I argue that Trump's atavism says less than you might think about America and its politics, and that slower growth is definitely better than recession but carries its own problems.
"That’s legit good news and a reason for a more optimistic outlook." JB
Little picture/big picture? The big picture is the future of this country and that depends on Trump being utterly discredited. Slow growth won't do that. I'm willing to suffer short term in order to have far more people abandon support for Trump in the longer term. One of the last things we want or should want is for Trump's tariffs to become normalized.
I think your observation of a flat real PCE YTD has been read by retailers that consumers are loath to accept price increases (this isn't post-covid w/ stimulus checks, soaring wages, and high savings), so retailers will wait on passing on tariff costs until the tariffed goods work their way through inventory and actually reach the stores. These are a small part of CPI weights, but they will be noticed by consumers, who will be incredulous of the headline inflation rate.
How does a US automaker profit when they already pay double the price for steel as the global average, and that's before an extra 25% tariff? How do they produce when China doles out rare earth like a lame sloth? How long until construction employment follows falling construction spending and falling house prices? In other words, more layoffs are coming. Probably not enough to push UER up much, but it will be enough to push investment and consumption down.
Your claim that a sizable percentage of Trump supporters don’t share his 19th political and economic views doesn’t explain why anti-immigrant, anti-globalist ( Brexit) and pro-authoritarian sentiments are sweeping the world today. These regressive views have been held for decades by many U.S.voters, but until recently those views were hidden within the dominant platforms of the two parties. By fleeing the democratic party in droves and destroying the ‘RINO’ republican party, the ‘purity’ of their retro populism and the size of their numbers could suddenly be seen. I agree that tech ceo’s and wall street free-marketers don’t buy into his tariffs, but they may constitute only a minority of Trump voters.
Trump has been signaling for years that he liked it better 50 years ago. In addition to all of these points, a lot of his “villains” sound a lot like the bad guys he focused on when he first got interested in politics, such as Japan buying up all the New York real estate. I think the missing link is that a large percentage of 2024 voters were too young to hear those echoes and call BS, so they were easily duped. Now they’re seeing what those “great” times looked like and are like, No! Not like that! Yes, he got the votes of some rich white guys and all the racists, but this economic/social argument moved some younger people who just don’t have the frame of reference to recognize where he was really going.
The return to the era of “Cats” is weird. You can bet Trump has never seen it — or likely any other musical or stage play. It’s likely the only musical he can think of. He really wants to return to the era of “Gentlemen Prefer Blondes”.
Trump does seem to want to turn back the clock, but what about the so-called “GENIUS” Act and pushing the crypto? That doesn’t seem to fit with his longing for the 19th and 20th century… or does it?
We all know what a fu**ing moron trump is (to quote that radical lefty - Rex Tillerson - CEO-Exxon - retired, trumps 1st Secretary of state). Let's make sure we also give "credit" / blame to that upstanding group of "courageous" souls - congressional Repubs. who clearly "stand up" for (stomp on) the American people with their extreme groveling to the chief hyena.
Tariffs, birther bull, hourly lying, sex abuser, predator, gold plated hair. When will even 1/2 of those 77 million who actually voted for this awful human come to their senses and scream, "enough, we're done with trump and his sycophants"
50 years ago Big Law firms, corporations big accounting firms did not hire Blacks, Hispanics or Jews. Women were hired as admins or secretaries. Few women or Blacks attended medical or law school. Do we want to go back?
Swing voters told pollsters that the economy was their top concern. 67% of voters went to the polls believing the economy was in bad shape because the mainstream media had obsessed about the price of eggs but buried any good news about the economy. The media then claimed voters were going on personal experience, ignoring the fact that voters had also told pollsters that they were personally doing well financially but they still believed the economy was bad.
Not too long ago many economists were suggesting that the Fed should target 3% PCE inflation rather than 2% because the latter is an arbitrary number. Implicit in this argument is the idea that 3% inflation should be palatable all things considered. So even if we assume the tariff and immigration policy shifts inflation to 3% on a sustained basis that by itself does not suggest a calamity but it maybe merely a continuation of the affordability malaise that has gripped the nation.
I also wouldn't discount the fact that the largest companies in the world as rich as many nation states combined are currently engaged in an all out sprint for AI and investing hundreds of billions of dollars over the coming years. So while there may be dislocations localized here and there, it is hard to see the US economy not do well when the government is running a 6-7% annual deficit and the private sector is investing like drunken sailors because they are in an arms race scenario. Our base case should be that in spite of Trump, the headline employment and GDP numbers will continue to be good to great unless AI starts to really disrupt the job market.
Most people have no clue that 2% is an arbitrary number and that it was a random number picked by central bankers in New Zealand. This is one of the things the media should be highlighting. When Reagan was in charge of what the media portrays as a great economy inflation was over 4%.
"True, but the polling data show that a lot of people are, once again, recognizing the betrayal."
Very true. But it isn't enough to recognize the betrayal. It is necessary to act on it. It isn't as if this Republican siren song is new. It is just more strident. Think of Newt Gingrich, the Tea Party, Sarah Palin, G.W. Bush .... Trump is just an extreme version of that sequence. And yet that music has charms to soothe savage breasts over and over again!
Remember when the Clintons were repeatedly investigated for “murdering” their close friend Vince Foster? I have people in my family who still believe that vicious, cruel lie. And then there was the Chickenhawk Bush’s henchman trashing John Kerry’s genuine war heroism. I was appalled at the lack of outrage from the mainstream media over these slimy slanders. The media just accepted Bush’s claim that his campaign had had nothing to do with the Swiftboat liars even though they were funded by close allies of Bush. The media also knew that his father had also lied about having had nothing to do with the race-baiting Willie Horton ads that Lee Atwater eventually admitted Bush had personally approved. The double standard is blatantly obvious.
If we experience growth slowing to around 1%, and the jobless rate to tick up by 0.5% is this not a strong indicator of an oncoming recession as per the Sahm Rule?
"That’s legit good news and a reason for a more optimistic outlook." JB
Little picture/big picture? The big picture is the future of this country and that depends on Trump being utterly discredited. Slow growth won't do that. I'm willing to suffer short term in order to have far more people abandon support for Trump in the longer term. One of the last things we want or should want is for Trump's tariffs to become normalized.
I think your observation of a flat real PCE YTD has been read by retailers that consumers are loath to accept price increases (this isn't post-covid w/ stimulus checks, soaring wages, and high savings), so retailers will wait on passing on tariff costs until the tariffed goods work their way through inventory and actually reach the stores. These are a small part of CPI weights, but they will be noticed by consumers, who will be incredulous of the headline inflation rate.
How does a US automaker profit when they already pay double the price for steel as the global average, and that's before an extra 25% tariff? How do they produce when China doles out rare earth like a lame sloth? How long until construction employment follows falling construction spending and falling house prices? In other words, more layoffs are coming. Probably not enough to push UER up much, but it will be enough to push investment and consumption down.
Ignoring misogyny and racism is fatal, we ignore that too many among T supporters applaud these qualities
Your claim that a sizable percentage of Trump supporters don’t share his 19th political and economic views doesn’t explain why anti-immigrant, anti-globalist ( Brexit) and pro-authoritarian sentiments are sweeping the world today. These regressive views have been held for decades by many U.S.voters, but until recently those views were hidden within the dominant platforms of the two parties. By fleeing the democratic party in droves and destroying the ‘RINO’ republican party, the ‘purity’ of their retro populism and the size of their numbers could suddenly be seen. I agree that tech ceo’s and wall street free-marketers don’t buy into his tariffs, but they may constitute only a minority of Trump voters.
Trump has been signaling for years that he liked it better 50 years ago. In addition to all of these points, a lot of his “villains” sound a lot like the bad guys he focused on when he first got interested in politics, such as Japan buying up all the New York real estate. I think the missing link is that a large percentage of 2024 voters were too young to hear those echoes and call BS, so they were easily duped. Now they’re seeing what those “great” times looked like and are like, No! Not like that! Yes, he got the votes of some rich white guys and all the racists, but this economic/social argument moved some younger people who just don’t have the frame of reference to recognize where he was really going.
The return to the era of “Cats” is weird. You can bet Trump has never seen it — or likely any other musical or stage play. It’s likely the only musical he can think of. He really wants to return to the era of “Gentlemen Prefer Blondes”.
I dunno, I suspect he likes Evita, and wonders why she didn’t stay on top!
Great response!!
Thank you! I too am an 80’s aficionado, the difference being I don’t want to do it again
Trump does seem to want to turn back the clock, but what about the so-called “GENIUS” Act and pushing the crypto? That doesn’t seem to fit with his longing for the 19th and 20th century… or does it?
Defense is a Glod Damn Frog word!!!! War is a good old German that the frogs tried to steal.
We all know what a fu**ing moron trump is (to quote that radical lefty - Rex Tillerson - CEO-Exxon - retired, trumps 1st Secretary of state). Let's make sure we also give "credit" / blame to that upstanding group of "courageous" souls - congressional Repubs. who clearly "stand up" for (stomp on) the American people with their extreme groveling to the chief hyena.
Tariffs, birther bull, hourly lying, sex abuser, predator, gold plated hair. When will even 1/2 of those 77 million who actually voted for this awful human come to their senses and scream, "enough, we're done with trump and his sycophants"
50 years ago Big Law firms, corporations big accounting firms did not hire Blacks, Hispanics or Jews. Women were hired as admins or secretaries. Few women or Blacks attended medical or law school. Do we want to go back?
Swing voters told pollsters that the economy was their top concern. 67% of voters went to the polls believing the economy was in bad shape because the mainstream media had obsessed about the price of eggs but buried any good news about the economy. The media then claimed voters were going on personal experience, ignoring the fact that voters had also told pollsters that they were personally doing well financially but they still believed the economy was bad.
I am with Dan Froomkin:
“I Blame the Media”
https://criticalread.substack.com/p/i-blame-the-media
Not too long ago many economists were suggesting that the Fed should target 3% PCE inflation rather than 2% because the latter is an arbitrary number. Implicit in this argument is the idea that 3% inflation should be palatable all things considered. So even if we assume the tariff and immigration policy shifts inflation to 3% on a sustained basis that by itself does not suggest a calamity but it maybe merely a continuation of the affordability malaise that has gripped the nation.
I also wouldn't discount the fact that the largest companies in the world as rich as many nation states combined are currently engaged in an all out sprint for AI and investing hundreds of billions of dollars over the coming years. So while there may be dislocations localized here and there, it is hard to see the US economy not do well when the government is running a 6-7% annual deficit and the private sector is investing like drunken sailors because they are in an arms race scenario. Our base case should be that in spite of Trump, the headline employment and GDP numbers will continue to be good to great unless AI starts to really disrupt the job market.
Most people have no clue that 2% is an arbitrary number and that it was a random number picked by central bankers in New Zealand. This is one of the things the media should be highlighting. When Reagan was in charge of what the media portrays as a great economy inflation was over 4%.
Interesting article. Wish the graph had understandable axis labels. A few sentences to explain the graph would help.
"True, but the polling data show that a lot of people are, once again, recognizing the betrayal."
Very true. But it isn't enough to recognize the betrayal. It is necessary to act on it. It isn't as if this Republican siren song is new. It is just more strident. Think of Newt Gingrich, the Tea Party, Sarah Palin, G.W. Bush .... Trump is just an extreme version of that sequence. And yet that music has charms to soothe savage breasts over and over again!
Remember when the Clintons were repeatedly investigated for “murdering” their close friend Vince Foster? I have people in my family who still believe that vicious, cruel lie. And then there was the Chickenhawk Bush’s henchman trashing John Kerry’s genuine war heroism. I was appalled at the lack of outrage from the mainstream media over these slimy slanders. The media just accepted Bush’s claim that his campaign had had nothing to do with the Swiftboat liars even though they were funded by close allies of Bush. The media also knew that his father had also lied about having had nothing to do with the race-baiting Willie Horton ads that Lee Atwater eventually admitted Bush had personally approved. The double standard is blatantly obvious.
Great points, as usual and digging the Dickens and Timex refs.
If we experience growth slowing to around 1%, and the jobless rate to tick up by 0.5% is this not a strong indicator of an oncoming recession as per the Sahm Rule?
We'll just need to wait a little longer for tariffs to more vigorously affect price levels.