Full stop.  If ACDelco doesn't have to compete with LG and other S Korean flat screen producers the new screen in your Jeep will cost twice as much and perform 50% worse.  That is inflation.  And that is bad for consumers.  BAM (aka mic drop).

PS this is a long term cost which financial investors and consumers will be slow to realize, but in a decade when our companies are less competitive than the rest of the worlds you can thank Trump's tariff policy.

 

Tariffs part 1 or is Team trump learning business from Marx

 I am going to spend many hours writing blogs about Trump/MAGA which is probably not good for my health and a waste of time and energy, but I do find many folks asking me things and being the thoughtful guy and excellent economist I am going to share.   I am going to provide a daily series of bite sized tidbits about tariffs to start.

Ask a macro economist what the singular most important factor is for a country to achieve and maintain a high standard of living and they will tell you productivity.  If you can produce more with less then you will have a higher standard of living.  There are many things that help an economy be more productive, from infrastructure to a highly educated work force to rule of law and even the old Protestant work ethic (can I say that without risk of being canceled?).  Something that absolutely makes an economy more productive is having to face competition.  Its a basic tenant of capitalism--think Adam Smith and animal sprits and creative destruction and all that stuff.  If a business (or an entire country) is sheltered from competition what drives them to innovate?  Guess what protects businesses (and entire countries economies) from competition?  Tariffs.  Want to see an economy that is protected from international trade--take a peak at North Korea.  When team Trump talks about tariffs being a tool to make America great again--more like make our businesses less competitive by protecting them from global competitors.  And that will lower productivity which will slowly but surely eat away our standard of living.  Make America Great Again is clearly a great slogan but Tariff man would be more accurate to say Make America More like North Korea.  MAMLNK---an ugly word just like tariffs.