Speaker Johnson Prays for Cuts in Medicaid That Will Throw Grandma Out of her Nursing Home, Into the Street
Happy Valentine’s Day, My Fellow Americans
Actually, It’s Not Just Misunderstand and It’s Not Just Poor Strategery—It’s Magical Thinking
The two posts immediately below deal with Trump’s fundamental misunderstanding of how money and interest rates work. One quotes in full a Wall Street Journal Editorial Board piece published late yesterday. The other gives some context: it explains why the fact that these truths are now coming from the WSJ Editorial Board, not some other publication, is a man bites dog story, not a mere dog bites man piece of news.
This is correct as far as it goes, but it does not go far enough. There are all manner of things that I do not understand. But that does not mean that I engage in magical thinking. I do not fancy myself the God of Genesis 1—who just says things, and then they are so.
King Canute knew that he could not make the tide turn back just by telling the tide to turn back.
Trump thinks that King Canute was wrong.
We have elected someone with severe mental illness.
Those who voted for him are getting the president they richly deserve.
Trump’s Brain
The WSJ Editorial Board Tells Donald That He Doesn’t Know Shit From Shinola, and That His Approval Rating is About to Sink Like a Stone
The Wall Street Journal Editorial Board writes,
Trumponomics and Rising Inflation
The President calls for easier money even though consumer prices keep rising. Does he want even higher prices?
The Editorial BoardFeb. 12, 2025 at 5:33 pm
“Interest Rates should be lowered, something which would go hand in hand with upcoming Tariffs!!!” Mr. Trump posted on his social-media site. The layers of intellectual confusion here are hard to parse, especially since higher tariffs will mean higher prices on the affected goods. But perhaps the President wants the public to look elsewhere when assigning blame for rising prices.
Yet if he’s trying to blame the Federal Reserve, which controls short-term interest rates, he has the analysis backward. Rising inflation means the Fed must be more cautious in cutting rates. This is how financial markets read the news that the consumer-price index (CPI) rose 0.5% in January. Long bond rates rose sharply, with the 10-year Treasury note popping to 4.63% from 4.53%. This reflects market worry over inflation.
The concern is warranted based on the trend in CPI, which has risen each month since a 0.2% increase in October. The 12-month increase in CPI is now back to 3%, up from a recent trough of 2.4% in September. So-called core prices, less food and energy, rose 0.4% for the month and are now up 3.3% over the last 12 months.
The price increases were broad-based, hitting insurance, used cars and trucks, airline fares, medical care, haircuts, day care, sporting events, cable television, and more.
Mr. Trump isn’t responsible for this after only three weeks in office. But someone should tell him that the mistake goes back to the Fed’s premature interest-rate cut of 50 basis points in September. Long bond rates shot up immediately and have stayed higher, but the Fed still cut another 25 points in November.
Fed Chair Jerome Powell seems to recognize that mistake because he has been saying for weeks that the central bank is in no rush to cut further. The last thing Mr. Trump should be doing now is demanding that Mr. Powell cut rates further and faster—unless the President wants inflation to resume its Biden-era climb.
The Powell Fed is likely to ignore Mr. Trump, and well it should. But the President’s demand illustrates another risk of Trumponomics. As a real-estate investor, Mr. Trump has long been an easy-money guy. He likes low rates and a weak dollar, which could lead to higher prices, all other things being equal.
As a political matter, an inflation revival may be the biggest threat to the Trump Presidency. Mr. Trump was elected as voters reacted to inflation and falling real incomes under Joe Biden. Real average earnings are flat over the last three months as inflation has bounced up. If this persists, Mr. Trump won’t have a 53% job approval rating for long.
Schadenfreude, Y’all
Dumb and Dumber
Wall Street Journal Editorial Board, The Dumbest Trade War Fallout Begins: Canada and Mexico vow retaliation in response to Trump’s tariffs, amid new economic uncertainty
What Mango Mussolini Thinks He’s Doing—A Clever Way to Transfer Wealth from the Poor to the Rich
The WSJ doesn’t say it, so I will. As far as I can tell, Orange Jesus knows full well that tariffs are going to increase inflation, cost jobs, and hurt his supporters. But he thinks they are a complicated, and therefore clever, way to generate a shit load of revenue and thus finance tax cuts for the billionaires.
As for the foreigners, Trump hates them all, but he particularly hates American allies. As the WSJ points out, Mexico and Canada will be hurt even more than his American supporters will be hurt. For Mango Mussolini, that’s a feature, not a bug.
Some Thoughts from the Wall Street Journal Editorial Board
Now back to the Wall Street Journal Editorial Board, which writes,
“WILL THERE BE SOME PAIN? YES, MAYBE (AND MAYBE NOT!). BUT WE WILL MAKE AMERICA GREAT AGAIN, AND IT WILL ALL BE WORTH THE PRICE THAT MUST BE PAID,” Mr. Trump posted on Truth Social on Sunday morning. He also included a blast at these columns for leading the “Tariff Lobby” after our Saturday editorial called his 25% across-the-board tariffs on our friends and neighbors “the dumbest trade war in history.”
We appreciate Mr. Trump’s attention, though we’re anti-tariff and not lobbyists. But bad policy has damaging consequences, whether or not Mr. Trump chooses to admit it. Mr. Trump can’t repeal the laws of economics any more than Joe Biden could on inflation.
***
Tariffs are taxes, and when you tax something you get less of it. Who pays the tariff depends on the elasticity of supply and demand for the specific goods. But Mr. Trump wants American workers and employers to take one for the team. Hope you don’t lose your job or business before the golden age arrives.
The economic fallout began Saturday evening as Canada said it will retaliate with a 25% tariff on $30 billion (Canadian dollars) of U.S. goods, with another C$125 billion to follow in three weeks. Mexican President Claudia Sheinbaum also promised to retaliate.
Canada’s new border taxes will hit orange juice, whiskey and peanut butter—all from states with GOP Senators. Prime Minister Justin Trudeau said Ottawa’s tariff list would also include beer, wine, vegetables, perfume, clothing, shoes, household appliances, furniture and much more. He said Canada could also withhold critical minerals.
Note that Canada’s Conservative opposition leader, Pierre Poilievre, also called for retaliation. Mr. Poilievre is the favorite to be the next Prime Minister and he rightly said the trade war will damage both countries. But he said Canada had to stand up for its “sovereignty” and protect its economic interests.
Mr. Trump’s tariffs are already roiling North America’s energy markets, which are highly integrated. The President implicitly recognized the risk by hitting Canada’s energy exports to the U.S. with a lower 10% tariff. But that will still hurt Midwestern refiners that rely on Canadian oil. Canada and Mexico could send more of their oil elsewhere for refining, perhaps even China.
Canada’s expanded Trans Mountain pipeline runs from Alberta to the West Coast and has spare capacity. It could be used to increase tariff-free oil shipments to Asia that would hurt California refineries that now import oil from Trans Mountain. California could have to import more oil from the Middle East.
Mr. Trump says the tariffs will revive U.S. manufacturing. But Jay Timmons, CEO of the National Association of Manufacturers, said in a statement that “a 25% tariff on Canada and Mexico threatens to upend the very supply chains that have made U.S. manufacturing more competitive globally.”
He added that, while his members understand the need to reduce fentanyl flows to the U.S., “the ripple effects will be severe, particularly for small and medium-sized manufacturers that lack the flexibility and capital to rapidly find alternative suppliers or absorb skyrocketing energy costs.”
Many more trade groups have criticized the tariffs, including even U.S. aluminum makers who benefited from tariffs in the first term. Canada accounts for more than half of U.S. aluminum imports (owing to its cheap hydropower) that secondary and downstream manufacturers use.
***
None of this means the Trump tariffs will tip the U.S. economy into recession. U.S. growth may be strong enough to absorb the blow from tariffs, as it was after Mr. Trump’s more modest levies in the first term. But the same can’t be said about Mexico and Canada, where growth is weak and which depend on U.S. markets for much of their GDP.
The tariffs may also not cause a surge in the general U.S. price level. Overall inflation depends far more on the Federal Reserve’s monetary policy. But prices will increase for most tariffed goods, which will be painful enough.
The tariff broadside also adds new policy risk and uncertainty that could dampen business animal spirits. Markets have been pricing in an assumption that Mr. Trump would step back from his most florid tariff threats, or limit tariffs to China.
The hammer blow to Mexico and Canada shows that no country or industry is safe. Mr. Trump believes tariffs aren’t merely useful as a diplomatic tool but are economically virtuous by themselves. This will cause friends and foes to recalibrate their dependence on America’s market, with consequences that are hard to predict. How this helps the U.S. isn’t apparent, so, yes, “dumbest trade war” sounds right, if it isn’t an understatement.
Attacking Denmark and Other Horseshit: My Two Cents
Everybody’s got their take on the “Gulf of America” and other babblings from the Trump “news conference” yesterday.
As per usual, some espouse the view that Trump is playing some kind of three-dimensional chess.
May I humbly suggest that Trump has, for a long time, suffered from malignant narcissistic personality disorder and related mental diseases; that, to his portfolio of afflictions, he has recently added early stage dementia; that his mental and physical health are worsening by the day; and that handing him power was a breathtakingly irresponsible act.
The Richie Richs did it because they loved them some tax cuts back in 2017—and here in 2025, they would love them some more tax cuts.
What with the confusion in their Republican legislative ranks, I don’t think they’re actually going to get their tax cuts.
What with the tariffs, the deportations, and other reckless nonsense, I think the Richie Riches are going to wind up screwed, blued, and tattooed.
It couldn’t happen to a nicer bunch of guys.
The End of Accountability? “To See That Things are Hopeless and Yet be Determined to Make Them Otherwise”
Frank Bruni, What if Trump Doesn’t Need to Keep Any of His Promises?
Jerusalem Demsas, Does Democracy Even Work? One researcher tests the limits of “deliverism.”
George Packer, The End of Democratic Delusions: The Trump Reaction and what comes next
Bruni write many things, including:
If Americans under Trump are demonstrably and undeniably hurting as much as they were under President Biden, he’ll weave stories and hurl accusations that absolve him of responsibility and assign it to his political foes. And he’ll find many more takers than he would have before we could all customize the reports we receive so that our designated heroes remain unblemished, our appointed villains irredeemable, our biases affirmed.
And before our entrenchments in such cinched corridors of pseudoreality zapped our powers of discernment. “We’re living in a world where facts instantly perish upon contact with human minds,” George Packer wrote in The Atlantic this month. “Local news is disappearing, and a much-depleted national press can barely compete with the media platforms of billionaires who control users algorithmically, with an endless stream of conspiracy theories and deepfakes. The internet, which promised to give everyone information and a voice, has consolidated in just a few hands the power to destroy the very notion of objective truth.” …
The next best thing to results is illusions. And a record of accomplishments isn’t necessary in a hall of mirrors, not if it’s big and blinding enough.
By contrast, Jerusalem Demsas, who writes for The Atlantic, writes,
[T[he Democratic Party’s performance in the 2024 presidential election has led some to doubt whether the feedback loops necessary for good policy—and a healthy democracy—even exist.
This episode of Good on Paper pushes back against the pessimists. Interpreting signals from voters is complicated, and so much is contingent on which issues are salient when they head to the ballot box. But the political scientist Hunter Rendleman’s research indicates that when states rolled out Earned Income Tax Credit programs—a benefit for working-class Americans—voters rewarded governors who implemented the policy with higher vote shares and approval ratings.
“I think I’m an optimist on sophistication,” Hunter told me. “I think a lot of times political scientists are a bit pessimistic on individuals’ capacities to actually know what’s going on to them because it is quite complicated. But we don’t often set up our analyses or studies in a way to give voters the benefit of the doubt.”
George Packer, also writing in The Atlantic, tries for a balanced view:
The Trump Reaction is more fragile than it now seems. Trump’s behavior in the last weeks of the campaign did not augur a coherent second presidency. He will surround himself with ideologues, opportunists, and crackpots, and because he has no interest in governing, they will try to fill the vacuum and turn on one another. The Trump administration, with a favorable Congress, will overreach on issues such as abortion and immigration, soon alienating important parts of its new coalition. It will enact economic policies that favor the party’s old allies among the rich at the expense of its new supporters among the less well-off. It’s quite possible that, approaching 80, Trump will find himself once more among the least popular presidents in the country’s history. But in the meantime, he will have enormous latitude to abuse his power for enrichment and revenge, and to shred the remaining ties that bind Americans to one another, and the country to democracies around the world.
The Trump Reaction will test opponents with a difficult balancing act, one that recalls F. Scott Fitzgerald’s famous line about a first-rate intelligence holding two opposed ideas in mind while still being able to function. The Democratic Party has to undertake the necessary self-scrutiny that starts with the errors of Biden, Harris, and their inner circle, but that extends to the party’s long drift away from the most pressing concerns of ordinary Americans, toward the eccentric obsessions of its donors and activists. But this examination can’t end in paralysis, because at the same time, the opposition will have to act. Much of this action will involve civil society and the private sector along with surviving government institutions—to prevent by legal means the mass internment and deportation of migrants from communities in which they’ve been peacefully living for years; to save women whose lives are threatened by laws that would punish them for trying to save themselves; to protect the public health from Robert F. Kennedy Jr., the nation’s security from Tulsi Gabbard, and its coffers from Elon Musk. …
A few weeks before the election, Representative Chris Deluzio, a first-term Democrat, was campaigning door-to-door in a closely divided district in western Pennsylvania. He’s a Navy veteran, a moderate on cultural issues, and a homegrown economic populist—critical of corporations, deep-pocketed donors, and the ideology that privileges capital over human beings and communities. At one house he spoke with a middle-aged white policeman named Mike, who had a Trump sign in his front yard. Without budging on his choice for president, Mike ended up voting for Deluzio. On Election Night, in a state carried by Trump, Deluzio outperformed Harris in his district, especially in the reddest areas, and won comfortably. What does this prove? Only that politics is best when it’s face-to-face and based on respect, that most people are complicated and even persuadable, and that—in the next line from the Fitzgerald quote—one can “see that things are hopeless and yet be determined to make them otherwise.”
Facing MAGA 