Supply Chain, Chain, Chain of Fools

 

Supply Chain, Chain, Chain of Fools

PETER ON THE WRITERS’ HANGOUT PODCAST!

“Europe has not started this confrontation… We do not necessarily want to retaliate, but if necessary, we have a strong plan to retaliate and will use it.” 

European Commission president Ursula von der Leyen

You can tell that the proposed Trump tariff scheme had three clear underlying philosophies: 1. Obfuscate the numbers, 2. Maximize fear/bully power. 3. Even if it is just a slapdash litany of angry numbers, let the nations impacted retaliate so we can rally American voters around that. Even as Trump has suggested that American companies will make more here and that foreign manufacturers will relocate here, for companies (at least those with the highest wage rates) to manufacture, it does not help that their raw materials and secondary modular add-ins (often patented) are still being imported. Not to mention the years it takes to build or retrofit factories. Prices will continue to rise, and the probability of a near-term recession or worse (like stagflation) increased very quickly, from 40% to 60%+.

Trump hates numbers that make him look bad. So, for example, the Department of Commerce is already twisting an alternative to our GDP measurement, the Treasury is suggesting that expired or expiring tax rates which are renewed must not be counted as tax increases. The Trump administration continues to believe that tariffs are not “taxes.” A very lonely perspective. The above formula, where the variables are not clearly identified, is how they determined the “effective” tariff rate. The numerator seems to deal with trade imbalance, and the denominator addresses the tariff differential. But since tariffs are often set, product-by-product, the numbers used for Trump’s giant billboard from hell are of necessity deeply flawed and wildly in accurate. The Trump pattern to deal with facts he doesn’t like is to simply ignore those and substitute its own calculations as “truth.” “Fake news” is now the only Trumpian “truth”!

Back in Trump 1.0, in September of 2019, Trump tweeted that Hurricane Dorian would ultimately slam into Alabama. The National Weather Service immediately pointed out that Trump was incorrect, but he repeatedly doubled down, going so far as to add his black-line Sharpie “enhancement” (look carefully at Trump’s add above) to the NWS map to add Alabama (it was still on the Gulf of Mexico in those days) to the danger zone. Trump even presented his “enhanced map” in a public showing in the Oval Office. The same NWS that DOGE is slicing today, was right then… and usually is… saving farmers, travelers, pilots and navigators and their people they impact billions of dollars… not to mention lots of lives. From changes at RFK Jr’s HHS, to the cut off of USAID medicine and food to starving millions overseas to cutbacks at OSHA and a willingness to ship documented and undocumented aliens from the US to life-threatening detention in El Salvador without due process if they have tattoos the ICE doesn’t like.

Americans have seriously benefitted from less expensive manufactures from overseas market, almost as foreign nations were subsidizing US consumers. Let’s face it, Europe has a lot of cool stuff, from designer fashions to cars and unique food products that taste the way they do because the soil, climate and location of where they were grown. Trump wants to force Americans to buy local substitutes, which can be radically different from the imports they replace. Example: “cheese” is not a uniform product.

Unfortunately, Trump always believes that he not only is the smartest person in the room, he seems to have expanded that belief, first to the United States… and now… world. Yet he seems to have derived his belief in the efficacy of tariffs from “tariff guru” Peter Navarro, who seems to have been recommended by Jared Kushner based on his online search for books touting tariffs. Navarro was thus selected. Suspicion has recently mounted against “expert” economist, Ron Vara, whom no one seems to be able to find… but is frequently cited by Navarro for “factual” support. Was Ron Vara simply an anagram derived from Navarro? Uh oh! The same Peter Navarro who served four months at the Federal Correctional Institute in Miami after a contempt conviction?

Trump’s overall vector is to demand personal fealty to him from every federal employee, even if there is unequivocal hard evidence to the contrary. That, and generating one of most massive, deficit busting tax cuts for the mega-rich while cutting programs for the rest of us, directly threatening Social Security (wink, wink, “we are not touching existing benefits”), Medicare, Medicaid, VA hospital staffing. etc. Retribution is priority number one! Death is acceptable collateral damage.

After the plunge of trillions dollars of US shares value after the tariffs were announced, US stock markets continued in free fall in the days beyond, but Trump enjoyed several rounds of golf (of America?). Ignoring an almost unanimous voice to the contrary from the major economists in the world, Trump smugly reassured Americans that a big payoff was just around the corner. Prices continued to soar. Millions of Americans protested all across the country on April 5th.

Trump felt secure as the business world and cowering law firms stayed silent, but there was one huge surprise “financial bazooka” that the European Union could deploy against the US banking and financial services sector, one of our most profitable areas… and lots of that activity does involve Europe… in a huge way. So if the US and EU do not reach a tariff accord, what exactly that that “bazooka”? Stuart Dyos, writing for the April 3rd Fortune.com, explains: “That plan could involve the Anti-Coercion Instrument (ACI), allowing the bloc to place market limitations on service companies that could hit American tech or Wall Street. Put in place in 2023, the ACI allows the bloc to respond to coercion through diplomatic means by any retaliatory measure necessary like import or export restrictions or limitations on access to the European market…

“‘It’s called the big bazooka,’ Fabrizio Pagani, a partner at the investment bank Vitale and a former top economic official in Italy, told DealBook. ‘I personally think the big bazooka should be used first of all as a deterrent. So put it on the table, and let’s negotiate,’ Pagani said.

“According to a preliminary plan obtained by DealBook, in response to tariffs, the EU officials have brought up the possibility of implementing ACI to limit American banks’ ability to access the bloc’s public procurements market, essentially barring banks from projects worth $2.18 trillion each year . Additionally, the plan suggested targeting the roughly $327.02 billion annual flow of European investment into American companies… ‘It’s more the nuclear option,’ global economist for ING Carsten Brzeski told the New York Times... Use of the instrument could escalate the trade war and some experts believe this would further impact consumers.” You mean like Meta, Google, Morgan Stanley, Blackstone, Goldman Sacks, Bank of America, etc.? And I know why Trump is attacking our finest universities: no matter the DEI excuse, they teach economics, physics, history, engineering… what we affectionately call “facts.” Folks who cannot be fooled are not Trump’s buddies.

I’m Peter Dekom, and I am still puzzled at what Trump’s grades at Wharton (University of Pennsylvania) must have been to result in the unconscionable babble that emanates from the Orange Man himself.

They Hate Us… and They’re Right

Canadians? No, Americans!

They Hate Us… and They’re Right

O Canada, glorious and free!

O Canada, we stand on guard, we stand on guard for thee.

O Canada, we stand on guard for thee.

”They defile the sacrifices of Canadian soldiers on a hundred battlefields around the world where they fought and died for freedom. They kept the peace often side-by- side with their American brothers and sisters in arms.” 

Steve Schmidt, Canadian journalist

Now we know what they are guarding against. One of the problems in dealing with a delusional American President seeking to find a positive legacy somewhere is that he is, well, delusional. He liked Greenland because it was big… and then he looked up and saw Canada, it was even bigger and richer in… immigrants with advanced degrees in science, medicine and engineering that couldn’t get into the United States, most certainly not with their families. That American tech companies were moving their research centers to regions of Canada, rife with glorious universities, very high standards of living, universal healthcare and massive safety nets for the disabled and elderly… speaks loudly on investors looking to future growth. Tenured professors at major American universities, under assault by an education-averse Donald Trump, are accepting faculty positions in Canada. Hey, Donald, what were your grades after daddy bought you an undergraduate spot at Wharton? We all figured out that you must have missed all your economics classes!

Given that the United States had a glorious past (e.g., pre-Trump), Canadians figure that they can learn how to live with a whole lot less trade with its enemy to the south, and besides, China is sending a team of trade representatives to see if they can make up the difference. Because with the United States taking itself out of the game, at least Canada has a glorious future waiting for her. California has always been very open to Canadians, especially in our local entertainment community, and Canada might as well add an 11th province in Palm Springs… except they are selling their homes there and returning to the motherland… because California is part of the United States. Hollywood even likes to shoot TV series “up there.” Except soon, the Canadian dollar soon will be too strong against its American counterpart.

Hey, we always wanted to join with our other west coast brethren in the US – we call the combination “Cascadia,” and become part of the Canadian Commonwealth. But Canadians are cancelling trips to the United States, even routing connecting trips that use to entail a stop here, by taking even longer routes to avoid the good old USA. As US NHL teams fly north to play Canadian teams, they are getting used to the boos during the playing of our national anthem. The reverse does not happen, because most Americans think the Canadians are correct in their taunts.

Well, we know one political faction in Canada that is grateful for Trump’s election interference: newly-elected Prime Minister Mark Carney, whose road to victory was based primarily on Trump’s 51st state annexation dreams. Carney stated that Canada will enter trade and security talks with the US on "our terms", has said. Following an election set against the backdrop of US President Donald Trump's tariffs and musings about making Canada the 51st state, Carney said that he would only pay his southern neighbor a visit when there is a ‘serious discussion to be had.’ How do I break it to him that Plump Trump will revel in “alternative fact” driven narcissism long before he even contemplates anything “serious.” Even the vast majority of the American electorate rolls their eyes at the thought of an American invasion of Canada. The closest Canada gets to MAGA ignorance may be the oil rich prairie provinces. The only shooting war likely to take place between the US and Canada will probably entail hockey pucks.

In the meantime, American-made products have been quickly removed from retail shelves, and it is considered near-treasonous for a Canadian to buy anything made in the US. But if you speak with most Americans about Canada and Canadians, there is a warm glow that emanates almost immediately. We like them; we really like them!!! Trump has this bizarre notion that any nation that gives US consumers a good deal is “ripping us off”… no, Donald, a “bad” trade imbalance only means we got everything on sale!!

Robert Gillies, writing for the April 29th Los Angeles Times, explains how big mouth Trump completely changed the course of the recent Canadian elections: “Pierre Poilievre, a [conservative] firebrand who campaigned with Trump-like bravado, had hoped to make the election a referendum on former Prime Minister Justin Trudeau, whose popularity declined toward the end of his decade in power as food and housing prices rose and immigration surged.

“But then Trump became the dominant issue, and Poilievre’s similarities to the bombastic president seemed to be costing him support… ‘He appeals to the same sense of grievance,’ Canadian historian Robert Bothwell said of the Conservative leader. ‘It’s like Trump standing there saying, ‘I am your retribution.’ ’… Bothwell added: ‘The Liberals ought to pay him. Trump talking is not good for the Conservatives.’… Foreign policy hasn’t dominated a Canadian election this much since 1988, when, ironically, free trade with the United States was the prevailing issue.” Sigh. Funny, I like ice hockey, have seats for the Los Angeles Kings, our local NHL franchise and even represent a number of folks born in Canada. And I can do a mean Canadian accent both in English and Quebecois (it ain’t French!). “Banh sur, J’erray dan mon char maintenan, eh?”

I’m Peter Dekom, and if I were younger, and Trumpism were the long-term expected law of the land, I would have to think seriously about going north to watch hockey… and live the American dream in Canada, where it is still possible.

Not for Sale Ever!

 

Not for Sale Ever!

"There are some places that are never for sale ... having met with the owners of Canada over the course of the campaign, it's not for sale. It won't be for sale ever." 

Newly-elected Canadian PM, Marc Carney, to Donald Trump

“Kalaallit Nunaat [the Greenlandic name] is ours… We don’t want to be Americans, nor Danes; We are Kalaallit. The Americans and their leader must understand that. We are not for sale and cannot simply be taken. Our future will be decided by us in Greenland.” Greenland’s Prime Minister, Múte Bourup Egede

I admit that I am a major hockey fan. I have season seats at the Crypto Arena (yes, I hate that name) to watch the Los Angeles NHL franchise (the Kings) with American, Swiss, Swedish, Russian, Slovenian and a lot of Canadian players, working together. With the tensions with Russia and Trump’s outlandish claim that Canada should be the 51st state and that the border separating us is artificial (aren’t most borders artificial?), I wonder how those players living and playing in the United States feel about effectively playing for an “enemy” nation. I know how I feel: embarrassed and angry, over Canada, an ally, a friendly, welcoming nation and a great trading partner. Trump wants their natural resources, sounding a familiar refrain over his desire to buy/annex Greenland, a Danish territory.

Greenland’s Prime Minister, Múte Bourup Egede, presides over a vast land, a Danish territory, with under 60,000 people. But Donald Trump, apparently using spies to undermine local opposition, is enjoying his aspirational role as a neo-colonialist and sees that frozen land as essential for our national security. Could it be to perfect control over the opening of the Northwest Passage – a shortcut for shipping as the Arctic melts? Or is it the trillions of gallons of oil, a comparable stash of natural gas (drill-baby-drill?) and a massive repository of much-cherished rare earths (did-baby-dig?). Short of invasion, which I doubt Congress would ever permit assuming the United States remains a representative democracy, both Greenland and Canada are likely to remain very much independent of the United States.

But since Canada is on the front burner in the heated tariff war, and because Canadian PM, an elected liberal who owes his victory to the fierce opposition of his entire constituency to Trump’s threats and entreaties, met with Trump in the oval office on May 6th, today’s blog will focus on that embroglio. It is clear that both Canada and the United States need to reach a modus vivendi, but it is difficult to understand how Canada’s supplying American consumers (business and otherwise) products and natural resources that we wanted at affordable prices constitutes our being “ripping off for decades,” a completely unsupportable Trump claim.

Looking our aggregate purchase price (the “trade deficit”), without looking at the value of the goods, received seems unbalanced and meaningless. Further, focusing on goods versus goods and services also seems fairly lopsided, when the United States is primarily a service economy with only strong agricultural and industrial/military manufactures as hard good exports. The proper analysis is “trade balance” in which the money expended in buying foreign goods is balanced by the value of those goods purchased. And regardless of what Trump claims, there is no evidence of a trade imbalance under that metric. Further, the manufactures Trump seeks to reshore are incapable of being produced at remotely a competitive price. We would be wasting money building factories, which take years to build and put online anyway, to make the TV screens, plastic toys and smart phones that will NEVER be competitively priced.

But what was fascinating about the Trump/Carney meeting is: 1. Carney so outclassed Trump in a mild and subtle way that it was a profound embarrassment to look at the stumbling Trump searching for a response and 2. they did not even try to lay the groundwork for a revised trade agreement. I must say it is hard to balance Carney’s expertise, a Harvard undergrad in economics (summa cum laude), a Doctor of Philosophy from Oxford (economics), 13 years at Goldman Sachs, Governor of the Bank of Canada, Governor of the Bank of England, etc., etc. before becoming Prime Minister of… against Trump, a Wharton undergraduate, who never revealed his grades there. My guess he did not fare well in economics.

To this day, despite an almost uniform understanding by most credible economists, Trump has refused to acknowledge to anyone that tariffs are effective a tax paid by importers and shared by consumers. Even Treasury Secretary Scott Bessent would not provide a clear answer to a congressman who asked in a committee hearing, “Who pays the tariff?” To the rest of the world, it is obvious. As the container traffic at all the Los Angeles harbors (the main ports for Chinese imports) is dropping like a stone, as consumer prices are already rising in anticipation of an ultimate tariff resolution, it is obvious to most people.

To make matter more complex, there is this trade agreement negotiated by Trump 1.0, that Trump touted as the greatest trade agreement ever, that already exists. “The Agreement between the United States of America, the United Mexican States, and Canada (USMCA) is a free trade agreement among the United States, Mexico, and Canada, in effect from July 1, 2020. It replaced the North American Free Trade Agreement (NAFTA) implemented in 1994, and is sometimes characterized as ‘NAFTA 2.0’, or ‘New NAFTA’, since it largely maintains or updates the provisions of its predecessor.” Wikipedia. So, to abrogate that treaty to create a new installment with Canada probably requires Mexico’s assent. That Trump has unilaterally abrogated this and many more treaties, many of which have been ratified by Congress, is another metric of Trump’s ignoring the other “co-equal” branches of constitutional governance.

And there’s this other detail: Trump only has a right to use unilateral power to set tariffs only in an “emergency.” But since Trump is setting tariffs for the entire world, what kind of suddenly new global emergency is there? After all, the tariffs are now global. California has challenged Trump in recent litigation: “The lawsuit argues that President Trump lacks the authority to unilaterally impose tariffs against Mexico, China, and Canada or create an across-the-board 10% tariff. The President’s use of the International Economic Emergency Powers Act (IEEPA) to enact tariffs is unlawful and unprecedented.

“The IEEPA gives the President authority to take certain actions if he declares a national emergency in response to a foreign national security, foreign policy, or economic threat. The law, which was enacted by Congress in 1977, specifies many different actions the President can take, but tariffs aren’t one of them. In fact, this is the first time a president has attempted to rely on this law to impose tariffs.” Gov. Gavin Newsom Newsletter, April 16th.

I think Trump just might like to lose that suit. It would give two him immediate benefits: 1. A way out of his disastrous tariff policy decision that is already a failure. And 2. It would give him another reason to rail against California and liberals in general. Whatever is said and done, Canada looks noble, and its representation is exceptional. By contrast, the US position is absurd, and Trump plays the fool.

I’m Peter Dekom, and while many believe we should just let Trump and his band of merry MAGA congresspeople continue to destroy their own credibility with voters, I would prefer that we stop that effort and save the nation from economic harm that may well be irreversible.

Banana Republic Marxism for America, Trump Style

 

A House Constructed of Lies, Mythology and Fabrications Cannot Stand

Unfounded Conspiracy Theories Can Destroy

I rely heavily on the notions of the lessons of history, notably 19th-century philosopher George Santayana’s admonition: “Those who do not study history are condemned to repeat its mistakes.” That said, the Dekom twist on this seeming historical axiom is that the story human evolution over time – “history,” if you will – is not purely cyclical; it is recurring circular patterns within a spiral where the vector of the spiral is determined by seminal changes: from the printing press and gunpowder to space exploration and climate change.

The agents of change can be as basic as inadvertently spreading European diseases to kill off indigenous peoples in the Americas or the passionate Christian belief in noblesse oblige – a French phrase meaning the obligation of nobility to act honorably and generously – when misapplied over the centuries, allowed white Europeans to hold an air of superiority above and against dark skinned peoples (often described as “heathen”) in soon-to-be European colonies in Africa, the Americas and Asia.

The result was resource-driven exploitation that made European monarchies rich and powerful in direct proportion to their willingness to apply forced labor (mostly slavery but including other repressive forms of subjugation) to pillage the Americas of gold, silver, spices, slaves and new varieties of crops from tomatoes and any variety of peppers, corn, and later oil and materials used in basic construction. Europeans grew fat and powerful based on those cheap imports.

As much as we shudder at the use of slaves to build what would later become the United States of America, the Spanish use of slaves in the 16th and 17th centuries to rape Mexico (which included much of what would become our West and Southwest) and Peru was exponentially worse. Until so much gold and silver was extracted so as to deplete the easy access, indigenous people crushed by disease and then-modern force of arms were joined by black Africans to work mines and fields at for free or subsistence living. Many died and suffered horribly in that effort.

Soon thereafter, those who had conquered those lands, occasionally joined by local intermarried peoples of differing races, began to resist Mother Spain and seek freedom from Spain’s insistence of paying relatively negligible sums, even to their ex-pat Spaniards, for the resources that had made them rich. But it was the ability of Europeans to extract extreme value from their colonies at remarkably low cost that propelled those of white European culture and ethnicity into the mega-wealth of modernity. See any parallels in the growth of the United States, particularly post-WW2? A strong dollar versus most of the rest of the world, even including Europe, struggling to rebuild after global devastation. We bought those cheap foreign goods in huge volumes.

Sure, Marshall plan helped accelerate that recovery, but bottom line, that muscular dollar allowed the United States to import natural resources and manufactures based on cheap labor for a pittance of what replicating those efforts (if even possible) at home. Post-WW2 America was a period of massive subsidized higher learning, housing support and the growth of our own consumer-driven economy, driven by a new era of clever marketing for Americans to buy more than they needed, to “keep up with the Joneses.” “Mad Men” on steroids.

Nobody in that era screamed at those supplier nations, “You are ripping us off with your cheap products! You are killing our local jobs!” We were enjoying amping up our standard of living, migrating the bulk of our jobs out of the “dirty” world of farming and resource extraction (notably Texas crude) into the clean and massively more lucrative service economy. Migrants (quasi-slavery) proliferated in local US agriculture as technology (service-based) improved that industry such that less than 2% of our labor force worked the fields while agribusiness exported 20% of its aggregate output to massive profitability. Engineering, creative intellectual property, mastering the global financial infrastructure and academically driven innovation now generated 80% of our jobs and created the effective American hegemony over the global trading structure. With cheap imports, we simply migrated most of our new jobs into new and more profitable sectors.

The result was unavoidable: a sweeping global trend, conspiracy theory believing masses, and the autocrats who used the coattails of this populist movement to tell those masses that all that we had benefitted from was bad. Ignorant leaders, promulgating toxic fabrications, became the excellent purveyors of blame. The great mobility/productivity accelerators, the truly greatest job creators in American history, higher education and skill training were a cast as elites exploiting traditional working-class Americans, a notion that was seemingly confirmed in the increasing globalization of all levels of trade. While there was some truth in some of that assessment – we did not educate those displaced with new skills – there was the harsh reality that those who did not meld with the times would be left behind. The world is competitive. As we demean the true job creators – primarily sophisticated training and higher education – we decimate our competitive advantage. We are never going to recapture our manufacturing past… nor should we want to. Our competitors, notably China, are ramping up such training and higher education.

Why this exploration of the past? Because the Western powers got rich and powerful by exploiting foreign regions to secure economic benefits at levels that had never been seen before. Cheap goods were had by the white Western world’s exploitation of regions willing (or forced) to provide their minerals, fossil fuels, agricultural products and manufacturers to those colonial powers at unbelievably low cost. I do not recall those Western nations excoriating these nations providing such values at bargain rates as “ripping the colonial powers off.” Those “trade imbalances” provided nothing but underlying inexpensive imports that made those Western colonial powers thrive, reveling in wealth that would make even Scrooge McDuck blush.

The notion of simply examining the dollars spent on foreign goods as a toxic balance of payments deficit is colossally inaccurate. There is an offset that is missing: the value of the goods received. And when that trade deficit is only measured in the value of tangible goods, when the bulk of our international revenues (and 80% of our non-governmental jobs) are generated from our service sector, the distortion is magnified exponentially. In short, Donald Trump’s obsessive-compulsive belief in the glory of massive tariffs is one more massively big lie from the Father of Toxic Mendacity.

Trump had to dig into the ash-heap of economic outliers, based on an online search by his son-in-law, Jared Kushner, for a potentially “credible author” on the subject of the benefits of major tariffs. That bizarre and somewhat random search produced Peter Navarro (pictured above), a Harvard-educated conspiracy theory spouting economist who has been the President’s basis for his own misplaced belief in tariffs. Jailed for contempt, derided by most of the primary economists in the nation, Navarro is and was Trump’s slender thread to justify that massive deployment of tariffs would produce major government revenues to reduce the deficit, fix that magical term “trade deficit” and reshore traditional levels of manufacturing to our rust belt and beyond. All lies. And still, Trump tells us that those nations providing us with inexpensive goods, which we could never manufacture here at anything near an affordable price, as “ripping us off for decades.”

I’m Peter Dekom, and as the nation’s economy unravels to a level that may never be restored, I wish we had educated people running our nation because: “Those who do not study history are condemned to repeat its mistakes.”

What?

 

What?

Is Going on Here?

There’re a whirlwind of issues flurrying about. “Efficiency” seems to ratify an “ends justify the means” approach to governance. The Constitution no longer seems a deterrent. A man, who in my opinion, suffers from Aspergers syndrome (a mild form of autism that often manifests itself in focused pockets of sheer brilliance and a warped if not severely limited capacity in everything else), has been selected by the President of the United States, who himself believes he is God’s anointed one to rule America, to slash government waste. At least, that’s what the mandate was. Elon “don’t burn my Teslas” Musk instantly pledged that he could cut $2 trillion in corruption, fraud and waste from the federal budget.

Federal agencies were closed, tens of thousands of federal workers were told to leave (most of whom were veterans in government jobs), and the massive impact of all this cutting led to government denying food and medical aid to many impoverished peoples overseas, loyal federal workers with decades of experience and expertise were now stranded without a paycheck, and federal agencies were unable to service citizens with legitimate needs… as rich bigwigs celebrated the layoffs at the IRS, eliminating the staffing required to audit the complex tax filings of the tax avoiding/evading mega-wealthy class.

Well, then Mr Musk downsized the expected savings, cutting his expectations in half, down to a mere $1 trillion. Yet, as reported by the March 12th Associated Press: “Overall [federal] spending rose by $40 billion, a 7 percent increase compared to the same month last year… According to the Treasury Department's monthly statement for February, direct spending surged by $29 billion compared to the same month last year. This is primarily due to a $10 billion increase in debt servicing, which reached $86 billion, and a $14 billion rise in tax credits and related payments.”

By the time the cabinet met in early April, the DOGE spending cut target was reduced to $150 billion, a 92.5% lower result than was first promised to the America people. Maybe, that spending cut was not a spending cut in the first place. Ya think?! Somehow, shock and surprise, those cuts and workforce culling were focused on programs Republicans have been trying to eliminate since WWII. They also came at a time when Trump’s mega-contributors were counting on MAGA legislation to extend and then seriously expand federal tax cuts that would benefit less than 5% of the population with any meaningful reduction for the rest. MAGA legislators were focused on federal budget – even noting the current worker-retiree financing structure for Social Security has been obsolete for decades – instead of supporting the necessary revenue to balance the budget.

This is where Trump’s obsessive-compulsive behavior kicked in. After shopping for any trained economist who shared Trump’s bizarre belief in the curative power of tariffs, a search led by son-in-law Jared Kushner during Trump1.0, an extreme outlier economist, who somehow got an advanced degree from Harvard, was picked as Trump’s mega-tariff justifier-in-chief: Peter Navarro… the same Peter Navarro who served four months behind bars for a contempt.

As the plan to roll out a new set of huge tariff increases, a strange and byzantine formula was devised (combining a trade deficit factor with hard tariff numbers) to justify what would turn out to be one of the most destructive governmental policies ever implemented, one that had the United States turn on its closest allies and decried the litany of lower-priced goods that American consumers loved and relied upon as “ripping us off.” Huh? They sell us stuff we want at absurdly lower prices, and they are ripping us off? First came absurd tariffs, especially against neighboring countries like Canada and Mexico. And an even bigger tariff scheme against China, perhaps the only major nation with whom the United States has genuine trade issue. Retaliatory tariffs followed, the markets crashed big time; all the economic indicators trended severely downwards.

What was happening in that marketplace that picks up US debt from our federal deficit spending, where interest-bearing treasuries are sold, was a threat ordinary Americans may have. And yet, that bond market dwarfs the stock (equity) market by a huge factor. Two factors pushed those holding US treasuries to begin to dump them and repelled traditional buyers who sat on the sidelines at the last treasury auction: the chaos that was now defining the US economy and the willingness of a US president to isolate his country and turn on his allies. Uh oh, Mr. Navarro missed that one… and the hike in treasury interest rates necessary to bring at least a few buyers back. Treasury Secretary Scott Bessent took Trump aside and explained that his tariff policies were playing havoc with the bond market, and that immutable interest charge in every federal budget was about to soar. The deficit was about to explode, not fall!

But as we alienated our traditional trading partner allies, lots of weird stuff was happening. More than just the boos when American NHL teams competed in Canadian venues… as our national anthem was played. More than the precipitous drop in tourism, big business, to the US. Credible economists, Wall Street itself, informed the nation that Trump’s policies were more than likely to precipitate a recession, if not stagflation (where the economy slows but prices do not). So, Trump paused the higher reaches of his absurd tariff plan, except as to China (and even there, succumbing to pressure from big donors, exempting electronics), for 90 days.

The tiny nations who were always subject to the whims of the rich and powerful countries, lined up to find ways to placate Trump and eliminate those killer tariffs. Trump claimed that as a big victory; it wasn’t. Europe was willing to negotiate, but only from a position of extreme economic power. China dug in, and noted that those rare earths, which they had in abundance and are vital for robotics, avionics, weapon systems and electronics, were blocked from export to the US. Although Trump swore he would bring China to its knees, I am more likely to become the next Tsar of Russia than is Xi Jinping’s surrender to Donald John Trump’s demands. Bully boy played into Xi’s plans. As we alienated our allies and nations around the world, Xi has begun a global tour seeking to replace the United States as the major trading partner… everywhere.

DOGE employees were already jumping ship back in February – where 21 DOGE staffers sent a letter of resignation saying “We swore to serve the American people and uphold our oath to the Constitution across presidential administrations,” refusing to use their technical expertise to “dismantle critical public services” – and Musk’s initial popularity, outside MAGA cult followers, was sinking faster than the Titanic.

As I have blogged repeatedly, there is no chance that this tariff approach will accomplish any of Trump’s stated objectives (generate massive new revenues such that the deficit will be seriously reduced, that there will be a near-term reshoring of manufacturing accompanied by a major boost in high paying blue-collar jobs and fix out trade imbalance), but how American consumers will suffer. We are now a pariah nation where the Trump pledge of “I am your retribution” has become the rallying cry of most of the rest of the planet against Trump’s losing effort to assert even greater economic control through his failing tariff plan.

I’m Peter Dekom, and as our economic ship sinks, a delusional Trump still harbors visions of conquering Greenland, the Panama Canal… and even Canada, perhaps beyond.

Don’t Reign on His Parade!

  

Trump on Truth Social   Trump Watching 7/14/17 Parade in Paris   Standard N Korean military show-off parade       Trump was ordained to rule

Don’t Reign on His Parade!

"And on June 14, 1946, God looked down on his planned paradise and said, 'I need a caretaker.' So God gave us Trump."

From a Trump 2.0 campaign video.

“The first time [Trump 1.0], I had two things to do ‒ run the country and survive; I had all these crooked guys… And the second time [Trump 2.0], I run the country and the world.” 

Trump in The Atlantic, April 28th.

“I don’t know. It seems — it might say that, but if you’re talking about that, then we’d have to have a million or 2 million or 3 million trials…We have thousands of people that are — some murderers and some drug dealers and some of the worst people on Earth… I was elected to get them the hell out of here, and the courts are holding me from doing it.”

Trump when asked if he supports the constitutional requirement of due process (Meet the Press, 5/4)

"Yeah, military tanks on our streets would not be good. If military tanks were used, they should be accompanied with many millions of dollars to repair the roads.” 

DC Mayor Muriel Bowser

To many, June 14th is flag day. This year, it also represents the 250th anniversary for the US Army. While a celebration ceremony was planned, a big fat showcase of American military power was not. Until someone noted that 14th was also President Trump’s 79th birthday, and HE wanted more. Only Congress can authorize a federal holiday, but the coincidence was just too tempting to our narcissistic President who posted the above AI-generated portrait of Pope Trump one week after he attended the real Pope’s funeral in Rome. The big parade, with an estimated cost approaching $100 million, is on. The Army planners are all over it: “Plans for the parade include 6,000 soldiers, helicopters, and armored vehicles, including Strykers, Bradley Fighting Vehicles, and possibly Abrams M-1 tanks, said the official who was not authorized to speak publicly.” USA Today, May 2nd.

Trump was inspired by the French celebration of Bastille Day (French independence day) during his first administration. It was huge, and French troops, missile and tanks were massively deployed. It was a rare demonstration of raw power for a Western nation; normally such ostentatious parades are typical signatures for autocratic nations like Russia, China and North Korea. Clearly, Trump was jealous.

His culture war, reflecting Trump’s America First “superiority” as well as his trade war assault on global economy, were, in his mind, destined to redefine his legacy as the single most powerful human being on Earth, a head of state that determined the state of the entire planet. And such a head of state, in his mind, deserved a celebration of his rippling and unbridled power. Happy Birthday, DJT! The nation adores you and has given you a mandate to rule… absolutely. Prove it to the world with a self-aggrandizing show of your raw military power!

Ever since Trump’s survival of an assassination attempt at a June 13, 2024 Butler, Pennsylvania, the already pervasive view among evangelicals that Trump was anointed to be US President exploded in the Christian press and many red state periodicals, as if citing a proven fact. And while the above AI-created photo was arguably posted as a joke, there was profound truth underlying that purported humor.

I’ve already blogged that destruction of the perceived “deep state,” not eliminating fraud and waste, was the real DOGE mission under Elon Musk. The flattening of the institutions of governance, the elimination influencers with the power to sway the public, the elevation of the “culture” war with white Chirstian nationalist zeal… were necessary precursors to Trump’s total control of the nation. See my recentIs It Merely a Constitutional Crisis Or a Bloodless Coup D ’Etat? blog. Surely, an autocrat’s dream parade would be a confirmation to the world, particularly to Trump’s opponents, that his ability to crush them was beyond question.

The $100 million cost of the parade was “peanuts compared to the value,” said Trump as the House debated cuts to Medicaid to enable Trump’s tax cuts for the rich. Indeed, such a parade, with ranks of soldiers saluting Trump in the stands as they marched by, would be a profound affirmation that Trump’s MAGA minions were now the culture that mattered, now that Trump will have confirmed his reign as King of “at least” the United States has begun. After all, only a ruling autocrat gets a parade like that. That Army anniversary… well that was merely a coincidence. 

I’m Peter Dekom, and I wonder how many loud arrogant man-screams of power the rest of the country needs to understand the danger this nation faces… and is willing to oppose that effort with everything they’ve got.

Is It Merely a Constitutional Crisis Or a Bloodless Coup D ’Etat?

  

Is It Merely a Constitutional Crisis Or a Bloodless Coup D ’Etat?

Hungary’s Viktor Mihály Orbán was duly elected and has served as that nation’s Prime Minister since 2010, as leader of Fidesz, his conservative party. He is MAGA’s poster-boy for a nationalist autocrat who orchestrated his repressive illiberal government in predictable stages. Taming the judiciary and the media, coupled with his arrests of dissidents, pressing for “correct thinking” in local schools, censorship, vigorous exclusion of encroaching immigrants, and tapping mega-rich oligarchs to purchase hammered media assets at distressed sale values, made Orbán wildly popular with American conservatives. MAGA officials often traveled to Budapest for rightwing gatherings, and Orbán appeared often at GOP functions in the United States… to adulation as a man who had converted Hungary into a perfect MAGA state.

But what propelled Orbán to power was his fervent embrace of reinforcing Hungarian culture above all else. White Magyar peoples, a mix of Roman Catholics and members of the Calvinist Reform Church (Protestant), even though in recent years, religious affiliation had fallen to 57% of the population. But for all practical purposes, the religion and the state were inseparable: when Orbán and his Fidesz Party gained leadership in 2010, most of the church property nationalized under communism remained under the control of the Hungarian government. A convert from Communist mandated atheism, Orbán was quick to remake his government as one of the last defenders of Christian culture in Europe. Everything else was the Hungarian equivalent of “woke.”

Orbán’s autocracy was easily imprinted on the Hungarian people. Even as he sealed Hungary’s borders from “invading” immigrants, the lily-white Magyars’ Hungarian language was not derived from any neighboring tongue. It is complex and difficult to learn, adding one more deterrent to peoples escaping Middle Eastern turmoil and desertification. Homogeneity seemed to seal Orbán’s complete control of his population. As Hungary was watching a drop in local birth rates, his push against immigrants was replaced with major incentives for Hungarian women to have increasingly larger families. Except Hungary’s position as an EU/NATO exposed its people, particularly rising generations yearning for the freedom than Orbán so completely repressed under this culture war.

Thus, there are now rising political forces, a charismatic opponent who has risen high enough the thwart arrest, that could change all of this. After all, Hungary still has elections, and virtually everything Orbán has stood for is an anathema to a very sizeable constituency. But as evidenced by recent protestors carrying a message to American voters: it is much easier to stop a rising autocrat at the beginning – before the infrastructure of repression is solidified – than fighting for your rights against such formidable institutionalized cultural domination. Hungary’s youth see the rest of the world via the Internet, so when Orbán moved to tax and control the Internet, the protests became massive (see above picture).

I’ve written this blog about the metaphor of Hungary to us, not just because what I see is the intentional erosion of the US Constitution by a mentally unstable Donald Trump using an equally mentally unstable Elon “I’ve leaving now” Musk. It happened in Hungary. After several decades under Orbán, this throwback, dictatorial culture war began to find growing opposition, and much like the rejection of rising autocracy in Poland, Americans should take heed that Trumpian/MAGA autocracy does not work. Culture wars are predicated on demonization and hatred, vilification that self-destructs over time. They accommodate a singular perspective that seldom keeps up with modernity, caters to rich incumbents above all else and always smacks of cronyism and corruption.

So, there are some cold, hard facts about what is happening in the United States right now. Fortunately for us, the missteps of the inept Trump administration are, obvious with its inane belief in tariffs and notion that trade imbalances only benefit the seller. Cheap goods benefit the importing nation far more than countries that export. While narrow-focused tariffs have a place in global economics, the broad-based Trumpian approach never works. The resultant retaliation and erroneous assumptions about major tariffs scheme misfired; we couldn’t bring back old-world manufacturing to a nation where 80% of non-governmental jobs are in the service sector,

There is no way outside of serious automation that we can return to generational labor patterns, as mega-out-of-touch Commence Secretary Howard Lutnick predicts. No, Howie, that is not the American dream. And don’t watch the fickle and volatile stock market, and remember, it takes months for the job market to reflect serious downturns. Instead, look at the traffic in our nation’s major ports. In early May, for example, Los Angeles/Long Beach, the largest harbor in the US, saw a reduction in container and ship traffic of between 35-40%. The chickens are roosting.

And as for that “constitutional vs coup” issue that prompted this blog in the first place, President Trump has written executive orders intended to implement almost half of the Project 2025 goals, all within his first 100 days, a record by a long shot. As “brown-shirt” ultra-rightwing senior Trump advisor, Stephen Miller, drools, fantasizing how our primary and secondary schools will produce “patriotic graduates,” cherishing white Christian nationalist values, the nation descends into freefall and soon to be an also-ran, former great power.

The collapse of the United States was very much programmed into the MAGA culture war, vectors mired in wishful thinking and groundless mythology. Elon Musk was never focused on reducing federal spending; his primary directive was to eradicate the federal bureaucracy (the “deep state”) which was this nation’s less-than-obvious first defense against autocracy. When people complained that the slash-and-burn approach did not present a post-decimation structure to resume government, perhaps it was because there was no intention to replace most of what was removed. Fewer experts in federal government, more of the whims of our Dear Leader could be implemented directly.

The Constitution had to be taken down as well. Surely the legislature and the courts would agree that the United States was at war, a battle against the invasion of undocumented immigrants. But that wasn’t a “war” such that constitutional protections could vitiated. To MAGAns, the Enemy Aliens Act of 1798 was intended to protect White nationalist culture. Trump’s attacking the First Amendment’s support for a free press, the right of people in the nation peacefully to protest against governmental polices, the prohibition against the establishment of a state religion, the term limits imposed on the presidency (22nd Amendment), the birthright citizenship mandate (14th Amendment), the right of those within our borders to have the right of due process before being deprived of liberty or property (5th and 14th Amendments), the relegation to the federal courts of the exclusive right to interpret statutes and the Constitution, etc., etc. were all limitations on legislative and executive powers, the guardrails of our democracy. Bye, bye!

And if those could be eliminated, either directly by interpreting them out of existence, or by appointing “Stepford wives” judges committed to the Big Boss’ directives without question… And if the Constitution could be eroded into meaninglessness, if Congress were too scared to act in contravention Boss Trump’s orders, if the federal courts (intimidated with threats) gave the Boss deference, and if that body of experts with decades each of relevant governmental experience could be fired, then, my fellow Americans, the least of our major fears should be our facing a constitutional crisis… that would have long since passed… it will be that a bloodless coup d’état is the new source of governance… and Boss Trump and his designated minions would be the unappealable prosecutors, judges, juries and executioners. No Constitution. No guardrails.

I’m Peter Dekom, and please listen to the messages from people living in former democracies who now wished they had acted before their dictators dug into their governing infrastructure so as to make return to freedom an unbearable and tortuous journey.