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Kugler, TDS and Recognize Palestine?

I posted earlier that Fed governor Adriana Kugler’s term was ending in January. This would give Trump the opportunity to nominate someone who could then be nominated as chairman when Powell’s term as chair ends in May 2026. Well Kugler may have read my post – which I doubt – and has decided to resign effective August 8 to return to Georgetown University as vice provost. Dr Kugler’s PhD is from Berkeley and she was once the US executive director of the World Bank, a position that President Carter had intended to nominate me had he been reelected. Despite that I voted for Reagan. All of the news wags are saying that Kugler is stepping down early in order to give Trump the opportunity to shape the central bank. In her resignation note, she gave no reason for departing early. But Trump being Trump said without proof that she resigned over a disagreement with Powell on interest rates. If that were true, wouldn’t she have dissented along with the two Trump appointees? Actually being an academic I know why Kugler is leaving now. It is because the academic year is beginning and she wants to be at the university when it starts. I did the same thing, as did many other academics serving in government positions.

Hate Trump? Get a Life!

I have an old dear friend of going on 50 years who is not just a liberal, she calls herself a socialist. Of course she vehemently hates Donald Trump. She read my Linkedin comment on the reinstatement of the fired NCUA Board members and asked “Still happy with the administration?” I responded “Huh?Read my blog and then think about that last sentence. See what I have said from the beginning about the firings. And the tariffs. I am no Trump apologist and never have been if you had been paying attention.” She doesn’t read my blog because much of it is too painful for her sensitivities. But if she had, she wouldn’t have made such a silly statement. But then I told her that despite all that Trump has wroth, that given the choice between Kamala Harris and Trump, I still would vote for Trump. I think she might have then had a minor heart attack. Going forward, we will revert to our nonpolitical conversations. When I said she had Trump Derangement Syndrone she said TDS did not exist because everything Trump did was destructive and evil.

One of my other yellow dog hate Trump democrat told me that TDS did exist but it was among the MAGAverse defending Trump no matter what. He said he hated the Big Beautiful Bill. I surprised him when I said that I hated it too. He hated it because it trashed all of Biden’s initiatives. I hated it because it did not reduce spending. I have said all along that what I care about is for the Federal budget not only to be constrained but to be on a path that reduces its rate of growth. Unlike my democrat friend, at my core I don’t care how it is spent. They can give the entire trillions to me. They can give it all to the military. They can give it all to seniors. Seriously. constrain the budget to grow at no more than the previous year’s increase in GDP. I would have the president’s cabinet submit their budgets to the House (those budgets would sum up to the total allowed) and then let the House tinker around with them but send out a bill that cannot exceed that mandated. I know that it may sound weird that I care how much is spent rather than how it is spent. But I do. I figure that businesses and consumers are smart enough to adapt to whatever nonsense comes out of the congress. 

Palestine, Oh Palestine, wherefore art thou?

What’s with England, Canada, France and Malta (Malta?) all saying they will recognize a Palestinian state (provided they can find it)? Did you know that currently 147 countries officially recognize a “state” of Palestine? They envision a country likely made up of the West Bank, Gaza Strip and East Jerusalem — territories Israel seized in the 1967 Mideast war. Does anyone really think that Israel will evict its citizens from their settlements on the West Bank and the Golan Heights like they did in 2005 when they demolished 21 settlements in Gaza? Do you think that Israel wants another Arab enemy state as a next door neighbor? I think a forced resettlement of Palestinians from Gaza like Trump has suggested and I elaborated in an earlier blog is more likely. Trump seemed irritated with the French announcement. I am surprised he didn’t threaten to double their tariffs. Tu as perdu la tête ? Macron?

Random Thoughts #65

My posting on Syndey Sweeney has blown up my text messages and emails. Most of the comments, save Larry, Drummer and sometimes druhead are not made on my blog, which is perfectly fine if others don’t want to share them with the public. I would prefer that they are on the blog to generate more conversation and thought. There are still those who contend in all seriousness that the pun on genes was out of malice. Personally, I pun all the time, sometimes considered not in good taste but always in good fun. Get a life, ya’ll!

OK all the brouhaha made me look at the ads. What I noticed was that all the jeans had wide legs eschewing the super tight look. Does this mean we are going to have a recession? Or does it just mean that I am really old if the first thing I noticed were the wide legs?

Some so-called expert said that the most intelligent dog was the Border collie. Obviously, that person never owned a German shorthaired pointer.

OK so Trump can’t do math. Recall that he is going to make the drug companies reduce their prices by 1,500 percent? But what of the democrats who had this poster displayed at a hearing?

Who’s afraid of AI? I read where AI will create massive unemployment. Where have we heard that before? Seems like every shift in technology brings out the same dire warnings. The agricultural revolution, the industrial revolution, the invention of the automobile assembly line, the mainframe computer (remember HAL or the Terminator’s Skynet?), the desktop computer and now AI all are (or were) forecast to bring poverty rather than prosperity. To have people wandering aimlessly in the streets. To force governments to have guaranteed annual incomes and augmented welfare programs. Give me a break. How many of us are toiling in the fields or sweating in factories or doing back breaking work? Yet we are employed and better off than previous generations. I am optimistic for my grandchildren’s future. So why aren’t you? BTW, a friend of mine kept wondering why was everyone getting upset over a steak sauce.

Australia is having Mitsubishi build their naval frigates amid efforts to build back their navy. Why can’t we do the same?

The Chinese are limiting the shipment of their rare earths to our military. Can’t say I blame them. Isn’t this tit for tat since we have banned certain chips being sold to the Chinese?

I am a deer hunter. The enduring value of Gore-tex is to allow hunters to hunt in all weather comfortably. The Swedish manufacturer Polarn has done the same for children’s outerwear. Now it is exiting the US because of Trump’s tariffs. They make their clothing in China and the tariffs on their merino wool clothing and insulated outerwear have gotten prohibitive. It won’t be the last to exit because of the tariffs (see my posting on Lesotho). Like the Canadians who drive their RVs into the states to fill them up on gas so they can siphon them off into their autos due to the high Canadian gas prices, I am wondering if we are going to see little kids coming through customs looking like the Michelin Man or the Pillsbury Dough Boy.

I was writing weeks ago that Fed governor Kugler’s expiring term offered Trump an opportunity to put his nominee (er, lackey) for chairman at the Fed starting in January. Now Kugler has resigned an lo and behold the media has discovered the same thing. I was once asked how is it that I can write something and soon thereafter it gets reported elsewhere. I guess that some things are so obvious because I know that all those folk are not reading my blog and Knoxville Focus articles.

The president has said that he is nominating Council of Economics head Stephan Miran to fill Kugler’s expiring term while he looks for a permanent person. That means that Miran will only be at the Fed until January. Then someone else will have to go through senate hearings. Pardon me if I don’t understand. Miran is no slam dunk given the democrats propensity to lobby against and delay all Trump nominees. He has to go through the confirmation process. Why do this a second time with someone else? It is bad sign – to me – that Trump did not have a permanent person already vetted and in place. Word is now that he is considering Judy Shelton again. He nominated her in 2019 but her nomination was withdrawn by Biden. Will the second time be the charm? Dr Shelton would be a superb governor. She is actually an expert on monetary processes and a staunch advocate of a return to a commodity standard like gold. She is a leading critic of the Fed. Her nomination would be consistent with Trump putting people in place at agencies at which they are critics.

Am I the only one tired of the president injecting himself into everything, no matter how trivial? Examples include extolling Mexican Coke (oops Mexican Coca-Cola) even though he drinks Diet Coke, threatening to withhold stadium funding for the Commanders unless they change their name back to the Redskins, saying ‘I HATE TAYLOR SWIFT,’ she’s no longer ‘HOT?’ because she endorsed Kamala Harris, then saying Syndney Sweeney was the HOTTEST!, firing obscure boards, terminating people left and right, firing Puerto Rico’s finance oversight board, putting on tariffs on every country in the world regardless of trade status, threatening to invade Panama and Greenland and so much more.

So what hath Trump wroth? Only total chaos in economics, world order, supply chains, national and international security, international relations, partisan politics, local, state, national and international governance, legal systems both home and abroad, and the daily news. That’s all.

Biden’s family got rich off of old Joe. Now Trump’s family is getting richer too. Hum, maybe side deals with tariffs?

So Lara Trump has decided not to run for the senate from North Carolina. She is a Trump by marriage and was born in Wrightsville Beach and went to NC State. I don’t know anything about if she would have been a good candidate or a good senator but that bar is very low. I do know one thing if her name were still Lara Yunaska she wouldn’t have even have a chance of being considered as a possibility.

Speaking of Trump-by-marriage rather than by birth. Tiger Woods is dating Vanessa Trump. Again this is a pseudo-Trump having been married once to Don, Jr. Vanessa was smart to keep the name Trump (as opposed to my ex and many like her who reverted to their family names). Hey would you want to be known as Vanessa Kay Pergolizzi? I think Trump likes this romance so that Tiger can help him with his golf game. Right now his swing reminds me of Charles Barkley.

Did Trump really cheat at golf in Scotland?

Our math challenged president just might be a Bernie bro

Donald Trump is not just a RINO, he might be a socialist. What! Well Trump just came out of the socialist closet. Not a Bernie Sanders socialist but an American socialist. I wrote in the Knoxville Focus (knoxfocus.com) on September 23, 2023 about the American brand of socialism. “In American Socialism, the means of production remain in private hands. The government determines winners and losers through subsidization and taxation. Since the means of production are still in private hands, American socialism requires a partnership between big government and big business, big media, big tech, big pharma and big retail. American Socialism manifested itself under Trump’s reaction to COVID. The first panicked response was to lock down the economy except for big business. Over 600,000 small businesses failed for no reason other than the government deemed them nonessential. Big businesses stayed open and had fewer competitors.”

Now Trump had abandoned free trade. He is anti-market and pro big business. No self respecting republican would erect trade barriers and start threatening the economic viability of our trading partners. And now he is trying to tell big pharna to lower their prices by 1,500 percent. I am not joking. Trump says that they must reduce their prices within the next 60 days. What? A republican sounding like Bernie Sanders? Did we elect Bernie president? Here is what Trump says “This is something that nobody else can do. We’re gonna get the drug prices down. Not 30 or 40% which would be great, not 50 or 60, no. We’re gonna get ‘em down 1,000%, 600%, 500%, 1,500%.” Well he was right about that one, this is something that nobody else can do, not even Trump. Some wags called his math befuddling. That is kind. He then doubled down saying “We will have reduced drug prices by 1,100, 1,200, 1,300, 1,400, 700, 600; not 30 or 40 or 50% but numbers the likes of which you’ve never even dreamed of before.” Hey, I thought the new math was only taught in today’s elementary schools. Remember 2 plus 2 is whatever little Johnnie wants it to be because we do not want to damage his self esteem. Karoline Levitt, his press secretary, reported this with a straight face. Maybe she has kids trying to learn math. Personally, I think she is as bad as Karine Jean-Pierre. Bring back Tony Snow!

So let me see. If Trump reduces a $30 drug by 300 percent, then the drug company will pay us $120 to “buy” it. Sweet! Sign me up! Trump sent letters to pharmaceutical manufacturers including AbbVie, Amgen, AstraZeneca, Boehringer Ingelheim, Bristol Myers Squibb, Eli Lilly, EMD Serono, Genentech, Gilead, GSK, Johnson & Johnson, Merck, Novartis, Novo Nordisk, Pfizer, Regeneron and Sanofi.  The letters listed steps to reduce the prices of prescription drugs in the U.S. “to match the lowest price offered in other developed nations (known as the most-favored-nation, or MFN, price).”  Trump warned that if steps weren’t taken the federal government “will deploy every tool in our arsenal to protect American families from continued abusive drug pricing practices.” Yep, sounds like ole Bernie to me.

Americans do pay significantly more for name brand drugs that most other countries. As a matter of fact those prices are often three times more. However, most American prescription drugs are of the generic variety and American generics are priced similar to those around the world. Even with the name brand drugs, Americans seldom see the full price given copays and insurance. It is well documented that other countries restrict high priced drugs that are available only to Americans – see the British and Canadian systems. Also our VA has less drugs available than you can get from your family doctor. I am reminded of the joke in which a guy walks into a gas station and says “Why are you charging $3.09 for regular? The station on the next block charges $2.89? The gas station guy says “Well why don’t you go over there?” “He’s out.” “Well when I’m out I also charge $2.89.”

The drug companies have talked about how much their R&D costs are and how much it costs to develop, go through the approval process and get a new designer drug to market. On average it takes from $1 – $2 billion to bring the drug to market and 10 to 15 years to go from development to approval. If Trump gets the drug companies to bend to his demands then look for all this to grind to a screeching halt. Yes we will still have drugs but the designer drugs developed to treat rare diseases will grind to a halt. But would you stay in business if you had to pay customers to take your product? What is Trump going to do next? Nationalize the drug companies?

Consider that the FDA approved the drug ipilimumab for the treatment of metastatic melanoma. Its cost is $120,000 for 4 doses. We see it advertised all over the place as Yervoy which works to activate the immune system by targeting CTLA-4, a protein receptor that downregulates the immune system. The commercial talks about “asking your doctor” and that the drug allows you to “live longer”. Now there are ads saying to link it with Opdivo with Yervoy is a combination of two chemo-free immunotherapy treatments and is “intended to treat adults who have been newly diagnosed with non-small cell lung cancer.”  What I want to know is if the drug is available through the Canadian and British health systems, what are the requirements for use and how much is the cost. I found the following regarding Canada, “One Canadian patient (Patient 7) accessed the combination therapy off-label through self-pay with 20% reimbursement through a Special Access Program, which resulted in approximately CA$100,000 in out-of-pocket fees. Five patients (Patients 3, 6, 9, 10, 11), all residents of the USA, were prescribed the combination therapy and received coverage from their private health insurance plan. Patient 14, a U.S. resident, was prescribed the combination therapy while it was still in phase 2 trials. Initially, his insurance provider denied coverage. However, after significant advocacy by his oncologist, full coverage for nivolumab and ipilimumab was eventually approved.” So much for free health care!

Click to access PC0396_Opdivo_Yervoy_Patient_Clinician_Input.pdf

Quiz: What’s the difference between Donald Trump and Bernie Sanders? Is it just the hair? Well Trump supporters say that Sanders is a communist while Sanders’ supporters say that Trump is a Nazi. But Nazi stands for the Nationalist Socialist German Workers Party which actually sounds communist to me. So does this mean that Bernie is a Nazi? 

Trump’s tariffs – a wee bit of mischief perhaps?

When Trump hit the Swiss with a stunning 39 percent tariff, one official bemoaned that he guessed that is the price the Swiss pay for independence. If they were in the EU their tariff would “only” be 15%. Trump said the 39% was because of a REALLY BIG DEFICIT, which happens to be a paltry $39 billion. I’m sure it is just a coincidence that their tariff equals their deficit. Hey, we know that Trump is not exactly a math whiz. Another Swiss official said that if every Swiss started drinking whiskey every day and bought a Harley, they would still be running a deficit. You just got to stop making Americans from buying Swiss goods Donald. Maybe they can become the 51^st state. Or maybe they could move their watch, precision tool and chocolate companies to the US. Then they can export their products back to Switzerland. But the chocolate won’t taste as good.

Pity poor Lesotho a country with a GDP of only $2.3 billion – not trillion but billion. Mind you there are over 600 American companies with revenues over $2 billion that are doing business with China. Needless to say Lesotho is perhaps the poorest country in the world. Trump’s initial tariff was an astounding 50%. This devastated the country’s textile industry with garment exporters shutting down and laying off workers. The country declared a state of emergency. The country had been benefitting from the 25-year-old American trade program that granted duty-free access to the U.S. market to dozens of African countries. Their textile industry was supplying garments to Reebok, Levis and to Walmart. With the tariffs, the orders went away, factories shut down and workers were laid off. Trump had derisively called Lesotho the “country that nobody had ever heard of.” Trump has announced that Lesotho’s tariffs will now be 15% and it will be interesting to see if business will come back even at that lower rate. Before Lesotho benefited from the African Growth and Opportunity Act, which allows 32 African countries to sell some 1,800 products in the U.S. duty-free. The law expires this year and it is doubtful if Trump’s republican controlled congress will renew it. Lesotho’s textile plants pay about $168 a month and if there is no work there is no pay. One factory produces 90 percent of its output for the US market. It is shut down and may not reopen even with the lower tariff. But Trump doesn’t seem to care that his tariffs will increase the misery of some of the poorest people in the poorest countries of the world. By the way, Lesotho’s trade deficit with the US was only $234 million not exactly a REALLY BIG DEFICIT. Trump should be ashamed.

There are plenty of problems with the tariffs not the least being the seemingly randomness of it all. Trump once threatened a universal tariff of 10% and then it changed to 15 percent. Yet every one of the 193 countries could negotiate for a different tariff. This opens the door to all sorts of mischief. It seems that these numbers change almost daily, the tariffs range from 10% (UK) to 50% (Brazil). Countries like Laos, Myramar, and Syria are at 40%. India was at 25% but Trump has threatened to double it if they don’t stop buying Russian oil. Of course, within the tariffs are higher ones like those on aluminum and steel.

If there is one positive thing, and maybe the only positive thing, about the tariffs is that it will greatly simplify the accounting. Currently it is a nightmare. Go to the Harmonized Tariff book at where you will see a specific tariff dor each product imported from a specific country for every country in the world. Last year we imported over $4 trillion in goods from abroad.

 https://hts.usitc.gov.

The schedule comprises about 5,000 commodity groups, each identified by a six-digit code, arranged in a legal and logical structure, and supported by well-defined rules to achieve uniform classification. The system is used by more than 200 countries and economies as a basis for their customs tariffs and for the collection of international trade statistics. More than 98 percent of the merchandise in international trade is classified in terms of the HS.  The HS nomenclature is updated every five years, with the most recent update in 2017. Whew!

But negotiating with every country with differential tariffs has got to lead to all sorts of mischief and even briberies, wouldn’t you think? Right now there are already dozens of carve outs. I wonder why? I want to know the logic – if any. I also wonder if Don Jr. and other members of the family are doing a Hunter Biden and doing some negotiations with side deals getting kickbacks for themselves and the Big Guy. Just saying. If Trump wanted to keep things simple then he would have simply imposed a flat tariff on all imports from all countries with which we run a deficit – say 10 percent – and none on those with a surplus. Now 10 percent of $4 trillion is $400 billion, a nice chunk of change. But he didn’t keep them simple. They are convoluted, complicated, confusing and without logic. 

The deals are not even legally binding. There is no treaty. There is only a handshake so they can be modified either up or down on a whim – and Trump is pretty whimsical. Take for example, Denmark. Although that country is a member of the EU with 15% tariffs, Trump has levied a 54% tariff on selected Danish products. Actually, I am surprised. I thought Trump would put a 1,000 percent tariff on Denmark unless they relinquished Greenland to the US. Why hasn’t he done this? The same is true with Panama whose tariff is only 14 percent. Trump wants the canal back in US hands, so why doesn’t he hit Panama with a 1,000 percent tariff until they say uncle and give it back to us? If Trump can put a 50% tariff on Brazil – a country that we have a surplus – because he wants them to stop the prosecution of one of his buddies, then why doesn’t he do the same with Denmark and Panama?

Lastly, I wonder if the tariffs will cause a rift in the EU? Several nationalist leaders oppose being ripped off. Marine Le Pen, the leader of France’s National Rally party, which is favored to win the presidential election in 2027, has called the EU deal a “political, economic and moral fiasco.” And that is an understatement. What is the French equivalent of Brexit? Adieu EU!

There they go again.

Once again, democrats in the Texas legislature have fled the state in order to deny republicans a quorum. At issue is the redrawing of congressional seats aimed at giving the republicans five new seats. Since this is not a census year, the redrawing is strictly for partisan reasons. The republicans are not denying it either. One legislator says “I’m not beating around the bush. I’m telling you that we have five new districts and these five new districts are based on political performance.” To create the five new Republican seats, the new map puts more Democrats into already Democratic-held districts and moves around Republican voters from red districts into Democratic districts. The redrawing will force some incumbent democrats to run against each other, put others into majority republican districts and was drawn in such a way to put Jasmine Crockett’s home residence into another district. I am sure that was just a coincidence. 

The democrats responded by fleeing to Illinois to be under the protective very fat wing of billionaire Governor Pritzker. Texas governor Abbott can levy fines of $500 a day or try to remove them from office. But Texas democrats running away is nothing new. In 2021 they fled to Washington, D.C., in an effort to block a bill on voting-by-mail rules. In 2003 the democrats again tried to block republicans from redrawing congressional districts. This time they fled to Oklahoma and New Mexico. In each instance, the democrats eventually came back with tails tucked between their legs and the legislation passed. This time will be no different. Why they went to Springfield, Illinois is anyone’s guess. Couldn’t they pick a better place – say Cancun? It is closer to home. Anyway, Illinois is a bad look. Don’t the Texas dems know that Illinois gerrymandered the republicans out of 2 seats four years ago?

The Texas republicans are saying that they are redrawing districts that make more sense geographically (wink wink) with them having more equal population. It merges two democrat districts in Austin and shifts the volatile Al (Full of Fire) Green into a republican-majority Hispanic district in Houston. I am sure that too was just a coincidence. Jasmine Crockett in her own immutable style says “They have decided that the only way that they can bring about this white supremacy agenda is by diluting the voices of people of color. And so what we have seen is, again, this rogue Department of Justice going out to do the bidding of this Temu Hitler. To the extent that he says, listen, the only way that I can ensure that I will have no checks on me is if I can sure that those voices of color do not have representation.” Temu Hitler? Now that is a new one. Isn’t Temu that online Chinese rival to Amazon? Well in street slang – of which Crockett is proficient – Temu “refers to the action of intentionally ignoring someone’s message. It is used in a dismissive or disrespectful manner when someone doesn’t want to acknowledge or engage with another person’s attempt to communicate.” Who knew? Also, advancing white supremacy by moving Green into a majority brown district? Well that’s novel.

Here is what Crockett said about Al (Full of Fire) Green “And so this is why we see Al Green…who has been a loud and proud voice of dissent against this administration, literally to his face at the State of the Union. And then again, by having the audacity to do what a lot of people had called for, which was to try to initiate the impeachment process. And so Al Green, who has served in Congress for over two decades at this point, is now at risk of losing his seat because those people of color in that particular district, they may now be broken out and parsed apart so that they don’t have this consolidation and this ability to elect Al Green.” Again, isn’t brown a color?

As to her district Crockett claimed that she was asked to verify her address alongside other incumbent Democratic members of Congress. She seemed puzzled by the request stating that she didn’t know why she was being asked because plenty of members (see Maxine Waters) did not live in the district that they represent. Article 1 Section 2 of the Constitution states that a representative must be at least 25 years old, have been a U.S. citizen for seven years, and, at the time of the election, be an “Inhabitant of that State in which he shall be chosen.” The key detail is that a representative must live in the state they represent and not the specific congressional district. Crockett is a lawyer and should know this. Accordingly, instead of being puzzled she should have just told the questioner to go pound sand. BTW, since the Constitution says “he” does that mean that all the women in the congress are there illegally? Just a thought. Of course the Declaration of Independence says “All men are created equal.” Does this imply that all women aren’t? I guess even then they realized there was a difference between Beyonce and Nancy Pelosi.  

Is the American Eagle nonsense due to TDS?

I don’t understand this American Eagle brouhaha. First I had never heard of American Eagle which is probably why they started their ad campaign which has gotten them billions of free advertising with their stock price surging 25 percent. I bet it made every business green with envy. The story even made the front page of the Wall Street Journal’s business section. Second I have never heard of Sydney Sweeney. From what I gather, the ad campaign is about blue jeans and Sweeney is provocative. Maybe to some but to us old folk its just another big busted blond selling stuff. 

Are some people upset that good looking women are used to sell stuff to other women? One really dumb comment was “Why is American Eagle using Sydney Sweeney to attract the male gaze when she’s wearing jeans for WOMEN?” Well then explain to me Victoria Secret you grouch. Surely they can’t be selling that racy lacy stuff to only trans people. By the way, Sweeney looks human – even if part of her may be enhanced – which is more than I can say for those Victoria Secret models which must be AI generated. In my 80 years, I have never seen a real live woman who looks even remotely like a Victoria Secret model. Have you? 

The Journal’s article says “American Eagle Confuses with Ads.” Huh? Confuses who? One person whined “It harkens to a dated sexuality that was common in ads of the past.” I guess the past was yesterday? Ok I get it. We have been going through the cancel culture period of wokeness in which sexuality was neutered. Boys were being made ashamed of being male. Target selling anti-male children’s clothing. Even Walmart has a trans section on its website. Yet I can see why some people may be offended. There are the men who wish their other halves (if they are women) looked a bit like Sweeney. And then there are the women who are just plain jealous. Sweeney is probably laughing all the way to the bank (probably wearing American Eagle jeans and a top open to her navel). But dated sexuality? Haven’t these people been near a college campus the past two years? Most of the coeds are in tights, short tennis type skirts or super short short running shorts. The guys are wearing baggy shorts. So the college women are flaunting their sexuality while the men are hiding theirs. I remember my other half commenting once “Don’t you think her shorts are a bit too short?” I demurred. Do you think any of the college crowd are offended by Sweeney? No. It’s the whining wimps on the left that wished they looked as good as Sweeney. 

I actually think that all the brushback is another symptom of TDS. Trump said that Sweeney was HOT and that the ad was the HOTTEST out there. “It’s for American Eagle, and the jeans are ‘flying off the shelves.’ Go get ‘em Sydney!” I guess Trump has first hand knowledge of hot big busted blonds (BBB) doesn’t he? I wonder what Melania had to say about that? Also Trump noted that Sweeney was a registered republican. Well she certainly couldn’t be a democrat looking like that could she? Sweeney is certainly no Dylan Mulvaney – who is probably a democrat. 

Would you believe that “The ad triggered backlash from critics on social media who felt the ad comes close to promoting eugenics, implying Sweeney’s blonde-haired, blue-eyed genes are more desirable than other traits?” Yes you would and indeed the media went out there and find some pseudo-expert to opine that “American Eagle was aligning themselves with a white nationalist, MAGA-friendly identity.” I’m serious. Sounds like Jasmine Crockett (who by the way has “straight” hair) but was instead some professor of anthropology at Northwestern. Anthropology? Give me a break. Apparently, this “expert” found offensive the line “Sydney Sweeney Has Great Jeans”. I wish they showed a picture of the anthropology professor. I also wish that American Eagle had been smart enough to run a set of companion ads featuring Beyonce. Now that woman has got some genes! On second thought, is that her real hair? Who cares?

When I was growing up, a lot of black people wanted to look like white people. The paragons of feminine beauty were Billy Holiday, Lena Horne, Dorothy Dandridge, Vanessa Williams and other light skinned beauties with straight hair. Black women were straightening their hair and putting stuff on their skin to lighten them up. Meanwhile the men were getting their hair processed. Some even tried wearing Nehru suits but I don’t think many tried going sockless in Bass Weejuns.

 Many of the big entertainers like James Brown, Jackie Wilson and BB King also straightened their hair. So did the famous vocal groups both men and women. The Black is Beautiful movement changed all that and you could look like Cicely Tyson then or Lupita Nyong’o and Adut Akech now and be acknowledged as beautiful. Blacks started wearing Afros and getting their hair braided. I went for several years without a haircut being on a graduate student’s stipend and married with two small children. In order to keep the hair somewhat manageable sometimes the whole family would be in braids. And this was in the 1960’s! I wish we had a picture taken of us four. Maybe one surfaced and is why the University of Florida threatened to deny me promotion and tenure. But that is a story for another day. Still though, I bet if you googled “The most beautiful black women” that the vast majority of them will have “straight” hair. Blame our white genetics or the women’s hairdressers but Rihanna would look good even with her head shaved.

BTW, this would have been my Mother’s 107th birthday. Happy birthday Mom. i sure do miss you.

Fire Lutnick!

When I wrote the posting on how to lie with statistics, little did I know that the news world would blow up over the firing of the commissioner of the Bureau of Labor Statistics Dr. Erika McEntarfer turning her into a cause celebre. I had pointed out that the initial jobs numbers were always overstated and having to be revised downward. This is due to the first numbers resulting from employer surveys. Those surveys have lousy response rates and are unreliable. That is why the numbers keep getting revised downward when the real figures come in. This year the average revision downward has been 55,000 per month. So I mused that if July’s number of 70,000 jobs was the estimate, then what was the real number. I also cautioned that most of the previous month’s job growth had been state and local government jobs and that the private sector job growth was negative. I said that Dr. McEntarfer should have been fired long before Trump did it for overseeing the production of such awful statistics during her tenure. 

So Trump did a really dumb thing. Surprise! Surprise! Instead of firing her because of having to adjust downward each month the previous month’s numbers, he fired her because he did not like the initial estimate of July’s numbers. This is beyond stupid. Trump said on Truth Social “I have directed my Team to fire this Biden Political Appointee, IMMEDIATELY. She will be replaced with someone much more competent and qualified.” Mind you she was confirmed by the Senate 86-9. Does that sound like a Biden lackey to you?  Trump then said “In my opinion, today’s Jobs Numbers were RIGGED in order to make the Republicans, and ME, look bad.” A group called the Friends of BLS (I am not kidding) responded “This rationale for firing Dr. McEntarfer is without merit and undermines the credibility of federal economic statistics that are a cornerstone of intelligent economic decision-making by businesses, families, and policymakers.” You think? Trump’s Labor secretary Lori Chavez-Deremer who is a political hack first said when the numbers were reported that even though the jobs data was revised downward for May and June, “we’ve seen positive job growth.” Then in almost the same breath when McEntarfer was fired said “I agree wholeheartedly with @POTUS that our jobs numbers must be fair, accurate, and never manipulated for political purposes.” Well so much for her integrity.

If Trump did not like July’s jobs numbers he should have fired Howard Lutnick, the Commerce Secretary not McEntarfer. Mind you Dr. McEntarfer was the messenger but Lutnick played a bigger rule. Back in February he terminated two unpaid expert advisory committees on economic data. Mind you, these were nonpaid committees. The committees were advising the administration on how to improve the reporting of statistical data. One panel was the Federal Economic Statistics Advisory Committee which made recommendations on improving inflation and employment numbers and reporting on GDP (gross domestic product). The second group was the Bureau of Economic Analysis Advisory Committee, which consulted on labor statistics. Mind you the committees were comprised was made of academics, private-sector economists and data scientists, and focused on continually improving economic data produced by the BLS as well as the Commerce Department’s statistical agencies, the Census Bureau and Bureau of Economic Analysis. One might argue that they were doing a lousy job and should have been fired – provided the BLS head, the secretary of commerce and the secretary of labor were taking their advice. One may even argue that most were probably democrats and hated Trump. That might be true but it doesn’t explain the wildly inaccurate numbers under Biden. One expert said “This will impact the quality of the data.” No kidding. As a side note, I was appointed to be on the unpaid committee that advised the FDIC on its merger with the bankrupt Savings and Loan Insurance Corporation (FSLIC). Somehow we escaped the ire of George Bush.

Now with the firing of the advisory committees and McEntarfer, Trump’s critics have more ammunition to question any data reporting coming out of this administration. I earlier commented on how several democrat senators were wondering if the cutting back on cities surveyed for the CPI was an attempt to skew inflation numbers. All this means is that every number is now going to be called into question. The market realized that the initial numbers were estimates and knew that they would be revised. However, the media usually ran with the initial numbers and wrote the headlines. Seldom were the revisions reported with the same gusto. I doubt very seriously if any business decisions were made on these numbers. Now going forward, they will likely be ignored. Given that Trump will now put into these positions his own people (re: political hacks) who knowing that their jobs are on the line will be motivated to report only data designed to keep their jobs. I guarantee that no one will believe any of these data now being reported. So how reliable will be the government’s numbers? Need I say Rosy Scenario is alive and well?

Again Dr. McEntarfer just reported the numbers and was fired. But Lutnick is partly responsible in that he fired the advisory committees months before. What was that about chickens coming home to roost? Advice to Trump, fire Lutnick!

The White House ballroom and Trump’s unlawful tariffs 

After lambasting the Fed for spending $2.7 billion of its own money on renovations to its aging headquarters and subsequent cost overruns, the White House has announced its own renovations. Actually it is not a renovation, it is an entirely new structure. The administration has no shame. It seems that the president wants a new 90,000 square foot ballroom. I guess Trump is going to throw some awfully big parties. Well it does leave a lot of room for his dancing. I wonder if he is going to invite the Village People to the grand opening to play YMCA? The cost is supposed to be $200 million with Trump and his buddies funding it. Trump is supposed to pay for any cost overruns. Want to bet? The press calls this a “massive” renovation and they found some “experts” to raise concerns about whether it will “respect the historic nature of the building.” Others were found that were “aghast” at the enormity of the project which will be twice the size of the White House complex. We also get the predictable whining about spending money on a golden ballroom while nixing money for pediatric cancer research. Or how about “Donald Trump wants your kids to go with fewer dolls while he gets a billion dollar airplane and a ballroom”? Oh boy. This is the administration of bad optics. But if you have Trump Derangement Syndrome any optic is a bad one.

The case involving Trump’s tariffs is now being heard at the US Court of Appeals. One court, the US Court of International Trade ruled that Trump did not have the authority to implement his “reciprocal” tariffs. The administration appealed to the Court of Appeals which allowed the tariffs while it deliberated. If Trump loses here – and I expect that he will – it will be interesting if he ignores this court’s ruling while he appeals to the Supreme Court. For an excellent summary of the first day in court and the economic analysis of the arguments see Don Boudreaux’s “A note on today’s oral arguments in VOS v Trump.” 

A Note On Today’s Oral Arguments In V.O.S. v. Trump

Trump’s final set of tariffs are supposed to have been implemented on August 1 and were full of surprises like his 39% tariff on the Swiss. Hey, you got to protect Hershey, don’t you? The question then arises as to whether the administration will dismantle the tariffs when it loses or will it wait for a judgment by the Supreme Court. To recap: to impose his tariffs the president invoked the International Emergency Economic Powers Act (IEEPA) claiming that trade deficits constitute a “national emergency.” Of course, this is nonsense and Don Boudreaux does a wonderful job explaining the speciousness of the argument. Trump knows that this is a lie but could probably not find any other basis to invoke the tariffs. Certainly a president does not have unlimited authority to unilaterally impose tariffs. The Constitution gives that power to the Congress making the president’s lawyers having to defend the indefensible. The president in his usual hyperbole said to his lawyers, “Good luck in America’s big case today. If our Country was not able to protect itself by using TARIFFS AGAINST TARIFFS, WEWOULD BE ‘DEAD,’ WITH NO CHANCE OF SURVIVAL OR SUCCESS.” Good grief. 

In the first day of questioning, the judges seemed skeptical of the administration’s arguments. Said one judge, “One of the major concerns that I have is that IEEPA doesn’t even mention the word tariffs anywhere.” Another judge said “It’s just hard for me to see that Congress intended to give the president in IEEPA the wholesale authority to throw out the tariff schedule that Congress has adopted after years of careful work and revise every one of these tariff rates.” I hope one of the eleven judges asks that if the trade deficits posed such a threat to national security then why did Trump levy them on countries with whom we have a surplus. 

Although the Justice Department said that the trade deficit has been “exploding” in recent years, rising from $559 billion in 2019 to $903 billion in 2024 it could not explain why such an “explosion” constituted a threat. On the contrary Boudreaux shows why our trade deficits are hardly a threat to the country and certainly not to its national security. 

I would be stunned if the Appeals court did not affirm the International Trade Court’s decision and blocked the imposition of the tariffs. Then it will be interesting if Trump decided to ignore the decision of a US Appeals Court.

What would you do if you were Jerome Powell?

If you were Jay Powell would you cut the Fed funds target rate now? Why? I wonder if anyone noticed that when the media said that the Fed left “rates unchanged” that the bond market rates fell? But yet we are told that the Fed left rates unchanged. What is going on? It is that the market determines interest rates regardless of what the Fed is doing. However, the Fed influences the range within which interest rates move. Currently, the Fed is reluctant to push that range downward stemming from its position that there is too much uncertainty with all the disruption caused by Trump’s policies. Powell as much said so when he said that absent the tariffs it is likely that the Fed funds rate would have been lowered. Back to you Mr President – who responded by calling Powell a moron. Wouldn’t it be nice to have a president who had a little class?

The presidents of the New York, Atlanta and San Francisco reserve banks all say to wait until all the tariff shakedowns have been completed and see what happens to prices. Not any prices mind you because the Fed doesn’t pay attention to the CPI rather it looks at the Personal Consumption Expenditures index or PCE. The CPI is a rather narrow measure of inflation. It looks at a basket of goods purchased by urban household. The PCE is a broader measure of price changes with weights that are different from the CPI. For example housing has a weight of 35 in the CPI but only 15 in the PCE. It is the PCE that just came in 3.4% well above the Fed’s target of 2.0 percent. Hum. Does that mean that the Fed should raise rates?

The Fed has two main objectives of stable prices and full employment. It seldom can do both and I suggest that it abandon the full employment goal. First, we really have no idea of what constitutes full employment. For example, last quarter the employment numbers looked good mainly because workers had dropped out of the work force reducing the labor force participation rate. State and local government hiring drove the numbers while private sector employment fell. I have long suggested that government hiring be excluded from the employment numbers. 

Rather the Fed should concentrate on inflation. Scott Bessent who seems to be Mr Know It All – with apologies to Stevie Wonder – has started criticizing the Fed. He says that AI will ignite a boom in production. Because AI could require fewer human resources, Bessent believes this economic boom could come without reignited inflation. When asked how the country should prepare for such a boom, Bessent said: “If the inflation numbers are low, then we should be cutting rates.” Well Scott the inflation numbers are not low.

However, the economy is showing signs of weakness. Job growth for July was awful. The numbers within the numbers show private sector employment falling. Immigration is taking a toll on businesses yet this may be unreported or underreported if the businesses were hiring illegals. Construction and agriculture are sure to be adversely affected. Consumer buying is slowing. Private domestic investment is falling. All these signs point to the Fed lowering rates. But inflation has started to rise because of the tariffs. If the Fed had lowered rates (by increasing the money supply) then the inflation would be exacerbated and we would have inflationary recession (stagflation). The folks who are now yelling at the Fed to lower rates would then be yelling at the Fed for having lowered rates.

I have heard some people saying that the rates should be lowered to lower mortgage rates. Well most mortgages are fixed rate and those rates are dependent upon the 10 year Treasury and not the Fed funds rate. The adjustable rate mortgages are the ones influenced by changes in Fed funds which mainly affect short term rates, not longer term rates. But don’t you think that Trump’s tariffs on aluminum, steel and especially lumber will affect housing costs more than mortgage rates? If these tariffs mirror those of Trump’s first term then expect the mortgage industry to crater. Anyway, the last time the Fed aggressively cut rates in 2024, fixed term mortgage rates went up.

Trump is trying to have the Fed save him from himself. Right now he has a convenient scapegoat for his policies. And if the Fed lowers the Fed funds rate and inflation rises, it will still be the Fed’s fault. Look back in December when the Fed cut 25 basis points, the market tanked. Then the Fed was criticized for lowering rates in the face of persistent inflation. Now we essentially have higher inflation rates but now the critics want rates even lower. Kindly explain why this makes sense? If the Fed was wrong to lower rates then why should they lower rates now when there is becoming some clarity about the effects of Trump’s tariff follies.

The next Open Market Committee meeting is September 16-17. It will be interesting to see if what the vote will be. If I were Powell I would have the committee lower the rate by 50 basis points just for the hell of it and sit back and see the reaction of the media, the markets, and Trump and his cronies. I bet the stock markets would tank and bond market rates would rise – just the opposite of what Trump wants. But absent that, let’s see what the economic picture looks like then and the predictions going forward. 

What job growth? What inflation?

Far be it for me to say “I told you so” but I told you so. Recall I wrote that the monthly jobs report is usually a fabrication. The results come from surveys and are always revised downward when the real numbers come in. On July 7 I said that the jobs report was a lesson in how to lie with statistics with employment figures revised downward by 55,000 jobs on average. Folks are highly critical of the Fed for its macro models but I have heard hardly a peep about the models used by the Labor Department in its surveys.

When the numbers were announced for May and June and the administration was doing high fives, I asked what would be the revisions? Turns out it was a whopping 258,000 lower making a three month growth in jobs of only 35,000. Recall that most of the job growth was in state and local government jobs. The jobs figure for July was a paltry 73,000. Now if that is the estimate, then what will be the revision? Well Trump did not like the 73,000 number and fired the commissioner of the Bureau of Labor Statistics. Mind you Trump fired the commissioner Erika McEntarfer and accused her of being a Biden appointee who was manipulating the numbers. Strange, but didn’t Trump like the numbers she manipulated (estimated) the previous month? The commissioner should have been fired long ago for not dealing with the poor estimates from the job surveys. As a good friend points out her firing smacks of Bolshevism with the disgraced commissioner sent to the gulag. Would that be Alligator Alcatraz?

Now Trump’s policies wouldn’t have anything to do with the poor job numbers would they? I can just hear the chorus now howling for the Fed to cut the target Fed funds rate. Indeed, Wall Street traders just increased the odds of a rate cut from 38% to 70%. But wait a minute. The inflation numbers have just come in as well. The Bureau of Economic Analysis reports that in June the Personal Consumption Expenditures index (used by the Fed) went up at a 3.4% annual rate. Now it was 2.0% in May and Trump and the MAGAverse were beating their chests and shouting to all the doubters (like me) “Where’s the inflation?” Well, here it is. Trump won’t like these numbers either. The Bureau of Economic Analysis is within the Department of Commerce. Watch out! The director is Vipin Arora. Look for Trump to fire him too.

Analysts say that June inflation is due to the first signs of the price increases due to the tariffs. Really? Just remember that importers and companies are bearing most of the initial increase in cost and only passing a small portion on to consumers. Imagine what the inflation figures will be once the full impact of the tariffs are passed on to the consumers. The analysts also note that domestic producers are starting to charge higher prices for their products as the foreign competitors’ goods are priced even higher. Surprise surprise. Breaking down the numbers, goods prices went up 4.8 percent in June compared to 0.9 percent in May. Durable goods prices went up a whopping 5.7% compared to 0.3% in the previous month. In contrast prices on services went up only 2.8% compared to 2.5% in May. Again recall the tariffs are on goods and not services.

These numbers are bad enough but are they understated too? Probably. The Bureau of Labor Statistics has reported that it is missing 15 percent of the data it normally collects on prices due to staffing shortfalls caused by Trump’s firings and a hiring freeze. This hasn’t gone unnoticed as democrat senators have questioned the accuracy of the data. Clearly, they are implying that the missing data must be due to the Trump administration trying to lie about the magnitude of the change in inflation. They wouldn’t do that. Would they?

What is the Fed to do? The abysmal jobs numbers say cut, cut, cut! But the inflation numbers say raise the rate. If the Fed were using the Taylor rule which says if the actual rate of inflation is above the target rate, it should increase the Fed funds rate. Trump would have a cow. If the Fed were reluctant to cut before when it was adopting a wait-and-see approach to whether the tariffs were going to cause inflation, isn’t the wait over? What is going to be this Fed’s main objective, job growth or inflation control? This is another case in which their mandate of full employment and stable prices is in conflict. If the Fed starts a policy of easy money in hopes of stimulating employment – one of Trump’s many demands – then what of inflation? Regardless of what action taken by the Fed, they will be the scapegoat. Trump will yell that if they had cut when he wanted it to then none of this would have happened. Of course that is BS but it is what we have come to expect from this president and his economic policies. I bet Jay Powell is thinking that May 2026 won’t come fast enough.