Tag: Economy
All that glitters is not gold
President Trump is promising a golden era. Let’s have a look.
What’s he doing now?
Tariffs, immigration restrictions, refusal to help democracies in Europe: this reminds me of the 1930s. So too does withdrawal from international institutions and stock market jitters. We know how that ended. Will it be better this time?
The campaign against woke as well as diversity, equity, inclusion is racial and gender prejudice incognito. Racism without the white sheet and pointy hat.
Firing of government workers and canceling of government grants and contracts is how both Trump and Elon Musk conduct business. These are the people you never want to do business with. They don’t keep commitments. They lie about accomplishments. The savings are going to be minimal. Firing all government employees would save 4% of the Federal budget. Firing IRS agents is going to increase the deficit.
The dismantling of USAID is already killing non-Americans who suffer from HIV, malaria, and other diseases. It is also hurting American agriculture and the American contractors who implement most of the work done abroad. At less than .5% of the budget, the savings are minimal. Once the court cases clear, I doubt there will be any savings at all.
What’s he aiming for?
Trump isn’t hiding his goals. He wants to extend a tax cut from his first term that will cost the US government $4.5 trillion. We know what that did the first time around: it was expensive and skewed to the rich. It did not deliver promised benefits. There is no way to compensate for the full $4.5 trillion, but the Republican House proposal is to take $880 million from Medicaid, depriving one-fifth of Americans of health insurance:
Trump will claim the savings come from waste, fraud, and mismanagement (WFM), but that is flim flam. There isn’t anywhere near enough WFM.
Trump has already suspended military aid and intelligence sharing with Ukraine, while asking nothing of Russia. Moscow continues its bombardment of civilians and its push for more territory. Trump’s goal is to get Ukraine to agree to give up land in exchange for Russian security guarantees. Putin has repeatedly proved those worthless. Trump expects the Europeans to provide peacekeepers, but that is entirely dependent on US backup through NATO’s Article 5. Trump is saying he won’t commit to that. The push to end the war in Ukraine is again flim flam. Dangerous flim flam as it is encouraging Putin to do whatever he feels like doing.
In the Middle East, Trump is still bragging on Gaza-lago, his scheme for rebuilding Gaza into a Mediterranean resort. No one things that is happening. If he were successful at moving the Palestinians out, it would make Americans targets of terrorism worldwide.
Dross is what you get
I underestimated Trump. To me, he is an obvious fraud. But he fools a lot of Americans. They think Musk is doing something that will balance the budget. They believe Trump will somehow make peace in Ukraine. His supporters don’t care that his Gaza ideas are bogus. It’s not just that all that glitters is not gold. It’s that anything Trump touches turns to dross.
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Dark times, but the worst is yet to come
@blisterpearl tweeted:
The Trump Administration is moving to cut off military supplies to Ukraine. Europe is trying to step up its game. But it can’t substitute all of the American weapons and intelligence on which Ukraine relies. Secretary of Defense Hegseth has ordered a halt to offensive cyber operations against Russia. Moscow is still conducting cyber operations against the US.
Tariffs go into effect on Canada, Mexico, and China today. They are 25% for Canada and Mexico, and an added 10% for China. Americans consumers will pay them. The stock market knew what to think: it dropped 2% yesterday and is no doubt headed down further.
Elon Musk continues to weaken the US Government, including agencies that regulate his businesses. The courts continue to issue orders to stop his blockage of government funds, but the Administration is mostly ignoring those. Trump hopes “his” Supreme Court will back his authority to make the cuts.
The US Congress remains in Republican hands. Tonight their half will stand and applaud wildly during the State of the Union. Trump meanwhile is denuding the Congress of its most important responsibility: the power of the purse. He is not expending appropriated funds.
No cure in Congress before November 2026
The American people don’t support this. Many managed to forget the disasters of Trump’s first term and too many didn’t turn out for last November’s election. But most now think Trump is doing too much too quickly. That is what Presidents try to do early in their term, knowing that resistance will build later.
The first available cure is in by elections. Two will be held April 1 to replace members of Congress appointed to the Trump Administration. They are both in deep red districts in Florida. It would be a minor miracle if the Democrats were to win one, never mind both. Another will be in upstate New York at a date still to be decided. It, too, is a Republican safe seat, more or less. If I’ve got this right, even winning all three would not flip the House. Marco Rubio’s Florida Senate seat will be up for grabs only in November 2026.
So essentially we’ve got a Republican majority in both houses until then. The damage Trump will have done is enormous. But it will be much worse if the Congress remains in Republican hands thereafter.
Can the popular will change Trump’s course before the next election?
Polls won’t deter Trump, who can’t run again anyway. I’d like to see the Democrats walk out on the State of the Union address tomorrow night. Or maybe not show up at all. Or hold up photos of Ukrainian President Zelensky as soon as Trump mentions Ukraine.
I wonder whether dramatic manifestations of popular opposition can do what is needed. A statement from the ex-presidents would help. So too would a national day of protest, say on May 25, the day before Memorial Day. Each major city should organize its own demonstration, with a monster one in DC.
Some Republican defections would help. Republican Alaska Senator Lisa Murkowski, has criticized what Trump is doing on Ukraine. But she failed to mention his name. If she were to caucus with the Democrats, even as an independent, it would make a big difference. Better yet if she brings a friend or two. So far though, we’ve seen little indication of courage on her side of the aisle.
The worst is yet to come
We live in dark times. But the worst is yet to come.
The budget ax will fall on Medicaid this year, which provides health insurance to twenty per cent of Americans. Trump will need to increase agricultural subsidies to compensate for the retaliation his tariffs will generate. Tariffs and the roundup of immigrants will raise prices, which are already headed in the wrong direction. Trump’s first-term tax cuts for the rich, which he wants extended, will boost the deficit.
If Putin gets what he wants in Ukraine, Moldova will be next. And after that the Baltics. The dominoes will fall, unless Europe finds the wherewithal to back a Ukrainian victory.
But the biggest threat looming is the Supreme Court. If it upholds Trump’s egregious behavior in eviscerating the US government, American democracy is doomed. Already the Washington Post and other media outlets are bending to Trump’s will. With the Supreme Court backing him, no opposition will stand a chance.
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The agreement they didn’t sign
I wrote most of this piece before today’s meeting. The analysis of the agreement is I think correct, even if OBE.
The US-Ukraine minerals deal were supposed to sign today has one great virtue. There are no obvious no-no’s, like limits on its territorial extent or obligations Ukraine will find onerous. It really doesn’t constitute what President Trump said he wanted, which was payback for US assistance. It does make Ukraine devote half its future natural resource revenue to the joint fund the agreement promises. But that is no loss since the fund is devoted exclusively to investments in Ukraine.
But if there are no glaring errors, it still doesn’t constitute a “devastating blow” to Putin. The devil is in the details, which haven’t been negotiated yet. Does this agreement apply to all of Ukraine’s sovereign territory as of 2014, before the first Russian intervention? Can the US turn around and negotiate a similar agreement with Russia that applies to territory Moscow now controls? It just isn’t clear.
This is essentially an agreement to negotiate an agreement. No harm yet in that.
No security guarantees
The big omission from Ukraine’s perspective is the lack of security guarantees. The agreement says this:
The Government of the United States of America supports Ukraine’s efforts to obtain security guarantees needed to establish lasting peace.
That is a backhanded way of saying the US won’t give guarantees but will support Ukraine’s effort to get them. The implied source is Europe, including the United Kingdom and Turkey as well as the European Union. No one else is available. The Europeans should bear this burden. Russian guarantees aren’t worth the paper they are written on.
The problem is that the US saying that the US will not guarantee the guarantors. That is, if NATO European member states guarantee Ukraine’s security, NATO’s Article 5 will not apply to their forces. If the Europeans get into trouble, for example with the Russians, the US will not help them out.
That is important. The obligation to protect European forces in Bosnia led to the Dayton peace agreement. Dick Holbrooke convinced President Clinton it would be better to deploy Americans to end the war rather than conduct an evacuation of the Europeans.
Production isn’t going to be easy or quick
Ukraine is a big country and may have lots of resources of interest to the US.
Here are the more “critical” deposits, rare earths and others (the pinkish area in the southeast is Russian-occupied territory):
But none of this is going to be easy or quick to exploit. Yesterday’s NPR interview on the subject suggested it will 18 years from the required up-to-date mapping to mineral production from a mine:
That would be 18 years in peacetime, or in a peaceful area of the country. I’m not holding my breath.
So why did it blow up?
Signing this agreement, which is no more than an agreement to negotiate, would have been much better than a pissing match. But Vance and Trump seem to me determined to sandbag Zelensky, who wasn’t humble enough for their tastes:
Zelensky should not have taken the bait. Who knows what comes next!
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Deal, no deal, ceasefire, peace agreement?
Ukrainian President Zelensky will meet Friday with President Trump to sign a minerals agreement the Americans have been insisting on. The Financial Times reports:
The final version of the agreement, dated February 25 and seen by the FT, would establish a fund into which Ukraine would contribute 50 per cent of proceeds from the “future monetisation” of state-owned mineral resources, including oil and gas, and associated logistics. The fund would also be able to invest in projects in Ukraine.
The $500 billion demand has disappeared. No security guarantees are included. The US stake in the fund is unspecified.
Deal, or no deal?
It is hard to know what to think about this, as it all depends on the details and on implementation. It is certainly not common practice for countries providing support to insist on repayment. But Trump is Trump. Personally, I wouldn’t sign anything he offers, but Zelensky is in a difficult spot. I hope he knows what he is doing.
The bigger question is whether this will bring Trump around to supporting Ukraine rather than Russia. I doubt it. Moscow will offer to match any terms Zelensky signs for minerals at least in Russian-occupied Ukraine. Trump won’t resist. Two deals of this sort will solidify partition.
What now?
Trump will continue to insist on peace talks. He desperately wants credit for ending the war. He has already given President Putin most of what Moscow wants. Trump is ready to accept Russian occupation of the territory it controls inside Ukraine. He has blamed Ukraine for the war. And he no doubt wants to end the shipment of arms to what he regards as the losing side.
Ukraine can do without the arms, at least for the next year or so. President Biden shipped ample supplies. The more important question is whether the US is prepared to continue providing intelligence. That is vital to Ukraine’s targeting. Also important to Ukraine is the use of Elon Musk’s StarLink satellite network, which it uses for military communications.
Trump’s reluctance to continue supporting Ukraine makes the Europeans more important than ever. If they step up their military supplies, Ukraine has a chance to outlast Russia in the current war of attrition. If they don’t, Kyiv’s manpower shortage will become ever more visible and relevant. Ukraine needs both Europe’s arms and its economic and financial support.
What about peace?
If Trump continues to insist, a ceasefire is a real possibility. Both Ukraine and Russia need a respite, during which they will resupply and reorganize for renewed fighting. The Europeans are saying they are prepared to observe a ceasefire. But the confrontation line is 600 miles long, with forces on both sides stronger than any the Europeans will deploy. The experience of monitoring a much shorter confrontation line in southern Lebanon does not bode well.
Neither Kyiv nor Moscow seems to me prepared to compromise on their basic war aims. Russia wants to limit Ukraine’s sovereign choices, like joining NATO. Ukraine wants Russia out of all of its territory, including Crimea. There may be a mutually hurting stalemate, but there is no mutually enticing way out. A ceasefire will give both sides time to contemplate whether one exists, but they certainly haven’t defined one yet.
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Part 1: Is this what you voted for?
J. F. Carter, US Army (ret LTC) 1968-1992, United Nations (ret D-1) 1992-2009, and European Union (ret D-1) 2009-2011, writes:
Dear Fellow Americans,
It is time to wake up from your slumber and face the truth. Our nation is in peril. Trump’s selection of Hegseth as SecDef and Gabbard as DNI, as well as VP Vance’s statements in Munich in support of the Alternative für Deutschland neofacists, reflect a dramatic change of direction. The President is conceding to Putin’s expansionism and betraying basic American principles. The credibility, rules-based order, national sovereignty, and freedom that have brought prosperity for the past 80 years are at risk.
Putin’s savior
Trump has thrown President Putin a lifeline. The Russian economy and military are exhausted. Ukraine would have prevailed, but Trump blinked. He is the 21st century version of Neville Chamberlain, who surrendered the Czechoslovakia’s Sudetenland to Hitler.
Likewise, Trump is yielding the national security of Ukraine and its citizens to Russia. Secretary of State Rubio will meet Russian Foreign Minister Lavrov in Saudi Arabia to negotiate a deal. This will be done without consulting Ukraine or the European Union. It will weaken NATO, which stands on the front line with Russia. That makes the US much more vulnerable.
The broader implications
Trump is signaling both Putin and President Xi. They now understand that they can do as they want, even if it means giving up Europe and Taiwan. Trump is also adding fuel to the fire in the Middle East. His pandering to Prime Minister Netanyahu will fuel Arab hatred of the US and inspire ISIS attacks on the US.
There are ongoing discussions of an Israeli strike against Iranian nuclear facilities. We can expect a catastrophic response. Trump is creating the conditions for igniting WWIII, or complete Western capitulation. We can only pray that a new Churchill or Roosevelt will sound the clarion call to reason and freedom.
Gutting American security and economy
To further undercut US security, Trump has gutted USAID and its soft power diplomacy. He and Musk are purging the FBI, CIA and the national intelligence community, as well as our world class military. He will install compliant loyalists. This is akin to Stalin’s purge of the military in the 1930s, which weakened the Soviet defense against Hitler’s army. Perhaps Trump thinks he can make a deal with Putin as Stalin did with Hitler in the Molotov-Ribbentrop Pact. That effort to buy peace between the two totalitarian nations led to catastrophe for both.
Not content with undermining our national standing and security, Trump is also undermining the economy. Tariffs, mass deportations, budget cuts, and gutting of the regulatory and oversight bodies will kill the Biden expansion. The Trump-Musk team fired 300 National Nuclear Security Administration employees and had to hire them back. It has fired 350 EPA and 1000 Veteran Affairs staff, as well as threatening to fire 90,000 IRS staff. How will that help to collect the millions of dollars needed to address the national debt?
Farmers will be particularly hard hit with the loss of markets that will never return. Canada, Mexico, Latin America, and some Asian nations will seek other trading partners. The EU, Russia, and China will benefit. US exports of oil, gas, steel, autos, and agricultural products will be replaced by less mercurial sources.
The budget
Will the average citizen be more financially secure with the MAGA Project 2025 budget proposals? It promises 4.5 trillion in tax cuts for the ultra wealthy and austerity for the rest of us. To partly compensate, $2 trillion in budget cuts are anticipated. These include Social Security, Medicare, Veterans Affairs, supplementary nutrition and aid to 40 million low income families.
The result will be more interest to be paid on the national debt, something traditional Republicans decry. Also a weaker dollar, weaker purchasing power, and much higher inflation. Republican President Lincoln warned:
It is the same old serpent that says work and I will eat. You toil and I will enjoy the fruits thereof.
The rule of law
Trump’s vindictive attacks against our system of jurisprudence and rule of law will further undermine US security. He released the convicted January 6 insurrectionists into society. What example does that set for law enforcement?
Are we now ruled by a mafia oligarchy like Russia? Trump has unleashed an unelected and uncleared citizen, Elon Musk, to access private data in the name of efficiency. This is in exchange for his $225 million donation to the Trump campaign and free unlimited X endorsements. The Trump Administration also tried to award Tesla a $400 million contract for its armored Cybertruck. Only publicity undid the deal. The Age of the Robber Baron is back!
Minorities and opposition
Trump’s people attack minorities, immigrants, non binary peoples, females, free choice, and books not sanctioned by them. Anything other than what their orthodoxy declares legitimate is fair game. Anyone different becomes a target for hatred and vitriol. It is the same scenario that Hitler used against communists, socialists, Jews and non whites. Divide and Rule! Us Against Them! The Soviets, Khmer Rouge and ethnonationalists in Yugoslavia all used these tactics. I personally witnessed it in Cambodia and Yugoslavia.
Hungarian PM Orban, Turkish PM Erdogan, Slovak PM Fico, the German AfD party, and Putin are all in with Trump! They suppress the media and fee speech. They call any opposition the “enemy of the people.” The White House even denied access to the Associated Press because it refused to rename the Gulf of Mexico.
Education and religion
Trump is trying to re-educate and dumb down the public by abolishing the Education Department. His followers are instituting their own curriculum, banning books, and endorsing the Bible in public schools. This violates the First Amendment provision of separation of church and state. The new Secretary of Health and Human Services, RFK Jr., symbolizes the current anti-science trend.
Are these people Christians as exemplified in the New Testament? Where is their compassion, love of fellow man or even sense of humor?
Questions we need to answer
What can explain Trump/MAGA actions that weaken the US and our allies? Why are they empowering Russia, China and other authoritarians? Have we become so ill educated that we elect inept clowns to entertain us? Where are the competent leaders to set the example of pride, dignity, courage, real strength, and placing country before self?
A small time bully and wanna be mafioso who bends to Al Capone-Putin is leading us to destruction. Are we Rome under Caligula or Nero, awaiting the fall of the Empire? What dirt does Putin have on Trump? Or is he and his ilk fascist at heart? Do they support the German AfD, Orban, and Putin to bring on chaos from which they will profit?
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The America Trump wants is not democratic
NPR broadcast a piece this morning on the dismantling of US democratization efforts abroad.
The Trumpkins/Muskites are cutting the National Endowment for Democracy (NED) and the National Democratic Institute (NDI). NPR doesn’t say, but I assume the International Republican Institute (IRI) is also bleeding out. It gets much of its funding through NED, as does NDI. State Department and USAID funding for democratization is also frozen.
Trump is an authoritarian
This is not surprising. Trump has made it clear he thinks he is above the law:
Vice President Vance in Munich this week lectured the Europeans for their alleged intolerance of authoritarian politics. He also preferred meeting with the head of the neo-Nazi Alternative für Deutschland(AfD) rather than Germany’s chancellor.
They are not hiding their own identity or their preferences.
It is not just a preference
At home, Trump is doing authoritarian as well as talking it. The Trump-backed Musk cuts are hitting institutions and programs Congress has authorized and to which it has appropriated funds. The President has a sworn obligation to execute those instructions. The House impeached Trump in 2019 for failing to do so with Ukraine assistance. But that can’t happen again so long as Republicans have the majority. Trump is unleashed.
Some Federal courts have begun to order unfreezing of funds and halts or reversal of firings. Trump is not complying. He is defying and pushing back to force escalation of the cases to the Supreme Court. There he hopes the 6-3 majority he created will back his moves. Even if he loses there, the delay will have destroyed most of what Trump and Musk wanted destroyed.
What’s next?
I expect Trump to go after the courts. He will order up impeachments in Congress of a few Federal judges. If he picks weak and vulnerable ones, they will resign to protect themselves. This will precipitate many more resignations, giving him the possibility of filling them with his own, young, yes-people.
I suppose at some point there will be massive demonstrations around the country to object to the authoritarian drift. Trump will order violent police action in response. That’s what he wanted to do in his first term. This time around, he won’t hesitate.
He also won’t hesitate to cut taxes for the rich, as he did in his first term. Some of those big cuts expire at the end of 2025. The Republicans in Congress are lining up to do the deed. They’ll give the working class voters who backed Trump a pittance.
The economy is headed into stagflation. Inflation is already up a tad. The new tariffs and shortage of labor due to deportations will contribute more pressure on prices. Meanwhile the government firings and the added costs of the tariffs to consumers will slow the economy. The stock market, which has experienced a glorious 16 years of rise, will implode. That’s not really a prediction, as I haven’t attached a date to it. But I find it hard to believe we’ll get through the next four years without a bust.
Stopping the craziness
I see little immediate prospect for stopping this craziness. A few Republican defections in the House and Senate would help. But Trump’s threat to primary defectors has worked so far. The only real dissenters among Republicans have been people who aren’t running again.
The first big opportunity will be the November 2026 Congressional elections. All of the House and one third of the Senate will then be up for grabs. But only a handful of seats will be competitive. Winning enough of those to gain a majority in one of the Houses will be existential for the Democrats. And for democracy in America and the world.
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