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.
And if you get rid of immigrants and also discourage people from coming here, certain sectors of the economy (as the writer mentioned) will suffer along with social security since the native population is aging and having fewer children. So much for 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.
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.
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.
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.
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.
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.
How much can states, towns, and municipalities shield themselves from the worst impacts of this economic kamikaze mission? We can generously presume that about 30% of Americans are on board with EVERYTHING Trump does or likes, come hell or high water. That leaves the vast majority of the country opposed to at least some of his policies. There must be a way that our decentralized system of government can protect the constituents who do NOT endorse this nonsense.
If only responsible leaders like Mr. Bernstein were still in charge, instead of the corrupt clown car of cretinous carnival barkers catastrophically crapping all over our economic future, we’d be just fine.
The perils of an uneducated, misinformed republic.
If we survive the next 3 years as a nation, I’ll be shocked.
All because most Americans couldn’t be bothered to vote, or to vote for a highly qualified black woman, instead simply shrugging their way into helplessness, poverty, disease and misery.
“Let’s destroy the labor market in an orgasm of performative cruelty, enact totally unworkable, moronic trade barriers based on a plainly self-destructive ‘plan,’ further explode the debt, and pillage social services so people suffer needlessly.” “Why?” “More money for our donors!”
This reminds me of 2002. Prior to 9/11 Bush was a moderate that passed a tax cut that wasn’t that big a deal. After 9/11 Bush went nuts and invaded Iraq and pushed through the extremely irresponsible 2003 tax cuts. The Ryan Tax Cuts in Trump’s first term were like the 2001 tax cuts that weren’t that big a deal and only added a little to the deficit. These Trump Tax Cuts are just like the 2003 tax cuts that will explode the deficit and any short term burst to GDP growth will be outweighed by the malinvestment made with those excess dollars.
How much is Trump going to reduce inequality by shipping 20 million penny less illegals home. Seems to me that will go a long way towards reducing the inequality Democrats created by encouraging illegal immigration.
We had a construction boom in 2023/24 in which a record number of apartment units and hotel rooms were delivered…those immigrants literally made America a better place by filling jobs Vance’s violent skanky drug addicted family members won’t fill because they are too whacked out on pills or too busy engaging in domestic abuse.
If you call taking 20 million jobs from real Americans and driving down the wages for all American a good thing then perhaps they should stay. Maybe Trump should invite in another 20 million to bid down wages even further?
Prime age employment increased from 2019 to 2024 and real wages were also higher in 2024 then 2019. The Biden Boom is over…illegal immigration always goes down when Republicans run the economy into the ground.
You're being ridiculous. Republicans believe in capitalism and Democrats believe in socialism. Democrats have no programs that are good for the economy. Democrats like to use business as a cash cow for their environmental plans and for their welfare programs. If they have even one pro business program why don't you tell us what it is????????
Obamacare and Medicare and Social Security and Biden’s IRA and BBB were all great for business…just look at the results! Trump never had over 3% GDP growth while Biden did!
We need to start over an economics 1 01 with you. We got from the Stone Age to here because people invented new products that free people wanted to buy to improve their standard of living. When the government interferes with the economy like in the case of Obamacare or Medicare it is simply interfering with money that would find its way into economic growth. Do you understand? The more the government interferes with people pursuing a higher standard of living by freely shopping for the best products possible the more it interferes with the growth in our standard of living. Look at Cuba. It has a lot of interference and a very low standard of living. Look at Europe it has a lot of interference compared to the United States and they have about half of the per capita GDP that we have. Look at the USSR and red China where again they tried to interfere with brilliant programs and they ended up slowly starving 100 million people to death. This is really kindergarten economics. If it is still not making sense to you please feel free to ask questions. Thanks
Don’t forget the loss of new business formation - immigrants start businesses. And the knock on effects of deporting energetic, risk-embracing individuals: you know, the folks who actually get up and go looking for that better future here.
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.
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.
And if you get rid of immigrants and also discourage people from coming here, certain sectors of the economy (as the writer mentioned) will suffer along with social security since the native population is aging and having fewer children. So much for 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.
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
...
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.
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.
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.
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.
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.
How much can states, towns, and municipalities shield themselves from the worst impacts of this economic kamikaze mission? We can generously presume that about 30% of Americans are on board with EVERYTHING Trump does or likes, come hell or high water. That leaves the vast majority of the country opposed to at least some of his policies. There must be a way that our decentralized system of government can protect the constituents who do NOT endorse this nonsense.
Use case for crypto: bribing politicians. Not zero.
Unassailable analysis.
If only responsible leaders like Mr. Bernstein were still in charge, instead of the corrupt clown car of cretinous carnival barkers catastrophically crapping all over our economic future, we’d be just fine.
The perils of an uneducated, misinformed republic.
If we survive the next 3 years as a nation, I’ll be shocked.
All because most Americans couldn’t be bothered to vote, or to vote for a highly qualified black woman, instead simply shrugging their way into helplessness, poverty, disease and misery.
“Let’s destroy the labor market in an orgasm of performative cruelty, enact totally unworkable, moronic trade barriers based on a plainly self-destructive ‘plan,’ further explode the debt, and pillage social services so people suffer needlessly.” “Why?” “More money for our donors!”
This reminds me of 2002. Prior to 9/11 Bush was a moderate that passed a tax cut that wasn’t that big a deal. After 9/11 Bush went nuts and invaded Iraq and pushed through the extremely irresponsible 2003 tax cuts. The Ryan Tax Cuts in Trump’s first term were like the 2001 tax cuts that weren’t that big a deal and only added a little to the deficit. These Trump Tax Cuts are just like the 2003 tax cuts that will explode the deficit and any short term burst to GDP growth will be outweighed by the malinvestment made with those excess dollars.
If he ships 20 million penniless, illegal, replacement Democrats home won’t that go a long way toward reducing inequality?
How much is Trump going to reduce inequality by shipping 20 million penny less illegals home. Seems to me that will go a long way towards reducing the inequality Democrats created by encouraging illegal immigration.
We had a construction boom in 2023/24 in which a record number of apartment units and hotel rooms were delivered…those immigrants literally made America a better place by filling jobs Vance’s violent skanky drug addicted family members won’t fill because they are too whacked out on pills or too busy engaging in domestic abuse.
If you call taking 20 million jobs from real Americans and driving down the wages for all American a good thing then perhaps they should stay. Maybe Trump should invite in another 20 million to bid down wages even further?
Prime age employment increased from 2019 to 2024 and real wages were also higher in 2024 then 2019. The Biden Boom is over…illegal immigration always goes down when Republicans run the economy into the ground.
You're being ridiculous. Republicans believe in capitalism and Democrats believe in socialism. Democrats have no programs that are good for the economy. Democrats like to use business as a cash cow for their environmental plans and for their welfare programs. If they have even one pro business program why don't you tell us what it is????????
Obamacare and Medicare and Social Security and Biden’s IRA and BBB were all great for business…just look at the results! Trump never had over 3% GDP growth while Biden did!
We need to start over an economics 1 01 with you. We got from the Stone Age to here because people invented new products that free people wanted to buy to improve their standard of living. When the government interferes with the economy like in the case of Obamacare or Medicare it is simply interfering with money that would find its way into economic growth. Do you understand? The more the government interferes with people pursuing a higher standard of living by freely shopping for the best products possible the more it interferes with the growth in our standard of living. Look at Cuba. It has a lot of interference and a very low standard of living. Look at Europe it has a lot of interference compared to the United States and they have about half of the per capita GDP that we have. Look at the USSR and red China where again they tried to interfere with brilliant programs and they ended up slowly starving 100 million people to death. This is really kindergarten economics. If it is still not making sense to you please feel free to ask questions. Thanks
Don’t forget the loss of new business formation - immigrants start businesses. And the knock on effects of deporting energetic, risk-embracing individuals: you know, the folks who actually get up and go looking for that better future here.
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.