Wholesale Misery

Whelp. It looks like Trump is going to actually follow through on his tariff bullshit. (Or maybe not. Who the hell knows?) Krugman makes the point that Trump hates Canada for its decency. While there's a point there, it seems pretty obvious that Trump hates democracies. He certainly hates democracy here at home. I've been hesitant to give into the idea of disunion, but as a New Englander, I could think of worse fates than joining Canada. Some of the Upper Midwest and the Pacific Coast could join, too. 

Being a citizen of Canada is imminently preferable to being a citizen of Trumpistan.

What is clear, as Richardson points out, is Trump is breaking laws and committing unconstitutional acts with breathtaking rapidity and frequency. She suggests that some of what DOGE is doing is eviscerating government workers and agencies for the purpose of creating the lean 19th century government that could "survive" a government shutdown. Perhaps, and given the rank evil of Trump's minions, that could be plausible. The Stephen Millers and Russell Voughts combine in equal measures the cruelty and stupidity that are the hallmarks of fascism.

The Federal Reserve Bank in Atlanta has a first quarter GDP contraction predicted for 2.8%. A few weeks ago, they predicted 2.3% growth. In other words, Trump's erratic, reactionary policy making has taken healthy economic growth and possibly turned it into a recession in just a few weeks. If these tariffs really go into effect, 2.8% contraction might be optimistic. 

There are so many ways that DOGE can and likely will immiserate Americans. I've been focusing on missed Social Security checks. However, the gutting of Medicaid will also hammer elderly Americans who rely on Medicaid to cover gaps in their Medicare. Every Federal employee who is laid off is an American who will not collect a paycheck. Every impounded dollar of Federal spending is a dollar removed from the American economy.

I don't think, frankly, that a depression is off the table. Federal spending is roughly a quarter of GDP, and that includes Social Security, Medicare and defense spending. A depression is a 10% drop in GDP. Trump and Musk are apparently working this way: gut the government and THEN give the tax cut. The problem is that Republican majorities are so slim in the House, that passing an actual budget seems far fetched. 

What's more, Federal spending has a multiplier effect. A dollar spent on education or infrastructure improves the overall efficiency of the economy. You wind up improving overall GDP with spending like that. Eliminating it will make America poorer.

It is 9:00am as I write this. We will see what the Dow does today. It certainly was unhappy yesterday. However, in October of 1929, it was not a complete downward spiral. There were rallies, there were sell offs, there were good days and bad. It will be in the interest of finance to prop up the markets a bit. The Dow will tell us something, but it is not a light switch that flips and creates a recession. It will be a data point.

It's possible that a huge sell off could prompt Trump to change plans. I remain skeptical of how hands on Mr. Golf is in the running of his administration. He is also a vindictive prick, who might not waver because he's a vindictive prick.

As the Chinese curse goes: "May you live in interesting times."