This is just us pulling an initial vacuum, drawing the real contraction in.
The mantra of some folks response to his more reckless statements has always been "it's just talk", but it seems to not be talk.
(Though this version is dumber with the President trying to do it through EOs, which is probably illegal and Congress should probably be much more upset their powers to be stupid are being usurped before their eyes.)
[1] https://en.wikipedia.org/wiki/Smoot%E2%80%93Hawley_Tariff_Ac...
People should have paid more attention
They just don't want to be left holding the bag.
That would fit the "can't alter my business that much..." mindset you're referencing I think.
In short, it must get worse before it can get better irrespective of what happens next or when.
Tourist travel to the US has contracted, for instance. US service exports are suddenly extremely suspect and a lot of countries are finding alternatives. US goods exports are facing massive headwinds, and counter-tariffs in some other countries (China, where imports from the US have basically stopped, and Canada where $400B+ of US goods were sold last year, many of which now see a counter-tariff and boycotts/replacement).
The situation is going to get much, much worse, and there is a serious sense of denial among both the market and many participants who seem to think Trump can retreat from his economic folly and everything will be good again. It won't. There is a massive structural shift that is going to linger for decades.
You will see panic in two weeks. I was talking to two truck drivers here in Lincoln, Nebraska I met at a Flying J. They are already talking about layoffs and job insecurity and they are wondering why no one cares. One of them asked where his bail out was.
The market, I think, is driven by AI and will be reactive, not predictive. All you need to do is be the quickest person out. All the under millionaire suckers will be wondering what happened to their 401k's.
"only about 12% of U.S. households have a net worth over $1 million."
https://finance.yahoo.com/news/guess-percent-people-1-millio...
I think more likely problems are small electronic PCBs used for semi-bespoke controls in whatever manufacturing that actually {happens in/moves to} the us, hvac controls etc.
It won’t cause the economy to collapse with alarms going off everywhere.
It will instead be a quiet, slow and sustained shrinking of the economy.
Agreed, this is the most likely outcome in the short term.
In the long term there are going to be unexpeted knock-on effects. Even a modest definancialization of the American economy makes it more robust to demographic changes and the end of the population-driven growth era. Lowered imports from abroad (especially china) and decreased consumption writ large means lower carbon footprint. Maintenance of airplanes getting more expensive means people fly less (already happening), again, lower carbon footprint.
The UK was the hardest hit by COVID, but it has recovered well.
Per-capita GDP has been rough in the UK post-brexit.
But compared to neighbours it's pretty close?
I was against Brexit, but I don't think the apocalyptic predictions have been borne out at all.
In the case of the US the result is isolation. That means loss of economic strength as well as loss of political influence. Those are more expensive than they sound because the second and third order consequences are security concerns and more powerful coalitions in opposition.
Could be. In the long term, the world needs to reckon with the fact that our implementation economic systems (capitalist, socialist, fascist) depend on population growth, and isolation could also mean removal from the chaos that ensues when the existing political systems can't cope. Assuming the US improves its situation, which believe it or not is oh so slightly better as a result of what's going on now.
How does losing a compensatory supply of labor across both low and high skill markets, cutting off ourselves from backup, discouraging fertility rates, and kneecapping any incentive to invest in manufacturing domestically AT ALL help the situation?
I'm on your side on the political issue, but the data do not agree with you: The states with the most restrictive reproductive laws have higher fertility rates. I'm not claiming there is a correlation -- but rather fertility is not at all governed by reproductive laws (or even motherhood support, because those states also have shit motherhood support systems).
To answer your question: Surviving into an non-population-driven-growth regime requires primarily two factors:
- reducing reliance on financialization
- reducing reliance on pure consumption
I'm not saying the US is good at either of those two (it's not) but it's better than it was, say, in 2019. I would even look at your retort -- it used the word invest. That suggests a heavily financialization-dependent mindset. If you are looking through those lenses, it is difficult to imagine what the future needs to look like.
Trump's economic and immigration and foreign labor policies do not encourage anything that mitigates the disaster of demographic collapse. We're making ourselves even more sensitive by taking away all the safety nets our economy could fall back on.
You're right, I don't believe it. :)
The reason this line of thinking doesn't work is that these measures affect all the trade that the US does with anyone, but for any other country they affect only the trade with the US. The US relative dependence on the entire world is larger than any individual country's relative dependency on just the US.
To illustrate:
US imports seem to typically be about 15% of the US GDP. EU exports to the US are only 3% of the EU GDP. So we'd kind of expect the shock to the US to be 5x larger than the shock to the EU.
The US being the centre of trade is basically the entire foundation of its GDP. It is the reason the US $ is the global reserve. It is the reason the world holds t-bills. It's the reason silicon valley is in San Francisco and the centre of the music and movie industry is in LA. It's the reason the financial capital of the world is in NY. It's why science revolves...revolved...around the US.
If you're living in the richest large country in the world, it's worth contemplating why that is. Is it US exceptionalism? No, it's that the US came out relative untouched from two world wars that seriously harmed most of the world, so it become basically the central hub. The geographically-safe, still wealthy friendly power.
That is all dissolving at an astonishing pace, and the reality will be a harsh one. Like the other post said, the US isn't going to suddenly be poor, but instead it's just going to be an endless drain as the world reorients.
And I mean you can say "oh well we'll do without!", and...okay? I guess it's just the new minimalist world!
As to the "the US will be harmed less than others", while I actually believe the US will be one of the hardest hit countries of all, because most of the US economy relies upon an illusion, it's a silly self-comfort anyways because the US is the cause of all of this. It's like salting the land and then gloating because your crops weren't grow well anyways.
That may have been the design case, but the reason it is now is just TINA. No other currency can absorb the volumes necessary. Let's go over the alternatives:
- Euro - has less than half the volume of the US. A possible contender, but remember each member state does get to dictate its own printing rules, so the
- Yen - one tenth the reserve volume, but pegged to a country that has been in several "lost" decades.
- Yuan - country has massive capital controls and you could get completely fucked if the government fears revolt and lets people move their money out of china. And yet, international reserves are LESS than the CAD.
> it's worth contemplating why that is. Is it US exceptionalism? No, it's that the US came out relative untouched from two world wars that seriously harmed most of the world, so it become basically the central hub.
I think you've got the causal arrow wrong on this. The US is geographically well situated. It touches both oceans, and has a huge gap between it and most of the rest of the world. It's ~energy independent, and has robust agricultural center. That's why it was untouched from both world wars and that's why it became the central hub of commerce in the postwar era. The US can afford to fuck up a lot of domestic and international policy and still generally speaking not worry about existential threats.
My point was precisely that the US benefitted by geographical happenstance. Not sure how I got this wrong.
Regarding existential threats, nuclear proliferation is going to go through its worst period in human history. We are going to end this decade with a number of new nuclear bomb participants, and it's a profoundly obvious, inevitable outcome of the current US administration's myopic policies. And with that the probability that some American cities become glassed keeps spiralling ever upwards.
Not really. At least in terms of oil, the majority of what’s extracted cannot be refined in the US because all of the refineries were built for non-shale oil. Basically all of the oil gets sent abroad to be refined and then sent back.
Why this isn’t talked about more, especially under the context of “drill baby drill”, I don’t understand. If anything the slogan should be “refine, baby, refine”
i would not be surprised if being ready for such a scenario + knowlege of shale reserve limitations is why those plants aren't kicked over so long as the trannsshipment for refining doesnt remain cost prohibitive.
Heard an interesting analysis by a Bloomberg Radio guest, running down the advantages/disadvantages between US and China. They came out mostly balanced, but the big imbalance is the population. The US population is a LOT less tolerant of disruption, and the Chinese population is more tolerant, and less informed, e.g., no one there even knows the rates are ~145%.
I'm inclined to agree. I see the US population as fully and multi-generationally accustomed to the luxury of comfortable living with a decent safety net. When things start to get really hard, the US population will get rapidly un-governable, while the Chinese will be both more ignorant, more controlled, and more willing to take some suffering for the country's good, while the US has been all about "ME" for quite a while.
What gives you this idea, at all?
Our safety net is non existent in this country. The fact is most people in the US feel squeezed, thats why Trump was able to win with his America First attitude to begin with.
I'm looking at it from a general historic perspective. Just look back 100 years.
Of course the safety net could be a lot better and the GINI coefficient is awful, but there still has never been more wealth floating about the general population. When the people complaining loudest about their situation are having boat parades, driving $75K pickup trucks with aftermarket mods, and getting their news on 75" TVs, and their biggest complaint driving their vote is the price of eggs due to an avian flu pandemic, they are definitely comfortable.
When that changes in a matter of weeks, we'll see what happens.
I just found the analyst's observations valuable and worth sharing.
This isn't reflective of the median reality for most people. Simply put, the strata divide is growing even though there is a lot of wealth in US society, it is spread incredibly unevenly.
The US isn't well prepared to handle a trade war, never mind that this trade war is really cover for a class war because big businesses felt labor made too many gains from late 2020 through early 2023
I won't dispute that the median reality for most people is far less than ideal. Yet from a historical perspective the overall life in the US is of historically unparalleled safety with overall peace and low crime rates, health with more ppl covered by insurance (but yes, less than 32 other developed nations, but higher top-quality care), and plenty of historically cheap goods imported from low-wage nations.
Yes, it can all be far better, the top 0.001% are stealing vast wealth that could literally transform lives, and there is a homeless problem from inadequate psych care. But we do not have massive poverty, unemployment is at record lows for decades, and so forth.
It appears we are about to find out what it is like to see breadlines and brutality.
And yes, I 100% agree the "trade war" is about cementing more gains for the top class because labor had it too good. They can only see a business model where they prosper only if everyone else suffers. They don't see the greater prosperity possible if everyone participates in building the prosperity.
Which in context of the conversation, means nothing. I'm not disputing the fact that relative to historical circumstances, entire swaths of the world have it better than ever, but that doesn't end poverty or meaningfully increase stability under the current regime, and whatever comes of this - and its not going to be good - will last far longer than the regime is likely to be in power[0]. Addressing current and future concerns is what counts here, regardless of how good anyone has it.
[0]: I hope the US can maintain free and fair elections. Remains to be seen if this administration, its cronies, and its followers running congress and SCOTUS won't dismantle elections
How does one reconcile this with the fact that 2/3rds of the US economy is based on consumer goods? I agree with the general premise that we probably don’t need so much frivolous junk, but like it or lump it, that’s what our economy has been based on for decades. It would potentially take just as long to remake the economy into something else.
So when the tariffs can change every day and you don't know if they'll be around in 5 years, do you commit millions to building something that doesn't pay off until 5 years from now?
Not a lot of domestic coffee production. I'm pretty sure there would be riots in the streets if coffee was $65/lb.
Well at least it would be a slow moving riot with lots of yawning.
We're sleepy if we need coffee. We're angry when we can't have coffee.
What would it take anyway . . . ?
Nobody's even building them right now. CAPEX and industrial investment have declined in recent months. (!!) They may even drop further. So it seems that if the aim is to revitalize America's industrial base, the present strategy isn't working, but is having an opposite effect.
US has taken concrete steps in the last 100 days to reduce all three.
https://en.m.wikipedia.org/wiki/Pollution_haven_hypothesis
A political/diplomatic example is rebuilding the Japanese Steel industry after WWII so they could regain self sufficiency. Until we decide to shoot ourselves in the foot hard enough we’ve had a consistent trading partner in high quality steel ever since.
The current “strategy” is painful because it has the weight of the past 60-70 years working against it.
https://en.wikipedia.org/wiki/Marshall_Plan
https://en.wikipedia.org/wiki/Reverse_Course
This isn't some retroactive attempt to justify something. This was the actual policy at the time.
Talk to anyone in industry and they'll say "we on/near shored because Covid supply chain problems taught us a lesson" or something along those lines. Those investments were just starting to bear fruit in the past few years.
Edit: And before anyone tries to put words in my mouth, this is neither an endorsement of "Trumpenomics" nor a dispute of the prior commenter's statement about them.
Credit should go to all factors, but sorry it's foolish to think orchestration of a trillion dollars into exactly these sectors wouldn't play a huge role.
Of course. I don't think many saw coming that we wouldn't be on friendly trade terms with Mexico and Canada.
> and I'm going to bet the trillion dollars in incentives played a far, far bigger role than the delta in people's resilience estimations
Which have you seen companies respond more swiftly to, opportunities to make money, or disruptions in their existing ways of making money? Which gets the CEO on the phone faster, a potential business deal or a prod outage?
Just about everyone experienced the latter during Covid. "Yeah we'd love to do all the electrical for your covid construction boom fueled McMansion development but switchgear is back ordered 18mo, sorry", and so on and so on across many industries. And they're all real salty about it.
I'm sure the incentives added fuel to the fire, but the way the Chinese economy stayed disrupted for longer really pained a lot of people in the US who depend on stuff from there to make money here.
My point is that near-shoring is the obvious thing to do under the rationale you're talking about, but actually wouldn't show up in that chart.
Here's a comparison of the US vs Europe (which experienced similar China shocks):
https://www.atlanticcouncil.org/blogs/econographics/the-ira-...
Depends on if the outage impacts the entire industry/sector or just his company. If the former, it's relatively fine because stock performance is going to be similar to competitors and investors won't be asking too many questions. Might be some wailing and gnashing of teeth but not too much action in the form of spending money on the problem.
I don't think many companies in my estimation took too many lessons from the COVID supply chain crises. If they did, the lesson was to simply outwait things. Everyone was having similar problems and you didn't be the single one of your sector to have re-shored production at triple the expense while your competitors simply spun back up once the Chinese factories got back on-line.
If it was such a compelling thing that was already happening we'd be seeing a lot more 'low value base component' manufacturing coming back, such as electronic components like resistors. So far from my basic understanding of the subject it's all the stuff quite high up the value chain instead. At best some things got near-sourced or moved around, with the raw inputs seemingly still coming from China in the end either way.
It would certainly be interesting to find some actual data here though.
https://www.bloomberg.com/news/articles/2025-03-31/us-busine...
The issue is that the aim clearly isn’t to revitalize the industrial base. If it were, then the tariffs wouldn’t be removed after negotiating with other countries. Since other countries can make deals to reduce the tariffs on their products, then it’s clear that the aim isn’t to get Americans to build things at home. The tariffs are clearly some kind of brinkmanship game to pressure other countries into making concessions.
But "everyone" doesn't mean everyone because everything on this list is exempt from the global 10% tariff and recriprocal tariffs (https://www.whitehouse.gov/wp-content/uploads/2025/04/Annex-...). Categories have been added to the list after influential people called the President. So even the 10% for "everyone" tariff can be negotiated away if you give the President something he values.
Part of Trump's genius tarriff plan was closing trade deficits.
Except trade deficit is just mostly a measure of how much countries choose to park the returns on their goods/services in your own country as investment in capex, domestic investments, etc. It is the foreigner choosing not to take the dollar or exchanged goods back to their own country, but to invest it in your own country.
You literally kill capex by killing the trade deficit.
So, on practice, you won't find a correlation here.
And double-digit increases are what they have been working toward the whole time, they know how to do it, that's how they have managed to get by, even though they know it will takes years. These are great business operators, they know they'll make it if they persevere, they just don't know how many years.
And these were the businesses that were shrewdly operating successfully in the USA in difficult markets with slim margins, even if they were leaning to any extent on cheap foreign materials, labor, or even weighted more toward robust domestic commerce in general.
Prevailing in situations that "average" businessmen aren't quite up to.
How do you think the less-skilled operators are going to feel? They know who they are. Lots of times their businesses are totally dependent on the majority of Americans overall being "richer" than most. And in less than 100 days really, that's been brought into question more times than in any other previous decade. With things like over-taxing and currency exchange taking their toll at the same time commerce itself as a source of prosperity is receding, this is going to make them some of them the most nervous of all.
Trump has always been foolish with money, after his first term the US can no longer afford lots of things that were affordable under all previous presidents, you can't make this up.
When a recognized business-bozo-in-chief can remotely do more percentage damage in one day than a business owner can make up for in one year, might as well give up now, or at least take a sabbatical. Trump can't last forever, and anybody who replaces him may not be any wiser or less misguided, but at least would be more stable & trustworthy.
So if CAPEX is declining, the downturn has already started. (I mean, I guess the article's headline already told us that...)
Too much is in flux to make an expensive decision that won't see value for years. There'd need to be grants to jump start construction.
The most scary thing are medicines, medical equipment etc. Healthcare is going to become even more expensive, no?
Above everything else, why would other countries/allies/trading-partners trust the U.S govt again? I just can't comprehend how this is good for anyone, other than those with spare cash to buy up distressed assets
Is that the most likely resolution? No, I don’t think so, I’m still holding most of my money out of the stock market. But doing lots of business with countries whose current government isn’t trustworthy isn’t an unheard of scenario.
That might be the whole point. Look at Trump's "now is a great time to buy" post.
It's also good for America's enemies. Maybe the goal is just a weakened America overall.
There is simply no way to speedrun that kind of development.
Personally I'd want one hell of an insurance policy to cover the risk of all that money being wasted when I finally open my doors and have to compete with overseas manufacturing that may no longer be burdened by these tariffs.
This is exactly the kind of short-termism that got us to where we are now. Why is it so hard to think on a 5-10 year timeline? This is country-level ADHD. Anything worth building requires long term investments. People in the past used to spend their life building cathedrals that they knew would never be finished in their lifetime, and now you're questioning whether it's worth investing in something that has an expected ROI in 5 years!
Trump has control of all branches yet isn't passing any legislation. All he's doing is introducing uncertainty.
Oh, you meant other people's money.
if you want people to think long term you need long term stable policies that won't change the next time someone else sits in the oval office or Congress changes hands. you need to commit to a strategy.
It's Risk vs Reward. Anyone who built something great took huge risks, for a huge return.
There is no return here. At best, you've sunk a ton of capital into a low-profit business that is propped up only by government subsidy.
Because the tariff plans have changed every few days. If the tariffs were stable over 5-10 years, businesses would adapt.
> This is country-level ADHD.
Yes, these tariffs are.
I am not against repatriating manufacturing, but it's something that needs to be done with thought and strategy. This trade war is worse than Biden's Afghanistan withdrawal.
"Biden's"? That's comparing an 100%-Trump fiasco with an 80%-Trump fiasco.
If we're gonna blame Biden for not breaking the US/Taliban ceasefire agreement and drawing things out... Then we need to talk about how it was Trump who made the agreement abandoning the Afghan government, Trump who negotiated that aggressive May 2021 deadline to land at the beginning of the next term [0], and Trump who had to be stopped by his staff from triggering a far-worse instant "fuck y'all, we bail" just days after he lost the election in Nov 2020. [1]
_____
[0] https://thehill.com/opinion/national-security/568154-trumps-...
[1] https://www.militarytimes.com/news/pentagon-congress/2022/10...
I'm not sure this small price difference will continue since I assume a reduction in imports might result in greater demand domestically and those factories might not be able to easily scale to absorb the shift.
and unsurprisingly, the imported goods are the goods that are still heavily reliant on labor cost.
If automation was possible, it would be the preference of any business to use that over human labor, simply for the consistency of output and ability to control cost factors. I do believe this to be the case in most instances.
Thats why car companies have long advocated for tariffs on imported vehicles (and is one tariff we have consistently held for a long time).
If people will be happy to buy locally-made furniture for triple the price and having it last longer is a different question.
Americans will learn too.
It is not black or white when there is not real [power of] law enforcement.
Just curious why you would think this? Markets react fairly quickly to major events...
The GDP is the result of what markets (not the stock market, but actual markets for goods and services) do, if markets react quickly so does the GDP. And markets were reacting to tariff threats and other issues early in the term, Atlanta Fed GDPNow Q1 projection rapidly turned from strongly positive to negative in February, IIRC.
It feels like this was the natural progression of stuffing trillions of dollars into the economy, along with ZIRP, and the free ride has ended. Tariffs will magnify the problem.
The whole bullwhip effect never occurred, prices never returned to pre-covid levels, as everyone claimed they would. So now we have years of stacking inflation that happened because of bloating the money supply, then ZIRP goes away, throw the tariff fears/uncertainty on top, and here we are. I have very little to no faith this administration will help the situation. Playing a game of chicken with the other global superpower is a losing proposition.
This problem has been years in the making, big ships don't turn on a dime.
No, but Trump is trying to turn the US ship in a dime, and like this aircraft carrier, we are about to drop a ton of money into the ocean...
https://www.nbcnews.com/news/us-news/us-navy-lost-67-million...
Trump’s been unusually active, so you’d expect to see direct impact in Q1 numbers.
> tariff day was less than a month ago.
Even desiring the current economic policy doesn’t mean uncertainty is beneficial. My mother for example was confused about when the tariffs took effect and therefore delayed a major purchase. The economy is simply the aggregate of many such choices.
I really think this is a huge elephant in the room that seems to be ignored.
The velocity of money is informative here, basically a dollar can only be part of so many transactions over a year. If rent is 1000$ and you get paid 4 days before rent is due you need to set aside 1000$. Bump that by 30% and now you need to set aside 1300$ and for those 4 days + however long it takes for the transaction to finish that extra 300$ isn’t part of the economy. Bank lending is a multiplier, but that runs into similar issues.
Then what do you call it when nobody has much money left, but it's declining in purchasing power no differently than if more money was being created?
It doesn’t really make sense to say that “nobody has it left” overall because money gets transferred in a transaction. So most people “not having money” could mean it’s someone else’s not gone.
However, money is only a signifier. It you mean the overall economy is declining long term, which is hasn’t been, that’s economic collapse. In such cases the amount of money in people’s bank accounts could remain constant but the their income declines alongside their spending.
As to what you’re experiencing, in 2024 people where still a shock even if prices weren’t increasing people seem to expect them to fall. Falling prices would be deflation which is a negative outside commodities.
Prices going up when the money in peoples' pockets is not.
>money is only a signifier.
I agree, signifies how rich or poor you are, as an individual or a nation.
Not the numeric amount, but what it will buy instead.
>that’s economic collapse. In such cases the amount of money in people’s bank accounts could remain constant
That would be true sooner or later even for those who rapidly decline to zero, think about those to which it would not have happened otherwise. Not to mention so many citizens not having a viable bank account to begin with these days.
By that definition those unfortunates would be suffering much worse than an "economic collapse", and there is great likelihood they would be overlooked until it is too late because everyone else has it so much worse-than-before themselves. Trump is not even as honest as Nixon, there's going to be a lot more businesses and families ruined before this is over. In times of triage for survival, only so many can be saved, and it can be kind of a crap shoot.
>Falling prices would be deflation
Got it. So rising prices are inflation.
IOW whatever it is beyond your control that makes it more difficult or impossible to afford what you once could. Or what was once almost within reach but can no longer be sure it's even on the horizon any more.
Got it. Not really the amount of money in "circulation", but what people are actually able to buy with it. Especially compared to what it was "before inflation".
People generally always figured this anyway, lots of them are not easy to fool.
Regardless of any fancy equations.
For the US you are really describing income inequality. Most individuals got fucked over a few are doing wildly better than ever. On net the overall economic output has been going up overall and per person since the country was founded, it’s simply not ending up in regular people’s hands.
Don’t forget the inherent march of technology where indoor plumbing > radio > TV > AC > cable > internet > cellphones > smartphones have all slowly been assumed to be something most people can afford. Similarly the standards for education, healthcare, homes, etc are rising faster than inflation because the standards keep rising. People aren’t buying modest 1bathroom 2 bedroom homes like they used to so yes those mini mansions cost more.
> deflation
Inflation becomes the new nominal.
If everyone has 2x as much money and things cost 2x as much forever that’s not deflation that’s just the new normal. For prices to fall you’d either need more economic output or less money in the economy.
Of course the extra money wasn’t evenly distributed, but again that’s income inequality…
No one who knows anything about economics or inflation claimed that prices would return to their pre-covid levels. However, inflation has gone way down from its peak.
I don't care if we blame the current economic policy, I don't like the current economic policy at all. I think the problem is much bigger than that.
I still would like to know where all that money went. I can't figure that out.
Obviously (real) wages did take a hit like everywhere but have been recovering, too.
My working theory is that noticeable inflations makes people go crazy and trumps anything else. Completely closes people off to rational thought and that’s what sunk Biden. Despite awesome economic recovery given the circumstances.
https://www.forbes.com/sites/eriksherman/2025/04/25/why-corp...
I get Covid was a mess in real time and it was used as a political pawn, which really sucks. Trillions of dollars went into the US economy, and most of the country feels broke.
I don’t care how the market did, fuck the market, it’s a bubble that’s been waiting to pop for years.
That's how inflation works.
> I don't care if we blame the current economic policy
You mean the previous one until January, that stopped the inflation, or the current one that is making a lot of it for the next months?
> I still would like to know where all that money went.
The money is cycling around people and companies. That's what money almost always do, the US was an exception until recently, but exceptions to that never last.
It is? Why have wages been so stagnant for so long? Isn't that one of the leading theories/reasons Trump was elected, people are completely strapped for cash. I had read recently that loans are being increasingly being paid late, credit card debt has grown massively, home prices and through the roof, and the job market is a disaster.
Where is all that money again?
Prices have basically only gone up on almost everything for the past 5 years. Going up slower does little good.
No, consumer prices trending downward is called deflation and the economy has been actively managed to try to prevent that for a very long time. Mild inflation has been the target and rule for a very long time, with the deviations being high inflation outside of a few major economic collapses. This is not a new trend of the last 5 years.
I suppose one silver lining is people ordering less crap? Might be good for the environment, just like during COVID. But a lot of businesses and people are going to be hurting :( As usual, people with cash will end up buying properties, businesses and other assets for pennies on the dollar.
Even if the situation was reversed tomorrow, ships cannot arrive until weeks later. I've seen "60 to 90 days" given, but I think this is time for the whole supply chain, not just port-to-port ship time.
And the situation won't reverse tomorrow. It's now at a place where neither US or Chinese leadership can change tactic without "losing face" badly.
This bad 2nd quarter is locked in. Likely much longer than that.
As for China, I mentioned that it's now that they feel disrespected, and it's about "face".
That's why I'm sceptical of the USA leadership's claims that China is calling up now to negotiate trade, which China denies (1). Why would they call? The ships not arriving is the negotiating statement. That message has to first sink in, in clear terms. Which it should in May and June
1) https://edition.cnn.com/2025/04/29/business/china-video-trum...
I also think China recognizes that Trump negotiations are largely about dominance and Trump’s ability to convey a narrative that he “out-negotiated” the other guy, rather than an attempt to get the optimal deal for the US. When you’re negotiating with someone like that, maintaining “face” (ie preserving your position of respect within the negotiation) isn’t some mysterious Chinese concept: it’s just addressing Trump on his own terms, ie understanding that he only respects strength.
It isn't logic, it's emotion.
"disrespectful" is a term that the Chinese officials have used to describe US officials statements (1). I'm not reasoning my way to that term, I'm noting that the Chinese are there.
That and "Bowing to a bully is like drinking poison to quench thirst" (2)
I agree with sibling comment that saving face is it's "addressing Trump on his own terms" but I wouldn't say it's "just" that. It's also universal human psychology to react defiantly, expressed in regional idioms.
I agree that it's bizarre that it ended up there, nevertheless this is the USA's "art of the deal" working out as well as it's going to. With China calling the bluff.
1) https://www.youtube.com/watch?v=xNUs9G0sCFc
2) https://www.mediaite.com/news/china-responds-to-trump-tariff...
By government decree. What other decisions should government make on our behalf?
Governments exist so that we can coordinate doing things that individually we couldn't do or wouldn't wish to do. It's us.
The problem with the tariffs is not that they're decreed by the government that your fellow citizens elected, it's that they're counterproductive to the extent that they're causing a recession.
Reddit is extremely biased toward being anti-Trump and anti-tariffs to a comical degree, so I would take anything written there with a grain of salt.
Yes, there have been photos of empty ports. But there number of ships headed into the US hasn't fallen yet¹, and tax changes take a up to a few months to reflect on the arriving trans-continental traffic.
So, are those some ports specialized in short distance commerce? Maybe domestic commerce?
1 - They notoriously have recently started to leave half-full. What means they'll need less time at the ports by June. That shouldn't make a difference now.
The chorus was slower growth in Q1, boosted by frontloading of purchases, with the real consequences only emerging in Q2 or Q3.
You may have expected this (and if so, I hope you bought some good PUT options), but most economists certainly did not expect this already for the first quarter. On the contrary, there was more the expectation that because of the looming tariffs, people planning to buy larger goods this year would rather expedite the purchase and do it now to avoid rising prices later, leading to a boost in orders. It is quite probable that this has actually happened, and that makes this number even worse.
For me personally, I've largely stopped buying non-required stuff. Not because of price increases, but because I'd rather have the cash on hand to help me & my friends to survive the next few years. Two of my friends lost their jobs in the Trump job cuts, and many of my friends are in less secure financial positions than I am. I'd rather be able to give them some cash than buy stuff I don't need, so I'm hanging on to my savings for now. Dark times ahead, and cash will be more useful than another guitar or whatever.
Yes, they did, and the Atlanta Fed GDPNow estimate for Q1 has been negative since, IIRC, mid-February. That in Q1 we were likely in the first quarter of a significant recession that would get worse if some way out of the planned tariff apocalypse wasn't found was a widespread perception.
The economy would be doing better if the previous admin's relatively hands off policy was continued.
But long term degradation of economy absolutely.
Any disagreement is a "hostile and political" act subjecting you to deportation without due process.
While it's true that both 10 != 0 and 100 != 0, you are certainly off track trying to equate 10 and 100.
You can claim that my assumed intent behind how the CPI is adjusted over time is a false equivalence. I'd argue with you there, but what absolutely is false equivalence is a pound of steak and a pound of ground beef.
No, you're not being fair.
You're being disingenuous trying to equate changing the CPI with a dictator firing people for presenting numbers not consistent with his lies.
The earlier you course-correct, or OTOH deviate, the more outsized the effect on your destination.
Remember when GNP was fired and replaced with GDP? And how it got that way?
That should be easy to pinpoint.
If not, you pretty much had to be there, and it would take some math back then that wouldn't do you any good at this point now.
ps: article link https://www.thedailybeast.com/donald-trump-melts-down-at-bei...
direct youtube link https://www.youtube.com/watch?v=am-Xs4Dug1o
What do you expect to happen when you have a compulsive liar say whatever is on his mind and then an entire ecosystem repeating what he said as if it were fact.
Now we know what circumstances led to his position and performance. Now we Americans are familiar with the new situation.
But it's very regional. Some areas will continue to see rising or stable prices.
I'd say that it changes the situation a little, but not everyone is able to work remote yet, so there's still the draw toward large city centers like you say. But personally I've met plenty of people who ditched their big city for the midwest as soon as they got approval to go remote. When their companies told them to go back to the office, they quit and found another job
Unfortunately we got lucky, the big players in REO weren't ready to 'close' that many packages last time. My first devops role was at a company that was working with big players to make sure next time this exact scenario presented itself the big guys will be able to deploy their cash to gobble these things up.
It is right that it is not likely a credit crisis that will be the trigger next time.
But it could be hyperinflation - which would de-facto crash the housing market.
Right now the PE value for the housing market is really high, and it is not likely to continue up forever.
Last year I built a house for ~30k shell, about ~60k with utilities and everything inside of it. My own labor.
Of course, there are only a handful of counties that will let you do that without licenses, or a building plan, or inspections at times that preclude holding a job. Because there is always some self-righteous actor, screaming at the rooftop that their neighbor is going to kill the whole neighborhood in a fire, no matter that housing has been virtually completely unregulated for owner/builders in my county for 2 decades and none of the hysteria people warned of came to fruition.
The plus is all these people screaming for expensive regulations are absolutely scared shitless of my area, and do not live here. Which is nirvana.
https://www.youtube.com/watch?v=r9j1Wz89vdc
Supposedly they don't need any permits. I didn't know there's something called roof grade spray foam.
Most people aren't building insanely stupid and dangerous homes because in most places they legally can't, and very few work specifically just in your county, so they just do what they mostly do, which is mostly safe and up to code. Maybe they cut a few corners. Probably a few weirdos doing entirely their own thing.
By the same token, if your weird neck of the woods made seatbelts non mandatory, it wouldn't mean everyone takes them off as they drive through, so the subsequent maintained levels of vehicular loss of life would say nothing about the increase of safety seatbelts provide. A few weirdos might be taking the belt off, though!
Still, it'd only take one weirdo's entirely preventable and lethal to their kids house fire/car crash to prove them idiotic and probably get the law changed.
I would posit one of the best things we could do to save children would be to completely deregulate the housing industry and eliminate trades licensing. This would not only enable housing accessibility but more money for education, healthcare, and good food for kids.
The next step up "problem" is that the income curve has flattened greatly in the last 75 years. So there are many more high earners mixed in that they are carrying "regular home" prices up with them.
In 1967 lower/middle/upper class ratio was 36%/54%/10%
In 2019 lower/middle/upper class ratio was 25%/41%/34%
The middle class is shrinking because people are getting richer, not poorer. That's the part you never hear people say. Probably because they don't even know it and just assume everyone is broke.
I can only imagine now, after the pandemic money shower (not stimulus checks), that this effect is even greater. Hell upper class might actually be at parity with middle class now.
Nah. Climate change is real, and humans can absolutely affect it.
Not enough good places to live? Make new ones. It takes decades or centuries but it can be done.
They're doing it wrong. I'll point to places adjacent to the sahara building a "green wall" which is turning parts of the sahara back to a savannah and replenishes the water table.
https://www.youtube.com/watch?v=xbBdIG--b58
Andrew Millison's youtube channel has several videos on the subject, and related subjects in other parts of the world too.
Pretty much all the good spots for cities have already been claimed, hundreds of years or even millennia ago. These are the spots people live in, and the spots people want to live in (as evidenced by ever increasing cost to live there).
Harbors? No. Trains and airplanes exist.
River ways? Los Angeles and California have demonstrated, with the LA river, that rivers can be constructed. Also, trains and airplanes exist. Wanna complain about no water? Well that's where land revitalization comes in.
Mine-able resources? Perhaps. There are lots (!) of resources in deserts that aren't mined. I also argue that food is basically a mine-able resource. I also argue that many resources can be imported instead. I also argue that plenty of people can work remotely without ever working a field or a mine.
That chart says it’s for households, not individuals so for the time scale shown (70s onwards) all you’re seeing is that 1 earner households became 2 earner households.
The stuff about upper class growing does not follow from that. Poor analysis.
On a price per square foot basis, home prices have been remarkably stable since 1960s. The share of income spent on housing has also remained remarkably stable. Though prices have ballooned, interest drops considerably, so monthly payments as share of income haven't changed that much.
The way things have gotten worse for people isn't so obvious. For one thing, people have many more choices to spend their money on, such as computers and college. That's created additional pressure on people without the cost of housing itself changing as much as people think, but its a problem someone from 1960 might roll their eyes at. (Hedonistic adaptation?) Then of course there's various income and geographical bifurcations. For example, you can choose to live someplace cheap, but then you're opting out of the highly dynamic and potentially highly lucrative portions of the economy. That's an opportunity cost, but not a literal cost if you're comparing to 1960s lifestyles.
I’m not sure that’s true, in fact I’m quite sure it’s not, but I’m willing to change my mind if you have a good source. In particular, home sizes have shrunk since 00 and prices have surely not gone down so it could only be true prior to then if at all.
Census and Statista have some data but this shows a decent chart: https://supplychenmanagement.com/2018/07/15/average-house-si...
https://www.census.gov/content/dam/Census/programs-surveys/a...
https://compasscaliforniablog.com/have-american-homes-change...
Note that the average square footage of news home in 1960s was 1200 sqf, but the average of a 1960s-era home today is 1500 because of additions.
Here are some articles with longer discussions:
https://moneywithkatie.com/blog/are-houses-more-expensive-or...
https://www.cato.org/blog/questioning-housing-crisis-crisis-...
If you don't trust the sources of those articles, note that I was skeptical, too (of similar articles I had read), which is why I went looking for primary sources.
There's a similar phenomenon with home ownership. The percentage of homeownership has only varied by a few percentage points over the past 60+ years. However, what has changed is the median age of homeowners: they tend to be older. In particular, younger people tend to wait longer to purchase a new home. Now, there's two ways to look at that: they wait longer because they need to spend more time saving money or they wait longer because they want to buy bigger homes or move into more exclusive neighborhoods. And those aren't mutually exclusive. But then there's also the demographic shift toward older Americans generally, which means younger people are competing with older people (with more savings) for homes.
The financial pressures are real, it's just that the sources of those pressures are much more complicated than in the popular discourse.
That's what they told me when I bought my $250K condo in the early 2000's. Then in 2008 it was magically worth only $125K after being appraised a year earlier for 350K.
Never forget: "The market can remain irrational longer than you can remain solvent"
And what's it worth today? What is the average annual price appreciation since you bought it?
Watching "home value" month-to-month is pointless.
As far as your "month to month" comment - I'm not a real estate investor. Just a guy, with a growing family who went to sell his house in 2008 and was told it was worth less than half of what I paid. It was a setback, we survived, we were fortunate.
> I think about this line a lot when I read about what Trump and Musk are doing
It's not just them though, but also their predecessors who created the conditions that led to Trump (e.g. pushing free trade even after the initial fairy tale that it would increase US manufacturing proved to be untrue). They were willing to sacrifice others' blue collar employment.
It's would be kind interesting to see every politician's list of who should be prioritized and who they're willing to sacrifice, but they'll never be explicit about such things.
Eh, kinda sorta. Trump is responsible for his actions, but the people who created the conditions for him are responsible too. There are a lot of leaders are very interested in having the buck to stop with him because it lets them off the hook.
IMHO, Trump's tariff policies were poorly thought through, and that's something that's all on him. But reshoring manufacturing is going to be costly, and those costs will land on people who aren't yet used to bearing them, and that's also on his predecessors who allowed the offshoring in the first place. If they'd never done that, there'd be no Trump and no pain of reshoring.
It's just a truism though isn't it? Everything in the past is responsible for what is the current state of things. You can say it but it has next to no meaning and is not interesting.
But using plain English and the plain meanings of words: Trump is responsible. You can blame Biden for not dropping out soon enough or whatever, but ultimately: what is happening now is on Trump.
What would perhaps be interesting is to discuss this objective failure of the American system. Far from the "greatest democracy in the world", the constitution is clearly quite, quite a shit one if it allows this to happen.
Personally I think it's a mix, but inequality is a big factor. Quoting Roosevelt:
"But I venture the challenging statement that if American democracy ceases to move forward as a living force, seeking day and night by peaceful means to better the lot of our citizens, then Fascism and Communism, aided, unconsciously perhaps, by old-line Tory Republicanism, will grow in strength in our land."
Not exactly. Being so blunt and simplistic is politics, pure and simple. The D's don't like the R's, so their analysis always stops once they can blame an R (and vice-versa).
I think it's a much more interesting and fruitful question to ask "Who is responsible for Trump," rather than "What is Trump responsible for."
IMHO, the Trump phenomenon is in large part the expression of rejection of neoliberalism, which the pre-Trump political structure made unexpressable. The result is a seriously flawed man gaining power, and causing way more damage than was necessary.
> What would perhaps be interesting is to discuss this objective failure of the American system. Far from the "greatest democracy in the world", the constitution is clearly quite, quite a shit one if it allows this to happen.
That's closer to what I'm getting at. However, what exactly is "this," though? Does it include deviation from a Wall Street-friendly stasis? Neoliberalism 'till death do us part?
>That's closer to what I'm getting at. However, what exactly is "this," though? Does it include deviation from a Wall Street-friendly stasis? Neoliberalism 'till death do us part?
Neoliberalism is much newer than the constitution and the country. Have a sense of scope when talking about the history of your country, it's new, but it's not that new.
The country is completely fucked—that we can all agree on. It's imploding and its position in the world is frankly becoming increasingly pathetic. America's friends pity it at best and detest it for its betrayal of Western civilisation at worst. America's enemies are laughing. If there are people to blame, then I'm afraid it's the American people. Americans are not worthy of the country that they have inherited. Americans are an undignified people, that's a bit part of the problem.
The playing politics part is (among other things) selectively focusing only "on the things Trump is doing."
Trump isn't responsible for creating the conditions that allowed him to get elected. A lot of the people who are really interested in focusing only "on the things Trump is doing" are the ones responsible for those conditions in the first place.
I mean, how bad do you have to be that people would rather vote for a sociopathic clown than you, when given the choice? But you know, thinking about that will make you uncomfortable, lets avoid it and focus on the clown!
Here's a thought: if you don't want to be ruled by a Trump, figure out how to avoid creating the conditions where someone like him could win. Strongly advocating for reasonable policies to create those conditions would also be better politics against Trump, right now than the incessant outrage about how terrible Trump is.
> Michael Scott: We are here because there is something wrong with society.
> Jim: See, you're always saying there's something wrong with society, but maybe there's something's wrong with you.
> Michael Scott: If it's me, then society made me that way.
That probably works as limited context joke, playing off of the saying "if you think everyone else is always the problem, then maybe you’re actually the problem," but it's not really something that generalizes. The relationship between individuals is a lot different than the relationship of society to the individual.
I don't think anyone can seriously claim that society doesn't have major problems, so any issues are actually individual ones. The people who claim that (and they exist), often are just gaslighting to deny a problem they don't want solved.
So like what the Biden admin was doing?
I'm sorry, but "a moron steps in and runs a wrecking ball through the global economy" is not something you look at and say, "wow, his predecessors really messed this one up". No, they did not create the conditions for this needless harm. The answer is, plainly, that Trump is a disastrous moron.
I took the OP to mean the predecessors like McConnell who were evil self-serving sociopaths and normalized a kind of politics to win at all costs, even if the cost is a detriment to the country.
(Yes, you may deem some things are of strategic value - then you put predictable and long term tariffs on a _limited_ number of items, ramped up slowly, matched with incentives to build up capacity in that sector.)
In the past, the tradeoff appeared to be that public school was offered to everyone, and that was enough to make a living. And now?
Harris's message: "Biden is doing fine and things are going great"*
Trump's message: "You're hurting right now, and I'm going to fix it for you"
Very similar to 2016 (in which Bernie's message was also closer to that of Trump)
Exercise for the reader: how might this framework explain Andrew Tate and the like?
* "The US economy is the envy of the world" (accurate though it may be) probably doesn't resonate when you can see your purchasing power slipping through your fingers (as highlighted by certain media outlets) and you can't buy a house
Yes, Trump is doing awful, aimless, cruel things, but he would be laughed out of power had the parties been serving any interest other than those of the wealthy.
I remember Obama and Clinton railing against NAFTA when they were competing for rust belt votes in the primary and it was insincere nonsense. Of course Obama's policies after getting elected revealed he thought as much and that was why so many democrats (now a globalist/neoliberal party) like him.
https://www.npr.org/2008/02/26/38185288/clinton-obama-and-na...
Trump is the reckoning that comes when you tell the exurbs / blue collar work force you ultimately don't care about them and they should all just learn to code.
They felt ignored and powerless and latched onto Trump and here we are. A populist movement in America was overdue, democrats could have taken control of it with Bernie but they put their thumb on the scale to get Hillary the presidency. Republican establishment looked on with despair and saw several of their favored candidates get their career ended but adapted.
To be fair, much of the hollowing out of the rust belt/rural areas is/was as you mention (although, I'd say that Trump doesn't give a rat's ass about those folks either, they were just a means to an end), but what's unsaid is the lack of infrastructure investment by the states themselves.
Had the state governments paid attention to the lack of decent educational opportunities, broadband, transportation and opportunities for the "new economy" (as compared with the withering/now withered manufacturing economy), there would be significant investment/start ups in/of tech companies in those areas, as the cost of living and capital/real estate costs are much lower in the "rust belt" and similar areas.
But no such investment was made by those state governments, so those areas left damaged by the loss of manufacturing jobs were left to rot. Not just by the Federal government, but even more so by the state and local governments in those areas.
There were/are other factors in play too, but you rarely (if ever) hear anyone calling state/local governments to task over this stuff -- it's always the "Feds" who, in point of fact, can certainly help, but remaking areas with sagging economies is much more a state/local thing, IMNSHO.
You misunderstand my point. Which is probably my fault. My apologies. I'll attempt to clarify:
I don't advocate for states to "pay to give each member or your state elite college educations." Rather, I was commenting on the disinvestment[0] in higher education by the states, resulting in poorer educational outcomes as well as fewer educated professionals to serve as innovators, knowledge workers and entrepreneurs in those states.
I'd posit that if many states in the rust belt invested in quality education, rather than forcing big tuition increases/student debt, more folks would stay in those states, with the positive economic benefits across those state economies improving the lots of everyone.
As for "global" businesses, they're mostly an outlier[1], at least in the US with ~15,000,000 businesses with less than 100 employees and ~170,000 businesses with more than 100 employees (of which only 45,000 or so have more than 500 employees).
And why, exactly, do folks leave such places? Why, for the better economics of states that invest in infrastructure and education. Folks wouldn't leave if they could do just as well or better in their hometowns. But (for a whole bunch of reasons, the ones I cite included), those places don't have the same economic opportunity because they don't have the infrastructure or skilled workforce to do so. If they did, companies would flock to those places as the cost of living and cost of doing business are significantly lower.
Why is Silicon Valley a hub for business?[2] Strong educational institutions, good infrastructure and a skilled workforce?
Why are prisons the highlight of six of the seven poorest counties in the US?[3] Poor or no educational institutions and a lack of skilled workers.
I hope I've clarified my point. My apologies for not doing so initially.
[0] https://www.cbpp.org/blog/by-disinvesting-in-higher-educatio...
[1] https://www.naics.com/business-lists/counts-by-company-size/
[2] https://en.wikipedia.org/wiki/List_of_highest-income_countie...
[3] https://en.wikipedia.org/wiki/List_of_lowest-income_counties...
There's just too many factors outside the state's control, beyond a lack of political support for those types of investments.
I never said it was. In fact, I repeatedly said that lack of infrastructure and disinvestment in higher education were among the reasons for the lack of economic activity in the rust belt and similar.
That said, without decent infrastructure and a skilled workforce, it's much, much harder to attract new businesses, innovators and entrepreneurs. Other factors (as I noted in both the comments to which you replied) are impactful as well, but I chose to focus on two that are (IMHO, at least) rather important.
An excellent point and more's the pity. :(
What industries, specifically, are you thinking about?
Because if those industries did not disappear completely but were instead offshored to arbitrage labor, then the global economy has definitely NOT moved on.
You aren't going to bring manufacturing back to the US and get jobs on the assembly line like your grandfather had, those jobs simply no longer exist. The few jobs that do exist won't pay enough money for a home with a two-car garage like your grandfather had on the assembly line either, they will pay barely subsistence wages like working in an Amazon warehouse. And American manufactured goods won't be competitive like they were when the US could leverage its industries against a Western world that was still rebuilding after the war. No one is going to want to buy American Ladas, and Americans won't be able to afford them.
https://today.yougov.com/topics/politics/trackers/the-democr...
It's pretty simple: collectively, they didn't care enough. Not enough to counter 30 years of neoliberalism, and stuff like "just learn to code" are convenient fantasies to avoid dealing with the problems they were too timid to address.
IMHO, we have Trump because the Democrats are terrible. They had eight f*cking years to change to actually defeat him, once the problem became evident, but they decided to sit on their hands except to fearmonger.
https://www.fisherinvestments.com/en-us/insights/market-comm...
Edit: here's a breakdown. It looks like imports (gold and tariff front running) were big negatives.
https://www.zerohedge.com/economics/us-q1-gdp-contracts-reco...
This is the actual calculation.
The uncorrected gdpnow number was too pessimistic while the human consensus was too optimistic. The corrected gdpnow number was pretty close (though last week nosedived too much). The early April gdpnow corrected number was bang on.
Can we please stop this insanity? We had a great economy before this guy messed with it.
This is why we keep economic policy in an independent agency instead of giving it to politicians.
That’s how the system works given that legislation is high-level, often vague and sometimes riddled with errors. Congress sets the goals and Executive i.e. public sector makes the decisions about how to implement it.
All the big corporations & big Money also have not challenged the president.
This is People’s & Money’s will.
Very true, however,
1) it does slow the process somewhat and therefore also reduces total throughput, this keeps government more stable and also gives more time to respond. Slow and stable may or may not be the best way to run a company, but the government is not a company.
2) It would put the individual congresspeople on record, and they are somewhat more dependent on/accountable to their local population. If for example all the farmers realized that the tariffs would destroy the farmer's livelihood, we could see Iowa withdrawing suport.
The US goverment was set up the way it is for reasons.
I thought the whole video is good watch too.
Trump blames Biden ‘overhang’ after GDP shrinks in first quarter, says growth will ‘take a while’
https://www.cnbc.com/2025/04/30/trump-gdp-tariffs-biden-over...
Funny, I did not hear him talk about how the economy would tank and people would have to "sacrifice" or growth would "take a while" when he was running for president.
Assuming independent, the Fed responsibility of lower inflation is higher than employment. They might tolerate some inflation for employment but we can only tell after the effects of tariffs kick in and we see the new inflation numbers.
One would have to be a moron or literally mentally ill to "believe in these policies,"
either having no understanding, or, having invested in some delusional confabulated make believe universe where the fundamental order of our civilization is collectively reworked (including by enemies and competitors at every scale) in a context of rapidly degrading climate, to suit your ideology.
Trump says anything he can think of and then whatever people respond to he goes with.
That + the last person to discuss something with him are his two leading decision making policies.
Playing devils advocate, I think most people thought the incoming tariffs were going to be a lot smaller, also maybe assumed there would be an industrial policy.
Followed by 2021-2024, where all the adults in the room were talking to the press, explaining how hard they had to work to convince Trump why he shouldn't carry out his worst ideas.
Followed by all of those people getting fired in January of 2025, and replaced by lickspittles, sycophants, and other flavors of yes-men.
There's no way that someone who surrounds himself with the kind of cabinet that he does, or reacts to criticism and feedback the way he does is going to be making good decisions.
From Wikipedia: “He was hired by Soros Fund Management, eventually becoming the head of its London office. In this role, in September 1992, he was a leading member of the group that profited by $1 billion on Black Wednesday, the British Pound sterling crisis.”
Making a better product than last year is also a strange way to claim growth.
What would be a better measure?
To your measure of food and work hours, here's 70 years of progress in less work buying more food-- https://cepr.net/publications/in-the-good-old-days-one-fourt...
[1] https://flatworldknowledge.lardbucket.org/books/beginning-ec... (Note that "Food" is "food as a percentage of income", and "eating out" is "eating out as a percentage of food" which makes the chart look weird. This means that the 11% number below includes the cost of the private taxi for your burrito.)
[2] https://www.axios.com/2024/02/27/price-food-us-inflation-dat...
I feel like I just got pranked by SEO somehow
https://www.bls.gov/opub/mlr/2022/article/improving-estimate...
> This is Biden’s Stock Market, not Trump’s. I didn’t take over until January 20th. Tariffs will soon start kicking in, and companies are starting to move into the USA in record numbers. Our Country will boom, but we have to get rid of the Biden “Overhang.” This will take a while, has NOTHING TO DO WITH TARIFFS, only that he left us with bad numbers, but when the boom begins, it will be like no other. BE PATIENT!!!
I'm curious how long he will get away with denying reality like this. The economical situation is likely to have much more immediate effects on people that almost every other topic. It should be much harder for him to do his usual thing once the economy really crashes, but who knows how his supporters will actually react.
- A growing trade deficit can reflect a robust economy. As U.S. consumers and businesses increase spending, imports rise, leading to a higher trade deficit. Simultaneously, higher U.S. interest rates attract foreign investment, strengthening the dollar and making imports more affordable.
- The U.S. trade deficit is counterbalanced by a capital account surplus, meaning foreign entities invest heavily in U.S. assets. This influx of capital supports economic growth, funds government debt, and contributes to job creation, particularly in sectors like manufacturing.
- Trade deficits allow U.S. consumers access to a wide array of affordable foreign goods. This access enhances purchasing power and living standards. Moreover, U.S. firms benefit from importing competitively priced intermediate goods, boosting productivity and innovation.
- While the U.S. often has a goods trade deficit, it maintains a surplus in services, including finance, education, and technology. This surplus offsets the goods deficit and underscores the U.S.'s competitive advantage in high-value service sectors. Wikipedia
- The U.S. dollar's status as the world's primary reserve currency enables the country to run trade deficits without immediate financial repercussions. Foreign nations hold dollars to facilitate international trade, which supports U.S. borrowing and spending capabilities.
- Concerns that trade deficits lead to job losses, especially in manufacturing, are often overstated. Research indicates that factors like automation and technological advancements have a more significant impact on employment trends than trade deficits.
- Trade deficits foster global economic interdependence, which can enhance diplomatic relations and geopolitical stability. By being a major importer, the U.S. strengthens its ties with exporting countries, promoting mutual economic interests.
While trade deficits can present challenges, they also offer benefits that contribute to the U.S. economy's dynamism and resilience. It's essential to consider the broader economic context rather than viewing trade deficits in isolation.
Maybe a naive question, but are only goods considered? I had always assumed the 'deficit' was "money in minus money out", and thus selling services, etc. would be included in it.
Conservatives rightly used to be concerned about budget deficits -- but trade deficits are entirely different. Just because they share the same word does not necessarily mean they are the same indicator.
I would be happy to see America as a net exporter, but I genuinely have to ask ... what is it that America - the richest country in the world - is going to make that other people want regularly aside from mass agriculture, specialized services, and advanced manufacturing??
Our domestic manufacturing base is thankfully not geared to produce a bunch of plastic crap to try to compete with China. And if you want to onshore critical supply chains -- great -- but again that has nothing to do with the idea of a trade deficit.
Genuinely looking for a thoughtful engagement here
It just so happen that tax breaks and military cost much more money then what they pretend save.
Consevratives used to (and still do) talk about budget deficits to derail conversations about programs they are opposed to but which are too popular to directly attack, but—then and now—continued to run up massive deficits on their own priorities, including shifting tax burden off of their wealthy benefactors.
As an example Tesla the company didn't exist 30 years ago. Say you got some shares early you can sell those to the Chinese in return for their widgets. That kind of thing can go on and on.
The middle class and poor are focused on buying food and gas, not on their stock portfolio.
59% of Americans say Trump is making the economy worse [0]
[0] https://www.documentcloud.org/documents/25920872-rel5b-econo...
Yeah, that was me last June. Thankfully the spouse is still working.
It's all about the framing. Prices up, wages down during Biden? Armageddon and only Trump can save us.
Prices up, wages down during Trump? It's okay, we're making an investment--we tolerate being worse off today to be better off tomorrow. Look at all the trash Trump's taking out! It's only going to get cleaner!
One test will be how much pain we've endured by the time midterms roll around, and how many people sour on the current admin and elected reps.
Another will be in 3.5 years, where we will find out if the joists and beams raised by our democracy's framers were solid enough to last 250+ years.
Imports surged in q1 to front-run tariffs. Imports are subtracted from GDP. Therefore GDP shrank.
C + I + G + NX = GDP https://www.bea.gov/system/files/2020-04/GDP-Education-by-BE...
https://www.bea.gov/sites/default/files/2025-04/gdp1q25-adv....
A reasonable question here is "did companies spend down petty cash to import goods in Q1" (no change to GDP), or "did companies stop investing and producing domestically in order to afford to import more goods in Q1" (reduced GDP).
Noah Smith is a galaxy-scale idiot, by the way.
Whether or not that's true in reality, it is true in the report that caused the headline.
From the article:
> A logistical consideration makes Wednesday’s report difficult to interpret: Imports subtract from the Commerce Department’s calculation of GDP, since they represent spending on foreign-made goods and services.
Because imports are only subtracted from the higher spending on imports in the first place.
Conceptually, imports are not part of GDP. Imports are never subtracted from GDP. But to calculate GDP, part of that is to take total spending (a number larger than GDP) and then subtract spending on imports.
So the 0.3% contraction in GDP has to be a real thing. Unless there's some other deeper technical discrepancy, or some kind of time lag where spending on imports and the import subtraction are being counted in different quarters?
So when imports are subtracted that doesn’t mean gdp is “short” imports. It means it isn’t affected either way by imports.
I've seen this in coffee - roasters buying a year's worth of packaging.
If a company 10x their imports to get ahead, we’d count the 100 worth of buying, and then subtract 100 because that was all imports. You still get zero effect on gdp from the import itself. Which is correct.
The point of the subtraction is to make imports zero impact, zero impact when big, zero impact when small.
1. Who pays for ads?
2. And if their business is being disrupted, what is the first budget that gets cut?
It also leaves more with uncertainty so they get stuck at their current jobs for longer rather than leaving, giving more control back to employers.
Everything implemented seems to be intentionally pushing even more economic inequality and divide between the top and the bottom, and to push the diminishing middle class even lower down on the totem pole.
I expect a wave of bad economic news, followed by a wave of consolidation, all the while prices rising, and toward the end of all this, the tariffs will be fully removed, but the prices will not meaningfully (if at all) come down, and the consolidation will have only further entrenched power at the top
I'm leaving my diversified retirement mutual funds as they are, because that's why they are diversified; but otherwise yeah, I sold all my other holdings during the rebound earlier this month. Not interested in participating in this wild ride.
Also did you take a huge take hit to reallocate to bonds or was it all in tax advantage accounts? Seems more crazy to sell all equities when you have to pay tax on the gains.
What will happen in the market if Trump keeps blinking and folds further, congress takes back the tariff power, Trump loses big in the midterms, GOP loses big in 28, AI ends up being a big thing, etc?
You will eventually have to buy back in and you don't know where the bottom is.
Speaking entirely to retirement accounts. Taxables are pretty much screwed either way.
>"What will happen in the market if Trump keeps blinking and folds further, congress takes back the tariff power, Trump loses big in the midterms, GOP loses big in 28, AI ends up being a big thing, etc?"
Maybe I will miss some growth. But watching my life's work evaporate on this wild ride is too much to stomach.
>"You will eventually have to buy back in and you don't know where the bottom is."
Indeed, and I don't intend to time it. Not waiting for a rebound. Waiting for sanity.
What bonds? There is an almost zero chance that the expenses of the US government decrease while there is a good chance that their revenue takes a hit. At some point you can't pay your dues (and no, printing currency is not paying your dues, you are getting hit on your basis).
It's possible everything is just going to be bad.
I am not. This is almost entirely an emotional decision. The "smart" thing to do from a purely algorithmic statistical point of view would be hold and wait. But I'll happily take my 5% for now, rather than waking up to crippling anxiety every morning about what the orange man is going to do next.
It's currently -2.7 percent.
This is actually buoyed by buying ahead of the tariffs, and the tariffs themselves haven't had a chance to take effect yet.
The economic nosedive is just beginning.
The same guy who got re-elected? Early term approval ratings mean less than nothing.
Actually, the way the report works is the opposite. The increase in purchasing ahead of the tariffs counted against GDP growth, in terms of how the numbers were calculated in this report.
To be clear: Trump is a disaster, and I disagree with his approach.
Most of the value of an iPhone is recorded as American GDP because American IP and software went into it, Apple is keeping a lot of the price for the phone, and only sending a bit off to China for assembly (and a larger bit off to South Korea, Japan, and Taiwan for components that China is assembling). What remains is still a lot of American GDP.
A small business who is contracting China to make the thing that they then sell is also generating a lot of GDP. Yes, they send some percent off to China to make the thing, but a majority is GDP generated here in the USA (the small business does the design, marketing, sales, etc...). If they go belly up because of the trade war (very likely, since no one else can make their thing, and before China developed this capability, making the thing wasn't even possible!), that GDP is gone, the people that small business was employing are unemployed.
The increased purchases should not decrease American GDP, unless consumers are buying directly from China using Temu and are not buying at Walmart.
If you take that money you would have spent buying something in the US that has imported parts (like its assembly), and instead say go out and by a DJI drone on TEMU, yes, you've decreased GDP. If you simply have no money to buy anything because DOGE decided to cut your federal job, then that would also decrease GDP.
I was jumping ahead too quickly to overall economic activity (which is going to drop).
Just because it's someone's profession doesn't mean is is or should be everyone's profession.
(And in general, the market sentiment seems to be "There's a decent chance this all just blows over", so shorting is likely as ill-advised as plowing in long, unless you happen to have better insight into the decision-making in the white house than the average participant)
I am posting an article that states there was disenfranchisement on a scale large enough to tip the election. You can find other sources than just this article.
If you’re not an American, you don’t get to use bad American logic. ;)
We see you.
Not voting was a vote for trump. Low turnout benefits trump. Americans had the choice between trump and a black woman, Americans chose trump.
Americans are so stupid and refuse to look at ourselves in a fair light. It's so dumb and the rest of the world is laughing at us.
"You can always count on Americans to do the right thing, after they've tried everything else." What this quote means is that Americans falsely believe we're exceptional and different when in reality we aren't, but we'll waste a ton of time/resources before we admit it.
After the Trump tariffs in the first term, US sales of Soy Beans to China never recovered. They switched to Brazil. What if the rest of the world just start buying fewer treasury bills (or paying less for the return) from now on? It is possible this could be worse for the USA than other developed countries.
Trump is screwing you over and he's doing it publicly. He's selling meme coins and selling your government. He dismantling the US for his personal profit and you are cheering.
No but we are so far apart on foundational beliefs about the state of the country over the last 20ish years that it really isn't worthwhile for most of us to discuss this anymore.
One side says we're saving the country, the other side thinks we're destroying it [another side thinks the first two sides are both crazy]. It's time to see who's right.
Trump's second term has given the world a wake-up call. Although Trump will likely be gone in four years, the MAGA movement could be long-lived and always four years or less away from taking over again. Even if Trump backs down on tariff's and expansionism during his own term, trust in the U.S. as a military ally and economic partner won't be restored quickly or easily.
What we're now seeing is world military alliances and the economy rewiring themselves, not to be subservient vassals of a hostile U.S., as Trump hopes, but to bypass the U.S.. If trade barriers around the U.S. are going to come and go in an unpredictable manner, then business will respond by building outside of that uncertainty. Manufacture of some low-end products may be onshored to the U.S., but only to meet domestic U.S. demand if and where that is high enough. It doesn't make sense to move manufacturing inside a region with unpredictable trade barriers if it's going to serve a global market.
Take a look at the election results in Canada. What was expected to be an easy majority win for the Conservatives just a few months ago came out as near-majority for the Liberals. Both parties campaigned on anti-Trump measures that include increasing East-West trade/infrastructure within Canada, diversification of the economy to rely more on Asian and European markets, and reduced spending on defence products from the U.S.. This is long-term policy that will make Canada less vulnerable to future MAGA'ruptions, even long after Trump is gone. Trump could do a 180 tomorrow, but the impact of what he's already done will last for decades at the very least.
[0] https://www.cnbc.com/2025/04/30/trump-trade-navarro-us-gdp-d...
Realistically we'll see a few giants pivot to less quality materials, many large and medium size businesses reduce their offerings, and a large amount of small businesses dissolving or filling for bankruptcy after not being able to weather the abrupt, completely voluntary supply chain disruptions across various industries.
zdragnar•9h ago
Now I hear the GDP contacted? So many mixed signals.
apples_oranges•9h ago
seanmcdirmid•9h ago
roxolotl•9h ago
It's very rare that prices going down is good. It usually results in a spiral that is negatively self reinforcing. Price stability is what you generally want.
semiquaver•9h ago
The price signal cannot function if it can only move in one direction.
breakyerself•9h ago
WorldMaker•8h ago
Eventually permanently decreased supply can also drive prices back upward, sometimes faster, as less competition means more supply-side bargaining power.
(Permanently decreased suppliers of oil may be a win for the planet in the long run, hopefully, but breaking the entire economy is perhaps the dumbest way to try to do that.)
mint2•5h ago
XorNot•9h ago
adverbly•9h ago
victorbjorklund•9h ago
margalabargala•2h ago
selectodude•9h ago
anovikov•9h ago
this_user•9h ago
surgical_fire•4h ago
slashdev•9h ago
Leading indicators, like housing and manufacturing, are not looking promising.
tzs•1h ago
For example at least 4 times the President said a couple weeks ago that gas in 3 states hit $1.98/gal, and he also said a couple weeks ago that egg prices are down 93% since he took office.
No one has been able to find out where that cheap gas and those cheap eggs are, and so some people are beginning to suspect that the President may have been mistaken.