I read a conservative article that lauded White House Press Secretary Karoline Leavitt for “shutting down” an AP reporter over “insulting” her intelligence with his question about tariffs as taxes. (You can watch her “shut down” here.) Apparently Leavitt and the conservative writer of the article need an education in economics, though Leavitt, in a moment befitting her hair color (that or she’s just a liar), ironically tells the AP reporter not to lecture her on economics with his claim that Trump’s new tariffs are taxes on Americans! She lectures him about how they most certainly are not. They are taxes on foreigners, she exclaims; then she diverts immediately to talking about all the good things she believes Trump is doing as if those things prove tariffs are not taxes on Americans.
As I’ve explained many times, they most certainly are; but if, on the small chance you’re inclined not to believe me out of loyalty to Trump, let me send you to another site for the education that didn’t take here on my site. You can go to this location (to save other readers from hearing what they don’t need to hear). Better yet, however, watch the video provided for everyone below and take it from “the Gipper,” Ronald Reagan, as he explains why the focused tariffs he is reluctantly imposing are something he is loathe to do because they hurt American workers and consumers and why he will, therefore, be working to remove them as quickly as possible, unlike Trump who has said clearly many times tariffs are his new tax policy to replace income tax. Reagan, who lived through the Great Depression, notes how tariffs drove the nation (and the world) deeper into recession until it became the total economic depression that it is now known to have been.
Leavitt needs a little old-school schooling from the Ronald, not the Donald.
Treasury Secretary Scott is Bessent upon our destruction
It may be that Treasury Secretary Scott Bessent should attend the old school with her. He went on record, as the S&P collapsed fully into the correction zone, saying he’s “not concerned about a little bit of volatility over three weeks.” His words immediately reminded me of how the Fed was not concerned about a little “transitory inflation,” either.
Having been right on about how certain I was that the Fed was going to have to eat its words, I’m now equally certain that Bessent is going to get a lot more than a three-week dustup. I’ve made the stock market’s imminent crash one of my predictions to paying subscribers for the year. Just as Jerome Powell had to eventually cough out his admission that “the word transitory wasn’t helpful,” I’m sure Bessent will have to try to pacify us with some statement of that kind down the road as people ask him, “OK, you weren’t concerned about a little volatility, but how are you liking a whole lot of it?”
Bessent’s argument was …
“I can tell you that if we put proper policies in place, it’s going to lay the groundwork for … both real income gains and job gains and continued asset gains.”
That is a statement that is automatically always true, no matter who says it. Yes, if you put in proper polices, of course, all things will go well. The question is are all these tariffs “proper policies?” Reagan agued that they are terrible policies that escalate into problems and then worse problems and then the worst of all problems because the tariff war keeps adding layers like a snowball, exactly as we are already seeing play out.
Bessent even claimed (as blithely as Powell did a couple of years ago about the transitory inflation he had lit on fire) …
“Maybe the inflation is getting under control and the market is going to have some confidence in that,” Bessent said.
How about maybe not? He said this based on two benign inflation reports this week—the only ones in months—but another article in the news recently helps explain what I haven’t bothered to just yet, as to why those reports are not going to console the Fed into reducing rates any further, even for the rest of the year. I may cover that in my weekend Deeper Dive, depending on what emerges on Friday.
Again, recently, the stock market’s decline was pinned mostly on Trump’s new tariffs du jour. It was Trump’s retaliation over the recent retaliation by Europe with a 25% tariff that hit US whiskey. Trump served up a 200% tariff in response to champagne and wine. For those in the Trump Administration who have argued tariffs are not going to cause inflation, I’d like to hear how a 200% tariff on French champagne coming into the US is not going to affect the price of French champagne in the US. Explain that to me. Are importers just going to absorb all of that? Even if they could, the importers are still Americans, even if not the ultimate consumers. So, it’s still a tax on Americans, Leavitt! For that matter, I’d like them to explain how Europe’s 25% TAX on whiskey going into the EU is not going to affect the price of bourbon in Paris. It will if the Francos drink any of it, and isn’t that the point of those EU tariffs—to make American whiskey so expensive no one in Europe buys it anymore?
These conversations by politicos are patent nonsense. It’s disgusting to hear supposedly educated people insulting our intelligence—not Leavitt’s, who goes along with it—by telling us this drivel and thinking we’ll swallow their bilge water like it is French champagne. Thus, I am not surprised to also read the following:
President Donald Trump’s full-speed-ahead approach to making radical change has forced his allies to fight from a defensive posture — explaining his plans after they have been executed — and raised alarms in his Republican Party that it could all end in a wreck….
Those fears haven’t deterred Trump from continuing to impose tariffs on foes and friends — which figure to raise prices on U.S. consumers — and slash federal government jobs, grants and contracts.
“There are worries,” said a person who has been involved in discussions about the economy with White House officials. Those effects on the markets and the economy are felt immediately, while policies aimed at spurring growth — including cutting taxes and regulations — will take much longer to implement, this person said.
The last paragraph is my argument, too: The benefits from things like governmental reductions in staffing or the sweeping deregulation laid out in another story will take a year or two to be felt as a benefit to the economy. By then, the destruction from the rapidly escalating Trump Tariff wars will already be complete, and the house of cards will be scattered all over the floor.
Privately, officials at the White House’s National Economic Council have indicated fears that it could be difficult to rebound quickly from a downturn, two people familiar with internal White House discussions said.
Ya think?! Especially one as deep as the depression they are now digging out for us. Collapse was coming, anyway, but this undermining of trade all over the world will be worse than the COVID lockdowns if Trump doesn’t knock it off, and he swore, yet again, that he is not about to:
President Donald Trump on Thursday doubled down on his escalating tariff plans, even as his economic agenda continued to rattle investors and contribute to a weekslong stock market sell-off.
“I’m not going to bend at all,” Trump said when asked about his tariff plans….
He’s actually bent completely backwards two times now that I know of and bent a fair way backward a third. But then he springs back up and reimplements his tariffs another time in even greater amounts because they are actually his new tax plan for the US as well as a cudgel to try to force Canada into becoming part of the great empire he envisions.
Trump specifically said he would not change his mind about enacting sweeping “reciprocal tariffs” on other countries that put up trade barriers to U.S. goods. The White House has said those tariffs are set to take effect April 2.
And that is exactly the historic dynamic President Reagan said he remembered living through under the Smoot-Hawley tariffs of the Great Depression. So, that oughta be fun! Yay! Another Great Depression to go through. I’ve always been convinced that the bursting of the Everything Bubble would be about that bad. This ought to assure it and maybe even double down on it.
Backing what I just claimed about his real reasons for tariffs, Trump couldn’t make that statement without immediately tying it to his determination to see Canada made into the 51st state of the United States of America, part of his greater vision for making America greater again.
Numerous analysts and business leaders have warned that Trump’s tariffs, and his unpredictable use of them, are sowing chaos in the markets.
No doubt. Even White House staff are starting to tremble a little at the reverberations they are hearing. While I don’t often join the popular analysts, I do on this one. There are apparently still some things that are just too obvious for even financial writers to miss.
The dark economic clouds are forcing Trump administration officials into the awkward position of explaining why a president who promised to boost the economy simply by winning election now faces falling stock prices, job losses that he incurred with unilateral cuts to government agencies and mounting predictions of a sluggish economy.
Even Senator Rand Paul, a longtime golfing buddy of Trump’s, said,
“Dramatic tariffs” on Canada and Mexico “could be devastating to the economy,” including in his home state.
“There are stories coming out talking about cars costing $10,000 more. And, of course, we’re worried about bourbon. We want to sell our bourbon. The Canadians are going to block our bourbon,” Paul said. “Now that you add lumber costs to that and steel with tariffs, nobody at home is coming up to me and saying please put tariffs on.”
And that’s just the beginning of the dark clouds that are gathering as the expanding empire starts to collapse into its own vacuous debt hole. When you need people around the world to consume more of your monstrous and ever-inflating mountain of debt, that’s not a good time to be starting economic wars with all of them.
“At some point, members of Congress start going into full freak-out mode,” the strategist said. “I don’t know that that point has been reached on the economy per se. I think it’s been reached on some of the DOGE stuff and some of the tariff stuff.”
Wait until you see how they all react when the actual storm hits. Right now, we’re just seeing the coming clouds. It might be a good idea to start wearing a life vest inside your own home because it may not have a roof for long. This is shaping up to be the ugliest storm since that tropical depression that became known as the Great Depression when it churned up into a full-blown category-5 economic hurricane that howled through about twenty years of global history, tearing up everything in sight.
Read the full article here