What Happened to the Minimum Wage?

 Popular Economics Weekly

As of January 2025, Alabama, Louisiana, Mississippi, South Carolina, and Tennessee have not adopted a state minimum wage. This means that workers in these states earn the federal minimum wage of $7.25 per hour.

PBS.org

Currently, just 34 states, territories and districts have minimum wages above the federal minimum wage of $7.25 per hour, according to the National Association of State Legislatures.

“Five states have not adopted a state minimum wage: Alabama, Louisiana, Mississippi, South Carolina and Tennessee. Three states, Georgia, Oklahoma and Wyoming, have a minimum wage below $7.25 per hour. In all eight of these states, the federal minimum wage of $7.25 per hour generally applies.” NASL

How is that possible in today’s inflationary economy when the price of everything is too high? Republicans call it States Rights, the mantra that conservative Republicans use to justify the high poverty rate prevailing in these red states, which is the reason a Donald Trump could become the president.

The federal government is so evil (too many gays, immigrants, taxes), say the red staters, that they must oppose as many of its policies as possible (other than social security, Medicare and Medicaid, of course).

It’s also a total con but Republicans have succeeded in convincing the majority of their electorate in those states to listen to them rather than the blue states whose excess (higher) tax monies pay their benefits and help to balance the budgets of the red states.

Kentucky is a prime example, where prosperous blue states such as California and New York have large surplus taxes that flow to poor red states like Kentucky—more than $60 billion annually in their case for pensions and healthcare owed its citizens—to support its citizens and its own budget deficit (due to a low tax rate).

The above PBS map highlights where the poorest (gray colored) states are located, mainly the south and Midwest where right-to-work laws that obstruct union organizing still prevail. These are laws that say one can work for a company that has unionized its workers in these states, but the Supreme Court has ruled they don’t have to pay the union dues that support the benefits being unionized (higher wages and benefits, generally) such membership gives them.

It's difficult to believe such ignorance still prevails with the modern mass media, but culture wars still exist in America with its many ethnic and racial divisions. Such a variety of immigrants has been the reason the United States of America has been the most prosperous country in the world, but also the most divided in these red states.

It’s the overweening bigotry, a relic of the civil war, that has kept red states poor; and a propaganda network of Fox News and conservative talk shows that has kept the likes of autocrats and dictators in power.

High inflation since COVID-19 is a good example of fear and paranoia topping common sense. Most people understand that inflation is caused by a shortage of things; in this case because of the COVID-19 pandemic that caused a brief recession and shut down the world economy.

But fear does funny things to people, and only such a well-oiled, conservative propaganda network could convince red staters that it was because Democrats had given them too much money to spend. Yet it is Biden’s New, New Deal legislation that is modernizing the American economy and keeping them at full employment!

But when has common sense prevailed in politics? We need to bring back the middle class that prevailed after World War Two, but was decimated by so many recessions since then, as politics gradually moved to the right and budget deficits grew.

Common sense could prevail if congress can avoid renewing Trump’s first term tax cut in the budget negotiations, which will increase the federal debt by another $4 trillion, while cutting Medicaid benefits in the red states that need them the most.

But since when has common sense prevailed?

Harlan Green © 2025

Follow Harlan Green on Twitter: https://twitter.com/HarlanGreen

Who Is Going to Mars?

 Answering Kennedy’s Call

“There is nobody in this country who got rich on their own. Nobody. You built a factory out there - good for you. But I want to be clear. You moved your goods to market on roads the rest of us paid for. You hired workers the rest of us paid to educate. You were safe in your factory because of police forces and fire forces that the rest of us paid for. You didn't have to worry that marauding bands would come and seize everything at your factory...

Now look. You built a factory and it turned into something terrific or a great idea - God bless! Keep a hunk of it. But part of the underlying social contract is you take a hunk of that and pay forward for the next kid who comes along.” Senator Elizabeth Warren

Blue Origins

Both Elon Musk and Jeff Bezos are in a race to land on the moon, and maybe beyond. Their enthusiasm is infectious, but also dangerous. It doesn’t prepare America for future generations. They are also propagating a giant lie that Oligarchs have used to hoard their wealth—that they are exceptionally beings who deserve special treatment (such as tax cuts paid with borrowed money).

It appears in Bezos stated rationale for taking the Washington Post’s editorial page to the right and not allowing opposing viewpoints.

“I am of America and for America, and proud to be so,” Mr. Bezos said. “Our country did not get here by being typical. And a big part of America’s success has been freedom in the economic realm and everywhere else. Freedom is ethical — it minimizes coercion — and practical; it drives creativity, invention and prosperity.”

The problem with conservatives’ ethos of personal freedom and free markets is that it doesn’t build forward or think of future generations. It doesn’t provide seed money for future growth as the Biden administration provided in its infrastructure, Inflation Reduction, and CHIPs Act bills that the Trump administration is trying to dismantle—further enlarging the budget deficit.

Musk’s and Republicans’ short-sightedness also applies to the dismantling of USAID. By working to improve the lives of the poorest in the world—mainly Africans today—it lifts up the ability of future generations to provide for themselves. It also prevents future worldwide pandemics, such as Bird Flu, and even the deadly Eboli-like virus now ravaging in war-torn Congo.

The result of Republicans’ belief in free markets has been five recessions since 1980 that were mainly caused by Republicans’ insistence of tax cuts without paying for them. It has led to record budget deficits and a record federal debt of $32 trillion.

The lie they continually foment, in other words, is based on pure greed. The future be damned, let’s go to the moon and beyond! Senator Elizabeth Warren, a former Harvard Law Professor, knows something about this. She has studied the poor, and written a book with her daughter on their dilemma, The Two-Income Trap: Why Middle-Class Parents Are (Still) Going Broke.

“In this exposé, says the Amazon summation, Elizabeth Warren and Amelia Warren Tyagi show that modern middle-class families are increasingly trapped by the grinding reality of flat wages and rising costs. Warren and Tyagi reveal how a ferocious bidding war for housing and education has silently engulfed America's suburbs, driving up the cost of keeping families in the middle class, and placing unprecedented pressure on hard-working families.”

And just as big a lie is that creativity, invention, and prosperity isn’t already happening with the AI revolution that has fueled the Big Seven U.S. companies, such as Microsoft, Facebook, to new market highs.

And much of it is being fueled by the Biden administration’s New, New Deal that has already created tens of thousands of manufacturing jobs, and kept US fully employed.

The Donald Trump, Elon Musk and Jeff Bezos Oligarchs of the world are not particularly exceptional people, just greedier in wanting to add to their wealth by making ordinary Americans less healthy, wealthy, and safe.

If Musk and Bezos want to end up on Mars, They can use their own massive wealth, not ours!

Harlan Green © 2025

Follow Harlan Green on Twitter: https://twitter.com/HarlanGreen

Will Consumers Stay in the Game?

 The Mortgage Corner

“In February, consumer confidence registered the largest monthly decline since August 2021, This is the third consecutive month on month decline, bringing the Index to the bottom of the range that has prevailed since 2022.” Stephanie Guichard, Conference Board Senior Economist

Conference Board

The last Mortgage Corner column asked what 2025 economic growth will depend on, and whether consumers will keep spending in the New Year. If they can’t continue their spending ways, growth will stall in this New Year. And as has been widely reported, the latest consumer confidence surveys show a weakening in their resolve.

It’s beginning to worry the financial markets and that affects our overall wealth and health, which is why I cover consumer spending.

The Conference Board’s consumer confidence survey caused some of the worry. Bloomberg News headlined that fact with the title, “Recession fear is back” recently:

“Perceptions of present and future financial situations worsened and the share of respondents expecting a recession in the next year rose to a nine-month high.

That pessimism has Americans cutting back their spending: According to a new study from Wells Fargo, more than half of consumers are delaying major life plans due to uncertainty over the economy and the consequences of Trump’s tariff threats. Of those, about a third said they were putting off buying a home while one in six have postponed education plans—and one in eight have pushed back retirement.” —Jordan Parker Erb

Such fear was the reason the DOW fell almost 800 points last Friday, although the markets might have a very tentative recovery this week. But there’s another elephant in the room besides their declining confidence that is causing more worries—the ongoing budget debate.

Republicans want badly to extend Trump’s tax cuts from his first term, which could add another $4 trillion to the federal debt, per the latest estimates, which is threatening the U.S. Treasury’s bond rating and causing investors to become leery about investing in US Treasury securities. They will demand higher rates to compensate for the added risk.

There is also another elephant—inflation fears. No one can agree on where public expectations are. Republicans want to believe Trump can conquer inflation, as he promised, but Democrats don’t, to no one’s surprise. Inflation has been rising, which will keep interest rates higher than they should be at this time in the business cycle. It is in its late stage because of a weakening job market. Just 143,000 jobs were created in January, though the unemployment rate dropped to 4.0 percent from 4.1 percent.

The housing market is also a good indicator of future economic health, and it is mired in a mini-recession because 30-year fixed mortgage rates are still close to 7 percent (6.8% at present). Existing home sales are down to a 4.08 million annual rate. New-home sales are doing better because builders are offering to buy down their mortgage rates, although tend to be more expensive, hence shutting out most first-time homebuyers.

"Mortgage rates have refused to budge for several months despite multiple rounds of short-term interest rate cuts by the Federal Reserve," said NAR Chief Economist Lawrence Yun. "When combined with elevated home prices, housing affordability remains a major challenge."

Affordability in all things will remain the question this year for consumers, unless prices show some sign of easing, but that will depend on lower interest rates, which will depend on lower inflation.

Am I sounding too pessimistic? It’s because we don’t know what the Trump administration will do. Markets don’t like confusion or chaos, and it won’t help to reduce the budget deficit, or inflation.

Harlan Green © 2025

Follow Harlan Green on Twitter: https://twitter.com/HarlanGreen

White Patriarchy In Decline

 Answering Kennedy’s Call

“Born to a rich father who made him the beneficiary of his own highly lucrative investments, Trump received the equivalent of more than $500 million today via means that required no business expertise whatsoever.”

Random House

It may now seem hard to wrap our heads around what the future might be, but Donald Trump’s own history and as leader of the white Patriarchy’s attempts to hold onto power, is actually proof of its imminent decline

Those that support Patriarchic policies—white supremacists in the main—have picked Donald Trump, a Lucky Loser as described in Russ Buettner and Susanne Craig’s book, to weaken the federal government and pass more tax cuts for the wealthiest to consolidate their power. This is Donald Trump’s second attempt as President who has never really succeeded in anything he has done, if one looks behind the curtain.

Trump’s history includes three marriages, many adulteries, sexual assaults, and failed businesses well documented in Lucky Loser that has been mostly hidden from public view by his many bankruptcies (6) and lawsuits (4,000).

This president, who is attempting to strip the federal government of anything that protects Americans to protect himself, in a vain attempt to keep the Patriarchy in power a bit longer, found unqualified loyalists to fill most of his administration, such as Defense Secretary Pete Hegseth, Health and Human Services Secretary JFK, Jr., and FBI Director Kash Patel (who wants to weaken the FBI at a time of growing terrorist threats).

Women, above all, (but other minorities as well), have filled the gap of incompetence left by relying on the patriarchy to rule in our modern society and economy. The Patriarchy’s cult of white male superiority hasn’t benefited most Americans since at least the 1980s by increasing the federal debt to an unsustainable level as well as limiting workers’ right to collective bargain.

Hanna Rosin's The End of Men? perhaps said it best for the female minority. Fortune Magazine’s review of it wrote: “Men are losing their grip, patriarchy is crumbling and we are reaching “the end of 200,000 years of human history and the beginning of a new era” in which women — and womanly skills and traits — are on the rise.”

That is why Diversity, Equity, and Inclusion (DEI) programs were developed to bring the best and the brightest women and minorities forward to fill the competence void—whether blacks, women, or Asians—that had been held back from competing fairly until then.

Vice President Vance evenIn  admitted in his semi-autobiography, Hillbilly Elegy, that at least 20 percent of the young white men he knew growing up in Appalachia (W. Virginia, Ohio) were lazy and not interested in working.

But the rationale Trump/Musk is using to eliminate DEI policies from government and the private sector is a huge lie. It’s policies that have actually improved the productivity and profits of U.S. companies.

McKinsey & Company in the fourth edition of Diversity Matters, drawing on the largest dataset yet—spanning 1,265 companies, 23 countries, and six global regions, plus multiple company interviews reported that DEI (Diversity, Equity, and Inclusion) policies can positively impact productivity and profits in the workplace “by fostering a more inclusive environment that leads to better decision-making, increased innovation, and improved employee morale, thereby attracting top talent and boosting overall performance.”

“Companies in the top quartile for both gender and ethnic diversity in executive teams are on average 9 percent more likely to outperform their peers. (This gap has closed slightly since our previous report.) Meanwhile, those in the bottom quartile for both are 66 percent less likely to outperform financially on average, up from 27 percent in 2020, indicating that lack of diversity may be getting more expensive”.

The attempt to paste non-whites and immigrants as somehow inferior to native-born Americans is another huge lie.

Scientific studies have shown there is no inherent difference in the intelligence or abilities of different races and ethnicities, only from environmental differences—i.e., where they were raised, which refutes the central reason that Trump claims to want to eliminate DEI programs from the government—better efficiency?

Why would there be such differences, as anthropologists have proven we all came from the same Homo Sapiens stock in Africa that migrated to succeed Neanderthals approximately 70,000 years ago.

Looking at IQ studies also refutes the falsity that women and minorities have less inherent abilities. Wikipedia gives a summary of the IQ research.

A 1995 report from the American Psychological Association responded to the controversy, finding no conclusive explanation for the observed differences between average IQ scores of racial groups. More recent work by James Flynn, William Dickens and Richard Nisbett has highlighted the narrowing gap between racial groups in IQ test performance, along with other corroborating evidence that environmental rather than genetic factors are the cause of these differences.

Flynn also notes that "Our ancestors in 1900 were not mentally retarded. Their intelligence was anchored in everyday reality. We differ from them in that we can use abstractions and logic and the hypothetical to attack the formal problems that arise when science liberates thought from concrete situations. Since 1950, we have become more ingenious in going beyond previously learned rules to solve problems on the spot."

The knowledge imbedded in our constitution and laws that we are all inherently equal, is our hope for a future that will take us out of the class warfare in which racists and nationalists want to keep American citizens encased—the suspicion and paranoia of the ‘other’ that the Patriarchy promotes to keep it in power.

We must 'fight like hell’ to expose their lies and incompetence so that a government of the people, by the people, for the people, shall not perish from the earth. Abraham Lincoln

Harlan Green © 2025

Follow Harlan Green on Twitter: https://twitter.com/HarlanGreen

Trump's Choice--Economic War, Not Peace

 Answering Kennedy’s Call

“Our society has been peaceful and healthy for so long that for many people serious disaster has become inconceivable. Americans who parade around in amateur militia groups and brandish Nazi symbols do so partly because they are unable to conceive of what life would actually be like in a fascist state.” James Marriott of The Times, cited by Heather Cox Richardson

Huffington Post

Our peaceful, healthy and democratic society is being rudely awakened by Donald Trump’s choices in his second term election. Because of the years of good times, Americans are not prepared for what will come next. But neither are the two ‘straight’ men doing the most damage who have chosen to take a chainsaw to the federal budget with little planning or fore thought of the consequences.

We can look forward to more chaos in the financial markets, for starters. Because Republicans’ next battle will be their attempt to pass a 2025 fiscal year budget and cut taxes at the same time. Because it is obvious that neither Trump nor Musk have any idea how our economy works.

One sign of their ignorance is Trump’s insistence that foreign corporations and governments pay the tariff taxes levied on U.S. imports. Tariffs are taxed and paid at the point of entry, either by the importers or their clients adding to their cost, which is inflationary

We are already seeing economic damage in the chaotic way Musk’s DOGE is downsizing watchdog federal agencies that monitor financial activity, such as the FCC and SEC, ignoring laws and congressional mandates. No economy can grow amid such ignorance of the ingredients that make it work, that create trust in its institutions.

GW Bush in 2000 tried to ignore most regulations that govern economic activity in Republicans’ earlier quest for a “free” market by ignoring regulations that protect markets that catch the cheaters. The Great Recession followed, the worst worldwide downturn since the Great Depression.

Republicans seem to have forgotten that lesson in their current support of what Trump/Musk are doing. Musk’s DOGE employees are not only blindly firing employees in the agencies that give consumers and investors’ confidence in the future, but the unpredictability of their actions is revealing that Musk/Trump never had a viable plan to do it.

The Clinton administration was the last administration to successfully shrink federal spending. It was carefully planned and led to the longest period of economic growth since WWII—for 10 years until the 2001 9/11 Twin-tower attacks.

They planned it carefully by taking the time to work with congress and institute budget cuts gradually over several years with the goal of shrinking government spending to 2 percent of GDP. It resulted in four years of budget surpluses from 1996 to 2000.

We are already seeing the toll on consumers from the incompetence of Musk’s DOGE hackers working in secret, some with criminal records. The University of Michigan sentiment survey of consumer confidence has plummeted.

Survey confidence dropped 10% from January to the lowest level since late 2023. The second of two readings of consumer sentiment in February slipped to 64.7 from 67.8 earlier in the month.

According to the report, Americans’ expectations for inflation over the next five to 10 years rose to 3.5% from 3.3% earlier in the month and from 3.2% in January. This is the largest month-over-month increase since May 2021.

And as if to confirm their fears, the DOW plunged almost -800 points and the S&P more than -100 points last Friday.

It is while Bloomberg reports U.S. business activity nearly stalled in February amid mounting fears over tariffs on imports and deep cuts in federal government spending, erasing all the gains notched in the aftermath of President Donald Trump's election victory.”

This is hardly a vote of confidence for an administration that was elected on the promise of reducing inflation.

Republicans and Trump’s electorate seem to have no idea what living under a fascist government means, where all power is concentrated in the executive branch under one man, with full disregard of the laws of the land, the constitution, the judiciary and congress.

It is sad they haven’t taken the more successful track to downsizing government that President Clinton took, another impeached president (not convicted). Working with congress and the laws of the land resulted in the Clinton administration’s four years of budget surpluses, not the impending chaos and economic destruction ahead caused by Trump and Republicans choice of vengeance over cooperation.

Harlan Green © 2025

Follow Harlan Green on Twitter: https://twitter.com/HarlanGreen

Does Trump Want Another War?

 Answering Kennedy’s Call

“I’m not sure most Americans appreciate the monumental damage President Trump is doing to the post-World War II order that is the wellspring of American global leadership and affluence.” NYTimes Nicholas Kristof

USAToday

There is a growing outcry over the “monumental damage” emanating from the bromance of two ‘straight’ (and white) men on a tear of petty vindictiveness settling old scores, which can have far greater consequences.

It is tearing apart our closest alliances that protect Americans and other democratic countries from the depredations of autocrats and dictators, such as Vladimir Putin, who must imagine himself Czar Ivan the Terrible killing hundreds of thousands of his own people in attempting to conquer Ukraine to make it a part of a new Russian Empire (350,000 dead Russians at last count, per NBC’s Morning Joe).

“We have Trump and his oligarchy of ignorant shoe shiners vandalizing the network of organizations, agreements and values—largely put in place by America since the Second World War—which have given most of us, including America, on the whole an extraordinary degree of peace and prosperity.” Chris Patten, former UK Tory Chairman cited by Nicholas Kristof.

The level of ineptitude that Elon Musk’s DOGE team shows is breathtaking, as are the attempts to hide it.

“All in all, what we’ve just witnessed is a stunning display of incompetence, dismissal of critical federal workers by people with no idea of what they do and why it matters. Musk and Trump have, of course, apologized and promised to do better in the future.” Nobel Laureate Paul Krugman

Why the petty vindictiveness of our Bromancers? In a frightening insight by Timothy Snyder, Author of On Freedom, they are really ‘straight’ men trying to appear strong. But that can only be done by weakening the strong that actually stand in their way.

“Trump is a strongman in the sense that he makes others weak. He is strong in a relative sense; as Musk destroys institutions, what remains is Trump’s presence. But other sorts of power meaning vanish, as Musk takes apart the departments of the American government that deal with money, weapons, and intelligence. And then the United States has no actual tools to deal with the rest of the world.”

Dr. Snyder explained what he meant in a recent New Yorker article. Trump and Putin are both fascists, which by definition means masters of propaganda that twist words such as ‘communism’, or ‘deep state’ into meanings that feed their MAGA followers’ paranoid fantasies.

Hitler’s Goebbels, and Russia’s Stalin were masters of such propaganda that led to World War Two. It is detailed in Snyder’s bestselling book, “Bloodlands,” which describes the hideous period in the 1930s and ’40s when as many as 14 million people perished at the hands of Hitler and Stalin, with Ukraine a “particularly awful” mass grave.

And Trump is using the same fascist vocabulary today in branding Ukraine’s Zelensky the dictator, when it is Vladimir Putin.

That is why Trump and Musk’s actions threaten world peace and our own domestic order. They accomplish it by weakening the military alliances that have protected us such as NATO, while eliminating whole government departments that protect our health and safety and more environmental catastrophes, while weakening the FBI and DOJ that protect Americans from domestic and foreign terrorists.

In fact, settling old scores is an attempt to protect themselves from their own mistakes (i.e., Trump’s convictions, Musk-Tesla’s auto-drive accidents) by putting the blame on others. That is why Trump says he does not know what Musk is doing, when asked. He can therefore blame Musk or his lieutenants when said mistakes are uncovered.

Both Democrats and Republicans must now find a way now to counter Trump and Musk’s biggest mistake of all, their preoccupation with vengeance to and masks their own weaknesses that could lead to another war.

It is weakening our own strength and ability to stand up to Russia and China, where a larger war is most likely to start—because they have become emboldened by our growing weakness.

Harlan Green © 2025

Follow Harlan Green on Twitter: https://twitter.com/HarlanGreen

Make Trump 2.0 Irrelevant Again!

 Answering Kennedy’s Call

“The United States now has the highest percentage of low-wage workers – that is workers who make less than two-thirds of the median wage- of any developed nation. Fully 25 percent of all American workers make no more than $17, 576 a year.” Harold Myerson The American Prospect,

We know how to counter the Trump administrations attempts to wreck the U.S. economy and our constitution from his past history. Blue states in particular have the power to keep their citizens healthy and safe. They did it in his first term, as I said in a 2017 Huffington Post article, when it was becoming obvious Trump wanted to act like an anti-democratic oligarch.

Climate change has been the target of Trump’s “drill baby drill” fossil fuel supporters since his first term, yet climate change poses the greatest danger to Americans’ health and safety, particularly to our west coast inhabitants (wildfires and floods) and east coasters (hurricanes and tornadoes), not to speak of the record low winter temperatures tormenting Midwesterners.

Huffington Post

“The U.S. just released its latest congressionally mandated Climate Science Special Report that says 2017 wreaked the most catastrophic destruction in 90 years with an estimated $175 billion in property damage. Only the San Francisco Earthquake (1906), Chicago Fire (1871), and Great Flood (1927) caused more destruction,” I said then.

Trump’s other first term attempts at relevance included, “his fiasco of an Asian trip, where he fawned over foreign leaders who gave him massive pageants, but no trade concessions, while abandoning the Trans- Pacific Partnership.

“The remaining 11 countries, including Japan, Australia, Mexico and Malaysia, said they had revived the Trans-Pacific Partnership (TPP) deal, a multilateral agreement championed under the Obama administration.

And also, “American leaders from state capitals, city halls and businesses across the country have shown up in force” in Bonn, Germany, to discuss carrying out the 2015 Paris climate agreement,” said California Governor Jerry Brown and Michael Bloomberg in today’s New York Times.”

This is when President Trump announced at the beginning of his Presidency that he was abandoning the Paris Accord in favor of supporting a return to coal and oil energy. But that wasn’t what the rest of America wanted, as some 50 percent of U.S. states and cities were represented in Bonn.

And now it is his indiscriminate use of import tariffs that threaten to wreck international trade.

President Trump’s attempts to return to the predominately white middle class of the 1950s have become irrelevant to most of the problems facing Americans and the world today. Trump is ignoring the damage revenge policies will do to the U.S. economy, and his own red state supporters by also attempting to destroy American’s social safety net, including cuts to Medicare and Medicaid that most harm red state citizens, protections against climate change, and wanting to downgrade the military alliances that have kept us safe.

Trump’s first term policies have been irrelevant in so many ways. He has done nothing for his red state supporters. As Thom Hartman highlighted in my last blog, red states continue to suffer most from:

— Spousal abuse
— Obesity
— Smoking
— Teen pregnancy
— Sexually transmitted diseases
— Abortion (at least before Dobbs; now it would be “forced births”)
— Bankruptcies and poverty
— Homicide and suicide
— Infant mortality
— Maternal mortality
— Forcible rape
— Robbery and aggravated assault
— Dropouts from high school
— Divorce
— Contaminated air and water
— Opiate addiction and deaths
— Unskilled workers
— Parasitic infections
— Income and wealth inequality
— Covid deaths and unvaccinated people
— Federal subsidies to states (“Red State Welfare”)
— People on welfare
— Child poverty
— Homelessness
— Spousal murder
— Unemployment
— Deaths from auto accidents
— People living on disability
— Gun deaths

Climate change is a good start, since the worldwide droughts have been a major cause of the worldwide migrations escaping from poverty that have upset the existing geopolitical order.

Let’s continue to make Trump and Republicans’ actions irrelevant that are attempting to destroy our federal government by supporting cities, states and even international organizations (UN, WHO?) that pursue the policies that have kept America great and the world at peace—policies that build rather than destroy, that breed trust and community, rather than hatred and division.

This strategy doesn’t minimize the suffering Trump has already inflicted on so many Americans but could mitigate some of the cruelty to come.

Harlan Green © 2025

Follow Harlan Green on Twitter: https://twitter.com/HarlanGreen

Donald Trump Is No Populist

 Answering Kennedy’s Call

An NBC News poll last April showed that Trump had a 26-point lead among voters who don’t follow political news. In contrast, voters who got their political news from newspapers, the most comprehensive form of daily news, supported Joe Biden by a vast margin, 70 percent to 21 percent. David French NYTimes

Mother Jones

It’s becoming clear what Donald Trump and Elon Musk have in common, when Musk has said he loves Trump 'As Much as A Straight Man Loves Another Man' on X. It is their unbridled greed that harms anyone on their way to greater fortunes.

Neither Trump nor Musk are populists. It is clear we are seeing two apex predators at work as the 2^nd Gilded Age is peaking. They are doing what the Oligarchs who support Trump have always done, preyed on the weakest and most ignorant.

That is why corporate profits are at a post-WWII high, 11.8 percent of GDP, when Trump Republicans want even more tax cuts with the federal budget now 120 percent of GDP. And people without college degrees die about eight years sooner than those with four-year degrees, according to NYTimes David Brooks.

This is why women with only a high school degree or less are five times as likely to have children out of wedlock or women with a college degree. And by the sixth grade, children of poor families are performing at four grade levels lower than the children of affluent families.

These sad statistics cited by David Brooks in a recent NYTimes op-ed are the result of years of tax cuts without paying for them by Republican administrations that has made the red states they govern the poorest states. and resulted in the record federal debt we now have.

Worsening the harm to ordinary Americans, Trump and Musk want to root out DEI personnel and programs that promote greater opportunity and replace them with even less competent personnel, such as Pete Hegseth, JFK, Jr. and Tulsi Gabbard.

In just Donald Trump’s first week in office, it’s becoming obvious that the lies he promotes will be no different than during his first term as president. He is counting on the American electorate who voted for him to not believe what they are seeing, as I said recently—a worsening climate, worsening inflation, less healthcare services, military preparedness, and public education.

These disparities exist mostly in the red states, to no one’s surprise, where essential public services are less available. There is an enormous poverty gap between the red and blue states, and Republican administrations have done nothing to bridge it.

“Some of the chasms are sociological. People with only high school degrees or less are much more likely to say they have no close friends. They are more likely to live in towns where social capital is collapsing and the young are fleeing.”

Why is it so many Americans don’t believe what they see? This is largely due to where they live—the red states.

Thom Hartman of the Hartman Report, a NYTimes best-selling author, says it’s because Republicans worship cheap labor — and having a steady and reliable supply of cheap labor requires widespread poverty.

It is what Trump’s electorate voted for, while:

— Blue states account for about 71 percent of America’s GDP, whereas Red states only produce 29 percent of our income and wealth.
— The median family income in Blue states is $74,243. In Red states it’s $63,553. Individual states highlight the disparity: New Jersey’s median income is $89,703, while Mississippi’s is $49,111.
— Counties that voted for Biden in 2020 are more diverse, being 35 percent nonwhite compared to 16 percent nonwhite populations in counties that voted for Trump.
— Counties that voted for Biden in 2020 are better educated, with 36 percent of their population having some college education compared to Trump’s counties at 25 percent.
— Residents of Blue states live 2.2 years longer, on average, than residents of Red states. Hartman lists many more disparities on his website.

Why don’t Trump believers follow political news; news readily available in most mass media? It is why red state economies have foundered, while Trump wants to govern as he did his real estate empire; with family and loyal friends, no checks and balances; which has largely been a failure.

It is why the 2^nd Gilded Age will end when Americans—particularly his populist supporters—realize this bromance of two ‘straight’ men will make all of US less safe, healthy, and wealthy.

Harlan Green © 2025

Follow Harlan Green on Twitter: https://twitter.com/HarlanGreen

Inflation Is Back?

 Popular Economics Weekly

“Kentuckians can’t afford the high cost of Trump’s tariffs,” which could cost the average Kentucky resident $1,200 a year. “[P]reserving the long-term prosperity of American industry and workers requires working with our allies, not against them.” Senator Mitch McConnell

FREDconsumerpriceindex

Senator Mitch McConnell’s op-ed in the Louisville Courier Journal (thanks to Heather Cox Richardson) tells us why the former head of the Republican Senate voted against Pete Hegseth for Defense Secretary and Tulsi Gabbard for Director of National Intelligence. He considers their history of incompetence a threat to our national security.

And it looks like that will happen, if President Trump and his Oligarchs get their way with tariffs. But signs of higher inflation are beginning to appear in the New Year that may hinder their implementation of higher tariffs.

Senator McConnell had been the Democrat’s biggest thorn until now, including stonewalling Presidents Obama’s pick of Merrick Garland for the Supreme Court, but of late has been more concerned with the damage that President Trump may do to national security.

Most of the tariffs Trump has announced are targeting our closest allies, thereby weakening them economically. Our closest allies are also our largest trading partners, so they have the low-hanging fruit that Trump first wants to pick by collecting taxes on their exports.

This, of course, increases his wealth and that of his supporters, almost all billionaires in their own right. But a budget battle is looming in March over annual expenditures and the debt ceiling that must be raised to pay for the tax cuts they want, and little room to maneuver with Republicans’ thin House majority.

This also endangers just how Republicans have increased their wealth exponentially since the 1980s while chiseling away at the benefits (such as Medicaid) that increase the wellbeing of the less wealthy—many of whom live in the red states they control.

It is unfortunate that President Trump’s wave of tariff announcements have occurred at the same time as inflation is beginning to rise again. This is incredibly bad timing when he said that he would bring down inflation on ‘Day 1’ of his presidency.

For instance, the retail Consumer Price Index for prices that directly affect consumers is back up to 3 percent y/y after hitting its low point of 2.4 percent last September. The rise in prices was mostly due to soaring food prices (eggs/bird flu) and energy prices (gas and oil)—probably because of the very cold winter.

McConnell’s main worry seemed to be how the tariffs would weaken relationships with our closest allies that help to protect us from the likes of Putin’s Russia or China’s Xi. Trump is using tariffs as a blunt weapon to bring down the budget deficit, while disregarding national security concerns that tariffs are supposed to enhance, which should be to increase the sourcing of strategic raw materials, such as steel and aluminum.

But we don’t really have a problem with aluminum and steel sourcing because our current alliances already supply what we need. That’s why we know Trump’s real reason is not to enhance national security, but to enhance his own financial security enriching himself and the billionaire class by taxing more imports to bridge the huge budget deficit gap.

So how in fact can we reduce the current inflation surge? We must reduce the demand side of the equation, which the Fed is helping to do by keeping short term interest rates slightly higher (4.25% to 4.50%) than current inflation. It makes credit more expensive for investments as well as consumer spending.

Reducing government investments will also reduce demand, because it flows into the private sector where it’s spent by consumers and businesses. But the Oligarchs want only to reduce the size of government expenditures that don’t directly benefit them, such as healthcare, environmental protection, and consumer protection by reducing regulations they don’t like that also reduce their profit margins.

Why otherwise fire so many Inspector Generals who monitor financial misbehavior? Or, why fire so many FBI agents who protect our national security, which is a sign they care little about our national security.

The problem is how to make government more efficient, but that also benefits the less wealthy? Everyone agrees there’s a lot of waste, but also necessary public investments that improve infrastructure, protect the climate, and national Research and Development that the private sector won’t do.

But Oligarchs want only to cut the benefits of everyone else.

Harlan Green © 2025

Follow Harlan Green on Twitter: https://twitter.com/HarlanGreen

Are Consumers In Danger?

 The Mortgage Corner

Total consumer credit rose $40.8 billion in December, after a $5.4 billion decline in the prior month, the Federal Reserve said last Friday. In percentage terms, it is the biggest gain since June 2022.

FREDconsumercredit

Will consumers lose their mojo? They shopped until they dropped during the holidays, which is why retail sales were up 3.9 percent in December as well. To do this consumers were spending more than they were earning. The question now is when will consumers run out of savings, and stop shopping? That will in fact determine economic growth in the New Year.

Revolving credit, typically credit-card debt, made up most of the increase, rising at a 20.2% annual rate. That follows a 12.1% drop in the prior month. Nonrevolving credit, mainly auto and student loans, rose at a 5.8% rate after a 2.7% rise in the prior month.

That’s the fine line the Fed’s Chair Powell is attempting to walk at their semi-annual congressional update this week. He didn’t say outright that the tariffs that President Trump has announced will cause inflation to spike so they can’t drop interest rates any lower, in answering questions.

"We are in a pretty good place," Powell told the Senate committee - citing tariffs, immigration, fiscal and regulatory policy as the key variables the Fed will "try to make sense of".

Therefore we won’t actually know the future until we see that happens when the new tariffs on imports kick in and those countries retaliate with their own tariffs on U.S. exports.

So January will be another story as consumers must begin to spend less to replenish their savings. A sign of their hurt is that the delinquency rate has risen, with some 3.5% of card balances past due by 30 or more days and 1.8% of accounts delinquent. Both figures are more than double the post-pandemic lows recorded in 2021, said Bloomberg.

Another hint on future consumer behavior is how small businesses are feeling. The NFIB Small Business Optimism Index fell by 2.3 points in January to 102.8. This is the third consecutive month above the 51-year average of 98. The Uncertainty Index rose 14 points to 100 – the third highest recorded reading – after two months of decline.

“Overall, small business owners remain optimistic regarding future business conditions, but uncertainty is on the rise,” said NFIB Chief Economist Bill Dunkelberg. “Hiring challenges continue to frustrate Main Street owners as they struggle to find qualified workers to fill their many open positions. Meanwhile, fewer plan capital investments as they prepare for the months ahead.”

Speaking of hiring challenges, Goldman Sachs put out a graph that shows just how important ‘unauthorized’ workers are to the U.S. economy. They make up approximately half of the jobs native-born Americans won’t take.

GoldmanSachs/MarketWatch

“The key risk is probably not a scenario in which annual deportations reach into the millions, but one where an immigration crackdown creates a climate where employers are afraid to employ unauthorized immigrants or unauthorized immigrants are afraid to go to work, potentially leading many to stay out of the workforce or even to leave the U.S. on their own,” said Goldman Sachs of their survey.

And we have just learned that inflation may be on the rise again, with the retail Consumer Price Index above 3 percent. The financial markets are reacting because of the news. It isn’t a good time to be imposing tariffs, in other words.

Harlan Green © 2025

Follow Harlan Green on Twitter: https://twitter.com/HarlanGreen

Tariff Wars--Part III

 Popular Economics Weekly

“It is inconceivable that other countries won’t retaliate, even if some of the governments might not want to retaliate, their citizens will demand that you can’t allow yourself to be beaten up. When you make like a gorilla thumping on his chest, are countries just going to say, ‘Are we chopped liver?’ Their politics will demand that they do something.” Nobelist Joseph Stiglitz

Krugman/Substack/Bloomberg

The real tariff wars have now begun. Not only has Trump announced 25 percent tariffs on all steel and aluminum imports but will soon instigate so-called reciprocal tariffs on those that impose tariffs in response.

Such blanket tariffs do not make economic sense, and it counters the advice of Trump’s own chief tariff negotiator, Robert E. Lighthizer.

Lighthizer, just wrote in a NYTimes Op-ed that “Countries with Democratic governments and mostly free economies should come together and create a new trade regime.”

Yet the just announced tariffs fall on our most democratic and free economic allies—Canada, Brazil, Mexico, South Korea, Japan, and Germany with which we already have trade regimes.

He has justified his tariffs with an outright lie; that foreign governments or export entities pay the tariffs when it is in fact a tax on the importer, or consumers when it’s passed on to the users of said imports.

Then why the lie, that Trump has maintained since his first term that didn’t work out so well for Americans? U.S. farmers, for instance, had to be reimbursed with taxpayer funds for the lost soybean and wheat exports that China would no longer buy.

Lighthizer all but admitted in a recent 60 Minutes interview why Trump has maintained the lie. The import taxes collected will help to finance the tax cuts that Trump wants, which benefit his wealthiest supporters, already immensely wealthy oligarchs, many sitting behind him during his inauguration.

And he cannot finance those tax cuts without a new budget agreement, because even his Republican supporters won’t tolerate a larger budget deficit with total federal debt now 120 percent of Gross Domestic Product, the highest since World War Two.

Does Trump really listen to his chief tariff negotiator when he has essentially abandoned just such existing trade regimes as NAFTA, the EU’s, or Obama’s Transpacific Trade Agreement? The 11 Asian countries left in the PTT agreement; Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, and Vietnam; went ahead and created their own trade regime when Trump abandoned it to keep from taxing each other’s imports.

The financial markets are reacting as they did when Trump first announced tariffs on Mexico and Canada, then quickly rescinded for 30 days—all indexes are plunging and interest rates continuing to rise in the expectation of higher inflation due to the rising prices that will follow.

And this at a time when the Federal Reserve must decide whether the inflation bogey man is back. Why wouldn’t those countries affected by Trump tariffs raise their tariffs in response, less they look weak to their citizens when Trump’s gorilla is thumping on their chests?

There is also the fact that higher taxes will mean slower growth, and so in wanting to appear strong, Trump will in fact be weakening the economies and alliances that have kept the U.S. strong.

Harlan Green © 2025

Follow Harlan Green on Twitter: https://twitter.com/HarlanGreen

Was It a Good Employment Report??

 Popular Economics Weekly

Total nonfarm payroll employment rose by 143,000 in January, and the unemployment rate edged down to 4.0 percent, the U.S. Bureau of Labor Statistics reported today. Job gains occurred in health care, retail trade, and social assistance. Employment declined in the mining, quarrying, and oil and gas extraction industry.

FREDunemploymentrate

The economy added just 143,000 new jobs in January as massive California wildfires and a cold snap in much of the country acted as a drag on hiring. The details of the employment report point to a robust labor market that gained strength at the end of 2024. The economy averaged 233,000 new jobs from November to January, well above the 180,000

One economist determined that most of the new jobs were in the service sector, as I’ve been reporting, hence favored immigrants who tend to fill the lowest paying jobs that native Americans don’t want. 

But it’s not just more wildfires we will have to worry about this year as world temperatures rise, but more hurricanes and floods, such as hit the east coast.

So what does that mean for 2025? It depends on what tariffs are enacted, what the Federal Reserve does with interest rates, and how many immigrants are deported, for starters. Then we still must worry about the effects of continuing wars and more climate disasters.

It would be nice if consumers continued to shop, in spite of what’s happening, which means they remain somewhat optimistic about their future.

However, the latest University of Michigan sentiment survey was a downer. Its gauge of consumer sentiment fell to 67.8 in a preliminary February reading, down from 71.1 in the prior month and the lowest reading since July.

Inflation was still their biggest worry. Americans’ expectations for overall inflation over the next year jumped to 4.3% in February from 3.3% in the prior month, according to the survey. That’s the highest level since November 2023, and it is only the fifth time in 14 years that there has been a one-month gain of that size.

It’s really how American consumers react that determines economic growth and hence the job market. The Los Angeles fires were one reason the January nonfarm payroll total was low. The recent hurricanes also punched another hole in employment. Forbes Magazine reported last October that Hurricane Helene was expected to cause a reduction of 40,000 to 50,000 payroll jobs with Hurricane Milton adding to the total.

And I won’t even try to predict when the Gaza and Ukraine conflicts will be resolved, or what it might do to the world economy with energy prices soaring.

The bottom line seems to be that the U.S. economy is escaping much of the damage because the Fed has been proactive over the inflation danger, and has been saying it wants to lower interest rates further to support the job market.

President Biden’s massive new, New Deal investments with the infrastructure, CHIPS, climate change, and healthcare legislation will be benefiting U.S. economic growth for years to come.

Economists are also estimating that the 3 million new immigrants added to the workforce over the past two years has made such growth possible. Will that continue if our worker shortage worsens?

“The flood of fresh labor eased a worker shortage after the pandemic and allowed the economy to add more jobs without driving up wages and inflation. Normally, rapid job creation tends to exacerbate inflation,” says MarketWatch’s Jeffry Bartash.

Did the influx of new immigrants hurt American workers? Economist Wendy Edelberg, director of the Hamilton Project at the Brookings Institution, estimates the labor force is about 172.6 million strong, instead of a reported 169.6 million at the end of 2024. Edelberg said the newly revised figures should show employment for native-born workers also rose in 2024.

So what are consumers to do? It is really too early to know what the 2025 job market will look like.

Harlan Green © 2025

Follow Harlan Green on Twitter: https://twitter.com/HarlanGreen

Q4 Economic Growth Continues

 Popular Economics Weekly

Real gross domestic product (GDP) increased at an annual rate of 2.3 percent in the fourth quarter of 2024 (October, November, and December), according to the advance estimate released by the U.S. Bureau of Economic Analysis. In the third quarter, real GDP increased 3.1 percent.

BEA.gov/Q4gdp

Economic growth is still looking good in the fourth quarter of 2024, with real (inflation adjusted) GDP increasing at 2.3 percent. It was mostly due to consumer spending over the holidays that rose 4.2 percent, largely because December retail sales soared, I reported earlier.

Consumers are not quitting their shopping habits, in other words, and it contributes some 70 percent to the GDP, while corporate profits are growing at a multi-decade high, which is why workers are still fully employed.

So, economists are now looking at the New Year predictions for economic growth. The Atlanta Federal Reserve’s GDPNow prediction for Q1 2025 has been going all over the place.

It now says real GDP growth is 2.9 percent on February 5, down from 3.9 percent on February 3. “…after recent releases from the Institute for Supply Management, the US Bureau of Economic Analysis, and the US Census Bureau, of lower “first-quarter real personal consumption expenditures growth and real gross private domestic investment growth.”

But inflation is still coming down, a good thing, since the tariffs to come will push prices higher on the taxed imports. It is especially true with the important Personal Consumption Expenditure Index the Fed likes to use to measure inflation.

“The price index for gross domestic purchases increased 2.3 percent in 2024, compared with an increase of 3.3 percent in 2023. The PCE price index increased 2.5 percent, compared with an increase of 3.8 percent. Excluding food and energy prices, the PCE price index increased 2.8 percent, compared with an increase of 4.1 percent.

Why so much fluctuation? It’s because of the presidential election, of course. There is tremendous confusion over what the Trump administration wants for economic growth. Reducing the budget deficit means finding budget cuts, which could slow down more business investment. Especially when Trump wants it to be in more fossil fuel production when we already have a surplus of oil and natural gas.

So in spite of concerns over their jobs that is showing up in consumer sentiment surveys, consumers keep spending according to the University of Michigan survey.

“Consumer sentiment confirmed its early-month reading, rising for the fifth consecutive month and reaching its highest value since April 2024. Buying conditions exhibited a particularly strong 32% improvement, primarily due to a surge in consumers expecting future price increases for large purchases. The expectations index continued the post-election re-calibration that began last month, climbing for Republicans and declining for Democrats in December,” said Survey Director Joanne Hsu.

And what will Friday’s unemployment report look like. MarketWatch’s Jeffry Bartash reports that weekly initial jobless claims are back to normal, with the effect of the LA fires diminished. New jobless claims, a proxy for layoffs, increased by 11,000 to 219,000 in the seven days that ended Feb. 1, the government said, which is in the normal range.

We could still have a very good 2025 year, in other words. Both the service and manufacturing sectors are growing, with manufacturing expanding after a years-long slump.

The Manufacturing PMI^® rose to 50.9 percent in January, 1.7 percentage points higher compared to the seasonally adjusted 49.2 percent recorded in December. It was the 57th month of expansion after one month of contraction in April 2020, per Timothy Fiore, Chair of the survey committee.

And lastly, private payrolls company ADP said U.S. businesses created a solid 183,000 new jobs in January, and wages rose 4.8 percent, which showed the labor market was still growing.

This is why financial market indexes are at record levels, despite the looming uncertainties. It looks like some irrational exuberance is motivating investors who rely more on rumors than research, though corporate profits as a percentage of GDP are rising 11 percent these days, according to one analyst, Deutsche Bank strategist Jim Reid, and as cited by MarketWatch’s William Watts.

So irrational exuberance will be the norm this year, which in general means either follow the herd, or hunker down and wait out the chaos.

Harlan Green © 2025

Follow Harlan Green on Twitter: https://twitter.com/HarlanGreen

The Coup Attempt by Trump-Musk

 A couple dozen young men go from government office to government office, dressed in civilian clothes and armed only with zip drives. Using technical jargon and vague references to orders from on high, they gain access to the basic computer systems of the federal government. Having done so, they proceed to grant their Supreme Leader access to information and the power to start and stop all government payments.

That coup is, in fact, happening. And if we do not recognize it for what it is, it could succeed.

In the third decade of the twenty first century, power is more digital than physical. The buildings and the human beings are there to protect the workings of the computers, and thus the workings of the government as a whole, in our case an (in principle) democratic government which is organized and bounded by a notion of individual rights.

The ongoing actions by Musk and his followers are a coup because the individuals seizing power have no right to it. Elon Musk was elected to no office and there is no office that would give him the authority to do what he is doing. It is all illegal. It is also a coup in its intended effects: to undo democratic practice and violate human rights.

Timothy Snyder, Author of On Tyranny

Fewer Jobs Available

 Financial FAQs

“It’s gotten harder for the unemployed to find work: Job openings in the U.S. fell at the end of 2024 to the second lowest level since the end of the pandemic.” MarketWatch

FREDjobopenings

Job vacancies reported by the Bureau of Labor Statistics have dropped from 8.2 million to 7.6 million openings in just one month. And this is becoming worrisome with the financial markets’ uncertainty over the effects of the federal government efficiency drive that President Trump is promising.

“It’s also taking people who lose a job a lot longer to find one. The number of people collecting unemployment benefits has risen to the highest level since 2018 if the pandemic years are omitted,” said Marketwatch.

This is having an impact on consumer confidence, needless to say, since consumers tend to become more cautious in their spending ways at such times. The Conference Board survey wasn’t upbeat.

“All five components of the Index deteriorated but consumers’ assessments of the present situation experienced the largest decline. Notably, views of current labor market conditions fell for the first time since September, while assessments of business conditions weakened for the second month in a row,” said its Chief Economist, Dana Peterson.

Why the doubts when the just elected Republicans are touting they can cure the budget deficit with a tariff war, which the Wall Street Journal just headlined was “The Dumbest Trade War in History.”

None of this is supposed to happen under the U.S.-Mexico-Canada trade agreement that Mr. Trump negotiated and signed in his first term, according to WSJ’s Editorial Board.

“The U.S. willingness to ignore its treaty obligations, even with friends, won’t make other countries eager to do deals. Maybe Mr. Trump will claim victory and pull back if he wins some token concessions. But if a North American trade war persists, it will qualify as one of the dumbest in history,” says the WSJ.

Then there are the ongoing deportations which will hurt service industries like leisure, transportation, healthcare, and construction which employ a majority of immigrants, especially in the smaller businesses.

The number of job vacancies reported by companies was lowest after the 2008 Great Recession and began the steady climb to 7 million just before the COVID-19 pandemic 7.6 million job openings has stabilized over the past several months, indicating that the job market and so the unemployment report hasn’t changed. There were 5.5 million hires and 5.3 million separations (i.e., left their jobs), indicating that some 200,000 new jobs were created, which will be confirmed in Friday’s official unemployment report.

All three major stock market indexes have been seesawing since Trump enacted, then suspended the Mexican and Canadian tariffs, but not the Chinese 10% tariff. So, it is really up to the new administration to calm the markets, if they don’t want more investors to head for the exits.

And how will the threatened firing of FBI agents calm the waters? Who will then protect us from domestic and foreign terrorists?

Harlan Green © 2025

Follow Harlan Green on Twitter: https://twitter.com/HarlanGreen

The Tariff Wars--Part II

 Financial FAQs

“Trump has called “tariff” the fourth most beautiful word in the dictionary behind “God”, “love” and “religion.” CNN

FREDdebt/GDP

On Saturday, President Trump, just 11 days into his second term, said he will impose a 25 percent tariff on Canadian and Mexican imports, and 10 percent on Chinese imports.

He has said it will raise revenue to correct the large trade imbalances with those countries, as well as induce Mexico and Canada to halt the flow of fentanyl into the U.S., and the flow of illegal immigration.

But immigration flows are already down to levels before even the Obama administration, while Mexico and Canada have already said they will work with Trump to stem the flow of illegal drugs.

So why is he doing what will badly harm the U.S. economy and that of our two best neighbors and trading partners? His real motivation is pure greed. He and his oligarch friends must decrease the massive budget deficit that has mushroomed to 121 percent of Gross Domestic Product (see graph), so that he can prolong the tax cuts that have transferred so much wealth from working adults to the wealthiest supporters and that has added $5 trillion to the national debt.

He must cut the huge budget deficit that has resulted because it is alarming bond investors and budget hawks.

Hedge fund manager Ray Dalio, founder of Bridgewater Associates, once the world’s largest hedge fund, has been sounding the alarm mostly recently in a Barron’s Magazine interview, in which he said our current budget deficit could give the world a “financial heart attack.”

“Think of the credit flow like the blood flow that carries nutrients through the system to the body. Credit creates debt that builds up like plaque in those arteries, and like plaque, it grows and crowds out the nutrients because debt service crowds out other spending,” , said Dalio

“When does the heart attack come? When the constriction is enough that it squeezes out other spending, which in increasingly happening, or when investors see that happening, which leads them to sell bonds,” said Dalio.

Tariffs had become Trump’s way of paying down the deficit by taxing imports. He has said collecting what he believes will be “billions” in taxes from the tariffs on imports will help pay down the huge budget deficit that he helped to generate from the 2017 tax cut bill (Tax Cuts and Jobs Act) in his first term.

But that tax cut was just the latest by Republican administrations that have caused the massive national debt, which is expressed as a ratio of debt-to-gdp in the above FRED graph dating from 1980, when Republicans first began increasing the budget deficit.

It has been Republicans’ huge tax cuts since President Reagan in 1980 that have created the largest national debt since World War Two, and the trickle-down economy ever since. And renewing Trump’s 2007 Tax Cuts and Jobs Act when it expires this year could add another $5 trillion to the budget deficit, according to non-partisan analysts.

So who will be hurt most by the tariffs? Workers in all countries at a time when inflation is still too high, and preventing the Fed from making fewer rate cuts this year due to higher inflation.

The NAFTA trade agree between Mexico and Canada has made North America the largest trade-free zone outside of the Eurozone, enabling each country to produce what it does best, such as autos where many auto parts are manufactured more cheaply and shipped into the U.S. where they are assembled.

Trump has repeatedly (and incorrectly) said that “the tariff sheriff” former President William McKinley, ushered in an era of American prosperity at the end of the 19^th century by going all-in in tariffs, said CNN.

No, it was the result of the industries created in the first Gilded Age by the Robber Barons of that era—the oil, railroad, and banking magnates of that era. And Trump, a convicted felon, believes he can be another robber baron in this Gilded Age.

Harlan Green © 2025

Follow Harlan Green on Twitter: https://twitter.com/HarlanGreen