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Trump’s threats, the autopen and the Congo

Is it just me thinking that the major predators on the world scene are all leaders of failed economies? Vladimir Putin, Xi Jinping, Kim Jong Un and Ayatollah Ali Khamenei are belligerent bullies rattling their swords. 

Trump just threatened Iran over the attacks on American ships and planes by the Houthis. Trump tweeted on Truth Social “Every shot fired by the Houthis will be looked upon, from this point forward, as being a shot fired from the weapons and leadership of IRAN, and IRAN will be held responsible, and suffer the consequences, and those consequences will be dire!” 

Trump loves exclamation points and CAPS! But isn’t it a bit incongruous that he tweets on “Truth” Social? Shouldn’t he go back to Twitter now that his bud Elon Musk owns it?

The democrats love to say that Trump is a Russian agent. The Hill says “the former head of Kazakhstan’s intelligence service, Alnur Mussayev claims that Donald Trump was recruited by the KGB in 1987, when the 40-year-old real-estate mogul first visited Moscow.” Other KGB operatives have said the same fueling democrat claims. All of the left leaning media sites gleefully report the claims yet to be substantiated.

What does Bernie Sanders say? Shouldn’t he and all those on the far left be overjoyed with Trump’s relationship with Putin? Didn’t Bernie honeymoon in Russia? Sanders was reported to have said on that trip “Our housing in general is better than yours, but people are paying 40 percent of their income for housing. The quality of your housing is not good, but we appreciate the fact that people are paying 5 percent.” That has to be one of the all time dumbest statements ever. That reminds me of the comment made by a Canadian to me when I was on a bear hunt. He criticized US healthcare and said that while Canadian healthcare was worse at least he did not have to pay very much for it.

Whatever the truth, I don’t think that there is any doubt that Trump likes Putin. He has treated him with kid gloves. In the talks about the war in Ukraine, Trump has been harder on Zelenskyy than on Putin. When Putin did not agree to the cease fire terms, Trump did not threaten him like he did Zelenskyy. Anyone else he would have immediately imposed more sanctions and a 100 percent tariff – or 200% as on French wines.

Speaking of which, who hasn’t – other than Putin – Trump threatened?

I still don’t understand why Zelenskyy did not offer to pay for US military aid to keep the weapons and intelligence flowing.

Trump is saying that the pardons granted by Biden are invalid because of the possibility that they were signed with the autopen. This would have to be decided by the courts. However, if the courts rule that use of the autopen is invalid then many of not most of the laws and other things signed by presidents since Geroge Bush the First will be invalid. Presidents have so many documents to sign that the autopen is often used. And yes, I know the issue is whether Biden knew what was being signed. But there is zero chance that any action taken by Biden during his time in office will be thrown out due to senility.

Remember when Trump referred Haiti, El Salvador and other countries as s-hole countries? Well it is true for Congo where 10 percent of my DNA is from. The Congolese have always gotten the short end of the stick. From the brutal oppression of the Belgium where millions died to having to dig cobalt for our cell phones and EV batteries to the mystery disease that is now killing scores of people, half of whom die within 48 hours of showing symptoms. The disease causes uncontrolled bleeding, vomiting, diarrhea and other symptoms of hemorrhagic fever. The World Health Organization says that this may be a new disease from a previously undiscovered virus. I wonder if any of the USAID frozen funds were to go to Congo? Meanwhile, Rwandan-backed rebels are seizing control of Congo’s eastern cities and are one of over 100 armed groups vying for control of the mineral rich east whose mineral deposits are valued at over $24 trillion. The new disease only adds to the misery of the Congolese. Last December, the country said a flulike disease linked to malaria sickened more than 400 people and killed at least 31. Congo is also battling an outbreak of Mpox with more than 55,000 cases and 1,200 deaths since the beginning of last year. Also a couple of years ago Congo experienced the world’s second-deadliest Ebola outbreak, which infected more than 3,400 people and killed 2,280.

Can you imagine sitting on top of $24 trillion in mineral wealth and still be among the poorest countries in the world?

Congo has over 5 million people living with HIV and has been called the rape capital of the world.

Again, my Congolese ancestors who were shackled, put on slave ships, survived the harrowing eastern passage and were enslaved in America were better off than their “free” bothers and sisters who remained in Congo. Today’s Congolese are only marginally better off. They face disease, semi-slave conditions mining cobalt, civil war and a subsistence lifestyle. To make matters even worse, the government has stopped the export of cobalt for four months citing an oversupply causing prices to fall. This hits the 200,000 small artisanal miners many of whom are children especially hard whose mining is their sole source of income. Please shed a tear for Congo.

US Debt. Is the sky really falling?

I know that many will have a visceral reaction to this post. But as always, prove me wrong and I will adopt your view.

I have a friend who is Mr Doom and Gloom. He is probably disappointed every day that the dollar is still the world’s reserve currency and hasn’t been replaced by the yuan, that the country has not gone bankrupt, that we are being run by a political mafia, that the Fed has to continually “print” money to pay our bills, that unfunded liabilities are off the chart and that one day the markets will quit buying our debt and that “we can no longer dig our deep hole deeper.” I sent him some political jokes that everyone else found amusing. Everyone but him. He says “by any mathematical or legal analysis this country is technically bankrupt.” I would argue that we might be morally bankrupt but as a country we are not either mathematically or legally bankrupt. But I guess it depends on how you define “bankrupt.”

Bankruptcy simply means that you cannot pay your debts when they come due. So bankruptcy means insolvency of which there are two types. First is cash flow insolvency where the debtor does not have the liquidity to pay debt when due. However, the debtor does have assets but they have not been converted to cash. Then there is balance sheet insolvency when the existing assets are not sufficient to pay the debt. Clearly, the country does not have cash flow insolvency. It can always “print” money to pay its creditors. What about balance sheet insolvency? Here there are unfunded liabilities do not appear on the nation’s balance sheet. Consider that the national debt is around $34 trillion. That is debt that has to be services now. Currently the interest on the debt is projected to be $1 trillion. That’s a really big number in that the amount spent on defense is $880 billion. But since the government has the power of the purse there is zero likelihood that the government will not pay its debt in a timely manner. One factor that is overlooked is who owns the debt. Over 35% of the debt is held by the Federal Reserve and by the US government. It is logical to assume that even if there were a repayment crisis that the government could choose to restructure that part of the debt that it owns while paying in full the other debt holders. Crisis averted.

What about the unfunded liabilities? Social Security is $60 trillion and Medicare is $103 trillion. These too are really big numbers  and are the promised payments less the projected income streams. Well just like any insurance company, so long as the payments do not come due in amounts that dwarf the income stream, those unfunded liabilities will not provoke a financial crisis. However, if the payments are greater than income, then benefits would have to be cut, or contributions increased or the difference financed through taxes. But in no case would the unfunded liabilities cause a bankruptcy. BTW if Social Security were not linked to wage indexing but to price indexing it would be in surplus rather than deficit. More on that in a later post.

Please don’t misunderstand. I am not pooh poohing the debt. I just don’t know when the debt is binding and will threaten our very existence. In 2005 the ratio of debt to GDP was 36%. Now it is 131 percent. Yes that is large but keep in mind the ratio was in Japan it was 216%. The Japanese debt ratio has been above 100 percent for over 20 years. The Japanese economy is still chugging along albeit at a very slow rate of growth. While many in the US point to the aging population and the increased payments from Social Security and Medicare as creating a debt crisis, that has not occurred in Japan which has an older population and a higher debt ratio than the US. However, Japan has been mired in a recession, slow growth and negative interest rates. Yet its economy keeps limping along with no default or bankruptcy in sight.

For me the biggest problem with the ever increasing debt is its impact on inflation, interest rates and private investment. Economics tells us that government borrowing “crowds out” private investment spending as interest rates are higher with the government in financial markets. The higher interest rates mean that there are fewer projects with positive net present values so there is less investment that would occur otherwise. This means slower growth and a lower GDP. The way to reduce the debt ratio would be to reduce government spending which would lower interest rates and increase economic growth which will in turn increase GDP. And of course, increased GDP along with reduced government spending means a smaller debt ratio.

Also the dollar is the world’s reserve currency and there is no viable candidate to replace it. When the euro was introduced there were some rumblings that it might replace the dollar but it has not as the EU keeps shrinking and is now only 60 percent of the US GDP. Some have worried about the yuan but so long as China is communist and is untrustworthy, that will never happen. China has 1.5 billion people compared to the US’ 350 million but its GDP is only 65% of the US. China may be a threat militarily but it is no threat economically. Also the Chinese are secretive. Its debt burden is likely higher than that of the US with its reckless domestic spending. The dollar makes up over 60% of the world’s reserve currencies. The yuan is not even in the top 4 trailing the euro, yen, pound sterling and Swiss franc.

Yes the BRICs countries have talked about instituting a new currency like the euro to replace the dollar in their trading with each other. Recall that Donald Trump aka the Tariff Dude, has threatened imposing with 100 percent tariffs to protect the dollar from a Brics currency. But then again Trump has threatened every country (except Russia) with higher tariffs. US tariffs do pose a danger to the dollar as countries will look for ways to circumvent the tariffs. The dollar has fallen as a result of Trump’s tariffs as countries will enter into agreements to pay for trade in currencies other than the dollar.

A major danger to the dollar lies in US inflation which weakens the value of dollar holdings. If tariffs cause higher inflation then look to other currencies such as the Swiss franc to increase its position as a reserve currency. But given the size of Switzerland, its franc will never replace the dollar. US inflation has historically been lower than the inflation worldwide making the dollar a safe haven currency. Although Trump is fixated on US deficits, the deficits actually help maintain the reserve currency status as the US imports goods and exports debt which contributes to worldwide liquidity and keeps the dollar king. Maybe if we called trade deficits US exports, Trump will stop his tariff silliness.

New California? Eastern Washington? Greater Idaho?

Most of what Trump is doing is temporary. The defunding of agencies, the firing of federal employees, the claw back of appropriated funds will have no lasting effect. Trump wants to abolish the Department of Education but cannot do that without 60 votes in the senate which he will never get. At best he can zero out its budget and let it lie dormant until the next democrat president resuscitates it. The same can be said for all the mayhem caused by Elon Musk and DOGE. It is all temporary. I tell my Trump-hating friends to chill. Trump is actually doing them a favor. By having the courts ultimately decide the limits of executive power Trump is increasing the power of the next democrat in the Oval Office. Shouldn’t the dems be supporting Trump rather than opposing him?

If Trump and the republicans really want to shake things up then why don’t they pursue changing how states can be formed. The western counties of Virginia want to join West Virginia. Thirty three Illinois counties want to leave for Indiana. Counties in California, Oregon and Washington want to leave their states either to form a new state (California and Washington) or to join a neighboring state, eastern Oregon with Idaho. Currently there are twelve successionist movements within the “United” States. There has even been a not so serious resolution by Georgia’s Marjorie Taylor Greene to split the so-called red states from the so-called blue states into separate countries. But that doesn’t address the red counties that want to join blue states and vice versa. Oregon counties would still be stuck in Oregon . Illinois counties will be stuck with Chicago dominated Illinois rather than finding sanctuary in Indiana. The interior counties of California will still have to deal with the progressive coast and the lunatic fringe that rules the California legislature. There are even counties in New Mexico and Colorado that want to join Texas. And what about those poor souls in New York state that have to deal with New York City? Even Saten Island wants to secede from the city. And I’m not even talking about movements that want their state to secede from the entire country because of the burdens imposed by the federal government. There are movements in New Hampshire, Texas and Louisiana that want to make their state an independent country.

So why doesn’t Trump lead a movement to make it easier for counties to either form new states or to merge with neighboring states? The last new state was West Virginia and was formed illegally. The Constitution is the main impediment. First, Article IV Section 3 of the Constitution says that only Congress can create a new state.

“New States may be admitted by the Congress into this Union; but no new State shall be formed or erected within the Jurisdiction of any other State; nor any State be formed by the Junction of two or more States, or Parts of States, without the Consent of the Legislatures of the States concerned as well as of the Congress.”

This makes it almost impossible because in order for the counties to leave one state for another, both state legislatures would have to consent as well as the congress. There is virtually no way that Illinois will set their counties free to join Indiana, or Oregon letting its counties go to Idaho or Washington allowing its eastern counties to become the state of Eastern Washington.

These movements are doomed and their advocates are wasting their time. The last state to be formed out of another state was done so illegally. When the western counties of Virginia voted not to leave the Union at the beginning of the Civil War they were outvoted in the Virginia legislature. However, Lincoln and the north did not recognize the succession. The western Virginia counties formed their own legislature which Lincoln recognized as the true legislature of Virginia rather than the one in Richmond which then was a legislature within the confederate states. In 1861, the rogue legislature in Wheeling voted to join the Union and the congress agreed allowing the new state of West Virginia to be created in 1863. In 1870 Virginia sued to get its counties back. The case was Virginia vs West Virginia and was heard by the Supreme Court where Virginia had no chance of winning. The court in this case and one in 1911 ratified the existence of West Virginia as a state.

What Trump and the republicans should do is to try to amend the constitution to allow an easier path to counties leaving one state for another or for new states to be formed. I am not certain if such an amendment can get two thirds approval in both the House and the Senate and get 38 of the 50 states to agree. But at least they can start the conversation and who knows, maybe a change might be a-coming.

Has anyone dominated the news more than Trump?

Well Kara Lawson’s Duke women’s basketball team won the ACC. Congratulations Kara! While at UT she was in my class and was a Finance major. I hear from her occasionally. One of my life’s many small world stories occurred when my other half and I were visiting the Big Island. One day we took our rental from Kona around the island to Hilo to go to Volcanoes National Park. We stopped to eat lunch at a local restaurant. We were asked to sit at the bar until a table came open. I was wearing a Georgia cap – like always – and a man sitting at the bar said “Go Dawgs.” I said “You know the University of Georgia?” “Most everyone else wonders why the Green Bay cap is red and black and not green and gold.” He said that he was from California and the only reason he knew it was a Georgia cap was because his niece went to the University of Tennessee. Naturally I said that I was on the faculty at UT. He then said “You are not Dr Black are you?” We nearly fell off our seats. I said yes and how did he know that. Then he said “You were my niece’s favorite professor.” His niece was Kara Lawson.

When Ontario threatened to impose a 25% tariff on electricity it exports to the US, Trump immediately said that he would raise the tariff on aluminum and steel to 50%. Ontario backed down. Then France imposed a 50% tariff on American whiskey and Trump immediately threatened a 200% tariff on French wine. Well Trump got Ukraine to agree to a cease fire and Putin rejected it. Only silence from Trump. Why didn’t he just as fast threaten Russia with a 200-500% tariff? Only silence. What’s up with that? Does Trump only threaten our erstwhile friends? Come on Donald, get as mad at Putin as you have done with Ontario and France. Doesn’t Putin know that resistance is futile?

Now the democrats are also learning that resistance is futile. They were going to oppose the budget bill in the Senate and filibuster it. This was stupid. They should just vote against it and let it pass since Kentucky’s Rand Paul will be the only republican to vote against it. What’s with these Kentucky republicans anyway? Will Trump rant and rave about Paul like he did Massie? In the end 10 democrats including Schumer voted to end any filibuster and let the bill advance. Now passage is certain. If the dems had caused a government “shutdown” the onus would have been on them, not Trump. They have shown the American public that they support keeping government spending growing. They are against cutting waste. They support the terrorist sympathizers like the one at Columbia University. One hundred democrat congressmen signed a letter supporting Khalil. They want open borders. They favor transgenders over women. These are all losing issues yet the democrats are lock step against the majority of Americans. The only reason why they don’t collapse entirely is that many of their constituents also hate Donald Trump.

Trump has made the democrats stupid. This is a short term funding bill. They should have just vote against it and let it pass. Then they can negotiate on a long term bill in which perhaps they can get a few crumbs of their own included. But “shutting” down the government never results in a shutdown. The democrats would actually help Trump who could have declared workers as “nonessential”. As before, when the public realizes that it functions just fine with the government “shut down” then it just gives Trump more cover for his actions.

But what would a “shut down” have entailed? Workers designated as “nonessential” would be laid off and not paid. But if a worker is nonessential then why is he employed anyway? The dems realized that this would give Trump an excuse to permanently eliminate that position. Before, after the last shutdown there was no reduction in force and the laid off employees came back and were given back pay. I recall that the military keeps working as does law enforcement and Social Security checks keep coming. The last time they closed the national parks and museums. Also one of the nonessential parts of the government, the Congress will still get paid. 

The democrats recognized this and folded. However, the ones in the House screamed. Hakeem Jeffries had said that the dems had the republicans on the run. Huh? Jeffries seems clueless. Maybe the dems need new leadership in the House. Pelosi said “America has experienced a Trump shutdown before – but this damaging legislation only makes matters worse. Democrats must not buy into this false choice. We must fight back for a better way.” AOC went after Schumer and essentially called him a traitor. It will be interesting if Schumer can continue as minority leader. It will also be interesting to see if he gets primaried when he is up for reelection in 2028. Will AOC run against him? Let’s hope so because she will have to give up her House seat.

I presume that Trump would not support the repeal of the Jones Act which requires that cargo shipped between US ports must be on US ships, made in America, owned by Americans and crewed by Americans. Republicans have long sought the repeal of the act because it raises costs to American consumers. Obviously the act was to protect Americans from foreign competition. But only 3 percent of the global commercial fleet are Americans and there are only 93 ships that move cargo between American ports. Trump with his America only policies is not likely to support a repeal of the Act.

Remember Trump’s vicious attack on Chip Roy? Well he has turned his ire on another conservative republican, Thomas Massie of Kentucky. Massie announced that he would not vote for a continuing resolution. He would only support a bill that cut spending. When he voted against the current one Trump ever the statesman tweeted “Congressman Thomas Massie, of beautiful Kentucky, is an automatic ‘NO’ vote on just about everything, despite the fact that he has always voted for Continuing Resolutions in the past. HE SHOULD BE PRIMARIED, and I will lead the charge against him. He’s just another GRANDSTANDER, who’s too much trouble, and not worth the fight. He reminds me of Liz Chaney(sic) before her historic, record breaking fall (loss!). The people of Kentucky won’t stand for it, just watch. DO I HAVE ANY TAKERS???”

Yet another presidential piece of tweeting diplomacy from our leader.

Massie then used the Trump tweet to solicit funds for his next campaign. “Why don’t more Representatives stand on principle? Because telling the truth can get you in hot water. I’m going to need your help. I will run again because we need at least one person in Congress who won’t cave. Can you show support by contributing now?” He raised $400,000. I am certain that a large number of the contributors would never have contributed to Massie in any circumstance other than opposition to Donald Trump. Watch out Rand Paul!

Is Chuck Schumer really a Palestinian?

Spring break 2025

When I was teaching I hated spring break. It would literally wipe out two and a half months of learning. It takes time for the students to get used to me. My methods are different than what they generally see. I link every lecture to current events. I send them stories from the financial press that supplement the book. I post current statistics and compare them to the ones in the text that are usually 4 years old. I call on them to answer questions at every class. If they don’t know the answer I tell them to guess. I tell them that there will no multiple choice true false exams only essays short answers and problems and they cannot use a calculator. Some drop immediately. After the first exam, more will drop. In this class I started out with 59 students. Seven dropped after the first class. Seventeen more did not come back after the first exam. The ones that remain are now used to me. The classes are more focused and no longer am I the only one having fun. 

And now to ruin it all and set me back comes Spring Break. When the students return from Spring Break, they don’t want to be back in school. They have spent a week in the sun, drinking, being rowdy and doing who knows what (I know). They are mellow. The last thing they want to do is to sit in a classroom and listen to lectures of systematic risk and immunization of portfolios. It is back to square one. Some never readjust. It is worse if they are graduating seniors. All they want to do is to graduate and leave. Spring break makes it worse. They don’t want to be there and the class now becomes a boring burden.

For me, the only saving grace for spring break arriving used to be BikeWeek which comes right after the Daytona 500. We used to go most every year. Spring break always begins when BikeWeek ends. The people in Daytona used to say that the BikeWeek crowds were their favorite. They were polite. Maybe they rode load Harleys on the street but they were quiet in the hotels. We no longer go. The vibe has completely changed. Once it was mostly older riders who went to the shops on Main Street and to the vendors at the Daytona Speedway. We would go to the races at the track as well. Then the kids on their sport bikes started coming. The crowds got rowdy and the cops less tolerant. The hotel where we always stayed stop allowing trailer parking after changing ownership, raised their prices and ended their happy hour. We used to have get togethers with riders with the same bike – then a Honda ST1100. That ended as well. It was not the same so we quit going.

This year for the first time, I am looking forward to spring break which is the week of March 17^th because I need the break. This has been an interesting semester. There are some very strong students but in the main, they have been tested using multiple choice true false which has yielded mainly students who cannot think and cannot reason. Although I park in the lot closest to the classroom building, it is up a fairly steep grade and my knees are perpetually sore. I am now walking like an old man. I have still not seen another professor when I venture up to talk to the secretary versed in the new technology. This generation considers the university as just a job and not a service. I could not be on such a faculty. This is a one off.

So I am looking forward to being able finally to go chill out at the farm, cutting up fallen timber, doing tractor work, moving my blinds and sitting on the front porch with a hot cup of tea, a good book and a cigar. I need the break.

Yes Karoline, it is a tax

There is now a silly debate going on. Trump’s spokesperson Karoline Leavitt shut down a reporter who asked why if Trump wanted to cut taxes was he raising taxes on American consumers by imposing tariffs. Leavitt was miffed. She said “He’s actually not implementing tax hikes. Tariffs are a tax hike on foreign countries that, again, have been ripping us off,” Leavitt said. “Tariffs are a tax cut for the American people, and the president is a staunch advocate for tax cuts.” The reporter responded that tariffs “don’t get charged on foreign companies, they get charged on importers.” Leavitt of course was wrong and dug herself deeper in a hole by saying that tariffs would increase wages and revenues for Americans and then she said to the reporter “I think it’s insulting that you’re trying to test my knowledge of economics, and the decision that this president has made,”

Well Karoline, he did not insult you . Tariffs are indeed a consumption tax. Tell Trump to think of them as the dreaded value added tax he so despises. Tariffs are collected at the port of entry and are paid by the importer and not the exporter Karoline. Who then pays? The American consumer as imported goods become more expensive. And what is this about increasing American wages and revenues? You are awfully young so probably don’t remember the impact of the Tariff Dude’s tariffs in his first term. The Tariff Dude loves tariffs on aluminum and steel. In his first term he levied a 25% tariff on steel and a 10% tariff on aluminum. He also levied tariffs on China, on solar panels and on washing machines. Studies show a drop in US GDP of $1.5 billion a month, an increase in consumer costs of $51 billion annually and a household tax increase of $625 per year. The prices of washing machines rose by 12 percent. A research paper at MIT found the tariffs had limited positive or negative effects on employment in the sectors protected by tariffs, and hurt employment in other sectors, including agriculture. Moreover, global investments in trade-related sectors declined by a $1 trillion.

I know that press secretaries must back their boss 100 percent even when they are wrong. Leavitt probably knows the truth but cannot admit it. That was especially evident in the last administration, Karoline is likely aware of the consequences of tariffs during Trump’s first term. Trump knows but doesn’t care. He undoubtedly knows that this time around his tariffs will have a larger impact in that they are larger and more comprehensive and target the entire globe rather than just our allies and China. There will be greater costs and global retaliation. Trump imposed tariffs on $380 billion of goods in his first term and now $1 trillion in his second term. Trump’s first term tariffs reduced employment by 142,000 jobs, reduced GDP by 0.2 percent and capital by 0.1 percent while increasing prices. Now imagine the damage that will be done by these tariffs. Estimates point to an equivalent tax of around $2,000 per household.

Now we have silliness going on. The cult of Trump is forced to argue that tariffs are not a consumption tax while the Trump detractors are arguing the opposite. This is one of the few times that republicans are defending a tax increase (albeit while denying it is an increase) while the Trump haters (nee democrats) are arguing against a tax increase for perhaps the first time in modern history. It is a tax increase – perhaps the largest in history – and will have dire consequences if fully enacted. I hope I am wrong. I hope all the economists from Adam Smith to me are wrong. But history and the data say otherwise.

But Trump is no fool. I think it should be apparent that Trump does not just want to equalize tariffs between countries. He is using fentanyl as an excuse for his tariffs on Mexico and Canada. Even if they stopped fentanyl he would still impose the tariffs. He wants to minimize or even end all imports. He wants to force the automobile companies to move production from Canada and Mexico into the states. He wants to end the importation of Canadian electricity, oil. steel, aluminum and lumber. He makes it no secret that he wants to cripple the Canadian economy. I guess he also wants the avocado industry to return from Mexico to California. So yes there will be slower growth, there will be increased job loss, there will be inflation and there will be a recession. Trump is set on building a wall around America. No allies. No alliances. Trump is only going to be around for this term and will be gone. What of the republican party? People have been asking if the democrat party currently in disarray will survive. Well a relevant question is whether the republican party will be able to survive Donald Trump a k a the Tariff Dude, current hero worship aside.

Jasmine Crockett, Mark Carney and Fartcoins

Jasmine Crockett who seems to be the voice of the resistance strikes again. Thecongresswoman from Texas said that it was not illegal for an illegal to come into the country illegally. Crockett said “They (the republicans) continue to say things like ‘the illegals’ and that they broke the law coming in. But what they’re not telling the American people is that it is a civil violation. It is not a criminal violation to enter the country illegally. It’s not. It’s not criminal. It’s not a crime. It’s not a crime.” Now Crockett is a graduate of Rhodes College in Memphis and has a law degree from the University of Houston. So one would assume that she knows the law with regard to whether an illegal coming into the country illegally has committed a crime. Almost immediately, those on the right exploded stating that under Title 8, US Code 1325, illegal entry is punishable by a fine or jail time. Tom Homan, the border czar, who had previously said that Crockett was “not very bright” was quick to unload on her. “It’s really pathetic that any member of Congress doesn’t understand what the law says.” Right. Especially one who is a lawyer. Did she pass the bar? Maybe Crockett misspoke.

Oh, Canada!

Donald Trump has flipped the coming Canadian election. Before the tariffs the conservative party was 20 points ahead of Trudeau’s liberals. Then Trudeau resigned and Mark Carney is replacing him. Now Carney’s liberals are slightly ahead of the conservatives. Why? Trump. Carney has pledged that Trump will not run roughshod over the country and resisting Trump has resonated with the Canadian voters.  Carney is the anti-Trump. He was the head of the Bank of England and the Bank of Canada.  He is a prominent leader of the global cabal that meets at Davos. Carney along with Michael Bloomberg and Blackrock’s Larry Fink were the main forces behind the net zero alliance pushing ESG (environment, social and governance) policies at the corporate level and seeking to rid us of fossil fuels. I once called Larry Fink the most dangerous person in the world since he is sitting atop $11 trillion in funds to manage. Of course, pressure mainly emanating from states like Texas, Florida and Tennessee and from republicans have caused Fink to back off his ESG demands. However, Carney who had been strong arming banks into signing the net zero pledges is still a true believer. So thank Donald Trump for getting Carney elected Canadian prime minister.

Fartcoin? Surely you juest!

I admit I know absolutely nothing about bitcoin. I cannot understand why any cryptocurrency has any value at all. I thought it was a way to launder money and would just be embraced by the dark side. Trump’s endorsement of bitcoin caused the price to go to $105,000. Trump announced a bitcoin reserve but said that the reserve would be from cryptocurrencies acquired through seizures and not through new purchases. That caused the price to promptly fall to $89,000. Someone told me that the attraction of cryptocurrencies is that they are outside the control of governments. Do I hear money laundering anyone? One person said that while the central bank can expand the money supply at will, not so much with bitcoin. Well I thought that you could create new bitcoin through “mining”. Anyway, if you reach a bitcoin limit all you have to do is create a new cryptocurrency. Currently there are over 25,000 cryptocurrencies extant. Moreover, there is something called meme coins that are created as a joke. There is a Trump meme coin, a DOGE coin, a Melania coin and even a fart coin. One would think that these would have zero value. But think again. The Trump coin is the number one meme coin and has a market cap of $2 billion. Fartcoin “only” has a market cap $250 million. Cryptocurrencies are the ultimate fiat currency. While national currencies like the dollar have been criticized for not being backed by anything other than the full faith and credit of the government, cryptos are backed by absolutely nothing at all making them the ultimate greater fool asset. Again one only would buy a cryptocurrency thinking that there is a greater fool out that that will be willing to pay even more for it. $89,000 for a bitcoin? Now where is that greater fool?

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I like Amy Coney Barrett

The holier than thou yahoos on the right are no better than the ones on the left except those on the left are supported by their minions in the media. Currently the ones on the right have their sharp knives out for Amy Coney Barrett who had the temerity to join the court’s liberals – along with John Roberts – in ruling that Trump could not freeze the USAID funds that were to pay organizations for work that they already had done for the government. Why they lashed out only at Barrett and not Roberts is something of a mystery. Sexist maybe?

I guess they forgot Barrett’s stellar performance at her senate confirmation hearing where she demonstrated a complete mastery of the law with almost an eidetic memory of prior rulings. Some idiot said that Barrett was “a warning against the dangers of Republican DEI.” Whatever that means. Another loud mouth proclaimed that Barrett was the “biggest disappointment on the court” and said that Trump should defy the court’s decision. That critic is a fool and wants to precipitate a constitutional crisis, a la Biden. Another critic said that Barrett was a DEI pick only chosen because she was a woman and a woman was needed to replace Ruth Bader Ginsburg. So I presume the same critics would say that Clarence Thomas was a DEI hire since he took Thurgood Marshall’s seat on the court. One critic – who I designate as a fool – said that Barrett was a “rattled law professor with her head up her ass.” 

Goodness gracious! What blind partisan idiots. What no criticism of Roberts whose vote gave us Obamacare? What a joke. All of the justices, save Alito and Thomas have been subject to tantrums from the right because they do not rule 100 percent on things some on the far far right would like. Gorsuch has often sided with the liberals, especially on Native American issues. Kavanaugh has been called “wobbly”. Roberts, of course, is called a traitor. What about rulings that were unanimous? Are all the conservative justices then wobbly?

The criticisms from the lunatic fringe on the right are embarrassing. Barrett has a terrific mind and is her own person. Her interpretation of the Constitution is as solid as Thomas’ or Alito’s. Her intellect is on par or above any member of the court. She is certainly not out of her league like Sotomayor. She has certainly not let her personal views trump her opinions like Kagan. I admire her (and Gorsuch and Kavanaugh) who unlike most of us does not let the brutal vitriol from the democrats in her senate hearing bias her rulings. Many if not most of us would never rule on any matter that would favor the democrats if we went through the hell of a confirmation hearing. Yet Trump’s appointees have risen above that and have ruled in a manner consistent with their interpretation of the constitution, The vast majority of Barrett’s votes have been with the other conservatives on issues important to the right such as abortion, and affirmative action admissions. She has voted with Thomas and Alito 80 percent of the time.

One legal scholar has called Barrett among “the most distinguished conservative jurists of the past 100 years.” He also said that “She’s been in the vanguard of conservative jurisprudence on abortion, racial preferences, the administrative state, religious freedom, Trump immunity, guns and the Second Amendment.” Obviously, her critics have forgotten about those opinions. They have also forgotten that she also voted to grant Trump sweeping immunity from criminal prosecution for official actions.

Two separate constitutional scholars have said the same about her. “Barrett clearly has some procedural preferences — she’s more hawkish on standing than many, she’s skeptical of the virtues of the emergency docket, and she dislikes reaching the merits of a big case when the details aren’t entirely clear — and she follows those preferences rigorously.”  They find her rulings consistent with her principles and may end with some votes that favor Trump and some that don’t. For this she should be lauded rather than cursed. She is indeed a terrific justice.

BTW although I am not a lawyer I think Trump’s tariffs are illegal. They are a clear misuse of the Emergency Economic Powers Act. I am wondering when will Trump be sued over it. . What will be the vote on the Court? I will bet that Trump will lose and it should be unanimous. If so, what will the MAGA zealots scream then?

Trump’s stock market

Donald Trump claims to pay attention to the stock market. Some have even said that Trump uses the market as a barometer of his success (or failure). I find that curious since Trump has to know that the market is losing value due to his tariffs. Yet he is plowing ahead. The market thinks he isn’t bluffing. Trump has to know that tariffs will lead to higher prices on consumer goods, higher prices on housing due to lumber costs rising and lower real incomes. He has to know that since announcing his tariffs that consumer sentiment has fallen every month that he has been in office. It fell in February and is still falling in March. Trump may be surrounded by sycophants who cheer his every move (see his cabinet and Fox) but markets and consumers are definitely not cheering. Trump has said that he wants lower taxes and lower interest rates to offset the tariffs. But that is simply crazy talk, unless he wants a full blown double digit inflationary recession on his hands. Earth to Donald: the Fed is not going to lower interest rates. Rather they are likely to raise them.

Stocks have been falling as Trump has geared up his tariffs. The S&P rose with Trump’s election and has given back all its gains since then falling 4 percent. The Dow has lost over 2000 points. The NASDAQ has lost 7 percent. The question is “Is Trump listening?” He takes credit for a rising market. Is he going to take credit for a falling one?

I have called his tariffs “stupid”. The Wall Street Journal has called them “dumb.” What will Trump do? He will likely blame everyone and every thing but himself. But ultimately it is all on him. It will be Trump’s inflation. It will be Trump’s recession no matter what he says. He claims that the tariffs are to stop the flow of fentanyl and illegals from Mexico and Canada. Huh? What flow of fentanyl and illegals from Canada? Trudeau called both Trump and the tariffs “dumb.” Trump wasn’t pleased. He actually said that he wants to force a recession in Canada to force companies to move their facilities to the States. He will lift the tariffs only if production is shifted from Canada to the United States. The Canadians are likely just to get ticked off and impose reciprocal tariffs, cut off gas, oil and electricity to the US and look for other trading partners. 

As to Mexico, they sent 10,000 troops to the border. The flow of illegals is down to a trickle and yet Trump is going forward with the tariffs. Like Canada, Trump wants to pressure firms to move their production from Mexico to the US. Perhaps this is why he doesn’t just renegotiate the trade agreement with Mexico and Canada. The trade agreement will lower all tariffs but leave production in Mexico and Canada. In the meantime, Mexico will pursue other trade partners. If countries have learned anything, Trump cannot be trusted.

February was a bad month for the markets. Forty percent of the earnings on the S&P 500 comes from overseas operations. Yet Trump took little notice. Trump says he cares about the markets but that doesn’t show in his actions. I don’t think he can take the Biden way out in blaming all his woes on the previous administration. It won’t be Biden’s inflation. It won’t be Biden’s recession. It will be Trump’s. The markets have been called overvalued but are now slipping into correction territory. Much of the volatility of the market is laid at the feet of the non-professional investors. Well if they panic and start to sell, then the market could be in for a significant correction. 

For every 5 point increase in tariffs corporate earnings fall by 2 percent. Thus, Trump’s 25 percent tariffs would translate to a 10% fall in market valuations. The markets have been volatile going up when Trump delays implementation of tariffs and down when he threatens to use them. With Trump’s reciprocal tariffs on every country that trades with America, look for even more market volatility. Let’s hope that Trump is bluffing because if he is not, look for a significant market correction followed by an economic downturn and inflation. And Donald, it won’t be Biden’s fault.

Random Thoughts #51

Back to Asheville!

The portion of I-40 in North Carolina that was closed due to Hurricane Helene is back open albeit only one lane in each direction. Motorists have been advised that the speed limit will be 35 mph and expect delays that may be hours instead of minutes. The reopening highlights the incompetence of Biden’s transportation secretary Pothole Pete Buttigieg who was clearly a DEI hire and who may have been the worse transportation secretary in history. Before, it was announced that the road would not reopen until September 2025. What happened? We got a change of administration. New Transportation secretary Sean Duffy made it a priority. He got a special use permit to allow extraction of construction materials from the Pigeon River rather than having to transport them 50+ miles reducing the timeline and the costs provided by the Biden Administration by two-thirds. Once the estimate was that it would take three years to get the interstate back to operating four lanes. Want to bet that now it will be quicker?

Pothole Pete, who has no accomplishments, is gearing up to run for the senate from Michigan. Odds of winning? Who knows but if Adam Schiff can win a senate seat in California then most anything is possible. 

The Weird Oscars

I just read about the Oscars. I didn’t even know it was on and even if I did, I wouldn’t have watched, would you? More importantly have you even heard of the winners? Best picture went to something called Anora which virtually no one has seen. It is supposed to be a foul mouth, sexually explicit comedy about a prostitute who marries the son of a Russian oligarch. Yep. Sounds like a winner to me. The prostitute won best actress.

Speaking of which, once the odds on favorite to sweep the Oscars was Emilia Perez with 13 nominations. The academy was poised to bestow best actress upon a male actor until it was revealed that he (she) had racist and xenophobic tweets. Gasp! The nerve! The movie ended up with only 2 awards.

Perez is described as a musical crime comedy about a Mexican cartel leader who transitions into a woman and is reformed. Sounds really entertaining.  Is this like taking the aggressiveness out of a dog by neutering it? Regardless, this is weird or am I missing something?

Has the Academy lost its flipping mind?

Why anyone cares what the movie industry thinks about itself and pats itself on the back is beyond me.

The public thought the best movies of 2024 were Inside Out 2, Deadpool and Wolverine and Wicked. Of course I would not award anything to anything named wolverine. Of the top ten highest grossing movies only Wicked and Dune: Part two were nominees. What no Beetlejuice? No Godzilla x Kong? No Kung Fu Panda 4? 

Trump’s non-negotiating tariffs

Turns ‘out that the tariffs were not a negotiation tool with Mexico and Canada to stop the flow of fentanyl after all. First Trump said that the tariffs would be delayed if they beefed up their borders. He lied. They did but the tariffs were imposed anyway. What Trump wants is to force the automobile companies to move all their operations back into the US. He said was “What they have to do is build their car plants in the United States, in which case you have no tariffs.” So Trump is saying that if US companies move their production into the US then there will be no tariffs on Canada and Mexico. Well Honda just announced that it is moving its production of Civic hybrids from Mexico to Indiana. Threats work.

If Trump wants to clamp down on fentanyl then why did he raise China’s tariffs by only 10% while raising Mexico’s and Canada’s by 25 percent? So fentanyl is just a ruse. Earth to Trump: RAISE CHINA’S TARIFFS TO 1000 PERCENT!
That will get their attention.

Speaking of China, Taiwan Semiconductor, one of only two trillion dollar companies outside of the US, has announced it is investing $100 billion in new plants in the US. I wonder what is the quid pro quo? More arms for Taiwan?

Trump versus the Federal workforce

Why shouldn’t Trump go after federal workers? They are part of the resistance. Ninety percent of them voted for Harris and 50 percent said that they would resist Trump’s initiatives. Federal bureaucrats know that administrations are short-lived and will hunker down and wait them out. Some agencies are notorious in slow walking policies that they do not favor. I should know having spent time a good deal of my career as a Washington bureaucrat.

One downside is that Trump terminated all probationary workers (including my cousin who had moved from Atlanta to Knoxville to take a position at Oak Ridge).

Trump’s pivot away from Ukraine

When did Kiev become Kyiv?

Trump is halting all military aid to Ukraine. I think this is called coercive diplomacy. Again, would he refuse to sell the arms to Ukraine if they wanted to buy them? Currently, Ukraine provides 40 percent of the materiel for its own defense, 30 percent from Europe and 30 percent from the US. But the 30 percent from the US is the most sophisticated, the most lethal and provides their air defense. Trump wants Ukraine’s minerals and Putin has offered to sell him minerals from the provinces Russia has seized that contain 40 percent of the country’s mineral wealth. Is there a deal with the devil coming?

Who can Ukraine turn to in order to bolster its air defenses? Russia is relentless with its drone attacks and loves to hit civilian targets. The day after Trump halted military aid, the Russians launched a drone and missile attack on Ukraine’s natural gas extraction facilities. Coincidence?

BTW, I have no doubt that Zelenskyy is probably skimming off some of the aid form the US and the EU. Ukraine’s officials are famous for corruption. But what government isn’t? There are millions in aid unaccounted for. Sounds like the Pentagon.

Democrats continue to hate women

The Senate failed to pass Coach Tommy Turberville’s bill to ban males from competing in women’s sports 51-45. I simply don’t understand the senate rules that 60 votes would be needed to pass such a bill. Every democrat voted against the bill, including John Fetterman. Again explain to me why the democrats continue to be on the wrong side of this issue. But I doubt if they will ever pay a price for this at the polls. Reelection rates in the House are usually 96% or higher. In the Senate the reelection rate was unusually low at 88 percent in 2024 but was 100 percent in 2022. Incumbency is powerful. Trump carried Wisconsin, Michigan, Nevada and Arizona yet democrats won their Senate seats. Only Arizona had an open seat and the republicans again for some reason ran the toxic Kari Lake who might have been the only candidate that could lose to Reuben Gallego. 

Lastly, I heard one of the most uninformed discussions ever on Trump’s tariffs on The Five on Fox. Only Harold Ford, Jr knew what he was talking about. Dana Perino made sense because her political instincts were right on. But Judge Jeanine and Jesse Watters who will defend Trump to the death had no clue what they were talking about. Your bias is showing Fox.