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.