So far not much pain. Unless you're a manufacturer, caught between tariffs on imported inputs like steel; and retaliatory tariffs on your export sales.
But when the retail inventories of goods amassed in anticipation of the tariffs are exhausted; then Trump's import taxes are going to hit consumers hard. Will those stockpiles get us through Christmas? Hard to say.
But when the massive BBB cuts to Medicaid & Food Stamps kicks in next year, Red states like Iowa--with a 22% Medicaid enrollment rate--are going to be economically devastated. Dozens of rural hospitals--the economic hearts of most rural counties--will be closing. FOX News will undoubtedly be running back-to-back segments on how it's all the Fed's fault for not cutting rates sooner. It remains to be seen whether MAGA voters will buy it, and change their voting habits.
But Trump promised prices would come down very quickly. Trump didn't understand the impact tariffs would have on prices and he certainly didn't educate his voters about the impact they would have.
I imagine Trump did understand, I also imagine he thought he would have more bully power to try to rein those increases in (by calling Amazon, Walmart, etc as he tried).
But your point is taken, he promised many things, even if they were conflicting with each other.
"This is exactly what I voted for" is the chant from the MAGAverse. "Donald Trump's Tariffs are working". "Just look at how much money has been collected due to tariffs". Tariffs are money that could have been used to employ more workers and increase productivity. That money is now going into government coffers instead of the economy and the Government is spending lots more money on building a paramilitary agency which will enforce Trump's fantasy of total control. We are paying Donald Trump to build himself a personal army of gunslingers who will do his bidding in a quest for power while we are poorer and have fewer jobs. And less security. "This is exactly what I voted for!" What could go wrong?
All of Trump's crises are based on emotion and cultural strife. There are no issues, there is no policy, there is no solution to his non-problems. Trump didn't have an enemy so he invented one. The enemy within. Now we are all enemies, which is the overarching plan. You can't trust anyone because anyone could be your enemy. Existing in such a society is a miserable prospect.
Yep, you are right on with that observation. It serves to highlight that Trump has successfully divorced economics from culture. And yet, one of the MAGA objections to immigration is stealing jobs from true Americans. Odd, the disconnect.
It’s both. Allowing people to cross over the border is based on cultural values. There are people like me who oppose it based on a belief in enforcing laws. Others feel that breaking laws are fine as long as there’s a good reason. There are also people like MAGA who are fine with their own breaking the law but oppose illegal immigration because they’re racists.
I generally agree with Noah. That said, almost any economic policy is better than Biden's sugar high, followed by nearly double digit inflation. And luckily his "Build Back Better" six trillion dollar spending spree wasn't enacted, thanks to only two courageous Democrat Senators. Every other Democrat Senator voted for this unfunded spending orgy.
The worldwide inflation? Which every nation on the planet experienced? And the US had the lowest rate of, compared to any other nation? Damn, Biden is craaazy powerful to have been such a bad president that every other country experienced his Bidenflation.
At most you could maybe attribute a few percentage points of that inflation to pandemic-era fiscal policy, which also includes the stimulus passed in Trump's last year btw. The rest might've had something to do with oh idk the once-in-a-hundred-year pandemic. I agree with the other commenter: this was very clownish of you to say
Biden's fiscal policies poured fuel on the fire, and attempted to pour more fuel on the fire. You don't solve a problem by doubling down, adding to the problem.
Our business closed a foundry, which used to employ 100 people with good wages. We were willing to accept financial losses. But we could not hire employees who were paid $1000 per week to sit at home. (regular unemployment compensation plus $600 per week from Biden's giveaway economic policies)
You mean the enhanced unemployment benefit trump introduced and Biden ended. Honestly your memory is bad ... trump introduced all of these policies and spent trillions of dollars on covid spending (more than Biden) and even his Non-covid spending was far higher. Yes democrats also spent on infrastructure and also on covid stuff for a limited time but don't fool yourself into thinking Trump's policies didn't lead to the closing of the foundry (if what you said about the reasons was accurate).
I honestly don't know who started this madness. I do know that Biden kept extending it. We then were forced to close the foundry. We held out as long as we could.
Democrats want to "buy insurance" to "prevent" every possible detrimental outcome, by spending taxpayers' hard earned incomes, or by running up deficits and sovereign debt. Sometimes the costs of this "insurance" is far too high.
I personally know people who never had it so good, never in their lives, for accomplishing nothing during Biden's spending spree. "Free money" is not free.
These are choices. Democrats went for everyone taking higher inflation while keeping their jobs. Trump has gone for a recession where more people will lose their jobs. Inflation will probably stay sticky because unfunded tax cuts and tariffs. Both parties need to get the deficit and debt under wraps and neither party is handling the unfunded portion of economics well.
Inflation was high because Powell allowed it to be high (rates should've started rising a year earlier), but Biden's stimulus efforts beyond the initial ones certainly didn't help. It's a good thing the student loans gift was shot down too.
The wisdom at the time was that deficits weren't going to cause inflation. It was true until it wasn't. If we want to rewrite history then please include Trump's higher than bidens covid related spending and even his non covid spending on oh tax breaks. It's even worse that trump is doing it again in his second term.
Both policies can be bad. Chances of long term damage from Trump’s policies can be higher because we’re also getting into fights with allies and not just China.
I mostly agree. We need allies in geopolitical affairs. Yet, still, at a fundamental level; sovereign nations have interests, which overshadow friendships.
Tariffs are not advancing those interests because they’re retarded policies that have been tried before and failed. There may be strategic reasons to do so if there are national security implications but there’s always a cost associated with tariffs.
Yes, true. And there are long term costs by hollowing out American manufacturing. We can't forever be a prosperous nation by taking in each other's laundry.
US does very well in manufacturing. It has 4% of the world’s population and 16-17% of the manufacturing output. What you mean is manufacturing jobs, which are mostly lost to automation because manufacturers have moved to higher margin products. This idiotic nonsense that US needs to do things that poor countries do and still remain a rich country, is a fantasy and needs to stop.
Democrat voters want something for nothing, more social benefits without paying higher taxes. Republican voters want something for nothing, tax reductions while preserving social benefits.
Politicians induge these voters' fantasies to be reelected. Here is the rub:
Intelligent Politicians know that eventually the manure will come in contact with the air moving device, a Minsky Moment. A grand bargain will be necessary. Each party wants to be as well positioned as possible when it becomes essential. The Democrats want to increase spending as much as possible before then. The Republicans want taxes as low as possible before then. Each party wants the best bargaining position. Neither party wants to ward off the eventual crises. Compromise has become a dirty word.
I guess they're just hoping that OBBA will magically usher in factories for everything so that the negative supply shock is neutralized. Unclear how you do this without immigrant labor (especially heavy in the construction trades) or with tariffed inputs but this admin is basically in Yolo mode.
I think the most fascinating thing here is the execution - yes the policy proposals are often bad - but the execution even on the policies they want seems subpar. There's literally a minimum of thought and planning that goes into these decisions and they don't understand how anything is implemented or enforced so we get EOs and soon I assume Pocket Recissions every day to make up for that.
Seems pretty bad but I guess the GOP no longer cares about governing or retaining congressional power/checks and balances.
As with his first term the one thing Trump has is the current relative strength of the US economy. It's a bit of a bummer that this will drag out as slowly as it does - something more acute would focus minds sooner and potentially avert a slow erosion. As it stands - it looks like we trudge along (And with deficits this huge I don't know how we get into a recession as NBER defines it).
I think the tag line here is a little misleading. Few Trump voters understand economic principles (the same would hold true for Harris voters). When the White House proclaims tariff revenues of $8t (on an annual import market of ~$3.5t) they celebrate that Trump's making America rich again by soaking countries that have been getting rich off of us for generations. It appears that these beliefs cannot be challenged by data; when they appear to be it's only a sign that the data is being manipulated by malevolent actors, as Trump tells them. (I presume all Trump voters finished elementary school, but he knows that when he reports he's brought drug prices down 1500% arithmetic will curve like space-time around a black hole.)
Most Trump voters voted for huge tariff revenues and draining the deep state swamp, and the information they're receiving from their trusted sources confirm that's the economy they're getting. Only in that sense, I think, are they getting the economy they voted for. And they're delighted.
That disapprove chart on issues will have a high correlation rate with economic disapproval when it does collapse. Because when the economy does crater no one will approve of the cultural crap either.
But Trump's voters are not getting the economy he promised them.
It was only after the election that Trump revealed that there was going to be pain before the Golden Age began.
So far not much pain. Unless you're a manufacturer, caught between tariffs on imported inputs like steel; and retaliatory tariffs on your export sales.
But when the retail inventories of goods amassed in anticipation of the tariffs are exhausted; then Trump's import taxes are going to hit consumers hard. Will those stockpiles get us through Christmas? Hard to say.
But when the massive BBB cuts to Medicaid & Food Stamps kicks in next year, Red states like Iowa--with a 22% Medicaid enrollment rate--are going to be economically devastated. Dozens of rural hospitals--the economic hearts of most rural counties--will be closing. FOX News will undoubtedly be running back-to-back segments on how it's all the Fed's fault for not cutting rates sooner. It remains to be seen whether MAGA voters will buy it, and change their voting habits.
The experts also told us we were getting empty shelves in June because the boats from China had already stopped coming.
But Trump already told us that kids only need two dolls, not 30! And subsidies for Obamacare premiums are going to disappear on January 1.
Trump was pretty open about his tariff plan, it's just that the voters didn't believe him or agreed with him. And here we are.
I think there's a third option: The voters accepted what Trump said about tariffs because they, like he, didn't understand tariffs.
Fair enough, although a tax on good will pretty intuitively increase the prices of those goods. But maybe people didn't think about it too hard.
But Trump promised prices would come down very quickly. Trump didn't understand the impact tariffs would have on prices and he certainly didn't educate his voters about the impact they would have.
I imagine Trump did understand, I also imagine he thought he would have more bully power to try to rein those increases in (by calling Amazon, Walmart, etc as he tried).
But your point is taken, he promised many things, even if they were conflicting with each other.
The only good thing about trumps tariffs is the corresponding damage will hopefully settle the debate on whether tariffs are beneficial
"This is exactly what I voted for" is the chant from the MAGAverse. "Donald Trump's Tariffs are working". "Just look at how much money has been collected due to tariffs". Tariffs are money that could have been used to employ more workers and increase productivity. That money is now going into government coffers instead of the economy and the Government is spending lots more money on building a paramilitary agency which will enforce Trump's fantasy of total control. We are paying Donald Trump to build himself a personal army of gunslingers who will do his bidding in a quest for power while we are poorer and have fewer jobs. And less security. "This is exactly what I voted for!" What could go wrong?
Indicators lag and I think we're already in what will be a recession
Odd that immigration is a cultural issue, not an economic issue.
All of Trump's crises are based on emotion and cultural strife. There are no issues, there is no policy, there is no solution to his non-problems. Trump didn't have an enemy so he invented one. The enemy within. Now we are all enemies, which is the overarching plan. You can't trust anyone because anyone could be your enemy. Existing in such a society is a miserable prospect.
Yep, you are right on with that observation. It serves to highlight that Trump has successfully divorced economics from culture. And yet, one of the MAGA objections to immigration is stealing jobs from true Americans. Odd, the disconnect.
It’s both. Allowing people to cross over the border is based on cultural values. There are people like me who oppose it based on a belief in enforcing laws. Others feel that breaking laws are fine as long as there’s a good reason. There are also people like MAGA who are fine with their own breaking the law but oppose illegal immigration because they’re racists.
I generally agree with Noah. That said, almost any economic policy is better than Biden's sugar high, followed by nearly double digit inflation. And luckily his "Build Back Better" six trillion dollar spending spree wasn't enacted, thanks to only two courageous Democrat Senators. Every other Democrat Senator voted for this unfunded spending orgy.
The worldwide inflation? Which every nation on the planet experienced? And the US had the lowest rate of, compared to any other nation? Damn, Biden is craaazy powerful to have been such a bad president that every other country experienced his Bidenflation.
(you're a clown)
I'm sure that President Trump would be pleased that you are mimicking his method of communication.
An ad hominem insult, more revealing about you than me for certain.
At most you could maybe attribute a few percentage points of that inflation to pandemic-era fiscal policy, which also includes the stimulus passed in Trump's last year btw. The rest might've had something to do with oh idk the once-in-a-hundred-year pandemic. I agree with the other commenter: this was very clownish of you to say
Biden's fiscal policies poured fuel on the fire, and attempted to pour more fuel on the fire. You don't solve a problem by doubling down, adding to the problem.
Right - Biden was trying to solve the unemployment problem that arose at the same time, which everyone forgets now because it was solved effectively.
Our business closed a foundry, which used to employ 100 people with good wages. We were willing to accept financial losses. But we could not hire employees who were paid $1000 per week to sit at home. (regular unemployment compensation plus $600 per week from Biden's giveaway economic policies)
You mean the enhanced unemployment benefit trump introduced and Biden ended. Honestly your memory is bad ... trump introduced all of these policies and spent trillions of dollars on covid spending (more than Biden) and even his Non-covid spending was far higher. Yes democrats also spent on infrastructure and also on covid stuff for a limited time but don't fool yourself into thinking Trump's policies didn't lead to the closing of the foundry (if what you said about the reasons was accurate).
I honestly don't know who started this madness. I do know that Biden kept extending it. We then were forced to close the foundry. We held out as long as we could.
Democrats want to "buy insurance" to "prevent" every possible detrimental outcome, by spending taxpayers' hard earned incomes, or by running up deficits and sovereign debt. Sometimes the costs of this "insurance" is far too high.
I personally know people who never had it so good, never in their lives, for accomplishing nothing during Biden's spending spree. "Free money" is not free.
These are choices. Democrats went for everyone taking higher inflation while keeping their jobs. Trump has gone for a recession where more people will lose their jobs. Inflation will probably stay sticky because unfunded tax cuts and tariffs. Both parties need to get the deficit and debt under wraps and neither party is handling the unfunded portion of economics well.
Inflation was high because Powell allowed it to be high (rates should've started rising a year earlier), but Biden's stimulus efforts beyond the initial ones certainly didn't help. It's a good thing the student loans gift was shot down too.
The wisdom at the time was that deficits weren't going to cause inflation. It was true until it wasn't. If we want to rewrite history then please include Trump's higher than bidens covid related spending and even his non covid spending on oh tax breaks. It's even worse that trump is doing it again in his second term.
So you were upset about inflation under Biden? Allegedly, a lot of voters were/say they were.
Yet, they are not upset about Trump’s inflation.
It’s all “cultural”. Immigration is “cultural”, eggs prices are cultural…
People just want to see the elites and their institutions burn. Like they don’t depend on said elites and institutions.
Both policies can be bad. Chances of long term damage from Trump’s policies can be higher because we’re also getting into fights with allies and not just China.
I mostly agree. We need allies in geopolitical affairs. Yet, still, at a fundamental level; sovereign nations have interests, which overshadow friendships.
Tariffs are not advancing those interests because they’re retarded policies that have been tried before and failed. There may be strategic reasons to do so if there are national security implications but there’s always a cost associated with tariffs.
Yes, true. And there are long term costs by hollowing out American manufacturing. We can't forever be a prosperous nation by taking in each other's laundry.
US does very well in manufacturing. It has 4% of the world’s population and 16-17% of the manufacturing output. What you mean is manufacturing jobs, which are mostly lost to automation because manufacturers have moved to higher margin products. This idiotic nonsense that US needs to do things that poor countries do and still remain a rich country, is a fantasy and needs to stop.
Democrat voters want something for nothing, more social benefits without paying higher taxes. Republican voters want something for nothing, tax reductions while preserving social benefits.
Politicians induge these voters' fantasies to be reelected. Here is the rub:
Intelligent Politicians know that eventually the manure will come in contact with the air moving device, a Minsky Moment. A grand bargain will be necessary. Each party wants to be as well positioned as possible when it becomes essential. The Democrats want to increase spending as much as possible before then. The Republicans want taxes as low as possible before then. Each party wants the best bargaining position. Neither party wants to ward off the eventual crises. Compromise has become a dirty word.
How many faces have to get eaten by leopards before people stop voting for the Leopards Eating People's Faces Party?
I guess they're just hoping that OBBA will magically usher in factories for everything so that the negative supply shock is neutralized. Unclear how you do this without immigrant labor (especially heavy in the construction trades) or with tariffed inputs but this admin is basically in Yolo mode.
I think the most fascinating thing here is the execution - yes the policy proposals are often bad - but the execution even on the policies they want seems subpar. There's literally a minimum of thought and planning that goes into these decisions and they don't understand how anything is implemented or enforced so we get EOs and soon I assume Pocket Recissions every day to make up for that.
Seems pretty bad but I guess the GOP no longer cares about governing or retaining congressional power/checks and balances.
As with his first term the one thing Trump has is the current relative strength of the US economy. It's a bit of a bummer that this will drag out as slowly as it does - something more acute would focus minds sooner and potentially avert a slow erosion. As it stands - it looks like we trudge along (And with deficits this huge I don't know how we get into a recession as NBER defines it).
Far from all of us, fyi.
I think the tag line here is a little misleading. Few Trump voters understand economic principles (the same would hold true for Harris voters). When the White House proclaims tariff revenues of $8t (on an annual import market of ~$3.5t) they celebrate that Trump's making America rich again by soaking countries that have been getting rich off of us for generations. It appears that these beliefs cannot be challenged by data; when they appear to be it's only a sign that the data is being manipulated by malevolent actors, as Trump tells them. (I presume all Trump voters finished elementary school, but he knows that when he reports he's brought drug prices down 1500% arithmetic will curve like space-time around a black hole.)
Most Trump voters voted for huge tariff revenues and draining the deep state swamp, and the information they're receiving from their trusted sources confirm that's the economy they're getting. Only in that sense, I think, are they getting the economy they voted for. And they're delighted.
That disapprove chart on issues will have a high correlation rate with economic disapproval when it does collapse. Because when the economy does crater no one will approve of the cultural crap either.