Economic / Psychological / Electoral

Well, Mad King Donald Trump is taking the world economy on a ride to no one knows where. Truly, no one knows where his trade policies will land us, but at the very least we will live in uncertainty as long as he is president. And uncertainty is very bad for business. As Paul Krugman writes:

What business can’t deal with is a regime under which trade policy reflects the whims of a mad king, where nobody knows what tariffs will be next week, let alone over the next five years. Are these tariffs going to be permanent? Are they a negotiating ploy? The administration can’t even get its talking points straight, with top officials saying that tariffs aren’t up for negotiation only to be undercut by Trump a few hours later.

Under these conditions, how is a business supposed to make investments, or any kind of long-term commitment? Everyone is going to sit on their hands, waiting for clarity that may never come.

And if business cannot make long term investment plans, there is no basis for new hiring. And if ordinary Americans don’t know what’s coming next, we will be canceling plans for big spending.

But what is worse, there are indications this morning that stock market losses are turning into financial turmoil. Hedge funds have made investments on margin, using borrowed funds. Now that they have experienced significant losses, those loans need to be repaid. Overnight, people have been selling US Treasury bonds at record rates, much the same way they did during the financial panic of 2008 and the panic associated with the onset of Covid in 2020. We can only rejoice that Jerome Powell is at the head of the Federal Reserve to deal with this as he did so competently in 2020.

Basically, no one can tell where this is headed. But everyone reading this survived the financial distress of 2008 and 2020. Indeed, I always thought that Trump would have to crash the economy in some way before we could be rid of him. I thought his most likely blunder would be crashing Social Security, but it turns out the world trade system was an even more vulnerable target.

In my last post, I talked about the three forces in political strategy: economic / psychological / electoral. Politicians who preside over a bad economy lose elections. Politicians who swiftly and suddenly cause a global economic downturn lose even the support of their own party.

Ten days ago, it would have been unthinkable that Republican senators would be drafting bills to oppose Trump’s power to levy tariffs. By last count, eight Republican senators have come out against Trump’s tariffs, led by Senators Chuck Grassley, Ted Cruz, and Rand Paul. Apparently, they have no fear of being primaried (even Elon Musk opposes Trump’s tariffs). And, BTW, farmers are one of the groups most sensitive to tariffs, because the price of agricultural commodities is heavily influenced by exports.

Prediction: I believe that these tariffs will be largely walked back. Either Trump will do it under pressure, grumping that we were just not ready to embrace the path to American greatness. Or Congress will pass Senator Grassley’s legislation withdrawing the power to set tariffs unilaterally by the president. Although, Trump has threatened to veto this bill, he may be pressured into signing it by Republicans desperate not to lose the 2026 and 2028 elections. However, business confidence will be restored only if Congress takes the tariff power out of Trump’s hands. If Trump is not prevented from further tinkering with tariffs, then a clear business horizon will not be restored.

So, we may be left with Trump crashing the economy by the failure of Social Security. In either case, you can survive indefinitely on a diet of beans, brown rice, and a few well-chosen vegetables. Be prepared to dust off your old copy of Diet for a Small Planet.

This is my favorite sign from April 5. I couldn't figure out how to copy a single frame from a video, so I recreated the sign using Microsoft Paint.

April 5 = Psychological Force

The April 5 “Hands Off” demonstration was all about the psychological. Although America is a country capable of limited amounts of abstract thought, this capacity is a thin layer on top of deep materiality. I’ve seen it estimated that we human beings take in 70% of our information visually.

So, on Saturday, the Anti-Trump movement became embodied. The “Hands Off” organizers made the excellent choice to encourage attendees to make their own signs. This meant that protestors looked like authentic individuals rather than brainwashed sheeple. The people made themselves seen “in the millions.” The crowds were big enough— a bit bigger than I expected. This is how Paul Krugman described “Hands Off” in a live interview with Mehdi Hasan:

Mehdi Hasan: Several hundred thousand people took to the streets across the United States over the weekend.

Paul Krugman (emphatically): In the millions!

Hasan: Let me rephrase. In the millions, people took to the streets across the United States of America ... and the message was very clear about Trump, Musk, and the government.

Krugman: Yeah, there's been a clear shift in the vibe now. The democratic impulse in America, a small “d” democratic impulse, is not dead. People care. They care a lot. And they were kind of stunned for a little while. But now you can just see, and this is really massive. This is not only leftists.

This is middle-aged regular people out there demonstrating who are outraged. And that's a good sign. The great danger when you have a would-be dictator, which Trump is, is that everybody just rolls over believing that his triumph is inevitable. And guess what? We're not rolling over. And that's a very big deal.

What is the Significance of the April 5 “Hands Off”?

It showed that we can assemble a large crowd, and we will show up in bigger numbers as the Trump Travesty unfolds. Mass demonstrations are not our most potent weapon, but a soldier needs all his weapons. Trump will blow himself up with his hand grenade, but we can finish him off with a knife.

I don’t think that we should aim for another mass demonstration anytime soon. The 50501 organization is pushing for demonstrations every couple of weeks, but I think they are misguided.

I think the obvious date for the next large demonstration is June 14. It is DJT’s birthday, and Donald Trump has begun planning a military parade from the Pentagon to the White House complete with tanks. We the people are uniquely equipped to stop this travesty. I will be sitting on my walker on Constitution Ave daring a tank to run me over. BTW, the Mayor of Washington has pointed out that tanks would do millions of dollars of damage to the streets of DC.

Enjoy More April 5 Videos!

Hands Off! Protests Across the Country

After I saw this video of Norm Eisen, I said: “I'll have what he's having.”