If the courts can't stop them...

Also, the Zen of Trumponomics: First, raise costs. Then, tell people to be less materialistic.

One disciplinary force down; another, much scarier one, under threat.

When the president was reelected, it was clear and explicit that his new team would be less restrained than the old one. In Trump 1, economic officials who opposed his protectionist trade agenda, for example, went from trying to explain the damage of broad tariffs to him to preventing memos from reaching him.

That’s all been gone since day one in this round. In fact, it’s worse. Not only do his officials bless his every tariff, but they’re inventing far-reaching rationales about “restructuring the global order” that gullible people, even at this late date, are buying (see Brad DeLong’s important takedown of the so-called Mar-a-Lago Accord).

Yet some us still hoped—perhaps in our own bout of gullibility—that two forces could discipline them: the markets and the courts.

Starting with the markets, at least thus far, we’ve been wrong. Not only are they—again, unlike in Trump 1—brushing off sell-offs and even market corrections (10% decline from the previous peak) but they’re basically saying “markets, schmarkets.”

Now, no one should judge the real economy by the ups and downs of the market, and if you asked me about the trade off between a market correction and a recession, like any reasonable person, I’d take the former. But that’s not my point. It’s that declining markets, which, for the record, do actually reflect something important right now, i.e., investors lack of confidence in their agenda, are not the disciplinary force we hoped for.

Ok, then. What about the courts? Close Trump watchers assured me that for all his lawless tendencies, he doesn’t cross that line. Yet that observation, which is incomparably more important than the markets’ one, is starting to look shaky as well. Others up here, like Norm Eisen and the Contrarian team, are more versed than I in such matters, and from what I read, at this point, they’re wading into that Rubicon rather than swimming across, as in explaining why they’re not violating court orders (against their deportation actions) rather than saying “screw you, courts.”

But the signs are clear: this disciplinary force—the rule of law—is also being tested in a way that is profoundly threatening.

The Zen of Trumponomics: First, raise costs. Then, tell people to be less materialistic.

I’ve already explored Sec’y Treasury’s unusual campaign urging people to chill out about higher prices due to their import taxes (aka, tariffs): "Access to cheap goods is not the essence of the American dream.”

The serious problem with this rap is not that it’s wrong about “the American dream,” which I assume—it’s not my area—for most people is not wholly materialistic. It’s that it is a “pain now, gain later” strategy, and as I and others have written extensively, there’s no clear path to gain later, especially if part one above re violating the rule of law proves correct.

But this discussion in Axios this AM—”Is this the end of cheap clothes?”—caught my attention (Ms. Caylor is the founder of an American textile company).

By raising prices, tariffs might force the U.S. consumer to buy less and discard less. "Everybody could be more thoughtful and mindful," Caylor says.

I mean, it would unquestionably be great if people were more thoughtful and mindful. And better for the environment, too. It’s true that the U.S. economy is, more so than other advanced economies, structured around greater acquisitiveness and consumption: our spending share of GDP is much higher than others (we’re at ~70%; Europe’s at ~55%; China at ~45%).

But there’s zero evidence that this is the thing that replaces the question marks in Paul Krugman’s schematic from this AM:

..the stages of Trumpist economic grief…:

1. Prices will come down right away

2. Actually, reducing prices is hard and will take a while

3. Sorry, but we need a painful economic detox

4. Hey, there’s more to life than consumer goods

5. ????

As I began this post, this Zen anti-materialism is just more backfilling, just the latest lurch from the chaos mongers desperately trying to rationalize irrational policy that is 100% antithetical to helping the working class people who elected them to help improve their living standards, not to convert them to Buddhism.