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Trump’s new economic war
Trump’s new economic war
Saudi Arabia and other producers must cut oil prices, global central banks “immediately” needed to slash interest rates, and foreign companies must ramp up investments in US factories or face tariffs. The EU — which came in for particular opprobrium — must stop hitting big American technology companies with competition fines.
Trump’s demands came amid a frenetic first week in office in which the president launched a blitzkrieg of executive orders and announcements intended not just to reshape the state but also assert America’s economic and commercial supremacy. Tariffs of up to 25 per cent could be slapped on Canada and Mexico as early as February 1, riding roughshod over the trade deal Trump himself negotiated in his first term.  China could face levies of up to 100 per cent if Beijing failed to agree on a deal to sell at least 50 per cent of the TikTok app to a US company, while the EU was told to purchase more American oil if it wanted to avoid tariffs. Underscoring the new American unilateralism, Trump pulled the US out of the World Health Organization, as well as exiting the Paris climate accord for a second time.
This proposal throws a “hand grenade” at international tax policymaking, says Niels Johannesen, director of the Oxford university Centre for Business Taxation at Saïd Business School. The move suggests a determination to “shape other countries’ tax policy through coercion rather than through co-operation”, he adds.
“Those around Trump have had time to build up a systematic, methodological approach for protectionist trade policy and it shows,” says former UK trade department official Allie Renison, now at consultancy SEC Newgate. The approach will be to build up a case file of “evidence” against countries, she says, and then use it to extract concessions in areas of both economic and foreign policy.
The question remains how far Trump is willing to go. The danger of trampling on the rules-based order, says Jeromin Zettelmeyer, head of the Bruegel think-tank, is a complete breakdown in the diplomatic and legal channels for settling international disputes. If Trump were to pull out of a wider range of international frameworks, such as the WTO or the IMF, he warns, then the arrangements that help govern the global economy could get “substantively destroyed”.
Some caution against being awestruck by Trump’s threats or his espousal of capitalism without limits, because his agenda was so incoherent. “What we are seeing is huge doses of American hubris,” says Arancha González, dean of the Paris School of International Affairs at Sciences Po. “We are blinded by the intensity of all the issues put on the table and by Trump’s conviction. But we are not looking at the contradictions. It’s like we are all on an orange drug
#elections/2024#govt/policy#people/Trump#politics#economy#news#finance#international#americanism
·archive.is·
Trump’s new economic war
MANAGING FINANCIAL INSTABILITY IN 2025
MANAGING FINANCIAL INSTABILITY IN 2025

Managing Financial Instability Risks in 2025

Summary

  • The analysis positions itself as a warning about economic warfare, not financial advice

  • Key threats identified:

    • Alleged Russian influence over key US political figures including Trump and Musk
    • Strategic goal to dismantle US through internal turmoil and financial destabilization
    • Bitcoin characterized as an economic weapon in a zero-sum game
    • Christian Nationalist alignment with plans to destroy dollar/Fed system

  • Immediate financial risks for 2025:

    • Potential government shutdown due to no budget passage
    • Proposed $2 trillion budget cuts by Musk
    • US debt default risk as leverage for cuts
    • Strategic Bitcoin Reserve proposal threatening dollar stability

  • Critical timeline identified:

    • January 2 2025: Government runs out of money
    • January 3: New Congress installation
    • January 20: Treasury transition period
    • May 2025: Potential default date ("X-Date")

  • Recommended defensive measures:

    • Diversify holdings across bonds, real estate, gold/silver ETFs
    • Avoid Bitcoin/crypto investments
    • Contact representatives to oppose extreme measures

  • Additional considerations:

    • Moving to another country unlikely to help financially
    • Social Security potentially at risk
    • Banking system likely to hold but spreading funds recommended
    • Resolution depends on mainstream Republicans recognizing and countering these threats

  • Document context:

    • Living document subject to updates
    • Written by Dave Troy, presented as analysis of warfare operations
    • Includes extensive bibliography and related articles
    • Last updated November 16, 2024
#economy#govt/policy#finance#people/Trump#elections/2024#politics#reference
·docs.google.com·
MANAGING FINANCIAL INSTABILITY IN 2025
The Cost-of-Living Crisis Explains Everything
The Cost-of-Living Crisis Explains Everything
headline economic figures have become less and less of a useful guide to how actual families are doing—something repeatedly noted by Democrats during the Obama recovery and the Trump years. Inequality may be declining, but it still skews GDP and income figures, with most gains going to the few, not the many. The obscene cost of health care saps family incomes and government coffers without making anyone feel healthier or wealthier.
To be clear, the headline economic numbers are strong. The gains are real. The reduction in inequality is tremendous, the pickup in wage growth astonishing, particularly if you anchor your expectations to the Barack Obama years, as many Biden staffers do.
During the Biden-Harris years, more granular data pointed to considerable strain. Real median household income fell relative to its pre-COVID peak. The poverty rate ticked up, as did the jobless rate. The number of Americans spending more than 30 percent of their income on rent climbed. The delinquency rate on credit cards surged, as did the share of families struggling to afford enough nutritious food, as did the rate of homelessness.
the White House never passed the permanent care-economy measures it had considered.
the biggest problem, one that voters talked about at any given opportunity, was the unaffordability of American life. The giant run-up in inflation during the Biden administration made everything feel expensive, and the sudden jump in the cost of small-ticket, common purchases (such as fast food and groceries) highlighted how bad the country’s long-standing large-ticket, sticky costs (health care, child care, and housing) had gotten. The cost-of-living crisis became the defining issue of the campaign, and one where the incumbent Democrats’ messaging felt false and weak.
Rather than acknowledging the pain and the trade-offs and the complexity—and rather than running a candidate who could have criticized Biden’s economic plans—Democrats dissembled. They noted that inflation was a global phenomenon, as if that mattered to moms in Ohio and machinists in the Central Valley. They pushed the headline numbers. They insisted that working-class voters were better off, and ran on the threat Trump posed to democracy and rights. But were working-class voters really better off? Why wasn’t anyone listening when they said they weren’t?
Voters do seem to be less likely to vote in their economic self-interest these days, and more likely to vote for a culturally compelling candidate. As my colleague Rogé Karma notes, lower-income white voters are flipping from the Democratic Party to the Republican Party on the basis of identitarian issues. The sharp movement of union voters to Trump seems to confirm the trend. At the same time, high-income voters are becoming bluer in order to vote their cosmopolitan values.
The Biden-Harris administration did make a difference in concrete, specific ways: It failed to address the cost-of-living catastrophe and had little to show for its infrastructure laws, even if it found a lot to talk about. And it dismissed voters who said they hated the pain they felt every time they had to open their wallet.
#politics#economy#trends#stats#marketing#people/Biden#elections/2024#govt/policy#narratives
·theatlantic.com·
The Cost-of-Living Crisis Explains Everything
Donald Trump’s Victory and the Politics of Inflation
Donald Trump’s Victory and the Politics of Inflation
I readily agreed that positive news about jobs, G.D.P., and Biden’s efforts to stimulate manufacturing investment—of which there was plenty—wasn’t receiving as much attention as it deserved, particularly compared with the voluminous coverage of inflation. But I also pointed to governments from across the political spectrum in other countries, such as Britain, Germany, and France, that had experienced big rises in consumer prices. Inflation, it seemed, was poison for all incumbents, regardless of their location or political affiliation.
According to the network exit poll, conducted by Edison Research, seventy-five per cent of the voters in last week’s election said that inflation had caused them moderate or severe hardship during the past year, and of this group about two-thirds voted for Donald Trump.
According to the Financial Times, “Every governing party facing election in a developed country this year lost vote share, the first time this has ever happened in almost 120 years.”
Immigration, the culture war, Trump’s reprobate appeal, and other factors all fed into the mix. But anger at high prices clearly played an important role, which raises the question of what, if anything, the Biden Administration could have done to counteract the global anti-incumbency wave. This is a complex issue that can’t be fully addressed in a single column. But one place to start is at the White House itself, where staffers at the Council of Economic Advisers (C.E.A.) and the National Economic Council spent a lot of time analyzing the inflation spike and examining options to deal with it.
Why, despite falling inflation, was public sentiment about the economy and the President still so sour? “We quickly realized that wasn’t just about the inflation rate,” Ernie Tedeschi, a former chief economist at the C.E.A. who left the Administration earlier this year, told me. “People were still going to the store and seeing high egg prices and high milk prices.” Even when an inflationary period peters out, prices don’t magically return to where they were before it began.
Most U.S. economists, including those associated with the Biden White House, remain skeptical about the efficacy of price controls, which they believe can lead to serious distortions and shortages. “I try to be humble, but I don’t know how they would have helped,” Tedeschi said. “People complained about inflation. If we had done price controls, they would have complained about shortages. It would still have been pinned on the President.”
Even if there was no simple policy fix for the political problems facing the Biden Administration, could it have done a better job of addressing voters’ concerns rhetorically? William Galston, a fellow at the Brookings Institution who worked in the Clinton Administration, said last week that Biden should have pivoted much earlier from emphasizing job creation to focussing on the cost of living. “He was trapped in a very traditional ‘jobs, jobs, jobs’ mind-set,” Galston said. “It was a fundamental mistake.”
Though Biden’s record on G.D.P. growth and employment creation is genuinely praiseworthy—since January, 2021, the economy has added sixteen million jobs—there is perhaps something in this criticism. For a time, it did seem that the White House wasn’t sufficiently acknowledging the frustration and anger that the inflation spike had generated. Still, beginning last year, Biden spoke out a lot more about high prices, and he sought to place some of the responsibility on corporate graft. He announced measures to crack down on “junk fees,” and criticized “shrinkflation” and “price gouging”—getting very little credit for it in the media or anywhere else. The Administration also tried to advertise the pathbreaking steps it had taken, through the Inflation Reduction Act of 2022, to lower health-care costs: capping the price of insulin for retirees, empowering Medicare to negotiate the prices it pays for some drugs, and introducing limits on out-of-pocket costs.
After Harris replaced Biden at the top of the Democratic ticket, she vowed that reducing the cost of living would be her first priority. She also outlined a number of proposals designed to help low- and middle-income families, which included expanded child tax credits, a new subsidy for first-time home buyers, and allowing Medicare to help cover the cost of home care.
Ultimately, however, none of these things dislodged the public perception that over-all prices were still too high and that Biden and Harris, if not entirely responsible, were convenient vehicles for voters to take out their frustration on.
#economy#politics#elections/2024#people/Biden#inflation#gop#opinion#people/Trump#people/Harris
·newyorker.com·
Donald Trump’s Victory and the Politics of Inflation