Garrison America

As of Monday, March 23, U.S. Immigration and Customs Enforcement (ICE) agents have been deployed to fourteen major US airports ostensibly to assist with crowd control and support TSA checkpoints during staffing shortages.  We've been told that agents are primarily assisting with, rather than operating, security, and the list of locations may change.

So far, every photo or newscast I've seen shows these guys standing or walking around in improvised and mismatched non-standard fatigues, ballistic vests, sidearms and automatic weapons; sometimes wearing ICE or POLICE patches.  They're unmasked and none of them are outfitted with a name tag or visible ID.  

Compared to the law in my community - by all outward appearances - they're unprofessional and poorly groomed.  Sloppy bordering on slovenly.  Up-armed mall cops.

We're paying these guys a premium wage to chill-out and stand around at the airport while the TSA agents continue to do all the work and go unpaid. 

Meanwhile, it is a proven fact that the long lines and wait times remain unchanged.

Check-out the photo above.  A few of you will cheer it; while most will shake their heads.

Welcome to the militarization of America.  Unkempt and unprofessional too.

I'm an old man and never thought I would live long enough to witness the normalization of this nonsense during peacetime.  

Ponder that.  

Peacetime. 

Any wagers this is a dress rehearsal so you will be less alarmed when you go to vote?

I pray this isn't a condition I have to get used to....

How To Blow-up The Budget

From the WSJ there is this.

According to projections from the Congressional Budget Office (CBO) U.S. debt will rise to more than 100% of U.S. gross Domestic product (GDP) before the end of this year. 

Debt held by the public will balloon to more than $56 trillion by 2036 as annual deficits continue to mount, according to the latest projections from the Congressional Budget Office.  By later this year, the federal debt held by the public is expected to surpass the size of the entire U.S. economy.

The main drivers:  increased spending on entitlement programs as the nation's population ages as well as rising costs related to paying interest on the debt itself.  Republicans have taken issue with the projections, suggesting the CBO's assumptions on economic growth are too low.

Here's a closer look at the numbers, in five easy charts.

The CBO projects that the annual U.S. budget deficit will top $3 trillion by fiscal year 2036. The deficit was briefly that high when the federal government spent heavily during the Covid-19 pandemic. 

By fiscal year 2036, the deficit will hit 6.7% of GDP, up from 5.8% in 2025.

Social Security and Medicare costs will drive mandatory spending to 15% of GDP by fiscal year 2036. Mounting debt will increase spending on net interest to nearly 5% of GDP.

CBO projects a $23 trillion deficit from 2026 to 2035, up around $1.4 trillion from its last projection. Tariff revenue will only partly offset effects of the GOP’s ‘one big, beautiful’ tax law.*

Debt held by the public will surpass 100% of GDP this year and is projected to exceed 120% by fiscal year 2036.

 *Projected revenues generated by import taxes are uncertain as a consequence of the recent SCOTUS decision.

  

If Only The Dead Could Talk

Ruben Ray Martinez, a 23-year-old U.S. citizen, was killed last year by an ICE agent, with the Department of Homeland Security accusing him of having struck an ICE agent with their vehicle. However, DHS’ account of the incident was fiercely disputed by Martinez’ childhood friend, Joshua Orta, who was present during the encounter and claimed neither had offered any resistance to ICE officers’ demands.

On Saturday, Orta died in an unrelated car crash while driving in San Antonio, Texas, with his stepfather confirming his death to the New York Times on Monday.

 

If Only The Dead Could Talk

Originally reported on Wednesday by Newsweek we learned of another Immigration and Customs Enforcement connection to the shooting death of an American citizen in March of 2025.  A shooting death kept from public scrutiny until only last week.

Coincidentally, and leading up to this, a review of internal emails obtained under the Freedom of Information Act (FOIA) indicate that senior Immigration and Customs Enforcement officials were informed of a significant rise in reported use-of-force incidents compared to the previous year.  In this case incidents in early March alone had quadrupled year-over year.  

Now the public learns of 23-year-old Ruben Ray Martinez shot last March in South Padre Island.  ICE's involvement in the shooting was not disclosed to the public until this last week.  

According to ICE documents, the episode, which occurred around 12:40 AM on March 15, 2025, Mr. Martinez failed to follow commands to exit his vehicle. Martinez initially did not follow officers' instructions but eventually slowed to a stop after receiving verbal commands.  Agents surrounded the vehicle and told him to get out of the car before he accelerated and hit a federal agent who reportedly landed on the hood of the vehicle.  Another agent then fired multiple times through the driver's side window.  

The Department of Homeland Security described the shooting as an act of self-defense, saying the agent had "fired defensive shots to protect himself, his fellow agents and the general public" after the driver "ran over" a Homeland Security Investigation special agent.

That agent was treated and released for a minor knee injury.  Martinez is dead.

According to Homeland Security Department policy an immigration agent is supposed to use deadly force only if the officer has reasonable belief that the subject poses an imminent threat of death or serious bodily injury.  Furthermore, the policy specifically states that officers should avoid placing themselves in positions in which they have no other option but to use deadly force.  

In ICE's own reporting this appears another instance of ICE agents not complying with department policy concerning placement of personnel in connection to apprehended vehicles.  Haven't we seen this before?

ICE has not reported the existence of dash cam or body cam video of the incident and no known public video has come forward.  Martinez had been celebrating his birthday with a friend known since elementary school.  He was employed at an Amazon warehouse in San Antonio and had no known criminal or arrest record at the time of this post.

Some will take exception to my view on this subject but I happen to believe federal agents concealing their faces behind a mask and not wearing identification is a bad look.  They need to be up-front like law enforcement we're all accustomed-to.  A sinister look invites nothing but trouble.  Sure, a few of you will tell me about doxing of federal agents.  But you know what?  If rampant doxing was as big as you might imagine, then all law enforcement everywhere would be masked all the time.  

It's not.  

Where I live law enforcement officers wear a badge with a number, including a name tag and rank, they don't hide behind a mask and produce a business card before we part company.  They're professionals and go about their job like professionals.  They're so good at their job they never, never, ever stand in front of a stopped vehicle.  Even I know not to do this.  Your local LEOs are likely identical to mine.  But I digress and apologize for the cheap shot.

Do you know what is an even bigger bad look than masked federal agents?  

Another of our countrymen gunned-down by a federal agent.  

Naturally, there's that small handful of my acquaintances who will bask in their ghoulish reflected glory over this and crow on social media about how Martinez had it coming and it was all his fault.  Nevertheless, I figure most people reading this are standard-issue citizens who understand that federal agents shooting Americans to death is just, plain, smarmy.  It looks terrible and doesn't poll well.  

Moreover, the image of the best professional ICE agents suffer because of this nonsense.  From the top down the reputation and credibility of the entire department suffers.  If, as a consequence, agency leadership comes-across as evasive or furtive the public will take notice and the people will mutter about it.  None of this is rocket science.  Hearts and minds; it is all about winning in the court of public opinion. Appearance counts for a lot.  

So, what do we know for sure? 

Martinez is dead and cannot speak for himself.  This is conspiracy fodder.

No dash cams, no body cams, no identification or accountability for the shooter.  Unheard-of in the world of professional law enforcement this is sloppy meatball policing for sure.  If this is a deliberate policy to never leave a digital trail; that is a really bad look.  (See about conspiracy above)   

How about the boss?  Yup, DHS Secretary Kristi Noem hiding this from the public as long as she has.  Or is this just another oversize example of garden-variety incompetence?  Both looks are really bad; the former is much worse than the latter.  

Hidden from the public for a year.  Sloppy or deliberate?  Reader's Choice - you pick.  

What are they hiding from us anyway?

The Dear Leader

click on the image to enhance your worship experience

Yup.  Another massive banner bearing the image of Donald Trump was hung from another federal building today; above the main entrance to the Department of Justice Headquarters in Washington, DC

Further evidence of the vast improvement of your and my prosperity and general lot in life.  Along with making the world a safer place. 

All Hail The Dear Leader! 

Time Out

Mr. Trump’s willingness to make a near-immediate conclusion about the deadly shooting appeared to be at odds with one of his senior advisers. Tom Homan, Mr. Trump’s border czar, told CBS News that he would not make a judgment call on video of the shooting circulating on social media.

“Let the investigation play out,” Mr. Homan said, “and hold people accountable based on the investigation.”

Homeland Security Secretary Noem commented on the fatal ICE-involved shooting in Minneapolis and claimed that the woman killed had engaged in an "act of domestic terrorism" by trying to target officers with her car. 

Ever since this happened is seems I cannot swing a dead cat without hitting someone falling over themselves to get into their respective echo chamber of righteous hyper-partisan outrage.  

 

Keyboard warriors out for blood.  

 

I got no interest in turning-up the volume on this as it is way too early in the process.

I'm willing to wait for investigators to do their job, allow the process to play-out and the conclusions released to the public.  

 

It is abundantly clear that the administration had basically decided-upon the narrative they chose to spin before the deceased had been positively identified.  And with the locals stonewalled in any investigative role that puts the FBI under additional scrutiny to not engage in a cover-up.  Appearances will count for a lot.  I'm willing to give the FBI a fair shot at interpreting the forensics.   

 

Time will tell.

 

And liars, where ever they may lurk, get found-out.  Eventually. 

Crossing The Line

 

I 've been thinking about this off and on for a couple of days and initially concluded that drawing any further attention to this perversity was a waste of valuable bandwidth.  But after 24 hours of observing a (thankfully) small number of my MAGA acquaintances using Face Book to ghoulishly bask in the reflected glory of the murder of an Hollywood  liberal this is my conclusion. 

I take no issue with satire, sarcasm or general snarkiness; I use it myself.  Nevertheless, I was raised to not gloat about murder or another family's very personal tragedy.  It is inconsistent with expectations of a Christian. Trump's Tweet is not tone deaf; it is wrong.  And while I personally consider this over the line and unpresidential; I fully expect more of the same from Donald Trump.  

  

Protecting Union Station

Godfrey C. Danchimah Jr. (born July 21, 1969), known as Godfrey, is an American comedian and actor who has appeared in multiple venues to numerous to list.  

Bio here.

Enjoy this YouTube Short.... 

Pentagon Press Corps

So, we’re gonna give the DOD a Trillion dollars and not have them accountable to a FREE press?

Naturally, this at the direction of the same collection of morons blathering about war plans in real time using Signal on their unencrypted personal devices.

No freedom of the press is one step closer to fascism.

The one thing that may save us from this administration’s clear authoritarian intent is its equally obvious incompetence.

Quote of the Day

 

 

During a Tuesday call in to the “Fox & Friends” morning television show, Trump said his orders have transformed Washington into - 

 

Just an incredible place in literally four days.  Did you see what’s happening with the restaurants? They’re bursting, they were all closing and going bankrupt.

 

It's gotten easier to fact-check misinformation, lies and the president himself with Open AI.

 

And for the record, Washington Post polling reveals the 69% of DC residents want the National Guard to go home.  It's apparently a bad look and impacting local business.. 

 

Rope A Dope

I had very low expectations and because it is in my personal enlightened self-interest that President Trump be successful I was hoping the president would not come across as falling under the thrall of a masterful East German KGB operative.  I've been pondering yesterday's summit in Alaska overnight and this morning and have a few observations. 

 

An American President applauds an indicted war criminal and ruthless assassin for the whole world to see.

Based on the press conference, Donald Trump got played again.

No ceasefire. None of the promised harsh sanctions. Nothing accomplished. Trump was too smitten to put Putin in his place and instead elevated Putin’s status on the world stage.

He’s so easy to manipulate with a few compliments. It’s pathetic and nationally embarrassing.

Rope a dope.

 

On This Day In History

Fifty years after the fall of Saigon (or its liberation, depending on whom you ask), Vietnam has transformed from a war-torn battleground to one of Asia’s fastest-growing economies—and now finds itself caught between two superpowers. 

For North Vietnam, the war was a hard-fought victory for independence; for South Vietnamese refugees, it marked a heartbreaking loss of homeland. For the United States, it was a national trauma and a cautionary tale about military overreach and unclear objectives. But beyond the battlefield, the country’s postwar path tells a remarkable story of recovery. 

After years of economic stagnation and international isolation—including a costly occupation of Cambodia and reliance on a crumbling Soviet Union—Vietnam had little choice but to pivot. The collapse of the USSR forced the country to look elsewhere, and by the late 1990s, it began opening its economy to the West. With the normalization of ties under President Clinton, Vietnam entered a period of rapid economic growth, joining the WTO and becoming a major global exporter, particularly in manufacturing. 

Today, Vietnam plays a careful geopolitical balancing act, especially as tensions rise between the US and China. When President Trump slapped sweeping tariffs on Vietnamese goods in April—only to pause them 90 days later—Chinese President Xi Jinping seized the moment to deepen ties with Hanoi. Now, Vietnam must decide whether Trump’s aggressive trade policy will push it further into China’s orbit, a reversal of centuries of resistance to Chinese influence.

Geopolitical expert Ian Bremmer breaks down how Vietnam went from devastation in the wake of the Vietnam War to becoming a regional economic powerhouse. 

Become a subscriber to follow where this leads us....

Is It Only The Economy, Stupid?

A variation on the title of this post was coined by strategist James Carville as a missive to campaign workers leading up to Bill Clinton's successful 1992 presidential campaign against incumbent George H. W. Bush.  I've written about the subject many times over the years.  Is it only about the economy?  Or is there more?  I would postulate that it is the economy and much  more.

Tomorrow Donald J. Trump will be sworn-in as America's 47th President.  Who, in the lead-up to the festivities, would tell you that he alone can fix our country's hellscape of lawlessness, disorder, economic collapse, inflation, energy dependence, mobocracy, crisis and chaos.

Perhaps you share that view.  Not me; I would submit that by any rational measure of the condition of the United State of America the president-elect will be taking over a country in rather decent condition. Let's take a walk thru the relevant numbers.

Contrary to what the president-elect will tell you drug overdose deaths are down and the manufacturing sector has created more jobs than at any time in the last decade and a half.  Although some prices remain stubbornly high; inflation is down significantly.  Inasmuch as federal largess under both Trump and Biden contributed to the expansion of the money supply Trump now shoulders the burden to reduce the cost of my groceries.  Fair is fair. 

December delivered an overall blowout jobs report and wages are up and continuing to rise, all the while unemployment is at levels before the COVID shitshow hit the fan.  Domestic energy production of crude oil and natural gas are at record levels and we are now the global leader in production and export of crude oil.  Meanwhile, a gallon of regular unleaded, around here anyway, will set you back less than $2.50.  We are awash in an embarrassment of energy and production.

Nevertheless, it goes beyond the economy.  Illegal immigration is belatedly, but at long last down and we've found ourselves with the lowest violent crime rates in fifty years.  No American military forces are in a hot war elsewhere in the world and Trump's go-to Gold Standard for how he's doing - the stock market has set a new record for the past two years.  Finally, Americans have shown signs of coming around to actually recognizing and accepting the reality that conditions on the ground are pretty darn good.   

I'll bet you a steak dinner that in reasonably short order President Trump will take credit for the strong economy he is about to inherit.  That's because as I gaze across my landscape I don't see a hellscape; I see prosperity and the best economy on the planet.  If you think I'm making this up out of thin air; fight me.

Do not get the impression I am diminishing the reality that not each and every single last American, shares the same upwardly economic prosperity and living conditions.  Poor people and economically disadvantaged families are real.  Nor am I blind to politics.  It is certainly in Trump's self-interests to paint as bleak a landscape a possible for his base.  Nothing new under the sun there.

As Trump assumes office there are no shortage of challenges ahead.  Russia, China and Iran are failing states.  Russian and North Korean military personnel allegedly execute Korean wounded to erase evidence of North Korean involvement in the war against Ukraine. Ugh.

Here at home, domestic terrorism has, again, reared its head.  There is funding the budget and passage of a reconciliation bill, the DOGE, the debt ceiling, tax policy, Social Security and Medicare.  Will there be a comprehensive immigration policy?   99 cent a dozen eggs?

Placing a higher value on action I try to tune-out the talk.  Consequently, I'm looking forward to detailed policy to materialize.  You know, policies which will improve your and my prosperity and general lot in life.  And maybe make the world a safer place.

Donald Trump has been dealt a solidly good hand and I'm looking forward to being witness to how he plays it.

Bring it on.....

Doge - American Style

Doge - Venetian Italian for Duke - the highest official of the Republic of Venice.  Spanning the 8th to 18th centuries, more than a thousand years, the Doge was the sovereign ruler of the Venetian State.  

The palace of the Doge is famous for its flamboyant gothic architecture and its Great Council Chamber which houses possibly the largest oil on canvas painting in the world:  The Glory of Paradise by Jacopo Tintoretto.  As the primary residence of the Doge of Venice the palace was the physical manifestation of this supreme sovereign authority.

It is fitting that billionaire oligarchs Elon Musk and Vivek Ramaswamy have been appointed sovereigns of the incoming Trump administration's Department of Government Efficiency or DOGE.  Of course, lacking the authority of a real government department there is no supreme authority.  

Sigh. 

Trump's transition team tells us that Musk and Ramaswamy are going to solve our country's debt problem. The DOGE is going to reduce the government's power, slash its workforce and crack-down on waste, fraud and abuse.  The sovereign oligarca announced they intend to reduce the federal budget by nearly thirty percent ($2 trillion).  So far, the chatter has been largely about cuts without much bandwidth devoted to a single ducat of additional revenue or investment in efficiency.  

Sure, I know it's early in the game and the president elect has yet to be sworn into office.  As a consequence I am resigned to the notion that for the present I will be subject to random dictum from Ramaswamy and Musk highlighting: The Usual Bill Of Fare.  Pledging to battle waste, fraud and abuse in Washington is as old as the hills.  Having been trotted-out with incessant frequency as a campaign promise by both sides it has become tread worn.  This spent refrain has become wearily uninspired.  It is tiresome.

Where to begin?  Try to stay with me as we take a deeper dive in the numbers. 

I've taken a run at this stuff before and it all comes down to money coming in (revenue) and money going out (expenses).  Nuanced by what is non-discretionary versus discretionary.  With a dose of old-fashioned politics thrown-in for good measure. 

The revenue side of the ledger includes a couple of large contributions; namely individual income taxes (about $2.2 trillion) and payroll taxes (about $1.6 trillion).  Smaller are corporate income taxes (about $420 billion) and various duties and tariffs, sales, estate and excise taxes (roughly $228 billion).  For the 2023 fiscal year money-in totaled $4.4 trillion+.

The president-elect has promised to reduce individual and corporate income taxes by at least $5 trillion over 10 years; reducing the money coming-in.  He has also promised substantial new tariffs on imports; although no estimates have been revealed for these tax increases.

Social Security and Medicare would be difficult to cut as Trump has promised he would not.  Nevertheless, both programs are living on borrowed time.  Without additional revenues and changes to the retirement formula, the Social Security and Medicare trust funds are already under stress from an aging population.  They will run out of money in 2033 and 2036 respectively.  This means that current retirees will experience a significant cut to their benefits anyway.  Trump's promise to end taxes on Social Security would accelerate the arrival of these cuts.

On the expense side of the ledger the three largest non-discretionary expenditures include the fore-mentioned Social Security and Medicare, federal civilian and military retirement and veteran benefits.  Total non-discretionary spending for 2023 was $3.8 trillion. 

There is an additional $659 billion of net interest (give or take) on the outstanding national debt.  It stands alone; but added to the non-discretionary component of the federal budget gets us to a grand total of $4.5 trillion.

What's left?  Discretionary spending of $1.7 trillion.  Included in this category is defense and roughly $9 trillion in non-defense spending.

Non-discretionary and discretionary explained

Non-discretionary programs are deemed mandatory spending which means funding doesn't require passage of an annual appropriation by Congress.  By example: if the DOGE Bros want to reduce Social Security, Medicare, federal retirement benefits (military and civilian) Congress would have to pass legislation reducing or defunding these benefits.  

There is net interest on the national debt -  almost $700 billion.  The credit-worthiness of our nation hinges on our promise to pay our debts.  I don't believe the DOGE Bros would recommend defaulting on the debt or devaluing our currency putting their own wealth at great peril.

On the discretionary side of the spending ledger the DOGE Illuminati have tweeted about unsupported billions upon billions of defense payments that cannot be tracked or audited. I'll not argue there isn't waste, fraud and abuse or other similar leakage in the defense budget; but not enough to reduce the federal budget by 30 percent.  I suppose Musk and Ramaswamy might recommend that Congress kill the F-35 program.  Alas, there is that nagging matter of Congress, national security and jobs. 

What's left? 

That leaves a grab-bag of leftovers the DOGE can submit to Congress and the President for elimination and defunding.  In the grab-bag is found Assistance to Individuals (namely nutritional and healthcare programs), transfers to states (Medicaid coverage for poor people, education, roads, bridges, highways, ports, airports and other infrastructure), National Parks, the National Weather Service, arts funding (public broadcasting); you get the drift.  

Of course, in the grand scheme of things, this grab-bag of leftovers doesn't even come close to scratching the surface of reducing the federal budget by thirty percent.  And here's the catch; a considerable portion of the grab-bag is decidedly popular with much of the public.  Defunding it would result in a cascade of serious budget shortfalls for the states leaving all the governors and the people very grumpy.  

The challenge for Trump and the DOGE is that a 10,000 foot view of the discretionary side of the federal budget reveals that it is just two things - military and defense; including a vast health and social insurance program that comes with it; and everything else.  Compared to defense, the rest of the discretionary budget is much more transparent because average Americans are witness almost on a daily basis to weather forecasting, highways, air traffic control, public broadcasting, national parks and monuments.  They cost relatively little money in a ginormous federal budget and are generally liked.

I readily admit I struggle with coming-across as slightly snarky about quirky oligarchs like Musk and Ramaswamy; they're billionaires after-all.  Who among us actually believe they are sincerely empathetic to the needs and wants of ordinary Americans?  How many of you think they relish the attention of the Trump reality show?   These juxtapositions mean they have to work harder at candor and authenticity if they want to be taken seriously and actually add value to the incoming administration.

If the DOGE only looks at cutting the budget their task may become virtually impossible as it would result in a significant disruption of services average Americans have come to expect from government.  The DOGE must explore creative initiatives that require investment in efficiencies and alternative sources of revenue and think big.  They need to go after the big money to make a historic splash. 

I'll let you in on a secret:  They need to shift that thing we refer to as an 800 pound gorilla.  They need to look to Social Security and Medicare - the root cause of our budget woes.  The subject politicians are so loathe to speak-of that they tip toe and shrink from it like timid sissies.   

I am not being snarky - if Elon and Vivek put their thinking caps on and put their minds to meaningful reform of both of these programs with a view to securing their future for the next couple of generations it would be earthshaking and enshrine their boss in history.  Who knows, I might even become a believer.

To be clear this would be a heavy lift.  Politically-fraught too.  The last president to pull it off was Ronald Reagan.

I wish them well as President-elect Trump will be a lame duck president; with effectively only a couple of years to implement meaningful change.   Which may partially explain why only a few days ago the richest man in the world is now walking-back his boast of $2 trillion budget cuts.    

There is enough meat on this bone there is a high probability of another couple-three blog posts to do it justice.  And since it is very early in the game there is ample time for bonafide policy to evolve and unfold.  Detailed policy which will improve your and my prosperity and general lot in life.  And perhaps make the world a safer place.

Of course, There is time for additional hedging and moving of goal posts; so stay tuned.

Cheers!

Join The Resistance

 Meanwhile in Greenland.....

Inflation By Any Other Name

This subject has come-up here from time-to-time and I have tried my darnedest to remain circumspect, intellectually honest, good-humored and resist any snarky impulses to poke fun of individuals who seemingly believe that presidents posses cryptic powers to turn inflation on, and off, like a switch.  When it comes to lazy economic thinking the struggle is real.  Thankfully, understanding inflation is not rocket science.  If you have a basic grasp of the interplay between excess liquidity (M2) and demand economics it is not very complicated.  But I digress.

Inflation figured significantly in both the run-up and results of last month's presidential election.  In his interview with Kristen Welker several weeks ago president-elect Trump said: I won on two things; I won on the border and I won on groceries.  And at the RNC convention of last summer Trump declared he would:  End the devastating inflation crisis immediately.  Trump took credit for low inflation in his first term of office; he might take the blame for price inflation in his second term.  Time will tell.

As an old guy I am mildly bemused at the notion that younger voters have no institutional memory of inflation, soaring energy costs and the accompanying astronomical interest rates, of the late 1970s and early 1980s.  By those hardcore economic standards today's historically low inflation, low energy costs and interest rates are the modern equivalent of lotus eating.  Nevertheless, the president-elect has promised to bring inflation down and if he doesn't the voters might become restive. He's certainly got his work cut out for him as there's not much a chief executive can do to immediately influence forces at play in an economy as large and complex as ours. 

Complicating this already challenging task is the potential interplay of tariffs and immigration policies. Consider this.

Tariffs are a tax.  If I own an import-export business and import an item subject to a tariff or duty I have to pay the US Treasury the tax due upon receipt.  The country of origin does not pay the tax - the importer does.  To cover the tax I'll mark-up the price of the imported item when it lands with a distributor.  As a consumer purchases the item from a retailer it is that buyer who ultimately pays the mark-up.  Consequently, tariffs can contribute to inflation as the price of retail goods rise. Trump's challenge is the use of tariffs as a negotiating tactic or to surgically target specific imported goods.  It's a high wire balancing act.  

Almost two million undocumented workers are integrated into our food supply chain.  Another 30% of construction workers are immigrant labor - documented or not.  Immigrant labor is a significant contributor to what we pay for everything from fruits and vegetables at the grocery to a replacement roof.

My hope is that the Trump administration finesses this stuff.  Get too aggressive on immigration and tariffs and prices could rise.  Fail at one or the other and you tread at your own peril with an economy-stalling bout of deflation.  If only there was a magic switch in the White House bunker.

Trump naturally supports the sweeping reform of government regulation.  Furthermore, efforts to re-shore manufacturing to our hemisphere implies efficiencies, retraining a labor force and other productivity gains.  This shrinks inflation pressures but takes time to trickle down in a network economy.  Because 70% of our economy is driven by consumer spending these gains would be modest at best.  

Last, but not least, there is: drill, baby, drill.  Trump has promised to increase domestic energy production by lifting environmental restrictions and fast-tracking permitting.  It isn't clear to me precisely how this will dramatically reduce inflation and shrink the price of my groceries; nor has the former president elaborated.

Transportation costs already benefit from lower energy pricing because domestic energy production has been at record levels for years.  Several weeks ago I filled-up the Honda with regular unleaded and paid less than $2.50 a gallon.  Prices fell further over the busy Christmas Holiday travel season.  Go figure.

I own shares of energy and related companies and in a world where CEOs answer to shareholders; further retail price reductions will be challenged by sustaining record profitability, dividends and share prices.   Besides, oil is a fungible commodity, traded in dollars.  Accordingly, global markets play an outsized role in pricing.  My sense is that lower energy costs are largely baked-into the cake so we'll have to see how this plays-out.  What I know for sure is government doesn't drill for oil and gas.  (Like I said, the struggle is real.)

In closing, inflation is relatively easy to explain; it is far more difficult to bend to your political will.  It is possible that the in-coming president is beginning to wrestle with boastful promises made during his campaign.  As I said to a pal several months ago:  I'm looking forward to detailed policy which will improve my prosperity and general lot in life.

Meanwhile, all of our major appliances have been replaced, a new water heater installed, a new car for me, new car for Jill and a contract for a replacement metal roof on the house in 2025.  If tariffs materialize I think we may have dodged the major impact of any Trump tax increases.  Only time will tell....

Edit To Add:

Got home around noon following an overnight road trip and topped-off the tank of the Missus' new Honda.  Local pricing for regular unleaded:  $2.479....

Laissez Les Bons Temps Rouler

Popular sentiment about the economy is both a curious and fickle phenomenon.  Over the last couple of years consumer confidence did not necessarily reflect the underlying strength of the US economy.  I've blogged about it from time to time as I've scratched my noggin over perceptions of what is real versus perceived.  As a recovering financial guy I periodically puzzled-over this disconnect.  Perhaps that is exactly the point - perceptions in and of themselves are naturally fickle.  Which is why they are nothing more than perceptions.  Don't over analyze it; what is perceived is frequently not founded in reality.

Now we learn that popular sentiment over the economy has flipped.  A majority of consumers (among Republicans anyway) now perceive that the good times are about to roll.

Last week, the New York Fed's monthly consumer survey revealed that an increasing number of us now share the expectation that our financial situation is likely to improve in the coming year.  Remarkably, this optimism has reached its highest level since the period of time immediately preceding the COVID shit show of 2020. 

This is further bolstered by the University of Michigan measure of US Consumer Sentiment indicating that it increased for the fifth consecutive month, the highest level since April.

Some may suggest this this is a consequence of the reelection of Donald Trump.  I am unconvinced as this has been percolating for the better part of 2024; but I'd not disregard the possibility of confirmation bias.  I am certain that the president-elect will take credit for the strong economy he will inherit. The only Trump Effect I can discern is found in reading the University of Michigan data.  Current conditions have been led by a surge in the purchasing of durable goods - a consequence of the perception that purchases of durables today would enable a buyer to avoid price increases in the future.  Which takes us to that nagging matter of inflation.

To be certain the economy remains healthy; the labor market is stable, consumer spending is robust and growth has been steady.  The core consumer price index (excludes volatile energy and food prices) has grown at an annual rate of 3.3% year-over-year; stubbornly remaining above the Fed's target rate of 2%.  

Domestic retailers are warning that proposed tariffs would result in higher prices to US consumers.  The president-elect himself has said that he can't guarantee anything when it comes to the impact of tariffs on Americans at the checkout.  This, along with immigration restrictions, may contribute to our ongoing inflation challenges.

So, stay-tuned.  None of this would be so consequential except that 70% of the US economy is consumer spending.  The remaining 30% is government spending, manufacturing and everything else.  So maybe sentiment counts for something after all.

Tariff Man

In case you weren't convinced that Donald Trump was serious about tariffs; he is.  But it's not necessarily about trade.

Raising the cost of imported goods from our two largest trading partners (Canada and Mexico) with the imposition of a 25% tax is very unlikely to happen.  Seriously, would Trump blow-up the Mexico-Canada-US trade deal he negotiated during his first term?  What would he gain by sparking a trade war with our neighbors?  And increasing the cost of imported goods on US consumers?  And contributing to inflation?  So it's basically bullshit.

What we are seeing is the threat of tariffs not for purposes of trade or economic policy but as a weapon of diplomacy and coercion. An escalatory ladder.  A bargaining chip.  Only a fool would enact them as you'd be punishing domestic businesses and consumers.  The investment markets don't like it either.

Tactically, tariffs may be a tool for rejuvenating targeted US manufacturing; but that ignores the simple efficiency of a cheaper dollar.  But you already knew that. 

The more things change the more they stay the same.

Independence Day

The week preceding my South Dakota vacation (likely Monday, October 28 or thereabouts) a couple of economic news feeds caught my attention with some pre-election chatter.   

Equity, fixed income and currency markets were beginning to signal a Trump win.  

With that I thought to myself:  Election too close to call.  Bad news for Team Harris.  All of which was confirmed Wednesday morning November 6.  Donald Trump had won both the Electoral College and the popular vote.

With this came a big mandate for change.  And a bit of relief for me about something long in the making and now confirmed.  The party of Ronald Reagan was dead.  I take no joy in its passing; only relief in that it is now over and done with.

As a general rule my opinions about Donald Trump have reflected that I do not think very much of him as a person.  Nothing in this recent election outcome has changed that view.  His exhortations invalidate everything I have been taught about how to live my life and everything I've imparted to my daughter about being kind, generous, loving your neighbor, being accepting, showing understanding, empathy, being truthful, ethical, sensible and levelheaded.  Not being a bully, selfish and an asshole.

There is a reasonably good possibility that about half the people reading this would tell me that they like Trump because he says what's on his mind, he tells it like he sees it and doesn't have a filter.  Well, sometimes it's OK to have a filter.  There was a time, not so long ago, when being an asshole wasn't cool.  If you were a shitty person and kept it to yourself, society was a better place because of it. 

I am the product of a lifetime of unintentional, prior influences and imprints.  Dig deep enough into my implicit biases and you'll likely catch a whiff of cold war.  So, get over it. 

In 2016 I considered Donald Trump to be a goof and a joke; not to be taken seriously.  While my life got along swimmingly with his policies during the first three years of his administration all of that changed with the COVID shit show of 2020.  In over his head, by the time the election rolled-around more than enough people had enough of the drama that I believe it cost him the election.

2024 was different.  In a disciplined fashion Donald Trump tapped-into working class anxieties and resentment over inflation and the general economy.  It doesn't matter a lick if I feel my world is doing better if a plurality of my countrymen do not. I've learned to be cognizant of this.  I can do better.  We can do better.

Donald Trump won the White House, the Senate and the House.  The Trifecta.  SCOTUS is icing on the cake.  Donald Trump is no goof or joke.  He brought home the first popular vote win for the GOP in two decades.  He is the real deal. He expanded the GOP base to broadly include a meaningful number of minority voters.  He deserves a great deal of credit for that.  Consequently, he has a ginormous mandate for change and an abundance of goodwill.

Speaking of which, political parties undergo generational change.  And my generation has been shuffled aside as there is no place or role for us any longer in what was previously known at the Party of Reagan.  Social media has been fertile ground for fourth grade caliber ridicule.  Being derisively called a NeoCon is apparently a new pejorative.  Who knew? 

None of the foregoing amounts to much.  Sticks and stones.  It is the loss of friends and acquaintances who have excommunicated one another over perceived grievances that is the real tragedy.  Perhaps this will heal with the passage of time.  We'll see.

In the fourth paragraph of this post I alluded to a feeling of relief.  A consequence of the election outcome is being relieved of the burden of party.  Doesn't matter which party either.  I'm done rolling that boulder up the hill.  I'm basking in the warming glow of something I find strangely liberating; and it is not my laptop.  My newfound independence is a second chance to look at the world with a clean slate.  Independence Day has come to November 6.

Meanwhile, I'm going to try to stand for something other than our base instincts. I'm capable of better.  Donald Trump won fair and square and there wasn't even a whiff of political violence as a consequence.  That speaks volumes.  So, I'm going to sit on my hands for a bit and wait for detailed policy proscriptions to materialize.  You know, stuff that will improve your and my prosperity and general lot in life.  Along with making the world a safer place.

Bring it on....

Strong Dollar - Big Deal?

Impacts of the American dollar relative to other world currencies depends.  It holds advantages for some and disadvantages for others.  Let me explain.

If the dollar has strengthened - for most American consumers this is a good thing.  If I am planning another family vacation travel abroad becomes less expensive.  Imported goods sold in the American market place are less expensive.  What's not to like, eh?

However, imagine I am an American manufacturer and rely significantly-upon global markets  to sell my product(s).  As the dollar strengthens, my product is less competitively-priced overseas and this can impact sales and profits.

So, you're likely scratching your head and wondering why this is a big deal.  

It is kind of a big deal as the dollar has reached a one-year high against our peer currencies.  Ironically, a consequence of traders betting on Donald Trump's Secret Sauce of trade tariffs, tax cuts and deregulation stimulating economic growth.  Trump's plans appear to be pouring gasoline on the fire he doesn't want.  He obviously wants a weak dollar which would buoy US exports.

This is complicated stuff and a simple Only I Can Fix It with a blunt shillelagh of tariffs isn't necessarily going to work.  This calls for nuance and incrementalism.

If you want to know how this is working out keep your eye on the dollar.