I not only agree with you, but I submit that this kind of caution on the part of the consumer is rational.
Just as businesses can't make decisions about long-term investments right now because of that uncertainty, consumers are in a similar situation situation
WTF as an utterance is probably the only thing growing in Trump 2.0 other than the holdings of the Grifter in Chief and his family. On Friday the GOP essentially uttered the immortal words of Marie Antoinette "Let them eat cake". Let's see how this chapter ends?
I don't object to Jaren Bernstein appearing on television to discuss tariffs, but I don't think it does any good at all. No, it can't hurt, but the number of people who are watching something like this appearance is quite small and the people who really need to see serious economic explanations aren't watching at all. Add to that, how much was Mr. Bernstein actually able to say? He had a few minutes to make some general comments. And nothing he says now will make any difference in voter behavior, which will depend entirely on what happens when Trump's moronic tariff regime is fully in place. Then, if prices rise as expected, and if consumers/voters are angered by the increases and accurately attribute the responsibility to Trump, we should see a reaction at the polls, assuming we have free and fair elections in 2026. I can't believe that Trump and his corrupt advisors don't have a plan for November 2026 and given what we've seen so far it is not a stretch to be concerned that we won't, in fact, have free and fair elections, or at least not an honest counting of votes. Trump will not lose if he can find a way to prevent it, and a declaration of martial law and cancellation of the mid-terms is no longer far-fetched. Short of that there are other things he can do to rig the outcome. It is pure folly to think that the SCOTUS majority will stand in the way of Trump's corruption, since they have facilitated it repeatedly.
The same goes for Substacks. They are tremendous sources of excellent information, but for the most part the people who need to learn and understand about the critical issues we're facing today aren't subscribers to Substacks. That is, in my opinion, the key reason why we are now watching as democracy and sane government is being dismantled by a stupid and ignorant fascist who cares about nothing but himself, his personal power, and his wealth. The overwhelming majority of the American electorate is woefully ignorant about political issues, economics, and what the actual role of the government is. A frequent opinion we here is that voters supported Trump because he's a businessman and he will run the country like a business. The stupidity of that position is truly shocking. As Paul Krugman has pointed out many times, the government is not a business and it shouldn't be run like one. Even a small amount of common sense ought to tell people that government is not a business. First, and this isn't, as they say "rocket science," businesses have no social responsibility at all. The government, on the other hand has a huge social responsibility and being profitable is not the goal. At the most, the government should balance its budget, but that depends on the situation at any given time. For example, during a recession or the pandemic, the government needed to increase its spending dramatically in order to prevent even worse harm than was already taking place.
The less well informed and more misinformed voters are, the easier it is for demagogues and con artists, like Trump and the GOP to manipulate them. Substacks are great, but I fear that the best we can say of them is that they are making already reasonably well-informed and engaged people more knowledgeable. That is undoubtedly a good thing, but it does nothing to solve the real problem, which is all the voters who are profoundly ignorant.
The first line of defense would be to greatly increase the civics curriculum in schools. That not only won't happen under Trump and Republicans, they are making things much worse since their idea of "education" is radical right wing indoctrination. Pro wrestling queen Linda McMahon, who has no qualifications to head the Dept. of Education is working at shutting down that department. As someone who has taught history and economics in high schools, the situation is dire. First, interest among students is very low, at best. Their parents are generally extremely poorly educated about civics in general and their understanding of history is pathetic. American presidents, not least of whom was Barack Obama, have done considerable damage to education in this country, in my opinion, by stressing that the goal of education is getting a better, higher paying job, not expanding one's understanding and horizons, that is making one a more complete human being. That isn't a surprise in a capitalistic country where money rules and the most money dominates.
Bernstein: "So, I have more faith in my second explanation: households are just downright nervous about Trumpian policies, from tariffs, to forced and often illegal deportations, to the highly unpopular budget bill they just jammed down everybody’s throat, to the daily chaos and BS..."
It may be that you are correct, but it is likely that large numbers of Americans are still disengaged and know very little about what Trump is doing. As difficult as that may be for reasonably well informed and engaged Americans to understand, it is normal in this country. If that is the case, then if more people were up to date on what Trump is doing, we should expect nervousness to be significantly worse and economic indicators would probably reflect that. Anyone who isn't aware of Trump's tariff madness, isn't likely to be as worried about future inflation and, thus, won't have reacted yet in any measurable way.
If Trump's tariffs have the expected effect, when prices rise significantly and consumers have to pay the increased prices, then their normal disinterest will be overtaken by reality. Then, we should begin to see a widespread response.
I am in complete agreement with you. Most of my friends and neighbors with whom I discuss economics, politics, current issues have expressed various actions they are employing to cut back on expenditures - and not just discretionary outlays. They are shopping at less expensive grocery store and using Costco-type stores more, using online coupons and discounts, cutting unnecessary auto trips by combining errands into just a couple days a week, postponing household non-emergency repairs and upgrades, canceling streaming music, tv, corporate newspaper subscriptions, planning to keep vehicles longer, and more.
I have gone off-grid for the barn, rental cabin and well house by replacing two electric company accounts with solar installed very reasonably by a friend in the industry, saving me an average of $150/mo which will pay for the solar in less than 5 months. I am planning to do the same with my house in the next couple months with much larger savings.
With homeowners' and auto insurance premiums jumping every renewal, energy costs and grocery prices rising, interest rates climbing, general goods becoming more expensive as well as service providers, how can we not do all we can to slash monthly costs? I am willing to adopt as many ideas as possible to keep my money in my pocket. We have no idea if/when inflation, stagflation, recession will erode the economy and I intend to have saved as much as I can to prepare.
Bernstein: "At one point in the discussion, I noted that real consumer spending so far this year, i.e., Dec24-May25, is up…0%. It’s actually down 0.2%, but easier on TV to just call that flat."
I'm sorry, but that makes no sense to me. You just said it is down 0.2% and it wasn't any more difficult than saying it was flat. Fudging on facts hardly makes sense. If spending is down 0.2%, then just say that. If down is the truth and down sounds worse than flat, then why would you not simply say it is down? Voters don't need euphemisms, fudge factors, generous allowances. They need the truth. Period.
I personally purchased a new vehicle earlier than I had planned because I was concerned that tarriffs would increase the price later this year. I wonder if these sort of decisions may have boosted the spending overall and perhaps the numbers would be even more subdued.
Will the doldrums continue in June? While we're waiting for Census Retail Sales data, a couple of private sector measures:
"Same-store sales were unchanged compared to the previous month (May 2025)." - NRSInsights, from retail point of sale systems. Fiserve's small business measurements for June show month over month sales down 1.4%, foot traffic down 2.0%, Retail sales -1.7%, services -1.2, restaurants -2.6%.
I assume that construction will continue to decline, as will most house prices. Is there any bright spot except tech spending?
Theory: It is immigration. Immigration has slowed dramatically, and many immigrants who are here have reduced consumption. For example, Modelo says that their beer sales, both in restaurants and grocery stores, have fallen.
The phrase "animal spirits" was widely used before Keynes, but he stereotyped its meaning with reference to economics. There's an excellent treatment in Wikipedia.
I not only agree with you, but I submit that this kind of caution on the part of the consumer is rational.
Just as businesses can't make decisions about long-term investments right now because of that uncertainty, consumers are in a similar situation situation
WTF as an utterance is probably the only thing growing in Trump 2.0 other than the holdings of the Grifter in Chief and his family. On Friday the GOP essentially uttered the immortal words of Marie Antoinette "Let them eat cake". Let's see how this chapter ends?
I don't object to Jaren Bernstein appearing on television to discuss tariffs, but I don't think it does any good at all. No, it can't hurt, but the number of people who are watching something like this appearance is quite small and the people who really need to see serious economic explanations aren't watching at all. Add to that, how much was Mr. Bernstein actually able to say? He had a few minutes to make some general comments. And nothing he says now will make any difference in voter behavior, which will depend entirely on what happens when Trump's moronic tariff regime is fully in place. Then, if prices rise as expected, and if consumers/voters are angered by the increases and accurately attribute the responsibility to Trump, we should see a reaction at the polls, assuming we have free and fair elections in 2026. I can't believe that Trump and his corrupt advisors don't have a plan for November 2026 and given what we've seen so far it is not a stretch to be concerned that we won't, in fact, have free and fair elections, or at least not an honest counting of votes. Trump will not lose if he can find a way to prevent it, and a declaration of martial law and cancellation of the mid-terms is no longer far-fetched. Short of that there are other things he can do to rig the outcome. It is pure folly to think that the SCOTUS majority will stand in the way of Trump's corruption, since they have facilitated it repeatedly.
The same goes for Substacks. They are tremendous sources of excellent information, but for the most part the people who need to learn and understand about the critical issues we're facing today aren't subscribers to Substacks. That is, in my opinion, the key reason why we are now watching as democracy and sane government is being dismantled by a stupid and ignorant fascist who cares about nothing but himself, his personal power, and his wealth. The overwhelming majority of the American electorate is woefully ignorant about political issues, economics, and what the actual role of the government is. A frequent opinion we here is that voters supported Trump because he's a businessman and he will run the country like a business. The stupidity of that position is truly shocking. As Paul Krugman has pointed out many times, the government is not a business and it shouldn't be run like one. Even a small amount of common sense ought to tell people that government is not a business. First, and this isn't, as they say "rocket science," businesses have no social responsibility at all. The government, on the other hand has a huge social responsibility and being profitable is not the goal. At the most, the government should balance its budget, but that depends on the situation at any given time. For example, during a recession or the pandemic, the government needed to increase its spending dramatically in order to prevent even worse harm than was already taking place.
The less well informed and more misinformed voters are, the easier it is for demagogues and con artists, like Trump and the GOP to manipulate them. Substacks are great, but I fear that the best we can say of them is that they are making already reasonably well-informed and engaged people more knowledgeable. That is undoubtedly a good thing, but it does nothing to solve the real problem, which is all the voters who are profoundly ignorant.
The first line of defense would be to greatly increase the civics curriculum in schools. That not only won't happen under Trump and Republicans, they are making things much worse since their idea of "education" is radical right wing indoctrination. Pro wrestling queen Linda McMahon, who has no qualifications to head the Dept. of Education is working at shutting down that department. As someone who has taught history and economics in high schools, the situation is dire. First, interest among students is very low, at best. Their parents are generally extremely poorly educated about civics in general and their understanding of history is pathetic. American presidents, not least of whom was Barack Obama, have done considerable damage to education in this country, in my opinion, by stressing that the goal of education is getting a better, higher paying job, not expanding one's understanding and horizons, that is making one a more complete human being. That isn't a surprise in a capitalistic country where money rules and the most money dominates.
Good points. One thing I do is share articles with people who are not political junkies like myself.
Bernstein: "So, I have more faith in my second explanation: households are just downright nervous about Trumpian policies, from tariffs, to forced and often illegal deportations, to the highly unpopular budget bill they just jammed down everybody’s throat, to the daily chaos and BS..."
It may be that you are correct, but it is likely that large numbers of Americans are still disengaged and know very little about what Trump is doing. As difficult as that may be for reasonably well informed and engaged Americans to understand, it is normal in this country. If that is the case, then if more people were up to date on what Trump is doing, we should expect nervousness to be significantly worse and economic indicators would probably reflect that. Anyone who isn't aware of Trump's tariff madness, isn't likely to be as worried about future inflation and, thus, won't have reacted yet in any measurable way.
If Trump's tariffs have the expected effect, when prices rise significantly and consumers have to pay the increased prices, then their normal disinterest will be overtaken by reality. Then, we should begin to see a widespread response.
I am in complete agreement with you. Most of my friends and neighbors with whom I discuss economics, politics, current issues have expressed various actions they are employing to cut back on expenditures - and not just discretionary outlays. They are shopping at less expensive grocery store and using Costco-type stores more, using online coupons and discounts, cutting unnecessary auto trips by combining errands into just a couple days a week, postponing household non-emergency repairs and upgrades, canceling streaming music, tv, corporate newspaper subscriptions, planning to keep vehicles longer, and more.
I have gone off-grid for the barn, rental cabin and well house by replacing two electric company accounts with solar installed very reasonably by a friend in the industry, saving me an average of $150/mo which will pay for the solar in less than 5 months. I am planning to do the same with my house in the next couple months with much larger savings.
With homeowners' and auto insurance premiums jumping every renewal, energy costs and grocery prices rising, interest rates climbing, general goods becoming more expensive as well as service providers, how can we not do all we can to slash monthly costs? I am willing to adopt as many ideas as possible to keep my money in my pocket. We have no idea if/when inflation, stagflation, recession will erode the economy and I intend to have saved as much as I can to prepare.
Bernstein: "At one point in the discussion, I noted that real consumer spending so far this year, i.e., Dec24-May25, is up…0%. It’s actually down 0.2%, but easier on TV to just call that flat."
I'm sorry, but that makes no sense to me. You just said it is down 0.2% and it wasn't any more difficult than saying it was flat. Fudging on facts hardly makes sense. If spending is down 0.2%, then just say that. If down is the truth and down sounds worse than flat, then why would you not simply say it is down? Voters don't need euphemisms, fudge factors, generous allowances. They need the truth. Period.
I personally purchased a new vehicle earlier than I had planned because I was concerned that tarriffs would increase the price later this year. I wonder if these sort of decisions may have boosted the spending overall and perhaps the numbers would be even more subdued.
Will the doldrums continue in June? While we're waiting for Census Retail Sales data, a couple of private sector measures:
"Same-store sales were unchanged compared to the previous month (May 2025)." - NRSInsights, from retail point of sale systems. Fiserve's small business measurements for June show month over month sales down 1.4%, foot traffic down 2.0%, Retail sales -1.7%, services -1.2, restaurants -2.6%.
I assume that construction will continue to decline, as will most house prices. Is there any bright spot except tech spending?
Theory: It is immigration. Immigration has slowed dramatically, and many immigrants who are here have reduced consumption. For example, Modelo says that their beer sales, both in restaurants and grocery stores, have fallen.
The phrase "animal spirits" was widely used before Keynes, but he stereotyped its meaning with reference to economics. There's an excellent treatment in Wikipedia.
https://en.wikipedia.org/wiki/Animal_spirits_(Keynes)