What's That Got to do With the Price of Eggs?

[ed. Get in losers, we're going losing.]

Looks like American breakfast isn’t saved after all. Sorry everybody!

I reported on declining egg prices for FT Alphaville this month. This was a fun story, because a big jump in US imports from Turkey and Mexico helped drive at least some of the decline. It also landed right as the White House (briefly) decided to slap super-high tariffs on a bunch of stuff, including food products that can’t really be grown here.

Egg prices did fall, so the story wasn’t wrong. But it only happened for wholesale buyers, which means food companies, bakeries, restaurants, and presumably grocery stores.

The price of fresh eggs at the grocery store — what regular people pay — still hasn’t dropped, according to the latest CPI report. It actually increased in March. Whoops!

So why hasn’t the decline in wholesale egg prices shown up at the grocery store?

It was definitely a big one! The USDA data shows a 63% drop, before prices started to creep higher again ahead of the Easter holiday:

And the jump in imports was also pretty big, going by our most recent data (from February):

And yes, the total amount imported was low compared to the total amount of eggs that Americans eat.

But eggs are a commodity — you can basically substitute any egg for any other egg, notwithstanding what homesteaders say about the superiority of fresh eggs from a home flock. (I might learn about that soon, so uhhhhhh wish me luck, lol, yikes.)

For commodities, an unexpected change in supply, even at the margin, can move prices noticeably. The decline in egg prices was also probably fueled by a decline in wholesale demand. It seems reasonable to think fewer people are buying eggs at Waffle House because of its 50c-per-egg surcharge. If they’re buying eggs to make at home instead, that could boost retail demand for eggs.

Beyond that, though, how do we explain the difference in egg prices between consumer and wholesale buyers?

Let’s suspend our cynicism — at least for a moment — and try to come up with a reasonable explanation besides price gouging I mean, uh, greedflation, er, nevermind, monopoly power, wait OK, let’s call it pricing dynamics that arise from inelastic demand.

Maybe this is simply a consequence of how consumer inflation is measured? Maybe the BLS’s survey logged the price of a dozen eggs on March 1, when prices were still high, and called it a day?

Nope!

... Most of the news stories about egg prices have mentioned Cal-Maine, the only egg producer that’s publicly traded. But their stories mention revenues, which doesn’t really address the central issue here, which is profitability. If Cal-Maine couldn’t provide competitively priced eggs because it was spending big replenishing its flocks after losses from avian flu, its sales would still be fine, but profits would suffer. The company owns 14% of the US’s layer hen flock, according to its latest quarterly report, so it could presumably move the needle (remember, commodities are priced on the margin).

But uh, check out the column on the far right, from its latest investor presentation:

That shows it earned $10.38 per share (diluted) in the quarter ended March 1. That’s 82% more per-share profit than it made for the full year of 2024. It’s already on track to exceed its per-share annual profit from 2023.

by Alexandra Scaggs, The Hedge |  Read more:
Image: Alexandra Scaggs for The Hedge. Source: Bureau of Labor Statistics. Cal-Maine Foods.]

[ed. So it begins. Never let a good tariff disaster go to waste. See also: What I Didn’t Know About the Egg Industry Horrified Me (NYT).]

Eve's Diary

SATURDAY.—I am almost a whole day old, now. I arrived yesterday. That is as it seems to me. And it must be so, for if there was a day-before-yesterday I was not there when it happened, or I should remember it. It could be, of course, that it did happen, and that I was not noticing. Very well; I will be very watchful now, and if any day-before-yesterdays happen I will make a note of it. It will be best to start right and not let the record get confused, for some instinct tells me that these details are going to be important to the historian some day. For I feel like an experiment, I feel exactly like an experiment; it would be impossible for a person to feel more like an experiment than I do, and so I am coming to feel convinced that that is what I AM—an experiment; just an experiment, and nothing more.

Then if I am an experiment, am I the whole of it? No, I think not; I think the rest of it is part of it. I am the main part of it, but I think the rest of it has its share in the matter. Is my position assured, or do I have to watch it and take care of it? The latter, perhaps. Some instinct tells me that eternal vigilance is the price of supremacy. [That is a good phrase, I think, for one so young.]

Everything looks better today than it did yesterday. In the rush of finishing up yesterday, the mountains were left in a ragged condition, and some of the plains were so cluttered with rubbish and remnants that the aspects were quite distressing. Noble and beautiful works of art should not be subjected to haste; and this majestic new world is indeed a most noble and beautiful work. And certainly marvelously near to being perfect, notwithstanding the shortness of the time. There are too many stars in some places and not enough in others, but that can be remedied presently, no doubt. The moon got loose last night, and slid down and fell out of the scheme—a very great loss; it breaks my heart to think of it. There isn't another thing among the ornaments and decorations that is comparable to it for beauty and finish. It should have been fastened better. If we can only get it back again—

But of course there is no telling where it went to. And besides, whoever gets it will hide it; I know it because I would do it myself. I believe I can be honest in all other matters, but I already begin to realize that the core and center of my nature is love of the beautiful, a passion for the beautiful, and that it would not be safe to trust me with a moon that belonged to another person and that person didn't know I had it. I could give up a moon that I found in the daytime, because I should be afraid some one was looking; but if I found it in the dark, I am sure I should find some kind of an excuse for not saying anything about it. For I do love moons, they are so pretty and so romantic. I wish we had five or six; I would never go to bed; I should never get tired lying on the moss-bank and looking up at them.

Stars are good, too. I wish I could get some to put in my hair. But I suppose I never can. You would be surprised to find how far off they are, for they do not look it. When they first showed, last night, I tried to knock some down with a pole, but it didn't reach, which astonished me; then I tried clods till I was all tired out, but I never got one. It was because I am left-handed and cannot throw good. Even when I aimed at the one I wasn't after I couldn't hit the other one, though I did make some close shots, for I saw the black blot of the clod sail right into the midst of the golden clusters forty or fifty times, just barely missing them, and if I could have held out a little longer maybe I could have got one.

So I cried a little, which was natural, I suppose, for one of my age, and after I was rested I got a basket and started for a place on the extreme rim of the circle, where the stars were close to the ground and I could get them with my hands, which would be better, anyway, because I could gather them tenderly then, and not break them. But it was farther than I thought, and at last I had to give it up; I was so tired I couldn't drag my feet another step; and besides, they were sore and hurt me very much. (...)

I followed the other Experiment around, yesterday afternoon, at a distance, to see what it might be for, if I could. But I was not able to make [it] out. I think it is a man. I had never seen a man, but it looked like one, and I feel sure that that is what it is. I realize that I feel more curiosity about it than about any of the other reptiles. If it is a reptile, and I suppose it is; for it has frowzy hair and blue eyes, and looks like a reptile. It has no hips; it tapers like a carrot; when it stands, it spreads itself apart like a derrick; so I think it is a reptile, though it may be architecture.

I was afraid of it at first, and started to run every time it turned around, for I thought it was going to chase me; but by and by I found it was only trying to get away, so after that I was not timid any more, but tracked it along, several hours, about twenty yards behind, which made it nervous and unhappy. At last it was a good deal worried, and climbed a tree. I waited a good while, then gave it up and went home.

Today the same thing over. I've got it up the tree again.

SUNDAY.—It is up there yet. Resting, apparently. But that is a subterfuge: Sunday isn't the day of rest; Saturday is appointed for that. It looks to me like a creature that is more interested in resting than in anything else. It would tire me to rest so much. It tires me just to sit around and watch the tree. I do wonder what it is for; I never see it do anything.

They returned the moon last night, and I was SO happy! I think it is very honest of them. It slid down and fell off again, but I was not distressed; there is no need to worry when one has that kind of neighbors; they will fetch it back. I wish I could do something to show my appreciation. I would like to send them some stars, for we have more than we can use. I mean I, not we, for I can see that the reptile cares nothing for such things.

It has low tastes, and is not kind. When I went there yesterday evening in the gloaming it had crept down and was trying to catch the little speckled fishes that play in the pool, and I had to clod it to make it go up the tree again and let them alone. I wonder if THAT is what it is for? Hasn't it any heart? Hasn't it any compassion for those little creature? Can it be that it was designed and manufactured for such ungentle work? It has the look of it. One of the clods took it back of the ear, and it used language. It gave me a thrill, for it was the first time I had ever heard speech, except my own. I did not understand the words, but they seemed expressive.

When I found it could talk I felt a new interest in it, for I love to talk; I talk, all day, and in my sleep, too, and I am very interesting, but if I had another to talk to I could be twice as interesting, and would never stop, if desired.

If this reptile is a man, it isn't an IT, is it? That wouldn't be grammatical, would it? I think it would be HE. I think so. In that case one would parse it thus: nominative, HE; dative, HIM; possessive, HIS'N. Well, I will consider it a man and call it he until it turns out to be something else. This will be handier than having so many uncertainties.

NEXT WEEK SUNDAY.—All the week I tagged around after him and tried to get acquainted. I had to do the talking, because he was shy, but I didn't mind it. He seemed pleased to have me around, and I used the sociable “we” a good deal, because it seemed to flatter him to be included.

WEDNESDAY.—We are getting along very well indeed, now, and getting better and better acquainted. He does not try to avoid me any more, which is a good sign, and shows that he likes to have me with him. That pleases me, and I study to be useful to him in every way I can, so as to increase his regard.

Extract from Adam's Diary

Perhaps I ought to remember that she is very young, a mere girl and make allowances. She is all interest, eagerness, vivacity, the world is to her a charm, a wonder, a mystery, a joy; she can't speak for delight when she finds a new flower, she must pet it and caress it and smell it and talk to it, and pour out endearing names upon it. And she is color-mad: brown rocks, yellow sand, gray moss, green foliage, blue sky; the pearl of the dawn, the purple shadows on the mountains, the golden islands floating in crimson seas at sunset, the pallid moon sailing through the shredded cloud-rack, the star-jewels glittering in the wastes of space—none of them is of any practical value, so far as I can see, but because they have color and majesty, that is enough for her, and she loses her mind over them. If she could quiet down and keep still a couple minutes at a time, it would be a reposeful spectacle. In that case I think I could enjoy looking at her; indeed I am sure I could, for I am coming to realize that she is a quite remarkably comely creature—lithe, slender, trim, rounded, shapely, nimble, graceful; and once when she was standing marble-white and sun-drenched on a boulder, with her young head tilted back and her hand shading her eyes, watching the flight of a bird in the sky, I recognized that she was beautiful.

by Mark Twain, Project Guttenberg | Read more:
Images: Lester Ralph

David Dee Delgado

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Thoughts

 "Everyone thinks of changing the world, but no one thinks of changing himself.”

― Leo Tolstoy

***

---As the philosopher Eric Hoffer explained in his 1951 book, The True Believer:

There is perhaps no more reliable indicator of a society’s ripeness for a mass movement than the prevalence of unrelieved boredom. In almost all the descriptions of the periods preceding the rise of mass movements there is reference to vast ennui; and in their earliest stages mass movements are more likely to find sympathizers and support among the bored than among the exploited and oppressed.

People need struggles. If their supply of problems dwindles too low, they begin to embellish the problems they already have, or invent completely new ones. As Hoffer writes:

Passionate hatred can give meaning and purpose to an empty life. Thus people haunted by the purposelessness of their lives try to find a new content not only by dedicating themselves to a holy cause but also by nursing a fanatical grievance.

The young and privileged are particularly prone to this. They don’t have to worry about money, nor do they have homes or families of their own, so they have nothing to lose, and nothing to conserve. This gives them both the need to find struggles and the luxury to be radical. [ed. See also: Entertain Yourself (LARB); and, The West is bored to death (New Statesman).]

***

I see the show downs, slow downs, lost and found, turn arounds. The boys in the military shirts. I keep my eyes on the prize, on the long fallen skies. And I don't let my friends get hurt. All you back room schemers, small trip dreamers. Better find something new to say. Cause you're the same old story. It's the same old crime. And you got some heavy dues to pay.  - Steve Miller Space Cowboy

***

Getting what we want, not what we want to want: it could be the slogan of our times - Unknown

***

"It's what you learn after you know it all that counts."
- John Wooden

***

At equilibrium, the evolutionary race is not only to the big and aggressive, but also to a certain number of the small and sneaky.

- Psychologist David P. Barash

How We All Became Clint Eastwood

Is This the Dominant Personality Type of Our Time?

Filmmaker Sergio Leone once explained why Clint Eastwood was a perfect actor for his movies. Eastwood’s portrayal of a cowboy, he explained, “only had two expressions: with hat and no hat.”

That might sound like criticism, or even mockery. But Leone needed a hero who presented a mask to the audience. In Eastwood, he found someone who did that naturally—as part of his acting style.

But Leone got lucky.

At least eight different actors—from Henry Fonda to Steve Reeves—turned down the role of the nameless stranger who destroys an entire Wild West town in A Fistful of Dollars (1964). With no better options, he hired an unproven film actor who possessed an extremely narrow range of facial and vocal expression.

That turned out to be just what he needed. But some people think this is terrible acting.

Talk show guest Ray Liotta left everyone in stunned silence when he said that Clint Eastwood was the most overrated actor of his generation. But Liotta doubled down—turning to the audience and saying: “I don’t give a sh-t.”

Even so, it’s hard to criticize Eastwood—because this flat style of acting became so pervasive in subsequent years. His detached, emotionless on-screen persona has served as a role model for countless heroes and villains.

Just think of all those Arnold Schwarzenegger movies where the dialogue became famous because it was delivered so mechanically. Or consider Anton Chigurh in No Country for Old Men—a performance praised by experts for its authentic portrayal of a psychopath. Or even Bryan Cranston in Breaking Bad, who became more emotionless and detached with each passing season.

After Eastwood, this exact same playbook worked for both heroes and villains. An extreme example is Terminator 2—where both the good guy (Schwarzenegger) and bad guy ( a T-1000 killer robot) battle to see who can achieve the most expressionless persona.

But the defining villain of this style remains Darth Vader. Eastwood had a face like a mask, according to Leone, but Darth Vader wears a literal mask. Not only can’t you see his face, but you aren’t even allowed to hear his natural voice—which has been processed to sound as inhuman as possible.

Clint Eastwood, for his part, continued to work variants on this character type—making millions of dollars in the process. In his career-defining Dirty Harry films, he showed that he required no cowboy hat to work this trope—although he repeats the gimmick of using up all six bullets that was so effective in the closing scene of A Fistful of Dollars.

No, Eastwood didn’t invent deadpan acting. But it had originally been done for laughs—most famously by Buster Keaton. In fact, the first use of the word “deadpan” in print (from 1915) refers specifically to Keaton.

Often the deadpan role went to the so-called “straight man” in comic duos—Martin (for Lewis), Abbott (for Costello), Rowan (for Martin), Smothers (for Smothers), etc. But these flat sidekicks were as necessary as the punchline in creating comic effects.

This deadpan demeanor was intrinsically funny, because any person with so little personality is weird, and makes us laugh.

Before Eastwood, we only see a few hints of this style in dramatic or action films, for example James Dean’s Rebel Without a Cause or Sean Connery’s James Bond. But they both seem positively giddy compared with Eastwood’s cold and wooden demeanor.

I call this the “Man without Personality”—and it’s almost always a man. When psychologists studied this character type, they identified 126 movie characters of this sort, and only 21 were female.

So let’s give credit to Glenn Close (in Fatal Attraction) and Sharon Stone (in Basic Instinct). But they are far outnumbered by male cinematic psychopaths with flattened personalities—such as Kevin Spacey (in The Usual Suspects) or Daniel Day-Lewis (in The Gangs of New York) or Anthony Hopkins (in The Silence of the Lambs).

Sometimes these characters are actual machines (as in Terminator or RoboCop or 2001: A Space Odyssey). But even when they are made of flesh-and-blood, they retain obvious robotic elements.

It’s disturbing how much pop culture has fallen in love with these mechanical figures. But even worse, in the world of Zero Personality, all moral values become irrelevant.

That was true even for Eastwood’s debut as the unnamed stranger back in 1964. He does two good deeds during the course of the film—but at the cost of killing (directly or indirectly) most of the citizenry during the course of 90 macabre minutes.

What a bizarre story to tell. And it raises obvious questions:

Where did this personality type come from? And how did it become so popular? (...)

Americans needed decadent Europeans to blaze the trail. We were too optimistic. But they had seen evil, up close and personal. And had stories to tell.

Alfred Hitchcock—an émigré himself—was the only other influential source for this character type in Hollywood films. But Hitchcock turned to psychotics for horror and repulsion, not audience acclaim.

And even Hitchcock knew the European philosophical roots of this personality style. In his underrated masterpiece Rope (1948) he even introduces a Nietzschean professor (played by Jimmy Stewart, of all people!).

He returned to this character type in Psycho (1960)—but, once again, for horror not heroism. And audiences were shocked. Even though there is little graphic violence on screen, the public found this film deeply disturbing—to a degree that Hitchcock himself never matched, before or after.

Then, over the course of just a few years, this murderous psycho went from villain to hero.

By the time we get to Dirty Harry (1971) and Death Wish (1974)—both starring Leone alums—audiences are actually cheering and clapping when the sadistic and expressionless protagonist commits cold-blooded murder. [ed. John Wick]

And here’s the scariest part of the story.

We’ve all become Clint Eastwood today.

Okay, maybe not everybody. But the main forums of public discourse on social media are filled with flat emotionless people who flare up into anger at the slightest provocation.

None of us saw this coming with the rise of the Internet. At least, I didn’t—nor did I hear anyone else predict the eventual effects back in the mid-1990s.

But maybe we should have anticipated it.

by Ted Gioia, Honest Broker |  Read more:

Images: Warner Bros./Paramount

[ed. See also: Subversively Human: A Conversation with Ted Gioia (Image Journal); and, Psychiatrists Declare No Country For Old Men Character As Most Realistic Portrayal Of A Psychopath (Unilad).]

Kazuaki Koseki. Himebotaru, a firefly native to the Yamagata prefecture of Japan

via:

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What’s More Vacuous Than An Endless Vacuum?

Well, I watched every second of the buildup, flight and aftermath of the first Blue Origin all-female space trip. You’ve heard of one small step for man? This was one giant leap backwards for womankind. I’m kidding, I’m kidding! What could be more empowering or something than watching Lauren Sánchez make going to space sound like brunch with the girrrrrls. Sally Ride could never.

Anyway, if you missed this, Jeff Bezos’s fiancee took an 11-minute trip to the edge of space on one of his Blue Origin craft on Monday, alongside some all-female passengers – sorry, “crew” – who included CBS anchor Gayle King and pop star Katy Perry. So yes: the Woman’s World video is no longer the most plastic feminist thing Katy’s done.

Given the mixture of freebie rides and seats sold to the super-rich, the thing people always say about Blue Origin tickets is that prices range from zero to $28m dollars. A bit like a seat on a RyanAir flight to Tallinn. But these spots were all personally gifted by Bezos and Sánchez because this was an Important Mission. Which also meant the whole thing was exclusively documented by Blue Origin’s Pravda-like web channel. Here, the anchors and reporters kept explaining that – unlike when men went to space in the past – this mission was all about emotions. But look, it’s great that we’re valorising emotions above all things, because it gives me permission to say how very much I hated this entire, hilariously vacuous spectacle.

Lauren already bills herself as a children’s author, helicopter pilot, journalist and philanthropist, and kept being told she was adding “astronaut” to the world’s longest multi-hyphenate. How did she find the trip? “I don’t really have the words for this, like … ?” OK but can you at least try? “I can’t put it into words but I looked out the window and we got to see the moon.”

Back at the viewing platform in the West Texas desert, commentary was provided by, among others, Kris Jenner and a bottom-tier Kardashian (Khloé). Khloé glossed the moment of landing with the words: “it’s literally so hard to explain right now”. Other insights? “There’s one woman whose grandfather is back there and he is 92 and they didn’t even have transportation back then.” I mean, the guy was literally pre-horse. Historic scenes.

Amid extremely stiff competition, the most hardcore gibberish emanated from Perry, who served up an entire word salad bar involving the “feminine divine” and being “super-connected to love”. “It’s about making space for future woman,” she explained. “It’s about taking up space.” Imagine going to actual space and talking instead about therapy-speak “space”. When Buzz Aldrin beheld the surface of the moon, he described it as “magnificent desolation”. Honestly, if he wanted to feel desolation he could have just tuned into this corner of West Texas on Monday afternoon. When a Stem advocate came for her post-flight interview, we got to see the apparently lobotomised reporter shriek: “How do you look perfect after just going to space?!”

In truth, how the women looked had been an overwhelming part of the buildup, and by their own design. In an Elle magazine joint interview with the passengers, Lauren showed off the hot space suits she’d personally commissioned, inquiring rhetorically: “Who would not get glam before the flight?” “Space is going to finally be glam,” agreed Perry. “Let me tell you something. If I could take glam up with me, I would do that. We are going to put the ‘ass’ in astronaut.” A former Nasa rocket scientist said: “I also wanted to test out my hair and make sure that it was OK. So I skydived in Dubai with similar hair to make sure I would be good – took it for a dry run.” Still want more? Because there was SO much of it. “We’re going to have lash extensions flying in the capsule!” explained Lauren. “I think it’s so important for people to see us like that,” explained a civil rights activist. “This dichotomy of engineer and scientist, and then beauty and fashion. We contain multitudes. Women are multitudes. I’m going to be wearing lipstick.”

Ooof. I always thought space travel was futuristic, but this was the first time it came off as travelling back in time, in this case using their little capsule to take us back to the most ludicrous inanities of 2010s girlboss feminism.

by Marina Hyde, The Guardian |  Read more:

Image: YouTube

[ed. Can't even generate the energy to cringe. Everything is so sad.]

Normalcy Bias

Normalcy bias, or normality bias, is a cognitive bias which leads people to disbelieve or minimize threat warnings. Consequently, individuals underestimate the likelihood of a disaster, when it might affect them, and its potential adverse effects. The normalcy bias causes many people to prepare inadequately for natural disasters, market crashes, and calamities caused by human error. About 80% of people reportedly display normalcy bias during a disaster.

The normalcy bias can manifest in response to warnings about disasters and actual catastrophes. Such events can range in scale from incidents such as traffic collisions to global catastrophic risk. The event may involve social constructionism phenomena such as loss of money in market crashes, or direct threats to continuity of life: as in natural disasters like a tsunami or violence in war.

Normalcy bias has also been called analysis paralysis, the ostrich effect, and by first responders, the negative panic. The opposite of normalcy bias is overreaction, or worst-case scenario bias, in which small deviations from normality are dealt with as signals of an impending catastrophe.

Phases

Amanda Ripley, author of The Unthinkable: Who Survives When Disaster Strikes – and Why, identifies common response patterns of people in disasters and explains that there are three phases of response: "denial, deliberation, and the decisive moment". With regard to the first phase, described as "denial", Ripley found that people were likely to deny that a disaster was happening. It takes time for the brain to process information and recognize that a disaster is a threat. In the "deliberation" phase, people have to decide what to do. If a person does not have a plan in place, this causes a serious problem because the effects of life-threatening stress on the body (e.g. tunnel vision, audio exclusion, time dilations, out-of-body experiences, or reduced motor skills) limit an individual's ability to perceive information and make plans. Ripley asserts that in the third and final phase, described as the "decisive moment", a person must act quickly and decisively. Failure to do so can result in injury or death. She explains that the faster someone can get through the denial and deliberation phases, the quicker they will reach the decisive moment and begin to take action.

by Wikipedia |  Read more:

Welcome to Nightmarica

I still remember back in 2002, when the Bush administration declared Jose Padilla an “enemy combatant” and deprived him of his legal right to trial. It was a national outrage, and rightly so. But now, 23 years later, the Trump administration is committing even worse violations of basic American civil liberties. Trump has rounded up and deported a number of Venezuelan citizens to brutal El Salvadoran prisons, accusing them of being in the gang Tren de Aragua based on nothing more than the fact that they have tattoos. In one case, makeup artist Andry Romero was deported based solely on the fact that he had a tattoo of crowns (which the administration thought was a gang symbol) on top of the names of his mom and dad.

But that’s hardly the worst case! The Trump administration also deported a man named Abrego Garcia to El Salvador completely by accident, then claimed they didn’t have the ability to bring him back:

The Trump administration acknowledged in a court filing Monday that it had grabbed a Maryland father with protected legal status and mistakenly deported him to El Salvador, but said that U.S. courts lack jurisdiction to order his return from the megaprison where he’s now locked up…

Abrego Garcia, who is married to a U.S. citizen and has a 5-year-old disabled child who is also a U.S. citizen, has no criminal record in the United States, according to his attorney. The Trump administration does not claim he has a criminal record, but called him a “danger to the community”…

He works full time as a union sheet-metal apprentice, has complied with requirements to check in annually with ICE, and cares for his 5-year-old son, who has autism and a hearing defect, and is unable to communicate verbally.

On March 12, Abrego Garcia had picked up his son after work from the boy’s grandmother’s house when ICE officers stopped the car…Within two days, he had been transferred to an ICE staging facility in Texas…Abrego Garcia’s family has had no contact with him since he was sent to the megaprison in El Salvador, known as CECOT…

“Oopsie,” [Salvadoran President Nayib] Bukele wrote on social media, taunting the judge [who had ordered the Trump administration to stop the deportation flights].

This sounds pretty similar to the beginning of the dystopian 1985 movie Brazil, in which an innocent man named Buttle is randomly arrested and killed in prison because of a typo on an arrest warrant for a man named Tuttle:

 

The error in real life isn’t quite the same as the typo in the movie. But what the Trump administration is trying to do — to seize a hard-working peaceful family man, who has not been accused of any crime, and to throw him into a hellish torture dungeon for the rest of his life — is very similar. Imagine, for a moment, that this was you, or your father. Now see if you can come up with a convincing argument as to why it never will be.

The Supreme Court, presented with the case, ordered the Trump administration to “facilitate” Garcia’s return to America, but gave no deadline. The administration is arguing that there’s nothing it can do — that Garcia has to spend the rest of his life in that dungeon because of their mistake.

Is this the America you grew up in? Maybe if your awareness of current events started with Padilla and Guantanamo and the War on Terror, it might feel like the arrests of Garcia and Romero are simply a minor evolution in the saga of American authoritarianism. But I remember a time when this kind of thing felt unthinkable, and was the merely the plot of dystopian fantasies.

by Noah Smith, Noahpinion |  Read more:

Image: YouTube/Brazil

[ed. Not trying to turn this into an economics or political blog, but there's so much of both to wade through lately. I expect "doomscrolling' will be the word of the year in 2025.]

What Would a Real Anti-China Trade Strategy Look Like?

Trump’s current trade strategy will diminish American power and American technological capability, divide the U.S. from allies and partners, and give China an opening to become the world’s preeminent nation. I still think it’s unlikely that this is intentional; there’s an old adage that you should “never attribute to malice that which is adequately explained by stupidity.” The haphazard, last-minute, on-again-off-again way that Trump and his team have rolled out their tariff policy, and the fact that Congress has not chosen to use its power to revoke the President’s tariff authority, suggests that stupidity is the main factor in play here.

But in any case, there are obviously some people within the Trump administration and the MAGA movement who would like Trump to produce a trade strategy that helps to contain Chinese power. CEA Chair Stephen Miran has written that “China has chosen to double down on its mercantilist, export-led model to secure marginal income, much to the rest of the world’s consternation.” And Treasury Secretary Scott Bessent went even further, suggesting that containment of China should be the main goal of U.S. trade policy:

Scott Bessent emerged from this week’s market ructions as a perhaps-unexpected lead trade negotiator, offering a potential scenario for the coming months: US deals with longstanding partners that put pressure on China.

“They’ve been good military allies, not perfect economic allies,” the former hedge fund manager said Wednesday of some of these US friends. At the end of the day, the Trump administration can probably reach an agreement with them. “Then we can approach China as a group,” he said.

The nations Bessent said he’s looking to — Japan, South Korea, Vietnam and India — happen to be neighbors of China. They are countries with which the US could work to isolate China, something that’s been called a “grand encirclement” strategy.

This is actually a very realistic goal. Every day that Trump’s tariff chaos makes the U.S. look like a chaotic clown car makes it a less realistic goal, but as of right now, I still think that it would be possible for the U.S. to radically pivot its trade and industrial policies in order to create a coalition of nations that could economically balance, compete with, and even isolate China. And it’s not too hard to imagine what that strategy would look like.

But first, we should think about why we would want to economically pressure China, and what we might hope to accomplish. After all, in an ideal world, countries simply trade with each other and get rich, instead of fighting. And China has plenty of good stuff to offer the world — cool cars, cheap solar panels and batteries, and lots more. Why should we take an adversarial approach to trade with China?

The reason is geopolitics. Singing hymns to the gains from trade doesn’t change the fact that for whatever reason, the leaders of powerful countries sometimes want to dominate or even attack other nations. The world is an ungoverned place, and the balance of power is the only thing that keeps the peace.

Currently, China has become the world’s preeminent manufacturing nation. Its current leaders also think of the U.S. and many of its allies as either rivals or outright enemies. They appear determined to conquer Taiwan, carve off pieces of India, Japan, and the Philippines, and generally use Chinese power to dominate smaller countries. It makes sense to want to weaken China’s ability to do all this, while strengthening the other nations’ capacities to resist it.

The goals of trade policy with China should therefore probably include the following:

1. Preventing China from gaining an overwhelming military advantage over other nations
2. Reducing China’s ability to exert economic pressure on other nations
3. Reducing supply chain vulnerability in nations threatened by China, so that any future conflict with China wouldn’t crash those countries’ economies.

That doesn’t mean that prosperity and cool cars shouldn’t be goals of China trade policy, but merely that they should be augmented with these other geopolitical goals.

In any case, when I talk about economically “containing” China, that’s what I’m talking about. So here’s a list of things we would do if we were serious about that goal. Obviously this list is very, very far away from anything the Trump administration is doing or contemplating. But this is what I think it would take.

Zero trade barriers with any nations other than China

Manufacturers need scale to drive down costs and remain competitive. One reason China’s manufacturers are so formidable — and why American manufacturers were so formidable relative to their rivals 80 years ago — is that they have access to a huge domestic market. Chinese car companies like BYD can sell untold numbers of cars to their billion consumers; this allows those companies to scale up and drive down costs to levels no foreign competitor can match. BYD is currently building a single factory that’s bigger than the city of San Francisco.

Another key factor that makes Chinese manufacturers so powerful is domestic supply chains. Practically everything that goes into a Chinese EV, particularly the battery, the metal, and the chips, is produced in-country. That makes it very quick and easy for Chinese manufacturers to source everything they need, instead of having to struggle to import it from overseas.

It’s inherently very hard for American manufacturers can match those two advantages. The U.S. is much smaller than China — our consumption is larger in dollar terms, but we have far fewer people, and so our companies can’t ship as many units domestically. Chinese people buy about double the number of cars every year that Americans do.

by Noah Smith, Noahpinion |  Read more:

Image: uncredited

[ed. See also: All the arguments for Trump's tariffs are wrong and bad.]

[ed. Masters Sunday!]
Image: uncredited via

[Wow. What a Rory-coaster. One for the ages. Congratulations Rory!]

via: here

[ed. Oh man... woke up hungry this morning and this didn't help.]

What Are Bonds and Their Relationship to Tariffs?

What is a bond?

A bond is a certificate confirming that its owner has lent money to a specified borrower that will be repaid at a fixed date, typically with a fixed rate of interest. Known as fixed-income securities, they appeal to investors who want stable returns.

Corporations issue bonds to borrow money and so do governments – to pay for investments and other expenditures. The UK government’s bonds are called gilts, while US government bonds are known as treasuries, traditionally seen as a safe haven because they are guaranteed by the world’s biggest economy. They are issued with different maturity dates when they must be paid off in full, with two-year, 10-year and 30-year bonds being common.

How are they traded?

Bonds can be bought and sold like shares on a secondary market – an exchange – but, unlike shares, they offer guaranteed annual returns. The bond market is the world’s biggest securities exchange, worth almost $130tn (£99tn), with the US market accounting for about 40% of debt worldwide.

Government bonds are usually sold to financial institutions in auctions, and can then be resold on the secondary market for more or less than their face value.

What is a bond yield?

Bond yields represent the amount of money an investor receives for owning the debt as a percentage of its current price. When the price of a bond falls, yields rise. The yield is commonly referred to as an interest rate, or the cost of borrowing to an issuer.

Rising yields suggest dwindling appetite to own the debt among investors, which can be influenced by a range of factors including an issuer’s ability to repay. For governments, this centres on the prospects for the country’s economy and finances.

Inflation expectations also have a significant impact. This is because inflation undercuts the future value of money received for owning the debt. This means investors could demand a higher yield to compensate for the risk.

And because other financial products, such as mortgages, are priced off the yield, there is a spillover into the broader economy.

What have Trump’s tariffs done to bonds?

At first the US president considered his tariff plan to be working, having anticipated stock markets would react badly to tariffs and the dollar would fall.

Trump was sure the bond market would remain calm because he promised to pay for tax cuts later in the year with revenues from tariffs, meaning the US government could limit the number of bonds it issues, keeping supply and demand in sync and putting a cap on overall government debt levels.

However, the tariff war has prompted fears of a US recession, making it riskier to lend to the US. There are concerns that the US will become locked in a titanic struggle with China, which would damage both economies over a long period and drag down global growth.

In response, investors have sold US bonds in huge quantities, driving down their value and sending the yield higher, making future government debt more expensive to issue.

Where did this leave Trump?

There was a fear in the White House that paying a higher interest rate on national debt would increase the government’s annual spending deficit, adding pressure to an already stretched budget and increasing the overall debt mountain.

Worse, the $29tn market in US treasuries is the bedrock of the global financial system and heavy selling could put pressure on other parts of it, forcing banks or other institutions to default and causing a wider financial crisis.

by Phillip Inman, The Guardian | Read more:
Image: Richard Drew/AP
[ed. If you read this and the following post you'll be smarter than 90 percent of the people in the country. As for what this all means going forward, the essay on Pax Americana (below) should not be missed. See also: What is the National Debt Costing Us? (PPF:]

The Congressional Budget Office (CBO) projects that interest payments will total $952 billion in fiscal year 2025 and rise rapidly throughout the next decade — climbing from $1 trillion in 2026 to $1.8 trillion in 2035. In total, net interest payments will total $13.8 trillion over the next decade. Relative to the size of the economy, interest costs in 2026 would exceed the post-World War II high of 3.2 percent from 1991. Such costs would rise to 4.1 percent of gross domestic product (GDP) in fiscal year 2035, if current law remains the same.

The federal government already spends more on interest than on budget areas such as:

• Defense
• Medicaid
• Federal spending on children
• Income security programs, which include programs targeted to lower-income Americans such as the Supplemental Nutrition Assistance Program; earned income, child, and other tax credits
• Veterans’ benefits

The Long Battle Over the Strength of America’s Federal Government

In July 1776, delegates from the 13 British colonies in North America unanimously declared their independence from Great Britain, asserting that each of the united colonies was “and of right ought to be free and independent states.” Within months, on the recommendation of those delegates, each of the 13 colonies established state governments. The delegates also directed a committee to formulate a plan for a national government. That committee proposed a confederation of the several states. The national government would have limited control of the foreign policy of the member states, and significant taxation would be possible only on the unanimous approval of all states. After considerable debate, all the states approved creation of that government, which we know as the Articles of Confederation.

It was a weak vessel for a national government, and it soon showed its impotence. A group of concerned leaders, fearing that the new nation would not survive rancorous competition among the several states and also the Articles of Confederation government’s inability to quell separatist movements, moved to form a new, stronger government. Among them were George Washington, Alexander Hamilton, James Madison, Benjamin Franklin and James Wilson. The convention of elected delegates generated by their concern produced the U.S. Constitution of 1787, which, when ratified by three-fourths of the states, “in Order to form a more perfect Union” established a strong central government.

But ratification was by no means assured, for strong cohorts in nearly every state opposed establishing a strong, central government. These people feared a virile government with significant power. Some knew they would lose powerful positions in their states. Others worried that certain basic rights would be disregarded. For many of the others, their opposition reflected a visceral aversion to any constraint on their freedom to do as they chose. This strain of rejection of any potential limit on individual freedom would live throughout the history of American political culture right down to today.

Supporters of ratification, calling themselves Federalists, worked tirelessly to persuade a majority of their fellow citizens to accept the new Constitution. Hamilton, Madison and John Jay wrote supporting essays in various newspapers explaining and justifying virtually every aspect of the document; we know these today as the Federalist Papers. But it was touch-and-go. Rhode Island was the only state to outright reject the Constitution, though eventually voters there did change direction and ratified. But in the most critical states, ones without which the new nation would not have been tenable, the vote was extremely close: in Massachusetts 187-168; in Virginia 89-79; in New York 30-27. For a good many Americans, a strong, central government was a fearful thing, and always would be.

In the 1820s, for example, Andrew Jackson won the presidency in large part by attacking the leadership of the government for having too much power, and once in office, made war against the central bank Congress had created. Later, determination that the central government should not dictate that individuals could not own slaves nearly broke the nation, leading to the secession of southern states and the Civil War of the 1860s. Industrialization in the decades after the Civil War generated extraordinary fortunes for bankers and corporate magnates who jealously guarded their right to do as they wished, including exploiting labor and endangering consumers with impure food and drugs. Most national wealth was concentrated in a small percentage of the population while many struggled to afford basic food, shelter and clothing. Reaction to such individualism led to Progressive reform at the turn of the 20th century, reforms fought by those who objected to federal power.

The 1920s saw renewed individualism as bankers and financial entrepreneurs speculated wildly with consumer deposits and borrowed capital. The Great Depression that resulted brought privation and suffering to huge numbers of Americans, leading to New Deal legislation to rescue and protect ordinary citizens.

After World War II, those fearing big government and international cooperation sought to undo the New Deal reforms. But Republican President Dwight Eisenhower mandated that those reforms would stay in place, including Social Security and protection of bank deposits, and such post-war institutions as the International Monetary Fund and the World Bank.

Today, those determined to destroy the power of the central, national government and exercise a freedom insensitive to the chaos and suffering their freedom has imposed on others are in the ascendency. We should remember, though, that each resurgence of unfettered individualism in our history has generated confusion and disarray, and has led to a renewed effort to empower government to provide protection and services for ordinary Americans.

There is every reason to expect the same renewed empowerment again as people regather their strength and support new government safeguards that “to them shall seem most likely to effect their Safety and Happiness.”

by Steve Haycox, Anchorage Daily News |  Read more:

Image: iStock/Getty

[ed. It probably took about three minutes to read this, and there's a tsunami of history behind each link. Why aren't civics classes being taught or given more attention in schools these days?]

via: misplaced

Crashing the Car of Pax Americana

[ed. Excellent.]

My ask of you in reading this note is that we make an effort to hold several conflicting ideas in our heads at the same time. Like, for example, that the American socioeconomic system desperately needs fixing after decades of venal corruption from (mostly) Democratic but (also) Republican Administrations AND there is an underlying global system worth preserving that gives the United States enormous privilege, wealth and freedom of action in the world. Or, for example, that there’s no reason to doubt the authentic intentions of Donald Trump and his Administration to improve the position of the United States AND their economic policies can have the unintended consequence of blasting the underlying global system to smithereens, making it impossible to achieve their goals. It’s really not easy to hold all of these ideas simultaneously! Every bit of party propaganda from the left and the right, every big voice on social media, everyone wants you to give yourself over to a single idea of party purity and ignore everything else. But it’s just not true.

The truth is that the United States became as sclerotic and bloated under Joe Biden as the Soviet Union under Leonid Brezhnev, and that Joe Biden’s cognitive decline and its obscene cover-up made the United States government a global patsy and a domestic feeding trough. The truth is that our border policy was stupidly permissive. The truth is that we really do need to eliminate vast swaths of the Federal bureaucracy and the Christmas tree funding programs that always grow and never shrink. The truth is that a Department of Government Efficiency is a really good idea.

AND the truth is that the purpose of government is not efficiency for efficiency’s sake. AND the truth is that the quality of mercy is not strained and neither is due process, so that justice may be sure but never cruel. AND the truth is that spending money to curry political favor abroad through CIA USAID programs is a lot cheaper and a lot more efficient than sending in the Marines, AND is a lot more profitable than seeing the Chinese take our place in the world. AND the truth is that we have three co-equal branches of government, where the unconstitutionality of a President ‘vetoing’ Congressionally-authorized spending programs through Executive Order is well-settled law. AND the truth is that government debt isn’t like our own personal debt, so that we can’t go broke as a nation AND we’re nowhere near having a budget crisis AND we have the strongest, most vital economy in the world AND we can still grow our way to a more equitable prosperity without breaking a global system that works so formidably to our advantage.

This underlying global system has a name. It’s called Pax Americana.

• Pax Americana is the Bretton Woods monetary system and the Plaza Accords and the SWIFT banking system and the unquestioned dominance of the USD as the world’s reserve currency.

• Pax Americana is the NATO alliance and the Pacific Fleet and CENTCOM and the NSA and the unquestioned dominance of the US military as the world’s security arbiter.

• Pax Americana is the American brands, American universities, American entrepreneurialism, and most of all the American stories that have dominated the hearts and minds of everyone on Earth for the past 50 years.

• Pax Americana is the ability of the United States to set the rules for every coordination game in the world. The rules of trade, the rules of intellectual property, the rules of money, the rules of culture, the rules of war … all of those rules were made by us. Only by us! And in return we gave the rest of the world two things: global peace (pretty much) enforced by a blue-water navy with force projection capabilities anywhere in the world, and unfettered access (pretty much) to the buying power of the American consumer.

The results of Pax Americana?

• The United States has seen more than 300 million citizens lifted into the highest standard of living in the history of the world, as we have exchanged intangible things like services and the full faith and credit of the US government for tangible things like oil and semiconductors and food at an unimaginable scale.

• The world has seen more than a billion people lifted out of crushing poverty, mostly in China and India but everywhere else, too, as the capacity to make tangible things has shifted permanently (yes, permanently) from West to East.

My strong, unwavering belief is that Pax Americana is a damn good deal for the United States AND the world, especially as American leadership in AI opens up an entirely new realm of intangible things that the United States can trade for tangible things. Is it a perfect deal for the United States? No. Do other countries free ride on our provision of security and an end-market of the American consumer? Absolutely. Has the system been internally captured by oligarchs and professional politicians, so that the distribution of this great wealth flowing to the United States goes less and less to ‘average’ Americans? 100%. Should we aggressively prune and reform the Pax Americana system? Should we root out its foreign free riders and domestic leeches? Yes, please!

But that’s not what this Administration believes. Neither Donald Trump nor his key advisors believe that Pax Americana is a good deal at all, much less a damn good deal like I believe. They believe the United States is being cheated and taken advantage of without end, both internationally and domestically. They don’t want to fix the Pax Americana regime of coordination through multilateral rule-setting. They want to blow up the entire deal and replace it with an America First regime of competition through bilateral engagement.

I appreciate their frustration. I share a lot of it. But I am desperately opposed to crashing the Pax Americana car, Annie Hall style, because the America First system that this Administration wants to have as a replacement is not a stable system that is possible to have as a replacement. The end result of blowing up Pax Americana and its – yes – globalist system of rules and institutions and alliances that coordinates the flow of capital, labor, goods, services and culture without ‘winning’ any head-to-head relationship will be a system that is both worse for the United States AND the world. Here’s why: 

by Ben Hunt, Epsilon Theory |  Read more:
Image: Annie Hall

[ed. From the comments:]

***

I spent almost eight years working in the Appalachian Basin. You have no idea just how bad it is and how deep the pain runs. (You also probably don’t know just how hilariously well armed the Amish are in that part of Ohio; some of those guys could put on a gun show by doing nothing more than opening their barn doors)

How can we keep Pax Americana going in a way that benefits all Americans - and by benefit I mean offers lives of dignity with meaningful work, meaningful relationships and recognition of value?

What if that’s not what a lot of those people want? Because in my experience down there this was not a universal goal, nor would it even carry the majority of the population on any given day.

When the shale boom came it brought with it billions of dollars of absolutely free money that was handed out in exchange for what the residents previously believed was damn near worthless land. Tens of billions flowed from the ground and into the pockets of landowners. All the hotels and motels were full every night for years. Every restaurant was packed day and night. Energy companies paved roads, donated to every local community organization, soccer team, bought every animal from every 4H kid at every county fair. Every county courthouse was filled with landmen who spent all day making copies of deed records, at 25¢ a page. Thousands of pages, by 15-20 guys, every day. The Recorder’s office was running a machine that spat out $5,000/d, every day, for months. Companies cut checks directly to the county for expanded hours so their people could work before and after regular closing times. They paid tens of thousands for a few extra hours a day over the course of a few months. Government revenues ballooned.

Then what happened?

Hundreds of good paying jobs were created overnight…and most went to workers from Texas, Louisiana, and Oklahoma, not Ohio or Pennsylvania. Know why? Nobody could pass a drug test. No, I’m not shitting you. I had a friend who had a wireline company and he tried to hire two locals. Both didn’t even show up for the drug test. That was the last time he bothered to even advertise his job opening in the area. He hired professionals from out of state. Less hassle.

Before a single cubic foot of gas or barrel of oil came out of the ground the local Ford dealership made news as it catapulted to the top of the list of highest volume dealers in the state. It seemed like every farm large and small had a new F-150 in the gravel driveway.

The casinos across the river had multiple record years in a row after a decade of a slow decline. Strip clubs boomed.

And nobody really built anything. The families who were rich before were simply even more rich after. One prominent local attorney—whose conduct would have gotten him disbarred in any other place—tightened his grip on the area, and after a particularly major payout bought a second home in Lake Como, Italy.

The old men dying of black lung kept on dying. The young men continued their drift into addiction, which had started to take hold years before that. Crime went up despite poverty going down.

The local wastewater treatment plants were at least smart enough to make deals with the service companies to clean the used frac water. Again, government receipts grew, but how much of that made it to the people? (Not much)

Nobody bothered to clean up the brownfields and open a new facility making drill pipe. That ended up happening an hour north instead. It took two years for the owner of a previously defunct gravel yard to open back up, despite the fact that he was sitting on a gold mine. (I know this because I tried to buy part of it from him and he not only wouldn’t sell but quite literally did not understand the magnitude of what was about to happen)

Very little changed because the people didn’t want anything to change. Many of them talked about Weirton Steel as if it was still 1981, and cursed the foreigners (ArcelorMittal) who owned what was left of it. (And in a small twist of irony the man who bought that bankrupt company off of the employees in 2002–for a hilariously low ball price—would go on to be the Secretary of Commerce under the first term of the president that they voted for in overwhelming numbers) It’s been 15 years of oil and gas money steadily flowing to the area, and nothing has changed. The complaint that “there aren’t any jobs” is old enough to drink. Some people had the good sense to leave. Everyone else was just more comfortable staying and watching everything die.

I’m not unsympathetic, but the way these folks are talked about—and talk about themselves—you’d think they had no agency of their own. They think their salvation is just around the corner, if only we’d just blew up every working institution around the globe they’d make it to the other side of this mess. It’s paternalistic horseshit that Trump is selling and they’re lining up around the block to get their wheelbarrow full of it.

Bernhard Langer Gifted One-of-a-Kind Mercedes For Final Augusta National Start

Langer's 2025 outfit (right) was inspired by the all-red look he wore in the final round of his 1985 Masters victory (left) 

Perhaps the only feat more impressive than finagling a ticket to Augusta National is making it out of the Masters merchandise tent alive and with everything you want. Forbes reported a few years back that Augusta National makes around $69 million a year off merch alone, $10 million a day throughout the tournament. And yet, as hard as you look and no matter how much money you can offer, there’s one piece of Masters memorabilia that you’ll never be able to buy. Only Bernhard Langer has this, and we’re betting that he’s not giving it up anytime soon.

Yup, that’s a one-of-a-kind Mercedes-Benz S-Class, complete with a green paint job, Masters logos and Langer’s signature. If anyone deserves it (other than me), it’s the two-time Masters champ playing in his final start at Augusta National. The 67-year-old has been a Mercedes ambassador for 40 years now, hence the personalized car that normally runs between $120-190K.

Mercedes labeled it a “one-off handcrafted vehicle,” and the customization, like the 2,800 meticulously embroidered stitches, was all done in-house at the company’s prestigious MANUFAKTUR facility in Sindelfingen, Germany.

“Bernhard is a true golf icon, who has been an integral member of the Mercedes-Benz family for nearly 40 years,” said Bettina Fetzer, Vice President of Mercedes-Benz Digital & Communications. “As we celebrate his extraordinary career, we honor our deep bond with a personalized S-Class crafted especially for him. We’re excited for many more great moments with him on the road ahead."

by Greg Gottfried, Golf Digest | Read more:
Images:Stefan von Stengel, Philipp Ruprecht

[ed. Sweet! A class act all the way. See also (first round): Masters 2025: In seeking to make history, 67-year-old Bernhard Langer put on a scoring masterclass (GD).]

Studio Ghibli, My Neighbour Totoro (Chinese poster) 2018.

via:

AI On Tariffs

Just out of curiosity, and apropos of nothing, we asked Grok (the AI chatbot created by Elon Musk) the following question: If a president of a superpower wanted to destroy his own country, what steps would he take? Here’s what Grok had to say:

If a president of a superpower aimed to deliberately undermine their own nation, they could theoretically take steps to weaken its economic, social, military, and political foundations. Here’s a hypothetical breakdown of such actions, assuming they have enough influence and control to push them through:

1. Economic Sabotage: They could tank the economy by imposing reckless fiscal policies—massive, unsustainable debt through unchecked spending or tax cuts without funding, devaluing the currency by pressuring the central bank to print money excessively, or dismantling key industries through deregulation or punitive tariffs that disrupt trade. Encouraging corruption and cronyism could further drain resources.
2. Undermining National Security: Militarily, they might weaken defenses by slashing budgets, pulling out of strategic alliances, or leaking sensitive intelligence to adversaries. Ordering troops into unwinnable, morale-crushing conflicts—or abandoning critical outposts—could erode military strength and global standing.
3. Social Division: They could stoke internal conflict by amplifying divisive rhetoric, targeting specific groups with policies that breed resentment, or letting infrastructure and public services crumble to fuel discontent. Misinformation campaigns, either directly or through proxies, could deepen mistrust in institutions.
4. Political Erosion: To cripple governance, they might attack the rule of law—pardoning loyalists who break it, stacking courts with unqualified ideologues, or pushing legislation that centralizes power in their hands. Undermining elections through voter suppression or outright fraud could destabilize democracy further.
5. International Isolation: They could alienate allies by breaking treaties, insulting partners, or cozying up to hostile regimes, leaving the country diplomatically vulnerable. Withdrawing from global organizations or climate agreements might also diminish soft power and economic leverage.
6. Neglecting Crises: In the face of natural disasters, pandemics, or cyberattacks, they could deliberately botch responses—ignoring experts, withholding aid, or spreading confusion—letting chaos compound.

Grok continues: “In practice, any president trying this would face massive resistance: checks and balances, public backlash, legal barriers, and pushback from their own administration or military. It’d take more than intent—sophisticated manipulation and loyal enablers would be key. Historically, no leader has pulled this off fully, but you can see echoes in cases like Venezuela under Maduro, where mismanagement and authoritarianism led to collapse—though even there, self-destruction wasn’t the explicit goal. Intentional ruin would be a slow burn, not a switch flipped overnight.”

by Open Culture |  Read more:

***

There is some evidence that the White House used AI to come up with a quick and dirty (and incorrect) formula to correlate tariff rates with trade deficits. I have no problem with using AI, I think they just didn’t go far enough. The White House should have asked the AI a question like this:

Suppose the US imposed tariffs on other countries in an effort to reduce bilateral trade deficits to zero using the formula for the tariff of (exports-imports)/imports. What do you estimate would be the consequences of such a policy?

Answer (O1 Pro):

A tariff schedule keyed to bilateral deficits—imposing a rate equal to (US exports − US imports) / US imports—would be extremely disruptive and unlikely to achieve its goal. Key points:

1. Immediate Impact on Prices and Supply Chains

• If the US imports more than it exports from a given country, (exports − imports) is negative, making the tariff percentage negative unless the formula is modified (e.g., by absolute value). In practice, one would presumably set a positive tariff aimed at closing the bilateral gap.

• Such high tariffs would sharply raise import prices for both consumers and firms reliant on foreign inputs. It would encourage attempts to switch suppliers but at the cost of disrupting supply chains and increasing production expenses.

Retaliation and Trade War Dynamics

• Targeted countries would almost certainly retaliate with their own tariffs. Retaliation would damage US export sectors—especially agriculture and high-value manufacturing—and risk a broader trade war.

• Countries with a US trade surplus would apply punitive measures that shift US business to alternative suppliers, undermining the very exports the policy is meant to foster.

Misalignment with Macroeconomic Fundamentals

• Bilateral imbalances reflect global production patterns, comparative advantage, and macro factors like savings–investment imbalances and currency flows. A country that persistently imports more overall does so because it’s running a capital account surplus. Tariffs don’t fundamentally alter that global saving–investment arithmetic.

• If the US still runs an overall current account deficit, restricting imports from some countries will simply shift deficits to others. Global supply chains will rearrange, but the total US deficit will be largely unchanged.

Violation of Trade Agreements

• Such a policy almost certainly violates WTO rules, since it imposes discriminatory tariffs based on bilateral imbalances. The resulting litigation and sanctions would add more uncertainty.

Net Effect: Reduced Efficiency, Higher Costs

• Economically, the net effect is negative. Costs rise for US consumers and US manufacturers reliant on imported inputs. Retaliatory measures reduce export opportunities. Overall trade volume shrinks. Growth slows, and no fundamental improvement in the US external balance occurs.

In summary, a bilateral “deficit-equalizing” tariff policy would create severe distortions, invite retaliation, and do little to fix the structural causes of US trade deficits. Empirical evidence and standard trade theory both suggest it would reduce economic efficiency and likely harm US producers and consumers alike.

by Alex Tabarrok, Marginal Revolution |  Read more:

[ed. Any Questions? See also: America Underestimates the Difficulty of Bringing Manufacturing Back (Molson Hart/X); and, All the arguments for Trump's tariffs are wrong and bad (Noahpion).]