Defeating The Greater Lawlessness

 Popular Economics Weekly

“The Republicans’ hunger for power has now reached such a point that they have selected and continue to support a president who has lied and cheated his whole adult life; from Trump Casinos to Trump Towers, from stiffing bankers and his workers to cooking the books.” H Green/Huffington Post

NYTimes

We knew as long ago as Nixon’s Watergate that the Republican Party harbored a lawless tendency when it suited them. Why else would President Reagan engineer the illicit Iran contra arms deal with Khomeini, or President GW Bush invade Iraq when UN inspectors already knew Saddam Hussein had destroyed his weapons of mass destruction a decade earlier, I said in 2017?

Now we have illegal tariffs and an unpopular war with Iran, one that will drive inflation even higher and might take years to return to the Federal Reserve’s 2 percent target to fulfill its mandate of full employment with stable prices.

The result? Another recession, sooner or later, as happened during Presidents Reagan (2) and GW Bush terms. In Bush’s case, he managed to turn four years of Clinton budget surpluses (1996-2000) that could have kept social security and Medicare solvent for decades into a worldwide Great Recession (2008-09), the worst since the Great Depression, according to most economists.

President Trump’s Republicans are following the same path with his huge tax cuts while borrowing $trillions to fight his wars, cutting public services to the bone and closing whole departments by firing more than 300,000 federal employees.

Republicans have doubled down on their lawlessness by allowing his illegal wars and tariffs, and maybe what could precipitate the next recession; their determination to deport as many undocumented immigrants as possible without allowing them due process or a legal pathway to citizenship.

Immigrants are taxpayers that add workers to our shrinking population, and their loss is depriving our economy of essential services—agricultural workers that supply our groceries, for starters, but also a large part of construction, healthcare, transportation and lower paying service workers in leisure and hospitality.

This can only be done because Trump’s Republicans either ignore or disregard the civil laws, as well as economic laws, and even the constitution in their hunger for power. This is impoverishing more Americans, not to speak of turning a blind eye to the illegal enrichment of the Trump family and their supporters.

What can be done to return the $trillions in wealth and power that Republicans have taken away from the American people via their massive tax cuts to corporations and wars that were never paid and ignore the most basic rules of capitalist enterprise, such as debts must be paid, contracts and treaties honored?

The sad fact is that the Iran war wasn’t necessary because President Obama had already negotiated a nuclear arms agreement with Iran and Trump’s tariffs have been mostly based on ignorance of foreign trade tradeoffs, not unfair trade practices.

The history of greater lawlessness and hunger for more power is leading to a massive disruption in foreign trade which is the life blood of the world’s economies. It is repeating the mistakes that choked off world trade in 1930 and led to the Great Depression.

The question is how much longer will consumers and voters tolerate the record of Republicans’ failures that have led to four recessions just since 1980 that were the result of their hunger for more power?

Polls are showing that ordinary Americans are beginning to understand what it means.

Harlan Green © 2026

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

“The economy hasn’t lost its mojo.” MarketWatch

 Financial FAQs

“Advance estimates of U.S. retail and food services sales for June 2026, adjusted for seasonal variation and holiday and trading-day differences, but not for price changes, were $768.6 billion, up 0.2 percent (±0.4 percent)* from the previous month, and up 6.7 percent (±0.5 percent) from June 2025.” Census.gov

FREDretailsales

Headlines, such as that consumers “haven’t lost their mojo” have popped up when retail sales rose 0.2 percent in June. It’s a sign of consumers are willing to ‘shop until they drop’, which may keep the U.S. economy growing for some time.

It also means that same level of irrational exuberance of the 1990s is back once again, with the major market indexes at record levels, and consumers seemingly oblivious to the conditions that prevailed during the late 1990s.

 Nobel Laureate Robert Shiller first presented the term irrational exuberance to Alan Greenspan’s Federal Reserve Governors in 1996 to evidence how overvalued stock market levels had become at the time. But it wasn’t until 2000 that the dot-com asset bubble burst that many market commentators and some economists are comparing to the current record market rally.

The MarketWatch headline portrays most of the media’s reaction to the latest Advance Retail and Food sales report by the U.S. Census Bureau. The slightly hysterical headline is really a sign of relief because of the slight drop in monthly gas prices that prevailed during the 60-day cease fire agreement.

But the cease fire has ended. And it reveals how badly the Trump tariffs and Iran war have hurt consumer spending, still the backbone of U.S. economic growth. We have been a consumer-driven economy since the 1950s and end of World War II.

And since retail sales are not inflation adjusted, when adjusted for inflation, gas and food in particular have become less affordable. Retail inflation is still above 3 percent. Retail sales have fluctuated wildly, as per the above graph, rising 6.7 percent in 12 months because consumer bought more in earlier months to get ahead of the rising inflation—i.e., before the Iran War began to jack up everyday prices.

Though sales at car dealers and online merchants both jumped about 2 percent in June, sales fell at grocery, clothing and healthcare stores, says MarketWatch.

So, consumers are still shopping because they must, putting them further in debt. The Consumer Price Index for basic necessities like gas and food is still above 3 percent, as I said, and the wholesale (PPI) price index for raw materials that go into retail goods is 5.5 percent annually, the U.S. Bureau of Labor Statistics reported. It’s still the largest rise in more than three years.

We don’t have to look at just the dot-com bubble to compare, either. I see an unsettling resemblance to the ‘roaring twenties’ of an earlier era from the recovery of another pandemic, the Spanish Flu pandemic of 1919 to 1920 that killed what would be millions of Americans if at our current population level.

It was a long recovery—until 1929 and the Black Friday stock market crash that led to the Great Depression, caused in part by another era of high tariffs that led to product shortages.

How long may this era of irrational exuberance last that has driven the financial markets to record levels with so much wealth pouring into a new space age that will take us years to return to the moon, much less turn a profit?

We are at another turning point in what currently looks like an A.I. revolution, much like the Internet’s introduction that took decades to adopt, and recovered from a Great Recession, let’s not forget.

So the best way to survive another bout of irrational exuberance is to be patient, in my opinion, rather than listen to the crowd that promises the next big thing.

Harlan Green © 2026

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

No More Jobs?

 Popular Economics Weekly

“Consumer confidence inched up in June as falling oil prices in recent weeks provided some relief to consumer inflation fears,” said Dana M Peterson, Chief Economist, The Conference Board. “Consumer appraisals of current business conditions were slightly more positive compared to last month. However, perceptions of the current labor market softened measurably as the percentage of consumers saying jobs were ‘hard to get’ rose to 22.5%, the highest level since January 2021 (22.8%). Conference Board

 

MarketWatch

The Conference Board’s Consumer Confidence Survey highlighted what was behind the meager total of 57,000 new jobs in June – the fewest in four months. The job market may not recover from the damage the Trump administration has done to the U.S. economy anytime soon.

Some 755,000 worker dropped out of the labor force in June because “jobs are hard to get,” said the Conference Board’s survey.

What's more, job gains in May and April were revised down to a combined 277,000 from a previous 351,000 - 74,000 fewer than previously reported.

Trump’s Iran War disaster is probably the main reason for the job losses because higher energy prices from the Middle East are elevating inflation and slowing down hiring for years to come. Wall Street is hoping the A.I. revolution will boost labor productivity to such an extent that it will tame inflation, but without creating many new jobs.

The other culprit for fewer new jobs? Federal immigration officials have detained more than 10,000 people in the last five days, reports the NYTimes, a major surge that has stemmed from a push within Immigration and Customs Enforcement to increase arrest rates. Immigrants won in the latest SCOTUS rulings that ICE cannot hold them without due process, which might slow down the roundups because it means a bond hearing.

The shrinking labor force will shrink economic growth as well since fewer workers means less will be produced; unless the A.I. delivers on it promises of higher producivity. And that will take years. But that means fewer workers, anyway. There will be more robots, Claude, ChatGPT, Open AI, etc., etc. and a shrinking workforce that pays less taxes to support public policies, social security, Medicare and public debt don’t forget, which is soaring, of course.

Well, many of the new jobs will be in the lower paying healthcare industry — hospitals, doctor's offices, dentists, nursing homes and so forth — that created 47,000 of the 57,000 new U.S. jobs in June.

The big question will be how to support our public policies that serve all Americans in the future (and preserve jobs), rather than more Republican policies that continue to favor the concentration of wealth via A.I. or whatever, driving U.S. ever closer to insolvency.

Harlan Green © 2026

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

No Relief From Inflation

 Popular Economics Weekly

 “From the same month one year ago, the PCE price index for May increased 4.1 percent. Excluding food and energy, the PCE price index increased 3.4 percent from one year ago.”

 

BEA.gov

The Personal Consumption Expenditure Index (PCE), the Federal Reserve’s preferred inflation gauge that covers the widest spectrum of price changes, showed no relief in May. In fact, the PCE graph above showed inflation’s steady climb since Trump’s April 2025 Liberation Day (illegal) tariff hikes levied on the rest of the world that must now be repaid.

Refunding the tariffs to importers won’t reduce inflation because the higher import costs were passed on to consumers and producers. It becomes a chain reaction as those costs work through the economy. There are also the distributors, for instance, as well as the retailers and manufacturers’ profits that go into the chain.

The 4.1% annual inflation rate means inflation is now out of control for wholesale prices that go into the finished products as well. This is while Kevin Warsh, the new Fed Chairman, has said he is committed to bringing inflation back down to 2%.

When and how can it be done? We will be living with the likelihood the Fed may have to raise interest rates sometime this year. The Ukraine and Iran wars are creating more product shortages on top of the supply chain shortages caused by the tariffs.

The Ukraine war could be over if Trump had taken Ukraine’s side in the conflict instead of Putin’s. And how will he handle the Iranians who have the U.S. over a barrel (of more than oil) because he must bring down the price of oil-based products as well?

The U.S. economy is growing at 2% in the latest first quarter revision because consumers have kept shopping, but with a terrific toll on their personal savings rate (down to just 3%).

The financial markets have added to the frenzy because of the A.I. spending to expand data centers. There’s more than a little irrational exuberance prevailing, I said last week.

Their actions have raised consumer prices to such a level that they may not come down for years. We know this because the wholesale Producer Price Index (PPI), that measures the price of raw materials going into the finished products rose a whopping 1.1% in May, seasonally adjusted, also the largest rise in more than three years that must work its way through the product chain.

No, inflation is here to stay for a while, producing an immense asset bubble as the U.S. economy advances into the next stage of our industrial revolution. Economists have another term to describe it—creative destruction—that economist John Kenneth Galbraith said was,

“the cyclical process by which the system eliminates the people and institutions which are mentally too vulnerable for useful economic service. Unfortunately the process has larger and less benign effects, including the possibility of painful recession or depression.”

We are in this inflationary mess because of executive actions made on impulse rather than research by a President and advisors who are completely ignorant of  basic economic theory, who has said he likes the inflation and no longer cares about the economy.

Who will be the winners and losers in the A.I. economy to come at a speed that will upend the lives and jobs of the next generations?

Harlan Green © 2026

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

Retail Sales Recovering?

 Popular Economics Weekly

“Advance estimates of U.S. retail and food services sales for May 2026, adjusted for seasonal variation and holiday and trading-day differences, but not for price changes, were $763.7 billion, up 0.9 percent (±0.4 percent) from the previous month, and up 6.9 percent (±0.5 percent) from May 2025.” Census Bureau

 

FREDretailsales

Retail sales are recovering in 2026 because consumers are still shopping, even though paying more for automobiles and gas because of the higher inflation. But it’s emptying their pocketbooks, to no one’s surprise.

So why do they keep shopping? There’s more than a little irrational exuberance prevailing at the moment in financial markets because of optimism over the SpaceX IPO that is breaking sales records. It’s called herd behavior in economic parlance, because its investors seem to believe SpaceX is the next big thing without too much forethought.

Nobel Laureate Robert Shiller calls it lazy thinking, listening to little more than word of mouth or hearsay, or scanning the headlines but not what is between the lines, instead of researching it.

SpaceX is making a tiny profit, yet Elon Musk’s hyper sales pitch has investors believe the sky’s the limit with future earnings from…what, a trip to the moon or Mars? Its IPO has capitalized it as high as established corporations such as Microsoft that have a track record of real profits.

The stock market indexes are still breaking records in part because the major corporations have record profits. And the job market is finally recovering, after almost no job growth last year. The sudden hiring surge is because manufacturing has rebounded; both from the Biden administration’s $5 trillion raised in legislation to modernize U.S. infrastructure and the $1.5-2 trillion suddenly pouring into the A.I. construction of data centers.

In fact, there’s so much irrational exuberance that this so-called A.I. revolution is now being compared to the Dotcom (in 2000) and housing bubbles (2008).

Too much fiber optic cable was laid in the years leading up to 2000 that is only now turning a profit, and too many homes were built during the bubble that weren’t being absorbed by the housing market, resulting in basically flat home sales and too little construction of new homes for a decade.

This is even though the U.S. population has increased by 60 million since 2000, according to the Census Bureau. The result is the lack of affordable housing and record homelessness, a cure of which would be more profitably invested in, rather than A.I.

But despite the market optimism, most consumers have become more cautious. Irrational exuberance hasn’t convinced ordinary consumers who can barely afford to keep up with rising prices. The Conference Board’s Index of Leading Economic Indicators that attempts to predict business cycles, shows too many headwinds for much improvement.

“Consumers are feeling squeezed because everyday costs—especially gas and energy—are rising faster than their incomes, leaving many households with less money available for things like travel, restaurants, entertainment, and shopping. The good news is that businesses are spending heavily on AI, data centers, and new technology, helping to keep the economy growing, while consumers pull back spending,” said Justyna Zabinska-La Monica, Senior Manager, Business Cycle Indicators for the Conference Board.

Growing retail sales are a positive sign that the economy is improving for consumers as well as market investors but it can’t last unless inflation declines. Will artificial intelligence be the ticket to greater prosperity for all?

Let’s hope so, otherwise the A.I. bubble will also burst.

Harlan Green © 2026

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

"I Love the Inflation."

 Financial FAQs

Huffington Post

Why would our President say, “I love the inflation.” in the Oval Office in front of the world’s press? Huffington Post reported it was after being asked if Trump was concerned about new consumer price index data that showed the annual inflation rate at a 4.2%, three-year high.

Energy prices are skyrocketing with no prospects for a resolution to the Strait of Hormuz closure. And the latest inflation news is that the Producer Price Index for final demand just rose a whopping 1.1% in May, seasonally adjusted, the U.S. Bureau of Labor Statistics reported, also the largest rise in more than three years

And the PPI contains the prices of the raw materials (such as oil products) that go into the Consumer Price Index. So no relief in sight for the pocketbooks of most Americans, the 80 percent of wage-earners that statistics show are now living from paycheck-to-paycheck.

Huffington Post reports the anti-Trump group Home of the Brave said that was why it was already putting the president's remarkable quote on political billboards in 16 states, part of a $15 million advertising buy highlighting the rising cost of living.

Yet there is a booming stock market (Thank you, Elon Musk’s SpaceX IPO). This is while wages rose 3.4 percent in the latest May unemployment report, which means it can’t keep up with 4.2% Inflation.

Most Americans are depleting their savings just to survive. The latest Personal Consumption Expenditure survey shows the sharp drop in personal savings—from 6.4 percent of their disposable income in January 2024 to 2.6 percent today that consumers are drawing from to keep up their spending.

It’s because most of the job growth has been in the lower-wage service sector—such as healthcare, education, and social services. Wages began to drop below 4 percent in May 2024, at the same time as inflation began to rise when Trump announced higher tariffs on all 180 countries in the world, which his advisors had to know meant another tax on consumers.

So the real reason Trump made such a flippant remark must be because he doesn’t give a damn about inflation, is blatantly ignoring the promise he made to voters that he would bring it down from “day one” of his presidency.

Why? He needs taxpayers to help pay down the ballooning debt incurred from his Big Better Tax Bill giving his fellow oligarchs such large tax breaks that it is endangering the full faith and credit of our government.

There’s another ‘balloon’ we should also start worrying about, the $ billions being invested in upcoming IPO's such as Elon Musk’s Space X that has sucked up some $75 billion in investments with little profits to show from it, and two more high-profile IPOs to follow: Anthropic and Open AI.

It’s part of the A.I. boom that’s being touted as another Industrial Revolution. But we mustn’t forget the pain such revolutions cost. The Industrial Revolution dating from 1890 caused 15 deep recessions or depressions, such is the price of such progress.

Or, we can demand that the record number of billionaires being created, and now even Elon Musk, the first Trillionaire created from the SpaceX IPO, pay their fair share.

Harlan Green © 2026

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

Is Employment Recovering?

Financial FAQs

 “The number of job openings increased to 7.6 million in April, the U.S. Bureau of Labor Statistics reported today. Over the month, hires and total separations decreased to 5.1 million and 5.0 million, respectively. Within separations, both quits (3.0 million) and layoffs and discharges (1.7 million) were little changed.” BLS.gov

FRED/jolts

The employment picture is improving, and there are prospects for more hiring ahead. The question is how long can it last with so much economic and geopolitical uncertainty?

The manufacturing boom is one reason for the employment surge because it’s building out our aging infrastructure, thanks to the Biden administration’s $1.2 trillion Infrastructure Investment and Jobs Act (IIJA). But manufacturing is growing also due to the binge in private investment for the AI build out of data centers I’ve been writing about—maybe as much as $2 trillion in mainly borrowed money.

Biden’s IIJA provides $550 billion in new funding to rebuild roads, bridges, public transit, water systems, and broadband access across the United States on top of $650 billion authorized by Congress for work on existing infrastructure, says Wikipedia.

The latest Institute For Supply Management survey reported:

“The Manufacturing PMI^® registered 54 percent in May, 1.3 percentage points higher than in April and its highest reading since May 2022 (55.9 percent). The overall economy continued in expansion for the 19th month in a row. (A Manufacturing PMI^® above 47.5 percent, over a period of time, generally indicates an expansion of the overall economy.) per Susan Spence, MBA, Chair of the Institute for Supply Management® (ISM®) Manufacturing Business Survey Committee

The good news is also showing up in vastly improved jobs data. The April JOLTS report on job openings being advertised by employers jumped to 7.6 million from its low of 6.55 million last December.

There was just a 100,000 increase in hires (5.1 million) over separations (5 million), in the report, because employers remain cautious over the tariffs and Iran war. But it’s also a sign they are holding onto their existing employees.

Add to this payroll provider ADP reported that U.S. businesses created 122,000 new jobs in May to mark the biggest increase in 16 months. It’s another sign of a rebound in hiring in what’s been a tough labor market for job seekers.

“Hiring was more broad-based in May than we’ve seen in the last few years,” said Nela Richardson, chief economist at ADP, the U.S.’s largest processor of company payrolls. “The labor market continues to show sustained momentum going into the summer hiring season.”

So economic growth is holding up for now. Q1 was revised downward from an initial 2.0% to 1.6 %, due to slowing consumer spending. Second quarter growth estimates are in the 3% range, with the Atlanta Fed’s GDPNow estimate of second quarter growth at 3.0%.

But an unusually pessimistic result from the University of Michigan sentiment survey reports that inflation expectations are sky high, which will further slowdown spending as consumers become more careful with their money.

“Year-ahead inflation expectations inched up from 4.7% last month to 4.8% this month. The current reading substantially exceeds the 3.4% reading seen in February 2026 prior to the start of the Iran conflict, along with all 2024 readings. Long-run inflation expectations climbed from 3.5% in April to 3.9% in May, notably higher than the 2.8% to 3.2% range seen in 2024.”

So there are many caveats to future projections of the job market and a recovering manufacturing sector. The 2026 International Monetary Fund World Economic Outlook highlights how precarious this recovery is. Our economic wellbeing may depend on the duration of the Iran war, to no one’s surprise. If it lasts more than a few months, the likelihood of recession has increased

Harlan Green © 2026

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

 

Is This Real Growth?

 Financial FAQs

“Real gross domestic product (GDP) increased at an annual rate of 1.6 percent in the first quarter of 2026 (January, February, and March), according to the second estimate released today by the U.S. Bureau of Economic Analysis. Real GDP was revised down 0.4 percentage point from the advance estimate, primarily reflecting downward revisions to investment and consumer spending.” BEA.gov

FRED/Q1gdp

Economic growth this year is improving because corporations are making record profits—up 17 percent annually in Q1 2026 from an average 13 percent since the COVID-19 pandemic.

But it looks like much of the growth may be part of the tech bubble—such as massive overinvestments in chips and artificial intelligence (AI)—creating a bubble which by definition and past history will eventually deflate.

Why the sudden jump in corporate profits to 17 percent? It’s mostly from investing in the massive buildout of artificial intelligence centers and the infrastructure. How long can such GDP growth continue, especially if those future investments, such as in AI programs or the chips that power AI, may take years to turn a profit?

Republicans’ Big Beautiful Tax Cut Bill encouraged corporations to invest as much as possible this year because they could write it off in the same year, and those investments are generating serious profits in the buildout of AI data centers, for starters.

But the Biden administration’s $5trillion in investments to modernize the American economy—the CHIPS, Infrastructure, and Inflation Reduction Acts—are also contributing to the surge in growth.

Yet largely because of the Trump Administration’s mismanagement; even attempts to cancel or impede many of the Biden administration programs that would actually improve inflation, healthcare, environmental protection, and bring the manufacture of computer chips home; we are seeing those profits going into irrationally exuberant, overinvestment in future technologies with uncertain futures instead that is pushing major stocks and market indexes to record highs.

The announcements on the possibilities of AI are mind boggling. Zack Kass, Open AI pioneer and author of bestseller, The Next RENAISSANCE: AI and the Expansion of Human Potential, has said:

“If directed wisely, it will secure our needs, accelerate discoveries that serve human flourishing and unlike the products that commoditize our attention today, free us to invest in connections creativity and love.”

It will free whom, and what will they do then? It is causing massive layoffs at the likes of Amazon (30,000 employees to date) who hope that programs like Claude and ChatGPT can do much of the thinking and future planning for these corporations.

Consumers aren’t doing so well that actually make up most of the GDP growth equation. Their so-called Disposable Income (an economic term) declined to “slightly less than -0.1%” in April.

It resulted in a lowering of the personal savings rate to almost 2%, one-half of its more normal 3-4 percent rate in recent years. Consumers are stretched in other words; more than half of their incomes are now spent on the soaring costs of gasoline/energy products, household necessities, and food. This is another reason we may see slowing GDP growth ahead.

There is no question that AI has enormous potential for good, in what British economist JM Keynes made in a famous prediction in 1930, should there not be too many bumps in the promised road to a greater freedom from work:

“Thus for the first time since his creation man will be faced with his real, his permanent problem-how to use his freedom from pressing economic cares, how to occupy the leisure, which science and compound interest will have won for him, to live wisely and agreeably and well.” JM Keynes

But Keynes said this in 1930. How long has it been since then?

Harlan Green © 2026

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

Time To Pay the Piper

 Popular Economics Weekly

 “The time to repair the roof is when the sun is shining. [State of the Union Address January 11 1962]” President John F Kennedy

Wikipedia

Two of our largest domestic economies are heeding President Kennedy’s words, “when the sun is shining”; it’s time to begin paying our national debt during this record-breaking stock market run that is currently benefiting the wealthiest Americans.

We are drowning in a federal debt that is endangering our good faith and credit while crowding out domestic spending on the public services that make life more bearable for ordinary Americans. We have a federal debt that is now 120% of the annual output of the U.S. economy (Gross Domestic Product).

New York City’s Mayor Zohran Mamdani, and California Governor Gavin Newsom have announced that it’s possible to balance a budget. Maybe that’s something Republicans should also heed if they want to remain relevant to America’s future by offering more than tax cuts and bloated military budgets.

New York City is the largest U.S. city with an 8.5 million population, and the State of California has the fourth largest economy in the world behind the U.S., China and Japan.

Mayor Mamdani announced the $124.7 billion Fiscal Year (FY) 2027 Executive Budget, putting New York City on firm financial footing while protecting the services working people rely on. “Through strong fiscal management, Mayor Mamdani balanced the budget through a combination of aggressive savings, new tax revenue, partnership with Albany and critical new investments.”

California’s 2026-27 budget, as revised by Governor Gavin Newsom on May 14, 2026, “projects no deficit for that year and the next budget year (2027-28), with a structural deficit eliminated through July 2028.”

It’s a sign that Americans in Democratic states at least want to move on from the trickle-down economic policies that Republicans have practiced since 1980, resulting in five recessions including the Great Recession on their watch.

It has perpetrated the greatest income and wealth inequality of all—red states depriving their own citizens of a livable minimum wage and social services that make their lives bearable, with no minimum wage higher than the national minimum wage of $7.25 per hour (portrayed in the Wikipedia map), or state taxes to pay their bills and provide adequate health care.

That’s a reason most Republican-led, so-called red states, have fallen far behind in growth compared to Democrat-led blue states –many with surplus tax revenues that go to many of the red states in the form of benefit payments to balance their budgets.

California, for instance, has the largest tax ‘imbalance’ in the nation. Varying estimates show Californians pay between $83billion and $275billion more to the IRS than the federal government returns to the state in the form of Social Security, healthcare, military contracts, and disaster aid.

Whereas red states like Kentucky require $Billions from the federal coffers to meet their budget needs. For instance, 10 red states have no Medicaid health insurance for their low-income residents.

The results show the glaring damage the minimal, ‘bare bones’ red state budgets wreak on the health and safety of their citizens. Red states exhibit higher premature mortality rates and higher incidences of death from major internal causes, such as heart disease, cancer, and stroke. Blue state citizens on average live longer.

NIH research shows a clear partisan health divide in the United States, with "blue" (Democratic-leaning) states consistently outperforming "red" (Republican-leaning) states across major public health metrics, including life expectancy, infant mortality, and preventable chronic illnesses.

The New York City and California examples show that state and federal governments know how to balance a budget that benefits all Americans, not just the wealthiest. The Clinton Administration even created four consecutive years of budget surpluses in the 1990s that paid down the federal debt.

A consensus is building that our national debt must be dealt with. Balancing budgets are the responsible way to deal with it, not the trickle-down economic policies that have created the monstrous debt from the many Republican tax cuts that have deprived red states’ citizens of a decent standard of living.

Harlan Green © 2026

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

Biden vs. Trump Presidency

 Popular Economics Weekly

“The Producer Price Index for final demand increased 1.4 percent in April, seasonally adjusted, the U.S. Bureau of Labor Statistics reported today. Final demand prices advanced 0.7 percent in March and 0.6 percent in February. The April increase is the largest advance since rising 1.7 percent in March 2022.” BLS.gov

FREDppi

Trump’s economy vs. Biden’s? It’s no contest. Trump made his major reelection campaign about attacking Biden’s inflation problem, yet the latest wholesale and retail inflation data show President Biden has easily won the inflation battle, as well as that for job creation and economic growth.

The retail Consumer Price Index is the highest in three years, and the wholesale Producer Price Index pictured above is now the highest in four years on Trump’s watch.

There’s no contest with job creation and economic growth as well. A total 234,000 payrolls jobs were added in December 2024, Biden’s last month in office; more than the 181,000 jobs that were created in all of Trump’s first year.

That’s because of Trump’s mismanagement of the illegal tariff war on the rest of the world, the 43-day government shutdown over Obama insurance subsidies (longest in history) that temporally laid off millions of workers and the immigrant deportations.

The illegal tariffs began the inflation surge we are seeing today in import prices. “The 12-month rise in U.S. import prices was the largest over-the-year advance since the index increased 4.2 percent for the year ended October 2022,” per the BLS.

This will also make it even more difficult to lower interest rates in 2026 for the Federal Reserve under new Republican Chairman Kevin Warsh. In fact, the Fed may have to raise their rates if inflation continues to rise and becomes unmanageable as happened during Biden’s term.

That’s because we are not yet accounting for the damage from the Iran war that is elevating prices for all the petroleum byproducts important for jobs and economic growth that are sure to seep into the inflation numbers.

Even if the Iran war is settled soon, predictions are it may take at least one year for a return to normal traffic in the Gulf and Hurmuz Strait that supplies at least 20 percent of the world’s petroleum.

The damage to jobs and economic growth in Trump’s first year shows the extremes to which Republicans will go to ignore basic economic principles (e.g., tariffs are a tax on consumers and producers) to protect their tax cuts.

Even higher inflation is sure to follow. The energy sector is already being hit with higher gas and diesel prices The AI buildout will increase the demand for electricity as the huge AI energy generation centers kick in from the $billions being invested, while Trump continues to cancel more alternative energy solar and wind projects that provide cheaper electricity.

From the start of the Biden presidency through December 2024, the Bureau of Labor Statistics (BLS) recorded an increase of about 16.1 million jobs, the highest total during a presidential term in history, equal to 336,000 per month (my emphasis).

And economic growth averaged more than 3 percent during his four years because of bipartisan plans to modernize the American economy.

What happened on Trump’s watch? Republicans have paid the economic price for refusing to compromise. America’s electorate came to believe that Republicans knew more about economic growth and what it takes to lower everyday prices for Americans.

Harlan Green © 2026

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Consumers In A Strait Jacket

Popular Economics Weekly

“The Consumer Price Index for All Urban Consumers (CPI-U) increased 0.6 percent on a seasonally adjusted basis in April, after rising 0.9 percent in March, the U.S. Bureau of Labor Statistics reported today. Over the last 12 months, the all items index increased 3.8 percent before seasonal adjustment. BLS.gov

FREDcpi

The Consumer Price Index for retail goods is the highest in three years and a reason the recent (December) Harris poll for The Guardian says 57 percent of Americans believe the U.S. is already in a recession—despite last week’s strong unemployment report and initial Q1 2026 2% economic growth.

One of the reasons for the inflation upsurge is the Hormuz Strait blockade by the U.S. and Iran as President Trump attempts to squeeze Iranian oil exports, when President Trump has said many times in many confusing ways the Iran war is over? We might find out after the Chinese summit.

That’s because China imports 40-50 percent of its oil via the Hormuz Strait according to most experts. And it’s almost the only leverage Trump has in his negotiations with Chairman Xi over the stranglehold Xi has on strategic minerals that make things like super magnets to power computers and jet fighters.

Food prices as well as that for petroleum products have a huge impact on inflation, per the CPI.  It’s the everyday items like food that are depressing American consumers big time.

· The index for food rose 0.5 percent in April after being unchanged in March. Five of the six major grocery store food group indexes increased in April.

· The index for meats, poultry, fish, and eggs increased 1.3 percent over the month as the index for beef rose 2.7 percent.

· The fruits and vegetables index increased 1.8 percent in April and the nonalcoholic beverages index rose 1.1 percent.

· The index for dairy and related products increased 0.8 percent over the month and the index for cereals and bakery products rose 0.1 percent in April.

The University of Michigan Sentiment Survey tells us why Americans are depressed:

“About one-third of consumers spontaneously mentioned gasoline prices and about 30% mentioned tariffs. Taken together, consumers continue to feel buffeted by cost pressures, led by soaring prices at the pump. Middle East developments are unlikely to meaningfully boost sentiment until supply disruptions have been fully resolved and energy prices fall,” said survey director Joanne Hsu

And when will that happen? I believe Trump is using the blockade to pressure China on trade concessions, rather than Iran; which is one reason he keeps belittling Iran’s efforts at ending the blockade. Iran is only important as a means of holding China’s feet to the fire on the Hormuz Strait.

Although it’s in both China and America’s best interest to conclude a trade treaty asap, and then work to re-open the Strait, it could still take months to finalize. And before gas prices and inflation begin to come down.

Harlan Green © 2026

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

Stagflation Isn't Going Away

Financial FAQs

“The number of job openings was unchanged at 6.9 million in March, the U.S. Bureau of Labor Statistics reported today. Over the month, hires increased to 5.6 million while total separations changed little at 5.4 million. Within separations, both quits (3.2 million) and layoffs and discharges (1.9 million) were little changed.’ BLS.gov

FREDjolts

The FRED graph of the JOLTS report (U.S. Job Openings and Labor Turnover Survey) shows the sharp decline in the number of job openings from its high of 12 million openings in 2022 at the end of the COVID-19 pandemic. This is another sign of stagnating growth. And though stocks continue to rally to new highs, interest rates are also rising, a sign of higher inflation.

Now combine no new job growth with rising inflation and we have further signs of stagflation, the combination that stopped economic growth for most of the 1970s. It has hovered around 7 million job openings during Trump’s second term because of Donald Trump’s almost single-minded job-killing policies.

It’s not just the illegal on-again, off-again tariffs that disrupt supply chains, but the immigration sweeps taking tens of thousands of workers out of their jobs and off the streets. And most of them pay taxes that would help in reducing our record federal debt.

Cap that with all the DOGE job cuts that have eviscerated the Labor Department responsible for enforcing OSHA worker safety laws and union wage negotiations. Millions have also lost their insurance coverage because Republicans blocked renewal of subsidies that made it affordable to ordinary non-seniors.

Job formation is now at a standstill because of Trump’s anti-labor antics. It’s mostly pure greed that motivates Republicans these days who have cut social services to the bone to pay for their tax cuts.

And there is plenty of time for stagflation to worsen as a semi-permanent feature of Trumponomics, his version of Reagonomics trickle-down economic policies, since Trump has three more years.

Inflation doesn’t disappear when economic growth picks up that is inflating stock prices. All the AI investing will ultimately increase productivity in factories that make cheaper products and need fewer workers. But who will buy its products with fewer employed workers, hence consumers, to buy its products?

Nobel Laureate economist Paul Krugman has pointed out the damage Republican economic policies have done to the health and welfare of Americans and American workers, as well that lessens their productivity because more sick days means time lost from the workplace.

“There is a strong correlation between right-wing politics and increased mortality — stronger than many of the statistical associations that guide public health policy. Deep red states like Alabama and West Virginia have life expectancy comparable to, say, Kazakhstan.”

I’ve written in the past about the dumbing down of the Republican electorate that is causing this; its refusal to rely on scientific knowledge, or support vaccines and publicly funded healthcare.

“We’re seeing the forces that keep U.S. life expectancy far below that in other rich countries, that cause Texans (for instance) to die younger than residents of Massachusetts, go into overdrive at a national level.”

This will cause the death of more Americans, further shrinking our available supply of workers. It’s already happened—just 15,000 new jobs per month were created in 2025. Professor Krugman warns the carnage will continue while inflation is soaring because of his many missteps.

“The consequences will be grim,” he warns.

Harlan Green © 2026

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

Does Inflation Ever Come Down?

Popular Economics Weekly

“From the preceding month, the PCE price index for March increased 0.7 percent. From the same month one year ago, the PCE price index for March increased 3.5 percent.” BEA.gov

FREDpce

Inflation is rising again, to no one’s surprise, from its low of 2.3 percent in April 2025 when Trump first announced his worldwide tariff hikes, to 3.5 percent in March this year. The reasons are clear, inflation is rising on Trump’s watch, not Biden’s.

And inflation almost never comes down without another recession. This is verified in the above graph of Federal Reserve’s preferred Personal Consumption Expenditure price index from 1980. The gray bars are the five recessions since 1980, and each clearly shows the beginning of the sharp downward move of prices in the PCE index

The only time prices have come down without a recession since then was during President Biden’s term—from its high in June 2022 to slightly above 3 percent at the end of his term.

Biden could do this because the Fed used its best tool to combat inflation; raising interest rates at the same time as Biden succeeded in lowering the federal debt by raising corporate taxes to counter the huge influx of government money injected into the economy ($5 trillion) from Biden’s bipartisan Infrastructure, Inflation Reduction and CHIPS Acts.

The bills were passed to inaugurate the biggest modernization of the U.S. economy since the Great Depression that employed a record number of workers.

So it is possible to bring down inflation without a recession. And there is substantial harm, especially to working Americans who face higher prices for basic necessities, such as gas and healthcare, for prolonging this inflation surge.

What had caused the five recessions since 1980? Republican administrations cut taxes without paying for them, ballooning the federal debt instead of reducing it. Recessions (gray bars) occurred in 1980, 1981, 1990, 2008-09, all during Republican administrations. The short 2000 recession happened because of the COVID-19 pandemic.

This is an unnecessary inflation surge, in other words. It’s because of multiple wars being fought and a Republican congress that will not curb a president who doesn’t care about the costs and harm he is doing to Americans and the American economy.

Harlan Green © 2026

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

Fitrst Quarter Economic Growth Improves

 Financial FAQs

Real gross domestic product (GDP) increased at an annual rate of 2.0 percent in the first quarter of 2026 (January, February, and March), according to the advance estimate released today by the U.S. Bureau of Economic Analysis. In the fourth quarter of 2025, real GDP increased 0.5 percent.

BEA.gov

“The U.S. economy has just powered through shock after shock,” was Fed Chair Powell’s summation of the state of the U.S. economy at his last press conference as Federal Reserve Chairmen.

First quarter 2026 real (inflation adjusted) GDP growth picked up +2.0% in the government’s first estimate, following +0.5% growth in Q4 2025, thanks to the $billions being spent in AI energy center build outs.

Kevin Warsh will take over as the new Fed Chairman in May, so there is speculation that he will push for easier monetary policy as President Trump’s pick for the new Fed Chairman by lowering the Fed’s interest rates and a more hands off management style.

Trump badly needs easy credit to maintain growth because of his economic mismanagement. A barely functioning government is either tied up in congress with the various shutdowns (last fall and current DHS funding), while illegal tariffs have choked supply chains.

Meanwhile, to Powell’s consternation, economic growth is picking up “through shock after shock”, from the Great Recession, COVID-19 pandemic, the 37-day fall government shutdown, tariffs, and the various wars that have caused energy prices to skyrocket.

The AI build out was predicted to boost growth, consumers continued to hold up their end, and government spent more on the Ukraine and Iran wars. The Defense Department reported the Iran war has already cost $25 billion in just the first two months.

And the financial markets continue to rally to new highs, so we are seeing some irrational exuberance, despite the game of chicken by Iran and Trump over the Hormuz Strait blockade. It’s obvious market investors continue to believe that Trump with his TACO policies will find a way to extricate American out of his latest war sooner rather than later.

But it also means $4 plus gas prices and soaring inflation for months to come. Even if the Iran war is settled sooner, predictions are that Middle East energy production won’t be restored to previous levels for at least one year.

The real problem is the Trump administration’s economic mistakes have taken us back to a Cold War economy—more military spending, fewer government social services, while endangering the good faith and credit of the U.S. federal government as the debt continues to balloon.

Something has to give, in other words. The financial markets won’t rally forever on the AI investment bubble, and consumers won’t keep shopping until they drop without an ensuing downturn.

The question is when on so many fronts. When will the wars end? When will enough consumers realize prices won’t come down and elect a congress that will control Trump’s extravagance and greed before he bankrupts the American economy?

When will it be one shock too many that drives us into another recession?

Harlan Green © 2026

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

A Better World is Possible

 

Popular Economics Weekly

"Today we won because the Hungarian people didn't ask what their country could do for them, but what they could do for their country," Prime Minister Peter Magyar

NPR

I never thought I would see the most famous line from President John Fitzgerald Kennedy’s 1960 inauguration speech be adopted by another head of state, much less by a Kennedy look-alike of about the same age (45 years vs. JFK’s 43 years).

In a victory speech delivered to jubilant supporters on the banks of the Danube River, Magyar reiterated his promises to rebuild Hungary's ties with the European Union and NATO, root out corruption and cronyism and "restore the system of checks and balances," reported NPR.

Peter Magyar had just defeated Victor Orban, Hungary’s 16-year Prime Minister by a landslide, who was leader of the world’s so-called ‘illiberal’ democracies. Why did Orban lose, according to most commentators? It was the economy, “fueled largely by concerns about entrenched government corruption,” said NPR

Hungary had become the poorest member of the European Union with an inflation rate twice that of the EU average, and plunging economy growth.

“Hungary is the most corrupt state in the European Union, according to Transparency International, an organization that aims to combat corruption. The EU has blocked billions in funding to Orbán's government for its alleged assault on the bloc's principles of democracy and equality,” said NPR

So much for one-man rule. It’s a fact that other countries ruled by such autocrats are suffering the same fate as Hungary, such as Russia and Turkey, who had been suffering from slow growth and double-digit inflation for decades.

Why? Such rulers think they know better than the experts. President Trump’s playbook followed that of Orban with U.S. economic growth also plunging of late—mainly because of his Iran war that has shut down petroleum production in the Middle East. Who knows what’s to come?

The Atlanta Federal Reserve’s GDPNow estimate of first quarter (Q1) 2026 economic growth widely followed by economists has plunged from its high of 3 percent, where it had been sitting since January 2026, to 1.3 percent in the latest revision, I reported last week.

The cult-like glorification and rampant corruption of President Trump that is harming the U.S. economy is almost a photocopy of Orban’s rule—tearing down the White House East Wing for a ballroom, wanting an Arc de Triomphe, family and son-in-law being enriched by Middle East rulers, his Bit-coin ventures (with World Liberty Financial, founded in September 2024 with the Trump family owning 75 percent), per The Nation, pardoning literally thousands of convicted felons, including convicted drug kings, and most of all extorting wealth from institutions and Robber Baron’s alike in return for special treatment.

Let us hope Hungary’s new Prime Minister can follow the path of President Kennedy, who concluded his inauguration speech with a plea to the rest of the world: “My fellow citizens of the world: ask not what America will do for you, but what together we can do for the freedom of mankind.”

Harlan Green © 2026

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

Our Inflation Nation

 Financial FAQs

“The Consumer Price Index for All Urban Consumers (CPI-U) increased 0.9 percent on a seasonally adjusted basis in March, after rising 0.3 percent in February, the U.S. Bureau of Labor Statistics reported today. Over the last 12 months, the all items index increased 3.3 percent before seasonal adjustment. BLS.gov

FREDcpi

We knew it was coming. Not just when. The Iran war is in its second month and has already produced the largest supply shock to the global oil market in history, the IEA said last month.

On Tuesday, the head of the group, Fatih Birol, told French newspaper Le Figaro as reported by several news agencies that the current crisis is more severe than the oil shocks of 1973 and 1979, and the 2022 Ukraine-war shock, combined.

And there’s no end in sight as the world’s largest economy is making the supply shortages worse. It’s an incredible reversal of our standing in the world.

The high spike in the CPI inflation graph above is a disheartening picture of what happens when mad kings attempt to control economies and countries that have a chokehold on supply chains needed by the world economies.

This is just the latest mismanagement by the Trump administration—and Republican Party also has allowed, let’s not forget—of the American economy. President Trump wanting to pay for his tax cuts with higher tariffs had already snarled supply chains and caused a second post-COVID inflation round.

The Biden administration had wrestled annual CPI inflation below 3 percent in 2024 from the earlier COVID-19 pandemic spike, where it stood until now.

And Trump apparently thought attacking a country that bordered a waterway through which 20 percent of petroleum supplies and products flowed would not do further damage to the world’s economies.

So what was he thinking? The problem is he doesn’t bother to think things through at all. This is the second spike that has raised the cost of living since the tariff induced inflation. So why would polls show a majority of voters believe Republicans are better at economic growth?

Is it because Trump runs the federal government from Mar-a-Lago, or one of his golf courses (That’s a joke.)?

The all-items consumer index rose the most—3.3 percent for the 12 months ending March, after rising 2.4 percent for the 12 months ending February. It rose 2.6 percent less food and energy over the year. The energy index increased 12.5 percent for the 12 months ending March, as a result of the Iran war.

And American consumers are already feeling it. The University of Michigan survey of consumer sentiment fell to a record low of 47.6 in April from 53.3 in the prior month.

“Consumer sentiment sank about 11% this month, extending a decline that began with the start of the Iran conflict, and is currently about 9% below a year ago. Demographic groups across age, income, and political party all posted setbacks in sentiment, as did every component of the index, reflecting the widespread nature of this month’s fall,” said Survey Director Joanne Hsu

It doesn’t mean consumers will shop more once they receive their Trump tax refunds. But inflation is a growth killer, and countries such as Russia or even Turkey that are experiencing one-man rule have had nothing but double-digit inflation for decades, because their leaders thought they knew better than anyone else how to run their country.

Harlan Green © 2026

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

Another Gulf War?

 Popular Economics Weekly

“So it looks as if the worst and the dumbest are not just at the top of the political leadership. They’re not just on the diplomacy and strategic policymaking end, but even in the cutting edge of the military. And it’s terrifying. America as we knew it may just not exist, even in our military forces.” Paul Krugman

Amazon

Nobel Laureate economist Paul Krugman is concerned about our military because it doesn’t look like President Trump will settle the Iran War any time soon, and Dr. Krugman is fearing the results could be catastrophic for the world economy.

And Nuriel Rubini, another economist, predicted in a recent CNBC interview that Donald Trump would escalate the war on Iran and thereby risk “1970s stagflation.” Dr. Rubini isn’t infallible. He is known for falsely predicting many ‘doomsday’ scenarios, but he did predict the Great Recession.

The U.S. was seemingly caught by surprise over the extensive damage that has already been done on Gulf refineries and U.S. Military bases in the area and almost 200 American casualties killed or wounded.

A JP Morgan commodities analyst Natasha Kaneva with co-authors Artem Fakhretdinov and Lyuba Savinova cited by MarketWatch is predicting trouble ahead if the war is escalated. “Much like during the pandemic, the shock unfolds sequentially rather than simultaneously — a rolling supply disruption moving westward, dictated by shipping times and buffered unevenly by regional inventories.”

Such disruptions are already occurring because so many petroleum products that originate in the Gulf must be transported by ship, and stockpiles are already depleted. In the first three weeks of March, Kaneva discovered a fall of 155 million barrels, mainly triggered by a 211 mbpd drop in oil in transit.

What would another “1970’s stagflation” look like that occurred once before because of another oil embargo—by OPEC—and resulted in multiple recessions? The rising prices of gas, fertilizers, and natural gas are already boosting inflation from the Strait of Hormuz blockade. Stagnating growth is sure to follow, since consumers will save more, consume less, which is the classical response to such conditions.

So why then would Trump even attempt it? He seems to believe the U.S. military could pull off another Venezuela—perhaps by quickly capturing Kharg Island, Iran’s oil shipping hub, and closing the Strait of Hormuz.

That brings us back to Professor Krugman’s prognosis on American military capabilities. “There’s no question that the U.S. has unchallenged superiority in all of the conventional aspects of warfare. There’s no Iranian Air Force for, you know, there’s no Iranian Navy in any conventional sense. Unfortunately, it’s not that kind of war. The failure to have a prepared response to the modern world of drones and inferior powers which nonetheless have the ability to do a lot of damage, has been a bit of a shock.”

But Trump doesn’t seem to be listening to anyone on the economy. In giving a recent “A plus plus-plus-plus-plus-plus” grade on the U.S. economy in a recent interview with Politico cited by The Guardian, Trump is living in a fantasy world while he drives the U.S. economy into a possible recession.

The University of Michigan sentiment survey on how consumers currently think about our economy hit a new low in March. “Consumer sentiment fell back 6% this month to its lowest level since December 2025. Declines were seen across age and political party. Consumers with middle and higher incomes and stock wealth, buffeted by both escalating gas prices and volatile financial markets in the wake of the Iran conflict, exhibited particularly large drops in sentiment,” said survey Director Joanne Hsu

Hsu also said year-ahead inflation expectations climbed from 3.4% in February to 3.8% this month, the largest one-month increase since April 2025.

What if our military has been fighting the wrong war? What if Iran has the capability that Ukraine has shown with its drone technology, though vastly smaller than Russia’s military?

The lessons from Vietnam, Iraq, and Afghanistan have already been forgotten if President Trump does escalate another Gulf War; by the “worst and dumbest.”

Harlan Green © 2026

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

What, Another Great Recession?

 Financial FAQs

 “The conflict with Iran has already put fresh stress on the U.S. economy, as businesses are reporting rising prices, fewer orders and a decline in employment. A survey of service-oriented companies — the sector that employs most Americans — fell to an 11-month low of 51.1 in March from 51.7 in the prior month, S&P Global said Tuesday.” MarketWatch

FREDpayrolls

Maybe we shouldn’t be looking at the 1970’s era of stagflation for the kind of economic damage from the Iran War and closing of the Strait of Hormuz to oil shipments. There is a short-term spike in oil prices, though oil from other sources than the Gulf can eventually make up the difference in supplies.

The war’s damage may take longer to materialize but look more like the Great Recession, which we shouldn’t forget was a worldwide recession that occurred in 2008-09, the worst since the Great Depression of the 1930s.

We shouldn’t forget that the Great Recession Bush/Cheney and their oil barons ultimately spawned with the ill-planned invasions of Iraq and Afghanistan was based on lies about the weapons of mass destruction that Saddam Hussein didn’t have.

And now Trump and his Robber Barons are taking the Gilded Age dreams of William Mckinley one step further with lies that Iran is preparing nuclear weapons to justify the ill-prepared war with Iran while aliening the allies that would help them succeed.

This is even though Trump’s just-resigned Counterterrorism czar Joe Kent said Iran posed no imminent threat with nuclear weapons.

The Great Recession was caused by more than the Bush wars on terror, of course. It was caused by putting too many regulation-cutting foxes in the Bush/Cheney hen house that literally resulted in the failure of nonbank banks like Bear Stearns and Lehman Brothers to fail.

Trump is following the same playbook by gutting the government’s regulatory agencies that could prevent the blatant fraud occurring with the Trump administration’s Bitcoin investments that have no regulations or backing with assets.

This time negative GDP growth could come from the faltering labor market, which is frozen in place with almost no net new job creation at all in 2015 as highlighted in the above FRED graph. Fed Chair Powell remarked at his latest press conference that they were torn over whether to cut interest rates or raise them because Trump’s immigrant deportations were causing a labor shortage.

Economic growth ground to a halt as well in 2008, even when Fed Chair Greenspan anxiously began to cut interest rates to prevent the near failure of our banking system.

Powell’s Fed Governors also predicted overall GDP growth of 2.4 percent in 2026, even though Q4 2025 Real GDP growth slowed from 1.4 to just 0.7 percent. So I don’t understand the Fed’s optimism over economic growth.

And history has shown that no job growth will ultimately lead to no economic growth,

The frightening truth is that both Republican administrations have made bad decisions for the same wrong reasons.

Harlan Green © 2026

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

Why Start A War?

 Financial FAQs

“The Producer Price Index for final demand increased 0.7 percent in February, seasonally adjusted, the U.S. Bureau of Labor Statistics reported today. Final demand prices moved up 0.5 percent in January and 0.4 percent in December 2025. (See table A.) On an unadjusted basis, the index for final demand rose 3.4 percent for the 12 months ended in February, the largest 12- month advance since increasing 3.4 percent in February 2025.” BLS.gov

FREDppi

Why start a war when President Trump’s tariffs are already raising the cost of everything? Because “The United States is the largest Oil Producer in the World, by far, so when oil prices go up, we make a lot of money,” Trump said in a post on Truth Social last week.

Who makes a lot of money? Most Americans could be losing a lot of money over the sudden rise in energy prices it is precipitating, but not his family and oil buddies, obviously.

His thoughtless remarks have put him in a bind, which is why he is lashing out at allies and enemies alike because they don’t want to fix the damage it is causing.

Right now it is the boost it has given to wholesale inflation. The Producer Price Index for wholesale goods, imported goods in the main, is climbing again.

And the tariff question is far from settled with the Trump administration required to pay back much of the $1.4 billion in tariffs that were illegal, according to the Supreme Court.

We add to that the resignation of Joe Kent, Trump’s top counter terrorism appointment, who said Trump attacked Iran because Netanyahu told him to, not because of some imminent danger. The former Director of the National Counterterrorism Center said “I cannot in good conscience support the ongoing war in Iran. Iran posed no imminent threat to our nation”.

So with the Strait of Hormuz closed that is choking off 20 percent of the world’s oil supply from going anywhere, the PPI wholesale cost of things is now the highest since February 2025.

This is probably why Fed Chair Powell announcement after Wednesday’s FOMC meeting that there was little chance of more than one rate cut in 2026, and maybe even a rate hike if Trump can’t stop the bombing and find a way to call the bombing campaign a victory. He must also find a way to open the Strait of Hormuz, of course.

The Federal Reserve stuck to its guns that one interest-rate cut this year was likely, but stressed conflict in the Middle East made its forecast uncertain. The Fed voted 11 to 1 to leave its key rate unchanged in the range of 3.5% to 3.75%.

BEA.gov

The Fed Governors also predicted overall GDP growth of 2.4 percent in 2026, even though Q4 2025 Real GDP growth slowed to just 0.7 percent. So I don’t understand the Fed’s optimism over economic growth.

The real culprit behind slowing GDP growth is less consumer spending. Fewer consumers are holding jobs for starters, and essentials like gas and electricity prices are soaring because of the Iran war as well as the tariffs.

So, the Fed wants to lower rates further to encourage more hires but rising inflation is holding them back. And Powell at his press conference said that conditions would have to be much worse for signs of stagflation such as occurred in the 1970s with the OPEC oil embargo.

Powell and the Fed Governors were surprisingly upbeat about our economic future, which is strange when Trump has started a war he never really planned or adequately prepared for.

Harlan Green © 2026

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

What Gulf War?

 Financial FAQs

“From the preceding month, the PCE price index for January increased 0.3 percent. Excluding food and energy, the PCE price index increased 0.4 percent. Excluding food and energy, the PCE price index increased 3.1 percent from one year ago.” BEA.gov

FREDBrentcrude

Oil prices spiked again on Thursday morning (to $94.35 per barrel) per the above graph on Brent crude oil prices, after Iran’s new leader said the crucial Strait of Hormuz should remain closed and that Iran will continue attacks on its Gulf neighbors,.

And the Fed’s favored inflation index, the Personal Consumption Expenditures core rate of inflation, which omits food and energy, rose by 0.4%. The core rate rose 3.1% in the 12 months ended in January, up from 3.0% in the prior month. It’s the highest rate in almost two years and decidedly not what the Fed wanted to see.

So, this is causing all the financial market indexes to plunge once again as it’s becoming increasingly obvious that Trump has no good reason for attacking Iran that is now morphing into another Gulf War.

“The war in the Middle East is creating the largest supply disruption in the history of the global oil market,” said the IEA in its March report released on Thursday that was cited by MarketWatch. Disruptions in the Strait of Hormuz have caused Gulf countries to cut total oil production by at least 10 million barrels per day, the energy body added.

So why shouldn’t President Trump’s new Gulf War repeat the 1970’s Arab Oil Embargo (OPEC) stagflation—slowing economic growth + higher inflation—that caused several recessions and resulted in the double-digit inflation of the era, I said last week.

I’m not the only one bringing up the similarities to 1970’s stagflation. Nobel economist Joseph Stigliz, a Clinton economic advisor who won the Nobel prize for economics in 2001, said in a podcast interview with Jack Farley of “Monetary Matters” released on Wednesday, that “We are facing a risk of stagflation with prices going up because of tariffs and war while growth is slowing.” The 92,000 nonfarm payrolls contraction in February was evidence for the slump in economic activity, he said.

And it’s beginning to show up in slower GDP growth. Real gross domestic product (GDP) barely increased at an annual rate of 0.7 percent in the fourth quarter of 2025, revised downward from 1.4 percent, according to the second estimate released today by the U.S. Bureau of Economic Analysis. In the third quarter, real GDP increased 4.4 percent.

BEA.gov

Oil prices had spiked earlier in June 2025 to $80 per barrel because of the short-lived Israel-U.S. strikes on Iran’s military and nuclear facilities. That should have been a warning of the potential economic damage from a longer war.

The other shoe to drop will be job creation. We are already in a stagnant job market with the loss of -92,000 jobs in February that basically erased the +126,000 job gain in January. Further losses are being hinted at by other indicators, such as the government’s JOLTS report that has shown no net growth in new hires for months.

It’s becoming more obvious that President Trump’s seeming incoherence over the reasons for his new Gulf war is hiding the real reason he started another Gulf War that he blurted out recently:

“The United States is the largest Oil Producer in the World, by far, so when oil prices go up, we make a lot of money,” Trump said in a post on Truth Social.

The sad truth is that Trump and his oil buddies are profiteering from a war that Americans, and much of the world, will end up paying for.

Harlan Green © 2026

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