The fragile architecture of American-led economic and technological exceptionalistic prosperity faces its greatest test since its origins in the years after the American Civil War. Ricardo Hausmann...
All sensible and persuasive, everything they're doing is economically depressive, especially the hoarding, but will it be enough to overthrow their AI-fueled oligarch machine anytime soon? I've heard Brexit has depressed growth by 10% but British politics are still stuck rearranging the deck chairs on the sinking ship of state. Rather than even trying to contemplate a new public-private partnership the global corporate order is trying to sever ties with democracy once and for all. I'm rooting for democracy, rooting for America, rooting for a liberal economic order that really factors in living wages and environmental sustainability. We might have the people, barely, but they have nearly all the institutional levers and guns. It's like watching an attempted murder-suicide pact unfold in slow motion. Hang on and hold out.
Britain's Chancellor of the Exchequer has put herself in a fiscal straitjacket, perhaps fearful of a Trussonomics meltdown if she doesn't. But the result, as in the US, is coddling the wealthy and reducing the social safety net, not the policies that Labour voters expected. After a year, it is clear that the growth the government expected is not happening, with Trump's import taxes making the UK economy even more precarious.
I am not as sanguine as you on the US. Stephen Miller has stated that he wants the US population to be 100 million white Christians. While this may be part of the plan to stoke fear and tilt the "democracy" towards keeping the GOP in power, if his wet dream was to be enacted in any way, how would the US even function?
In accordance with the smile curve, the US outsources manufacturing and retains design and marketing because those are higher profit margin activities. If the US eschews its competitive advantage, then that's not bullish for equities trading at historically high P/E's. Why do we do this? Because heavy industry is considered masculine, powerful, and profitable according to our gerontocracy's nostalgia. For them, steel is stronger than neodymium; coal and oil beat solar and lithium. Technology is changing, but our leaders are not.
Countries learned from the Asian currency crisis to hoard T-bills because the USD would be stronger and more stable than their domestic currency and debt. If the USD continues to fall against their own currencies, while becoming more volatile, then why would central banks put their reserves in T-bills? Why not a more diverse portfolio? Particularly if the Federal Reserve does not extend currency swaps in future crises.
The USD may remain the currency of trade, but not reserves. Perhaps that's good. I doubt it pushes interest rates up much. It probably reduces the US trade deficit. But the era of cheaper financing and cheaper imported goods will be over, and the US will feel poorer for it.
DeLong is brilliant, far smarter and better read than I am, but like many people writing about Trump and what he calls TRUMPXIT he is giving Trump far too much credit/blame and giving the Christian Nationalists who are the driving force behind most of what is happening to the United States today too little attention. All critical thinkers should understand that Trump is a childlike psychopath who can be easily manipulated to carry out the goals of the Christian right which has a long and enduring history in North America from the Puritans to today’s Capitol Ministries and Ralph Drollinger, Bible Teacher to the “stars” of Christian Nationalism who today control much, if not most, of the United States government. Mike Johnson, John Thune, Russel Vought, Kristi Noem, Pam Bondi, Brooke Rollins, Linda McMahon, Pete Hegseth, Karoline Leavitt, and many others can reasonably described as Christian Nationalist “disciples” of Drollinger and other Christian Nationalist preachers.
Trump is an ignorant creature with near zero thinking skills, much less critical thinking. By all reports he has the attention span of a small child and doesn’t read. The former daily NatSec briefing is gone, replaced by infrequent videos in the Fox News style he loves. It is important to, as the saying goes, compare and contrast, his lifelong utterances in various forums with the policies he is enacting through EO’s. Only two really stand out, his lifelong racism and his tariff obsession. He is not a Church goer but was in fact brought up with family exposure to the Calvinist theology of racism and the views centered around the God given and desired dominance of white men over women, the exploitation of nature and other peoples, and the God dictated hierarchy of father, family, and church, where the government’s only role is enforcing Gods true will through property rights, policing, and a military to keep out invaders. His lifelong psychopathic tendencies made him an easy mark for the Christian Nationalists. Give Trump something to hate and hurt and he is a happy puppy. He had little known lifelong animosity to education, both higher and public, to science, or even to programs like Medicaid. But these were all lifelong targets for dismantling of Russell Vought and others in the Calvinist derived evangelical white Christian Nationalism. Trump didn’t manifest the Christian Nationalist support for Manifest Destiny domination of the western hemisphere now evident in his comments on Greenland and Panama. But all of this has deep roots in the Calvinist theology which has been powerful force in US history. Autarky is a dominant theme in Calvinist economics. It was clearly evident to informed people in the US South that it was rapidly falling behind the North economically but the cultural factors that give rise to industrialization were an anathema to the Calvinist vision of isolated individual men dominating a system of autarky. As an example DeLong knows far more about than I do, railroads thrive when there is trade and movement of people in both directions and the South, being adverse to both bilateral trade and free movement of people, had fallen behind the efficiency of railroads in the North. Similarly there was little support for higher education in the South, as higher education was known to be the greatest threat to the world view of the Calvinist Christian men who dominated the South.
The Golden Age Trump refers to has a long and enduring history in Calvinist theology and it isn’t economic in nature at all, except for exploitation of Gods given natural resources by white men. Again, it is easy for the large organized movement of Christian Nationalism to manipulate Trump to achieve their goals which in most ways are identical to their earlier views on Gods plan for (white)man which was the backbone of the South, not just pre-civil war but extending through reconstruction and all the way to today in the minds of the Calvinist Christians who are now in power in the US.
I think DeLong is missing the forest for the trees on Trump as the chaos monkey driving the inevitable decline of the United States. What is happening is being guided by the long held dreams of Calvinist Christians, now manifest in Christian Nationalism. The isolation of the United States is the dominant goal. Many even know this is economically damaging and will always be, the economic history of the South is not unknown to some of these people. The Golden Age has nothing to do with economics, it is about an extremist religious view dominating the isolated United States without other “tribes”. They know it will be economically damaging. It is all in the plan, and they are carrying it out with amazing speed.
Personally, I highly doubt little Donnie absorbed any Calvinism. I also think you overestimate the coherence of the "Christian Nationalists." It's cosplay plus crude self-flattery (I'm Christian; hence, always correct). Kakistocracy is what we're seeing.
No, it is absolutely not Kakistocracy. Vought, Bondi, Noam, and others have been planning this for a long time, especially Vought. Almost all the absolute destruction of the United States was articulated and planned ahead of time. Destroying science, higher education, environmentalism, and most of government has been Vought's (and all of Christian Nationalism) plan and they have executed it better than Vought likely thought they could.
But they beg for distributional discussions. Virtually by definition, exports of IP benefit the shareholding class, which must have a dollar-weighted median above the 90th percentile of wealth
While issues with “Happiness = Reality minus Expectations” have a majority that demagogic kleptocrats can use to create a prisoners dilemma for both the lower-income victims of MAGA and those of us who think we gain best from robust opportunity for all
If we hope to continue leveling the playing field as we tried in the mid-late 20th C, we need to shift focus from the macro costs to the median voters’ understanding of how THEY are being exploited
Suppose that you are correct and that trading partners will seek ways around the US economy? Where do they go? The US economy remains the largest on the planet in nominal terms. What does the new global supply chain and trading flows look like? The EU is large, but wants to keep China at bay. India? Other BRICS countries? It seems to me that the US is the de facto major trading partner.
I noted this week that Trump's threats to end trade talks with Canada ultimately led to Canada backing down and canceling its digital services tax. Will Britain suddenly find its trade deal with the US similarly ended unless it cancels its desire to impose such a tax? And what about the EU?
Unlike early 20th-century Germany, the US has no peer country/countries to militarily oppose it. What if the US decides to return to Great Power actions, doing as it pleases? Invade Greenland for its minerals and access to the Arctic? Allow Russia to make war on Europe, using its hybrid war approach to undermine the opposing democracies, perhaps creating friends with autocracies in the EU, and try to create more?
Overarching all this nonsense is unabated climate change that is reducing agricultural output and creating both climate and economic refugees. With the US and Europe becoming fortresses rather than help? The US doesn't want to help, that is certain, and cares not one whit about trying to spread the idea of democracy by doing good deeds. Only China seems to have the resources to do this, but promoting its political system.
Trump and his acolytes seem intent to be pulling the roof down in that edifice called the USA. Why he has so many enablers in power staggers me. Are they all hoping to grab spoils for themselves in the ruins?
Do the math! The US is 4.5% of the world population and a bit under 20% of world GDP. Without immigration, which has been calculated to be responsible for nearly all of US growth since the pandemic, with native demographics and birth rates, it will be hard, if not impossible, for the US to grow much over the next couple decades. Using that and existing numbers for world GDP growth the US will be less than 10% of world GDP in 20 years, and 1% in 100 years. One of the dominant engines of growth has been US science. The FY2026 cut to the NSF is 62%. Under the OBBB the funding for ICE, deportations, the wall, and ICE will be 10x NSF funding. All of that ICE related funding is a pure deadweight cost contributing zero to real growth, while deporting workers is a pure first order loss to the economy. Brad could do a better job of putting numbers to this but it is economics 101, reduce the workforce and prime factors for growth and economic growth with fall precipitously, perhaps forever.
There should be more of this to contextualize numbers and significance. Note that there is an attempt to increase the white population from "quiverfull" to trad wives and trying to reduce women in the workforce. It won't be enough, but that seems to be a plan, although it will mainly reinforce patriarchy than increase the population.
I know that Japan is a special case but it has not welcomed immigration, yet did have a huge growth spurt. I have read that Japan is becoming more welcoming to immigrants. Has this had any economic and social effects yet?
It might be interesting to compare and contrast the various countries openness and growth.
Does America's economic position have any thing to do with being a lightly populated continental sized country full of natural resources? I think we were just very lucky to have open spaces and be open to immigration.
I believe that the basic truth is that Donald Trump just really, really hates America. He has never been able to get the ‘respect’ he thinks he deserves. He’s not out to make America great again. He’s out to make America grovel at his feet. https://open.substack.com/pub/jonthinks/p/donald-trump-hates-america?r=mrvx1&utm_medium=ios
I don't think it's quite that coherent. He is a chaos monkey, performing for what seems to him more bananas.
All sensible and persuasive, everything they're doing is economically depressive, especially the hoarding, but will it be enough to overthrow their AI-fueled oligarch machine anytime soon? I've heard Brexit has depressed growth by 10% but British politics are still stuck rearranging the deck chairs on the sinking ship of state. Rather than even trying to contemplate a new public-private partnership the global corporate order is trying to sever ties with democracy once and for all. I'm rooting for democracy, rooting for America, rooting for a liberal economic order that really factors in living wages and environmental sustainability. We might have the people, barely, but they have nearly all the institutional levers and guns. It's like watching an attempted murder-suicide pact unfold in slow motion. Hang on and hold out.
Britain's Chancellor of the Exchequer has put herself in a fiscal straitjacket, perhaps fearful of a Trussonomics meltdown if she doesn't. But the result, as in the US, is coddling the wealthy and reducing the social safety net, not the policies that Labour voters expected. After a year, it is clear that the growth the government expected is not happening, with Trump's import taxes making the UK economy even more precarious.
I am not as sanguine as you on the US. Stephen Miller has stated that he wants the US population to be 100 million white Christians. While this may be part of the plan to stoke fear and tilt the "democracy" towards keeping the GOP in power, if his wet dream was to be enacted in any way, how would the US even function?
I'm not optimistic about the US, rest assured; I'm anxious, like everybody else, but hopeful only because I see no better alternative.
In accordance with the smile curve, the US outsources manufacturing and retains design and marketing because those are higher profit margin activities. If the US eschews its competitive advantage, then that's not bullish for equities trading at historically high P/E's. Why do we do this? Because heavy industry is considered masculine, powerful, and profitable according to our gerontocracy's nostalgia. For them, steel is stronger than neodymium; coal and oil beat solar and lithium. Technology is changing, but our leaders are not.
Countries learned from the Asian currency crisis to hoard T-bills because the USD would be stronger and more stable than their domestic currency and debt. If the USD continues to fall against their own currencies, while becoming more volatile, then why would central banks put their reserves in T-bills? Why not a more diverse portfolio? Particularly if the Federal Reserve does not extend currency swaps in future crises.
The USD may remain the currency of trade, but not reserves. Perhaps that's good. I doubt it pushes interest rates up much. It probably reduces the US trade deficit. But the era of cheaper financing and cheaper imported goods will be over, and the US will feel poorer for it.
DeLong is brilliant, far smarter and better read than I am, but like many people writing about Trump and what he calls TRUMPXIT he is giving Trump far too much credit/blame and giving the Christian Nationalists who are the driving force behind most of what is happening to the United States today too little attention. All critical thinkers should understand that Trump is a childlike psychopath who can be easily manipulated to carry out the goals of the Christian right which has a long and enduring history in North America from the Puritans to today’s Capitol Ministries and Ralph Drollinger, Bible Teacher to the “stars” of Christian Nationalism who today control much, if not most, of the United States government. Mike Johnson, John Thune, Russel Vought, Kristi Noem, Pam Bondi, Brooke Rollins, Linda McMahon, Pete Hegseth, Karoline Leavitt, and many others can reasonably described as Christian Nationalist “disciples” of Drollinger and other Christian Nationalist preachers.
Trump is an ignorant creature with near zero thinking skills, much less critical thinking. By all reports he has the attention span of a small child and doesn’t read. The former daily NatSec briefing is gone, replaced by infrequent videos in the Fox News style he loves. It is important to, as the saying goes, compare and contrast, his lifelong utterances in various forums with the policies he is enacting through EO’s. Only two really stand out, his lifelong racism and his tariff obsession. He is not a Church goer but was in fact brought up with family exposure to the Calvinist theology of racism and the views centered around the God given and desired dominance of white men over women, the exploitation of nature and other peoples, and the God dictated hierarchy of father, family, and church, where the government’s only role is enforcing Gods true will through property rights, policing, and a military to keep out invaders. His lifelong psychopathic tendencies made him an easy mark for the Christian Nationalists. Give Trump something to hate and hurt and he is a happy puppy. He had little known lifelong animosity to education, both higher and public, to science, or even to programs like Medicaid. But these were all lifelong targets for dismantling of Russell Vought and others in the Calvinist derived evangelical white Christian Nationalism. Trump didn’t manifest the Christian Nationalist support for Manifest Destiny domination of the western hemisphere now evident in his comments on Greenland and Panama. But all of this has deep roots in the Calvinist theology which has been powerful force in US history. Autarky is a dominant theme in Calvinist economics. It was clearly evident to informed people in the US South that it was rapidly falling behind the North economically but the cultural factors that give rise to industrialization were an anathema to the Calvinist vision of isolated individual men dominating a system of autarky. As an example DeLong knows far more about than I do, railroads thrive when there is trade and movement of people in both directions and the South, being adverse to both bilateral trade and free movement of people, had fallen behind the efficiency of railroads in the North. Similarly there was little support for higher education in the South, as higher education was known to be the greatest threat to the world view of the Calvinist Christian men who dominated the South.
The Golden Age Trump refers to has a long and enduring history in Calvinist theology and it isn’t economic in nature at all, except for exploitation of Gods given natural resources by white men. Again, it is easy for the large organized movement of Christian Nationalism to manipulate Trump to achieve their goals which in most ways are identical to their earlier views on Gods plan for (white)man which was the backbone of the South, not just pre-civil war but extending through reconstruction and all the way to today in the minds of the Calvinist Christians who are now in power in the US.
I think DeLong is missing the forest for the trees on Trump as the chaos monkey driving the inevitable decline of the United States. What is happening is being guided by the long held dreams of Calvinist Christians, now manifest in Christian Nationalism. The isolation of the United States is the dominant goal. Many even know this is economically damaging and will always be, the economic history of the South is not unknown to some of these people. The Golden Age has nothing to do with economics, it is about an extremist religious view dominating the isolated United States without other “tribes”. They know it will be economically damaging. It is all in the plan, and they are carrying it out with amazing speed.
Personally, I highly doubt little Donnie absorbed any Calvinism. I also think you overestimate the coherence of the "Christian Nationalists." It's cosplay plus crude self-flattery (I'm Christian; hence, always correct). Kakistocracy is what we're seeing.
No, it is absolutely not Kakistocracy. Vought, Bondi, Noam, and others have been planning this for a long time, especially Vought. Almost all the absolute destruction of the United States was articulated and planned ahead of time. Destroying science, higher education, environmentalism, and most of government has been Vought's (and all of Christian Nationalism) plan and they have executed it better than Vought likely thought they could.
Okay, so it's a sleek and crafty Calvinist take-over? I'll stick with the kakistocracy hypothesis, thanks.
These macro analyses are important and insightful
But they beg for distributional discussions. Virtually by definition, exports of IP benefit the shareholding class, which must have a dollar-weighted median above the 90th percentile of wealth
While issues with “Happiness = Reality minus Expectations” have a majority that demagogic kleptocrats can use to create a prisoners dilemma for both the lower-income victims of MAGA and those of us who think we gain best from robust opportunity for all
If we hope to continue leveling the playing field as we tried in the mid-late 20th C, we need to shift focus from the macro costs to the median voters’ understanding of how THEY are being exploited
Suppose that you are correct and that trading partners will seek ways around the US economy? Where do they go? The US economy remains the largest on the planet in nominal terms. What does the new global supply chain and trading flows look like? The EU is large, but wants to keep China at bay. India? Other BRICS countries? It seems to me that the US is the de facto major trading partner.
I noted this week that Trump's threats to end trade talks with Canada ultimately led to Canada backing down and canceling its digital services tax. Will Britain suddenly find its trade deal with the US similarly ended unless it cancels its desire to impose such a tax? And what about the EU?
Unlike early 20th-century Germany, the US has no peer country/countries to militarily oppose it. What if the US decides to return to Great Power actions, doing as it pleases? Invade Greenland for its minerals and access to the Arctic? Allow Russia to make war on Europe, using its hybrid war approach to undermine the opposing democracies, perhaps creating friends with autocracies in the EU, and try to create more?
Overarching all this nonsense is unabated climate change that is reducing agricultural output and creating both climate and economic refugees. With the US and Europe becoming fortresses rather than help? The US doesn't want to help, that is certain, and cares not one whit about trying to spread the idea of democracy by doing good deeds. Only China seems to have the resources to do this, but promoting its political system.
Trump and his acolytes seem intent to be pulling the roof down in that edifice called the USA. Why he has so many enablers in power staggers me. Are they all hoping to grab spoils for themselves in the ruins?
Do the math! The US is 4.5% of the world population and a bit under 20% of world GDP. Without immigration, which has been calculated to be responsible for nearly all of US growth since the pandemic, with native demographics and birth rates, it will be hard, if not impossible, for the US to grow much over the next couple decades. Using that and existing numbers for world GDP growth the US will be less than 10% of world GDP in 20 years, and 1% in 100 years. One of the dominant engines of growth has been US science. The FY2026 cut to the NSF is 62%. Under the OBBB the funding for ICE, deportations, the wall, and ICE will be 10x NSF funding. All of that ICE related funding is a pure deadweight cost contributing zero to real growth, while deporting workers is a pure first order loss to the economy. Brad could do a better job of putting numbers to this but it is economics 101, reduce the workforce and prime factors for growth and economic growth with fall precipitously, perhaps forever.
There should be more of this to contextualize numbers and significance. Note that there is an attempt to increase the white population from "quiverfull" to trad wives and trying to reduce women in the workforce. It won't be enough, but that seems to be a plan, although it will mainly reinforce patriarchy than increase the population.
Re: Immigration
I know that Japan is a special case but it has not welcomed immigration, yet did have a huge growth spurt. I have read that Japan is becoming more welcoming to immigrants. Has this had any economic and social effects yet?
It might be interesting to compare and contrast the various countries openness and growth.
Does America's economic position have any thing to do with being a lightly populated continental sized country full of natural resources? I think we were just very lucky to have open spaces and be open to immigration.
Why haven't the tariffs started to bite yet?