Good note. I would add that they are ensuring the ruin of social security by cutting the supply of immigrants. We need more young immigrants, not only to help in the sectors you mentioned -- and thus pay into social security for say 40 years -- but also high skilled ones who will spur long term economic growth.
This is a reasoned, fact-based argument that should sway any open-minded person. But it won't work as intended.
Beyond living in hermetically sealed information silos, even those who can see beyond their favorite cable news channel or podcast of steroidal, tattooed anchors are still susceptible to confirmation bias.
But there's still more, durning the Civil Rights Era, white community leaders took actions that hurt their own constituents (closing public swimming pools for example), and those white constituents applauded the action. We will see an updated version of that.
I suspect that true MAGA members are not going to see the reality and will blame the Deep State for their misery. Some may just hunker down to live day to day to survive. More will just disengage because voting did not work.
You're too young to remember how effective LBJ was in passing legislation. He had advantages, notably less partisanship on most issues and a true landslide victory in 1964, besides which Trump's "mandate" looks pitiful.
One of the things you hint at but should make explicit is that their agenda of increasing interest rates also explicitly benefits their base (those with surplus assets to invest). Their agenda increases r and decreases g thereby increasing the concentration of wealth.
The past two days of notes are FANTASTIC. Please keep writing them.
Though agreeing with @Dave that youre not changing anyones mind here, putting a lot of pieces in one place is helpful to me in seeing whats happening.
I tend to focus on the cruelties and total injustices of the deportations, but you remind me of the econ impact, which when i know to look, we already see here in LA. Empty restaurants, parks. Calls not returned for a roofing project.
Assuming that some form of democracy remains, and the backlash happens after negative economic impacts give collective dope slaps, what can be undone?
Not our reputations.
We’re already behind in many tech areas, and its bound to get worse. Check out the new DJI (CN) battery offerings.
Investing to cause change will be harder, because our debt will already be huge.
Dang. Tough times ahead. Hoping that spirits move some with new ideas and energies.
Perhaps, like climate scientists, honest fear of allowing bias to cloud objective judgement by economists leads to predictions that understate how bad things will get.
The stuff that is happening is historically more awful that many could have imagined.
It is hard to believe this will not lead to disaster.
Excellent analogy: the US is conducting two huge experiments by acting on dogma rather than facts. Mr. Bernstein makes the case clearly in the economic realm. Others make it equally clearly in the case of climate change. Within the Trump administration there isn’t simply climate change skepticism or denial, but outright dismissal: “we’re not doing this climate change crap” is about how at least two cabinet members have put it. But Mother Nature doesn’t care what you think, and I contend that the serious consequences have already made themselves known. As for the economic and social realms, it’s hard to imagine the outcomes to be any better.
Hi, respectfully, in my opinion, you do raise some real concerns about risks of reindustrialization done poorly, but your deterministic claim that it’s “too late to unwind globalization”, I think, is in error and conflicts with both economic history and current structural possibilities. Globalization, especially its post-1980 hyper-centralized, financialized, and extractive variant, was a constructed outcome, built through deliberate policy, institutional design, and transnational elite coordination. As such, it can be unwound or restructured, and this is especially true if redundancy is prioritized (regional production ecosystems, local financial semi-sovereignty, decentralized innovation capacity, layered regulatory authorities, redundant nd dynamic education, redundant and dynamic science and engineering, etc.). Tariffs in that context are neither salvation nor sabotage, they’re instruments with effects that depends entirely on intent, the other policies in the policy paradigms set and how their interactions are designed, and broader institutional structures. You're right to worry about failure modes, AND I AM QUICK TO SAY THAT THIS ISNT BEING DONE IN THE 1830s TO POST WW2 YEARS PROVEN AMERICAN WAY AND SO I DONT FIRMLY ENDORSE A LIKELIHOOD OF ITS SUCCESS, but, having said that, if the current administration’s reshoring efforts, federal investments, and supply chain restructuring interact, intentionally or not, with other changes to national and global dynamics, we may see a shift away from our hyper centralized political economy system state monoculture and return to the sorts of more pluralistic political-economic order that can get the job done right
In a slow growth economy which just about muddles along without going into recession, the GOP will do quite well. The American economy is very dynamic and the people quickly adjust to new realities as long as it is not too disruptive and the GOP is sitting on gobs of cultural capital which it can burn for many years. So while directionally, everything is bad, like the proverbial frogs in a warming pot, the voters may not notice anything.
If Democrats ever tried to be as “bold” as Republicans the media — both mainstream and right wing — would crucify them. The media hold the “Mommy Party” to a far higher standard than they do the boys-will-be-boys “Daddy Party”. Biden had the world’s #1 economy in the world with he best job market in over fifty years but that was a story the mainstream “liberal” media refused to tell because of ……the price of eggs? Larry Summers said we had to have a serious recession to get inflation down? They refuse to admit it’s Democrats, not Republicans who are the ‘party of fiscal responsibility’? They secretly admire Grover Norquist? Biden was too old so nothing he did could have been successful?
When Biden or Harris tried to tout these accomplishments the mainstream media accused them of not understanding the struggles of lower income Americans. The MSM have been peddling the lie that Democrats are out of touch elites who have nothing to offer working class Americans — as if those aren’t the people who need the ACA Medicaid, Medicare, Social Security, affordable education and child care, etc. the most. Those are all programs created by Democrats and opposed by Republicans.
Well argued. I hadn’t thought about the reduction of demand from their immigration policy. Odd, though, to call the ending of subsidies for renewable energy blocking it. People are still free to invest in wind and solar.
Jared once again gets basic economics wrong. Perhaps he has limited scientific and mathematical training. His lack of understanding has already been demonstrated with his comments on money. He needs to learn some basic thermodynamics. Thermodynamic variables are the real measure of the economy. Even the supply siders understand this. Perhaps a place he could start is reading some of the work of economist Miles Kimball who describes himself as a Supply Side Liberal.
The fundamental first order coupled differential equations of economics from a thermodynamic, and therefore real, are based on only on the production of real Capital. Real Capital, C, includes both physical and intellectual components, think the production of food as physical capital and the development and improvement of Agriculture as intellectual capital. To first order the differential equations in the production of real Capital are dependent on the product of Labor, L, and C. Again using agriculture as an example, increasing the supply of food is increased when the supply of L (farmers, farm workers) increases or when the supply of arable land and water increases. The complementary first order coupled differential equation is the consumption of physical capital, e.g. people need to eat and water and land are both rival quantities consumed in the production of food. For the artificial but instructive agriculture example as long as the increase in L (farmworkers) exceeds the coupled loss in C (they need to eat food to be able to work) then real economic output increases with immigration.
Extended to the entire economy this is still the only set of equations that describe real economics, the production of real C and the supply of real L. A perfect model would require an additional pair of coupled equations for every distinguishable required source of input C and output C. Again using agriculture as an example a 2nd order term is the increase in production of food from the development of the plow. The development of the plow temporarily reduces the L available to produce food, and the production of the plow (real C) also reduces L for farming and consumes real C for the food required for L and the real (non-food) C used in constructing the plow.
Intellectual capital is the only second order term.
Tariffs are completely immaterial to real economics because money has zero thermodynamic value. Money is created out of thin air. Imports increase real C. If people in other countries want to use their real labor and real capital to produce new real capital and supply it to you in exchange for something which has zero real value that is a free first order increase in C. Free trade is in fact free in real terms. In real terms, which what describes reality, running a trade deficit is ripping off the other country.
Money is only a medium of exchange because it has zero thermodynamic value. Since one can conceive of an imaginary perfect accounting system where the real value of everything could be measured then money would not appear in economics at all. We substitute money for the exchange of real values because we don’t have ways to measure the real value of everything in the world or mechanisms for exchange of most real quantities.
Gutting the safety net is in real terms is at a minimum a 3rd order term. It only appears in the production of real goods if it reduces the supply of labor. In real terms at t=0 there is no change in the supply of the physical and intellectual capital available for use. The food and medical care is still available, only the mechanism of exchange is broken. In a system where real values were used and money was not involved nothing would change.
Again, this is at most college level math and science.
Good note. I would add that they are ensuring the ruin of social security by cutting the supply of immigrants. We need more young immigrants, not only to help in the sectors you mentioned -- and thus pay into social security for say 40 years -- but also high skilled ones who will spur long term economic growth.
This is a reasoned, fact-based argument that should sway any open-minded person. But it won't work as intended.
Beyond living in hermetically sealed information silos, even those who can see beyond their favorite cable news channel or podcast of steroidal, tattooed anchors are still susceptible to confirmation bias.
But there's still more, durning the Civil Rights Era, white community leaders took actions that hurt their own constituents (closing public swimming pools for example), and those white constituents applauded the action. We will see an updated version of that.
I suspect that true MAGA members are not going to see the reality and will blame the Deep State for their misery. Some may just hunker down to live day to day to survive. More will just disengage because voting did not work.
At least if we can still vote.
You're too young to remember how effective LBJ was in passing legislation. He had advantages, notably less partisanship on most issues and a true landslide victory in 1964, besides which Trump's "mandate" looks pitiful.
Otherwise, good note.
It’s never been about migration and migrants, documented or not. It’s always been about controlling America.
The first big goal is to ensure there will be no free and fair elections anymore. For that, they
create their own military, Trump’s SS-ICE (expanded by 20×)
terrorize Americans by denaturalization and deportations
place National Guards and US military occupying major cities
deprive Americans of basics such as health, education, sane prices, income, so they have no resources to resist oppression and usurpation
no nation wide injunctions by courts
censorship
immunity
...
One of the things you hint at but should make explicit is that their agenda of increasing interest rates also explicitly benefits their base (those with surplus assets to invest). Their agenda increases r and decreases g thereby increasing the concentration of wealth.
The past two days of notes are FANTASTIC. Please keep writing them.
Though agreeing with @Dave that youre not changing anyones mind here, putting a lot of pieces in one place is helpful to me in seeing whats happening.
I tend to focus on the cruelties and total injustices of the deportations, but you remind me of the econ impact, which when i know to look, we already see here in LA. Empty restaurants, parks. Calls not returned for a roofing project.
Assuming that some form of democracy remains, and the backlash happens after negative economic impacts give collective dope slaps, what can be undone?
Not our reputations.
We’re already behind in many tech areas, and its bound to get worse. Check out the new DJI (CN) battery offerings.
Investing to cause change will be harder, because our debt will already be huge.
Dang. Tough times ahead. Hoping that spirits move some with new ideas and energies.
Perhaps, like climate scientists, honest fear of allowing bias to cloud objective judgement by economists leads to predictions that understate how bad things will get.
The stuff that is happening is historically more awful that many could have imagined.
It is hard to believe this will not lead to disaster.
Excellent analogy: the US is conducting two huge experiments by acting on dogma rather than facts. Mr. Bernstein makes the case clearly in the economic realm. Others make it equally clearly in the case of climate change. Within the Trump administration there isn’t simply climate change skepticism or denial, but outright dismissal: “we’re not doing this climate change crap” is about how at least two cabinet members have put it. But Mother Nature doesn’t care what you think, and I contend that the serious consequences have already made themselves known. As for the economic and social realms, it’s hard to imagine the outcomes to be any better.
Hi, respectfully, in my opinion, you do raise some real concerns about risks of reindustrialization done poorly, but your deterministic claim that it’s “too late to unwind globalization”, I think, is in error and conflicts with both economic history and current structural possibilities. Globalization, especially its post-1980 hyper-centralized, financialized, and extractive variant, was a constructed outcome, built through deliberate policy, institutional design, and transnational elite coordination. As such, it can be unwound or restructured, and this is especially true if redundancy is prioritized (regional production ecosystems, local financial semi-sovereignty, decentralized innovation capacity, layered regulatory authorities, redundant nd dynamic education, redundant and dynamic science and engineering, etc.). Tariffs in that context are neither salvation nor sabotage, they’re instruments with effects that depends entirely on intent, the other policies in the policy paradigms set and how their interactions are designed, and broader institutional structures. You're right to worry about failure modes, AND I AM QUICK TO SAY THAT THIS ISNT BEING DONE IN THE 1830s TO POST WW2 YEARS PROVEN AMERICAN WAY AND SO I DONT FIRMLY ENDORSE A LIKELIHOOD OF ITS SUCCESS, but, having said that, if the current administration’s reshoring efforts, federal investments, and supply chain restructuring interact, intentionally or not, with other changes to national and global dynamics, we may see a shift away from our hyper centralized political economy system state monoculture and return to the sorts of more pluralistic political-economic order that can get the job done right
In a slow growth economy which just about muddles along without going into recession, the GOP will do quite well. The American economy is very dynamic and the people quickly adjust to new realities as long as it is not too disruptive and the GOP is sitting on gobs of cultural capital which it can burn for many years. So while directionally, everything is bad, like the proverbial frogs in a warming pot, the voters may not notice anything.
Are you willing to make specific predictions on growth, inflation, employment, and interest rates over the next three years?
If Democrats ever tried to be as “bold” as Republicans the media — both mainstream and right wing — would crucify them. The media hold the “Mommy Party” to a far higher standard than they do the boys-will-be-boys “Daddy Party”. Biden had the world’s #1 economy in the world with he best job market in over fifty years but that was a story the mainstream “liberal” media refused to tell because of ……the price of eggs? Larry Summers said we had to have a serious recession to get inflation down? They refuse to admit it’s Democrats, not Republicans who are the ‘party of fiscal responsibility’? They secretly admire Grover Norquist? Biden was too old so nothing he did could have been successful?
When Biden or Harris tried to tout these accomplishments the mainstream media accused them of not understanding the struggles of lower income Americans. The MSM have been peddling the lie that Democrats are out of touch elites who have nothing to offer working class Americans — as if those aren’t the people who need the ACA Medicaid, Medicare, Social Security, affordable education and child care, etc. the most. Those are all programs created by Democrats and opposed by Republicans.
Well argued. I hadn’t thought about the reduction of demand from their immigration policy. Odd, though, to call the ending of subsidies for renewable energy blocking it. People are still free to invest in wind and solar.
Jared once again gets basic economics wrong. Perhaps he has limited scientific and mathematical training. His lack of understanding has already been demonstrated with his comments on money. He needs to learn some basic thermodynamics. Thermodynamic variables are the real measure of the economy. Even the supply siders understand this. Perhaps a place he could start is reading some of the work of economist Miles Kimball who describes himself as a Supply Side Liberal.
The fundamental first order coupled differential equations of economics from a thermodynamic, and therefore real, are based on only on the production of real Capital. Real Capital, C, includes both physical and intellectual components, think the production of food as physical capital and the development and improvement of Agriculture as intellectual capital. To first order the differential equations in the production of real Capital are dependent on the product of Labor, L, and C. Again using agriculture as an example, increasing the supply of food is increased when the supply of L (farmers, farm workers) increases or when the supply of arable land and water increases. The complementary first order coupled differential equation is the consumption of physical capital, e.g. people need to eat and water and land are both rival quantities consumed in the production of food. For the artificial but instructive agriculture example as long as the increase in L (farmworkers) exceeds the coupled loss in C (they need to eat food to be able to work) then real economic output increases with immigration.
Extended to the entire economy this is still the only set of equations that describe real economics, the production of real C and the supply of real L. A perfect model would require an additional pair of coupled equations for every distinguishable required source of input C and output C. Again using agriculture as an example a 2nd order term is the increase in production of food from the development of the plow. The development of the plow temporarily reduces the L available to produce food, and the production of the plow (real C) also reduces L for farming and consumes real C for the food required for L and the real (non-food) C used in constructing the plow.
Intellectual capital is the only second order term.
Tariffs are completely immaterial to real economics because money has zero thermodynamic value. Money is created out of thin air. Imports increase real C. If people in other countries want to use their real labor and real capital to produce new real capital and supply it to you in exchange for something which has zero real value that is a free first order increase in C. Free trade is in fact free in real terms. In real terms, which what describes reality, running a trade deficit is ripping off the other country.
Money is only a medium of exchange because it has zero thermodynamic value. Since one can conceive of an imaginary perfect accounting system where the real value of everything could be measured then money would not appear in economics at all. We substitute money for the exchange of real values because we don’t have ways to measure the real value of everything in the world or mechanisms for exchange of most real quantities.
Gutting the safety net is in real terms is at a minimum a 3rd order term. It only appears in the production of real goods if it reduces the supply of labor. In real terms at t=0 there is no change in the supply of the physical and intellectual capital available for use. The food and medical care is still available, only the mechanism of exchange is broken. In a system where real values were used and money was not involved nothing would change.
Again, this is at most college level math and science.
How to say nothing in a lot of words
(Is a SIGHT to behold, in case you want to correct!! Thanks for your clear explanations!!)
What are you thinking about J.Powell’s replacement at the FED?
“ Trump says he has 'two or three' choices to replace Fed's Powell”
https://www.reuters.com/world/us/trump-says-he-has-two-or-three-choices-replace-feds-powell-2025-07-01/