Newsletter 12: Why is Trump Tanking the Economy?

Tariff Deep-Dive | The Resistance Fully Awakens | Hacks is Back

The Tariff Fantasy Explained

Virtually every sane economist of every political stripe agrees: Tariffs and trade wars are terrible for this country. For businesses, consumers, and taxpayers.

Kamala Harris said it on the campaign trail every day last fall. But, for some reason millions of people ignored that message as Trump was running on tariffs every day at the same time. Some sat on their hands of simply believed it wouldn’t happen. The Wall Street collective thought that as well — that it was bluster or would be small, targeted tariffs — easy to justify given another round of huge corporate tax cuts they stood to gain.

Well, Kamala was right and the other side was wrong and the market is tanking, we’re isolated from all our allies, and we now stand at the precipice of a recession. All for no damn good reason other than what’s in the twisted and delusional brain of Donald Trump.

WTF is Trump Thinking?

The question of why Trump really does anything is next to impossible. But, it’s usually based on stupidity, revenge, power, or corruption. Or some combination of all four.

On the stupidity front Trump has been a fan of tariffs since the 1980s, believing that they do the exact opposite of what he thinks. But, given that tariffs are so antithetical to Wall Street and business leaders of all stripes (especially Conservatives) it’s hard to believe that countless leaders haven’t tried to educate him even in the gentlest way possible over his years in power.

So, yes, abject stupidity is a real contender here. Because when you get past all that Wizard of Oz, reality show projection it’s pretty damn clear that Donald Trump is as dumb as a bag of rocks on any real substance on almost any issue.

I think the most likely reason is a combination of stupidity and the last three suspects — revenge, power, and corruption. Donald Trump wants to both punish and reward companies and countries based on his own ego or pocketbook, first and foremost.

He wants to be seen as some global dealmaker, changing markets based on megalomaniacal sense of genius — which is all really layer upon layer of bedrock repression covering the void where a soul should be. But that’s a different story. I do hope that Trump’s brain is preserved when he dies, because when we have the technology it’s going to be the motherload.

First and foremost, it’s power and revenge. It really is the economic side to his thirst for Dictatorship. And never discount the idea of personal gain. Trump (and his friends) can easily sell the market short and make untold millions. I wrote an article last month that laid this out last month called Donald Trump: Tariff King which you can read here.

Now even the Wall Street Journal is singing the same tune on power and corruption:

“Tariffs impose costs that businesses will want to avoid. They will thus be a windfall for Beltway lobbyists as companies and countries seek exemptions from this or that border tax.”

“Mr. Trump is saying there will be no tariff exemptions. But watch that promise vanish as politicians, including Mr. Trump, see exemptions as a way to leverage campaign contributions from business. Liberation Day is Buy Another Yacht Day for the swamp.”

How is Trump selling this? For starters, he’s lying. Bald-faced lying about how tariffs work. It’s his most over-the-top lie since January 6.

But, his broad, gauzy promise of bringing back American manufacturing — and better economic days when people in the middle got by on one paycheck — is deeply tied to a genuine desire in America and a nugget of truth.

This aspect of the debate deserves a little more history and analysis.

The Allure of American Manufacturing

It wasn’t that long ago when there were traditional hubs of different types of manufacturing across America. Shipbuilding in the northeast, textiles in the southeast, steel and metals in Pennsylvania, auto manufacturing in the Rust Belt, aerospace in the northwest.

You get the idea. It even went right down to the city level, with some town in, say, Oklahoma that produced much of the nation’s step ladders or some other quirky good.

That manufacturing base — and the good-paying jobs it provided — was the economic engine that created the rise and stability of the middle class after World War II. Tied with the GI Bill and the sudden affordability of college and you have decades of American productivity and a rising standard of living that had never been seen before in global history.

Starting in the late 70s and speeding up into the early 90s all that changed as companies shipped jobs overseas in search of cheaper labor. And while we learned to love a dozen tube socks for six bucks, that change radically altered our economic landscape. It decimated a huge swath of non-college workers, mostly men, who could make a decent living in all types of manufacturing jobs, from automotive to textile and beyond.

That begat the Regan Democrats, exemplified in Macomb County, Michigan which itself (after a healthy injection of racial and immigrant hatred) begat the core base of MAGA.

And while all that is true. It’s only part of the story. Because while many industries were decimated the United States is still a manufacturing powerhouse, second only to China. But, the dream that textile jobs are going to come back, or phone assembly jobs are going to leave China is never going to happen. Those days are over.

That’s why blanket tariffs are so stupid.

In China they put suicide nets around the apartment’s workers are forced to live in if they put together your iPhone. To minimize the suicide success rate. We don’t want those jobs.

Yes, there is an argument for some targeted tariffs. Take EVs from China which they’d love to flood our market with. EV jobs are a higher-skilled and we have a relatively new manufacturing base that deserves some nurturing in the form of keeping China out. The same argument could be made for solar panels and a number of other new products that could take off here. And some raw materials, say steel if our market is being flooded by cheaper, shoddier alternative.

The ironic reality is that the President who has done best on manufacturing since that giant sea change was Joe Biden. We’re not going to bring sweatshop jobs back. But, there are sectors of the emerging manufacturing economy that can be grown here and actually providing semi-skilled, good-paying jobs.

After decades of Buy American becoming jingoistic joke he required the federal government — one of the biggest buyers of tons of products — to only buy American. Symbolic, but significant. Even more significant was aspects of the rescue plan and CHIPS Act that brought tons of these new jobs to our country — especially in the semi-conductor industry.

One of the reasons Biden didn’t get the credit he deserves is that it takes time for larger manufacturing to get up-and-running — three to five years to construct a plant. Even buying into Trump’s fantasy that tariffs are going to bring manufacturing jobs flooding back into the country is going to take a long time. The idea that we’re at the edge of brief discomfort is another lie.

And while we are still a manufacturing powerhouse, that’s not our real economic reality. Post that 1970s manufacturing upheaval we transitioned into an information and tech society. Or at least that’s the short-hand. It’s primarily every small business under the sun.

As Mark Cuban recently noted, there are 33 million companies in the United States. Only 21,000 of those have more than 500 hundred employees. That 21,000 is 23% of total workers. A giant chunk of the 77% left are small businesses. 32 million entrepreneurs and small business people will all be crippled for something that makes no economic sense — short, medium, or long-term.

The point? This fantasy of some blurred vision of halcyon days is gone. And the sad reality is that the same folks who destroyed that entire way of life toy and manipulate people on how to bring it back when that is impossible.

It’s part and parcel with a long-term sad and sadistic spell Trump has woven. It’s a literal mirage when we need to be talk about true economic realities.

Trump and Elon are ignoring the more than 32 million entrepreneurs and small business owners and employees that can't afford to build a new factory or pay tariffs or absorb cancelled contracts. A giant number of those companies import either raw materials, parts, and components of all kinds to make their goods.

Right now, Trump is trying to run the global economy like a mob boss, abusing tariff powers that were only supposed to be used by the Executive Branch in an emergency. You know, like a pandemic or war, not because you’re an idiotic egomaniac.

If we do make it through Trump we need to go back to, and expand, the Biden model. That doesn’t mean that I support some Soviet-era planned economy. But, the government has the data, foresight, and expertise (well they did) to nudge with tax incentives and nurture a new economy where we have a comparative advantage.

Conservative will immediately yell that’s picking winners and losers! Well, to a certain extent, it is. But what is decades of subsidizing the fossil fuel industry?

Doesn’t it make economic sense to help burgeoning sectors create good jobs and exciting new products that other countries will want to import?

That’s rhetorical.

Of course, it is.

The Democratic Resistance Fully Awakens

It really feels like we’re crossed a threshold last week in the resistance movement against Trump, Elon and the extreme MAGA policies driving our economy off a cliff and threatening the economic security of millions of Americans.

It started with Senator Cory Booker’s impassioned and historic 25-hour speech in the Senate. I was initially a little skeptical about it, but as I dipped in and saw how it was catching on across social media I adjusted my tune. You can ready my thoughts on the speech here.

The week ended with more than 1,400+ “Hands Off” protests, marches, and rallies in every state in the nation. And globally. Some of these were huge, with 100,000 in both New York City and Washington, D.C. There were nearly 100,000 in Boston, Chicago and huge crowds in big cities and state capitols in red and blue states alike. There were even 2,000 protesters in The Villages in Florida.

In total the crowd estimates are over 5 million.

The protest covered everything — from government cuts and free speech to reproduction rights and rounding up immigrants. The tariff news only helped swell the numbers.

Stan and Cindy Prusik, who attended the D.C. rally, told ABC News they are worried about the future of their children and grandchildren along with the economy.

"I don't sleep well. I'm scared," Cindy Prusik said. "We've got money we've saved all of our lives, our retirement -- it's not going to be there. I'm afraid of what is going to happen with the world, let alone the American markets. I'm upset we've made enemies out of countries that were formerly our friends. It's just all so uncertain."

Looking down the road, it’s pretty clear that Trumps support still has nowhere to go but down. If he holds the line on these idiotic tariffs the pain for most Americans will only get worse. Add to that the pain and confusion as DOGE cuts start affecting more people. Then there’s a looming budget and tax plan that is going to be broadly unpopular. And any number of lingering issues that could flare up at any moment.

Culture Club: The White Lotus | Hacks is Back + More Hacks

The White Lotus ended its third season Sunday night. I gave the show a glowing review after the first episode. It’s still worth watching, but this season stumbled along the way with an ending that didn’t live up to past season. You can read my original review here and thoughts on the finale here.

Hacks is back for its fourth season on Max this Thursday. It’s not like the show needs promotion, it won outstanding comedy and Jean Smart has won a best actress Emmy three times along with writing and directing awards.

But, we live in a world with countless streamers and shows get lost in the shuffle. So, if you haven’t watched Hacks now is your chance. You have three great seasons to binge before you get to the new one.

The premise is pretty simple. A legendary Vegas-based comedian Deborah Vance (Jean Smart) is losing he long-running show on the strip. Forced to freshen up her act she brings in Ava Daniels (Hannah Einbinder) a young comedy who is her total opposite other than a love of comedy.

While the Deborah Vance character is an amalgamation of any number of female comedians, there’s not much doubt that there’s quite a bit of Joan Rivers. Like Rivers, Vance’s style of comedy is take no prisoners and decidedly not politically correct. Ava on the other hand is bisexual and epitomizes the woke stereotype.

You get the picture — they obviously clash but you know they’re going to end up being friends. While there’s nothing new with that comedy/drama premise the show does a great job not only making you want for that friendship to happen but throwing in real-world obstacles that keep both characters on their toes.

The writing is witty and sharp throughout and it really is one of the best shows I’ve ever seen that delves into the world of comedy and its creation. From Vegas to touring to the high-pressure world of TV and late-night talk shows it all feels real and the show does a great job putting the fictional Vance in the real world.

Great writing and production aside, this show would live and die on the strength of its two leads. Obviously, they kill it given the critical accolades. Jean Smart made her big break in Designing Women which I watched, but only on occasion. I’ve seen her in lots of things over the years but honestly didn’t take much notice. It’s impossible not to appreciate her talent here. Her Vance is the role of a lifetime and she not only nails the over-the-top aspects of the character but delivers on the subtle and sensitive.

While her character isn’t as iconic, Einbinder is great as Ava. The daughter of original SNL player Laraine Newman she is just as funny in a more droll, self-effacing way. And while this is a comedy, it’s not a sitcom and there are genuinely touching moments. As the show rolls into the third season some of the supporting characters really start to shine with more developed story lines. It will be fun to watch their growth in season four.

So, if you haven’t watched, get at it. This is a great show that’s well worth your time.

Tuesday Music Mix: Hacks

It didn’t take me long to find a Spotify playlist someone had put together with every song from the show. But, it was 10 hours long! I decided to do some deep trimming and cut that almost in half. It would have gone further if there wasn’t so much unfamiliar music that I liked.

There are some big song needle drops during the series. That I knew. I also knew there was a decent amount of club music. What I didn’t know was how much obscure (at least to me) 60s and 70s soul songs were in the show. I mean, a ton of them. There’s also original show music. Most of it is short, so I only left of few of the main character themes.

Pretty sure I’m going to use the soul songs as the basis for mix of its own, so keep an eye out for that.