Tag: economics

Trump Is Embracing ‘Daddy State’ Economics

The question of whether President Donald Trump has turned the United States toward a new “state capitalism”—one in which the government is not just economic referee but active player—has been answered. His second term brings policies that go well beyond traditional Republican pro-market orthodoxies, such as tax cuts and deregulation, and into direct involvement with production and capital. Yet this doctrine is less a coherent grand strategy than a set of ad hoc deals, sometimes pro-market and sometimes interventionist.

Some Trump policies—tax cuts, deregulating, talk of budget-deficit reductions—retain a traditional Republican tone. On the other hand, this administration’s protectionism and tariffs would have been inconceivable a decade ago. Republicans would also traditionally label the government’s acquisition of a 10 percent stake in Intel as socialism if proposed by anyone other than Trump. And other policies have the feel of mafia tactics made possible by the exercise of leverage, like letting Nvidia and AMD sell their chips to China in exchange for a 15 percent cut back to the U.S. government.

Trump also departs markedly from the past GOP playbook in his lack of recognition that the market allocates resources much better than politicians and bureaucrats do. He treats the market as a stage for negotiation to reorganize the world’s economies. Old-guard Republicans were globalists, whereas Trump built his appeal on “America First” nationalism and protectionism.

Earlier Republicans valued predictable rules, but as Cambridge legal scholar Antara Haldar noted in a Project Syndicate symposium this month assessing the direction of “Trumponomics,” the president “is willing to break any rule, norm, or promise…in the name of striking ad hoc corporate-style ‘deals.'” Where conservative-minded leaders of the past obscured the state’s role, Trump “flaunts it.”

Yet Haldar correctly argues that Trump’s approach differs from other forms of heavy-handed state control. It is neither the Chinese model nor that of the developmental state. It is “erratic, transactional, and short-sighted” and a rejection of the “quietly overbearing ‘Nanny State’…in favor of a commanding, patriarchal ‘Daddy State.'”

Princeton University historian Harold James, another participant in the symposium, sees Trump as a break from the past due to his revival of state-directed “industrial policy.” This started under former President Joe Biden’s administration, but there is no doubt that Trump’s pursuit of a manufacturing revival and reshoring of global supply chains, along with his tariffs and equity stakes in private companies and his overall aim to rebuild U.S. strategic capacity, fall well into that category.

Unfortunately, as James argues, Trump’s brand of industrial policy encourages “hyper-activist corporate lobbying, with large and well-connected enterprises getting the best ‘deals.'” In my opinion, all industrial policies end up this way, not just Trump’s.

Keep reading

National debt to rise to 120% of GDP by 2035, budget watchdog warns

The national debt is projected to rise from 100% of the U.S. Gross Domestic Product (GDP) at present to 120% of GDP by 2035, according to the latest figures from the Committee for a Responsible Federal Budget (CRFB), a nonpartisan fiscal policy think tank, based on baseline budget data from the Congressional Budget Office.

The CRFB released an adjusted August 2025 baseline, which found that annual deficits will “remain above 6% of GDP throughout most of the decade,” which is “more than twice the 3% target advocated by some policymakers.”

The budget watchdog group estimated that bringing the federal deficit down gradually to 3% of GDP would require around $3.5 trillion in savings over five years, including interest, or $7.5 trillion over ten years.

“To hold debt at 100% of GDP, approximately $4 trillion is needed over five years, or $9 trillion over the decade,” read their analysis.

The CRFB found that achieving a deficit equal to 4% of GDP would require about $5 trillion in savings while balancing the full federal budget, including interest, would require about $15.5 trillion in total savings.

The watchdog group noted that economic growth alone cannot solely take the place of major fiscal policy changes to get the fisacl situation in the U.S. under control. The CRFB recommended that the U.S government implement “super PAYGO” as well as trust fund reform and other spending reduction initiatives.

“Under Super PAYGO, every dollar of new spending or tax cuts would be offset by at least two dollars of revenue increases or spending reductions, thus ensuring that new tax cut and mandatory spending legislation also includes deficit reduction,” the CRFB said.

CRFB noted that “faster growth can make these fiscal goals easier.” However, the watchdog group said that “thoughtful pro-growth deficit reduction and reform is likely the best way to put the country on a sustainable fiscal path.”

The CBO recently released a separate estimate which found that the Trump administration’s tariffs will cut the U.S. federal deficit by $4 trillion through 2035. 

The analysis found the tariffs would lead to $3.3 trillion in direct tariff revenue and $700 billion in savings from lower interest payments on borrowing. These projections are revised from CBO’s earlier estimates. In June, the CBO had estimated that tariffs would offset budget shortfalls by $3 trillion.

Keep reading

The Smear Campaign Against Trump’s Bureau of Labor Statistics Nominee E.J. Antoni

President Trump’s nomination of economist E.J. Antoni to lead the Bureau of Labor Statistics has triggered those infected with Trump Derangement Syndrome. That’s too bad, because Antoni has some exceptional ideas to modernize economic data collection and reporting. 

Regardless of this latest TDS outbreak, it is time for the Bureau to modernize data collection and use available technology to get markets the most accurate and comprehensive information possible.

I’m no economist. I changed majors from economics to English before my junior year. But I can still hear my late father every month complaining about two things – the inflation report and the jobs report. My dad lived in the markets. CNBC burned like a log fire in our house. And those damn inflation and job reports were always flawed to my dad.

Inflation reports underreported some things and overreported others. The jobs report also has flaws. The current methodology at the Bureau is already flawed. Antoni knows exactly why and could make them better.  

The reports, for example, downplay inflation by underemphasizing things we all consume. 

The jobs report is also often a snow job. Goldman Sachs estimates that upcoming revisions to the Bureau’s 2024 jobs data may show a drop of up to one million jobs.

Antoni notes that the Bureau fails to differentiate between full-time and part-time jobs.  

This methodological failure has masked labor market weakness. After COVID, many Americans began piecing together multiple gigs. America met JD Vance’s grandmother, Mamaw, in “Hillbilly Elegy.” She worked multiple part-time jobs to get by.  

Yet the status quo at the Bureau of Labor Statistics is to count the part-time jobs as full-time jobs.

Changing this flawed methodology, as Antoni suggests, seems sound. 

Antoni has been pushing for refinements to the system from his perch at the Heritage Foundation, where he is the chief economist.

Did I say Heritage Foundation? Indeed, and thus we arrive at another triggering event for the hatred of Antoni. He comes from the premier conservative think tank, not the halls of Harvard. 

To sink Antoni’s nomination, his foes have turned to a ninety-year-old ship. 

Full disclosure. When I was a child, I built plastic model airplanes. My models included the ME-109, the iconic fighter in the Luftwaffe, as well as the RAF Spitfire. These two planes dueled over the skies of southern England to decide the fate of Western civilization. I even built models of the stubby, ridiculous-looking ME-163 Komet. You could buy the plastic model kits at the mall toy store for about $5. I don’t remember if they included the authentic swastika decals or if I threw them out. Even more damaging for my career, I displayed the models on my bookcase!

What does this have to do with Antoni, a naval history enthusiast? 

Keep reading

14 Million Illegals in 2023: The Cost to Our Nation

Illegal immigration in the United States surged to a record 14 million in 2023, according to a Pew Research Center report. That figure marked a sharp increase from 11.8 million in 2022 and broke the previous high of 12.2 million set in 2007. Numbers rose further in 2024 under Biden’s policies, then began to decline in 2025 under Trump, though the total remains above 14 million.

California, Texas, Florida, New York, New Jersey, and Illinois had the largest concentrations of illegal immigrants, with Texas rapidly catching up to California. Pew estimated that 9.7 million were part of the U.S. workforce in 2023, about 5.6% of all workers, with Nevada, Florida, New Jersey, and Texas recording the highest shares.

The economic impact of illegal immigration is staggering. According to a 2023 study by the Federation for American Immigration Reform (FAIR), the gross annual cost of illegal immigration, the total before factoring in taxes paid by illegal aliens, has risen to $182 billion.

Taxes paid by illegal immigrants cover only about 17.2 percent of these costs, leaving American taxpayers with a net burden of $150.7 billion per year. That amounts to $8,776 annually for each illegal immigrant or U.S.-born child of illegal immigrants. On a per-taxpayer basis, illegal immigration costs $1,156 a year, or $957 after accounting for taxes paid by illegal aliens.

These costs have grown sharply. The 2022 totals represented a 30 percent increase over just five years. A previous FAIR study in 2017 estimated the net annual cost at $116 billion, underscoring how quickly the burden has escalated.

The local impact of illegal immigration is especially visible in law enforcement statistics. In Los Angeles County, 95 percent of all outstanding warrants for homicide are for illegal aliens, and as many as two-thirds of all fugitive warrants in the county involve illegal aliens.

Keep reading

Trade Crackdown: 14 Countries Receive Tariff Letters Including Japan, South Korea And Thailand

  • US President Donald Trump announced plans to impose higher tariff rates of 25%-40% on key trading partners and signed an executive order holding off the new duties until Aug. 1.
  • Tariffs on Japan, South Korea, Malaysia, Kazakhstan and Tunisia, would be 25%, South Africa and Bosnia 30%, Indonesia 32%, Bangladesh and Serbia 35%, Thailand and Cambodia 36%, while Laos and Myanmar would face a 40% levy.
  • Meanwhile, Trump suggested the possibility of additional trade negotiations and delays at the White House shortly after he sent out the tariff letters, as he said the notifications were “not 100% firm”. He also said the US is close in making a deal with India.
  • White House Press Secretary Karoline Leavitt said additional letters will arrive in the coming days.

Main takeaways:

  1. the deadline was pushed towards August 1st vs. July 9th;
  2. announced new tariff levels (effective on August 1st) for 14 countries
  3. Trump said that the tariffs on each country would be separate from any “sectoral” tariffs that he imposes;
  4. we should expect more deals/letters coming: Leavitt said Trump will send more letters 

Keep reading

‘No exceptions’: Trump threatens additional tariffs on BRICS-linked countries

US President Donald Trump has threatened to impose additional tariffs on any country affiliated with the BRICS+ group of emerging economies. 

Trump made the threat early on 7 July in a post on his Truth Social platform. 

“Any Country aligning themselves with the Anti-American policies of BRICS, will be charged an ADDITIONAL 10 percent Tariff,” the US president said. 

“There will be no exceptions to this policy. Thank you for your attention to this matter!” he added. 

Trump’s statement coincided with an ongoing BRICS summit in Rio de Janeiro, Brazil. 

On Sunday, the bloc made a declaration condemning the rise in US tariffs in an indirect swipe at Washington, expressing “serious concerns.”

These measures are “inconsistent with WTO (World Trade Organization) rules” and “threaten to reduce global trade, disrupt global supply chains, and introduce uncertainty.”

In a statement at the summit, Brazilian President Luiz Inacio Lula da Silva slammed NATO’s decision to hike military spending by five percent of GDP annually by 2035. 

“It is always easier to invest in war than in peace,” Lula said, while also condemning the genocide against Palestinians in Gaza. 

Iranian Foreign Minister Abbas Araghchi attended the BRICS summit. Iran’s President Masoud Pezeshkian was initially scheduled to participate before Israel launched a brutal US-backed war against the country in mid-June. 

The BRICS nations condemned the recent US and Israeli strikes on Iran during the summit. 

“We condemn the military strikes against the Islamic Republic of Iran since 13 June 2025. We further express serious concern over deliberate attacks on civilian infrastructure and peaceful nuclear facilities,” the bloc said, adding that the attacks “constitute a violation of international law.”

As the fate of stalled nuclear talks between Tehran and Washington remains uncertain, US economic sanctions have continued to target Iran. 

A few months before the US-backed war on Iran, a brief trade war erupted between Beijing and Washington. 

Beijing imposed high levies on US-sourced natural gas imports in response to Trump’s sweeping tariffs on Chinese exports. 

China and the US agreed on 12 May to remove most of the tariffs imposed on each other. 

Keep reading

Contra Klaus Schwab, Government Cannot Create Prosperity

There is no sense living in a free country without prosperity. Think Klaus Schwab of the global elites, “You will own nothing but be happy.” How charming.

If we want to own something, we should understand the system that creates prosperity and then protect it. Are you aware that many economists have no idea how prosperity is created? Their fallback position is “it’s complicated.” 

No, it is not.

We come from nature, from planet Earth. Understanding nature gives us a starting point for the mechanics of prosperity. Students of nature have described thousands of systems, but none have ever gotten to nature’s true foundations. Not even AI. 

A tenet of the environmental movement is “there is no waste in nature.” The obvious question, then, is if there is no waste, what is the mechanism that drives it out? 

Competition drives waste out of nature. 

People understand competition and they understand waste. What they don’t understand is that the two are inextricably connected like opposite ends of a seesaw. When competition goes up, waste goes down, and vice versa. Since there is no waste, nature is a perfect competitive system.

The competition/waste connection gets you a long way to understanding the operation of nature but there is a very necessary third fundamental; everything moves to ease.

You can prove this by going to a national park. There, signs read, “Do not feed the animals.” Why? Because if you start feeding the animals, they will stop feeding themselves. Everything moves to ease! 

We can apply these three fundamentals of nature to the two great systems unique to humans, the marketplace and government. 

We easily see that the marketplace operates essentially like nature. It, too, is a competitive system that eliminates waste. Everything about the marketplace is based on a move to ease. Why trade if it doesn’t make your life easier? 

Government, on the other hand, is singular, meaning there can be no competition. No competition means there is no mechanism to eliminate waste. It is a feature of the system. As for a “move to ease,” take a moment and think about government employees…enough said! 

Keep reading

The $96 Billion Lie: How Liberal Economists Manipulate Immigration Statistics to Hide the Truth About America’s Job Crisis

An economic analysis reveals how selective statistics are used to portray illegal immigration as beneficial while obscuring its true impact on American workers.

For years, liberal advocacy groups and complicit media outlets have pushed a narrative that sounds almost too good to be true: illegal immigrants are contributing $96 billion annually in taxes while maintaining higher employment rates than native-born Americans. Like most things that sound too good to be true, this claim crumbles under basic economic scrutiny.

The recent surge in claims about immigrant “tax contributions” and “employment rates” represents a sophisticated misinformation campaign. The cornerstone of pro-illegal immigration propaganda is the claim that undocumented immigrants pay $96 billion in taxes annually. This figure, popularized by the Institute on Taxation and Economic Policy (ITEP) and parroted by countless media outlets, is a masterpiece of statistical deception.

The $96 billion figure lumps together sales taxes paid by everyone, excise taxes on gasoline and utilities, property taxes supposedly “indirectly paid through rent”, which is an economic fallacy, and a small fraction of actual income taxes.

Advocates then present this mix as if undocumented immigrants are dutifully filing tax returns and contributing to Social Security like law-abiding citizens.

They are not.

Keep reading

Economic suicide by design

This week, Oregonians heard the announcement that Tektronix, an iconic Oregon-based company, is moving its headquarters from Oregon to North Carolina.

Tektronix has decided that it has had enough of the Oregon Democrat high taxes, poor schools, and constant degradation of the quality of life for its employees. Textronix was once one of the largest employers in the state of Oregon. Anybody working in the electronics branch of technology relied on Tektronix test equipment to troubleshoot electronic problems. Driving by the Tektronix campus was very sad for me when we moved to Oregon. The parking lots around the Tektronix buildings were mainly empty, and slowly got even emptier. As an Electronic Technician who relied on the Tektronix test equipment my entire career, this was like watching an old friend slowly die from neglect.

Elections have consequences, and so does how people vote. Voting for more taxes, higher fees, and the crazy bills the Democrat supermajority pushes through is costing Oregon thousands of highly-paid citizens who have had enough, and they then leave Oregon for different states. Yet Oregon continues down the same old path to economic disaster. Oregonians cannot figure out that Democrats are all the same; their solution to problems is to raise taxes and fees on everything. For decades, Oregonians have been voting for Democrats to lead Oregon, and nobody noticed that conservatives and Republicans were leaving over economic or freedom issues. The Democrats, Liberals, and progressives just kept on making Oregon less affordable and less desirable to raise a family or retire here.

Keep reading

Josh Hawley Wants To Raise the Minimum Wage

Sen. Josh Hawley (R–Mo.) has introduced a bill to increase the federal minimum wage, which has been $7.25 an hour since 2008. Hawley wants it to be $15 an hour. Many of us thought that the minimum wage issue was settled, but here we are again.

This is freshman-level economics: If you introduce a price floor on labor, the supply of people willing to work at that wage will exceed the demand, resulting in unemployment. If an employer can either have three employees making $10 an hour or two at $15 an hour (and one on public assistance), which do you think he would choose? Politicians like Hawley seem to think companies will simply accept lower profit margins. But they won’t—they’ll raise prices, cut staff, or go out of business.

Since hardly anyone earns $7.25 an hour these days, the federal minimum wage doesn’t cause serious economic distortion. A $15 mandate, by contrast, would wreak havoc, especially in low-cost-of-living areas. A simple thought experiment would be to imagine what would happen if we had a $10,000-an-hour minimum wage. This would obviously eliminate most jobs. The same principle applies to smaller hikes, even if the effects would not be as drastic. If prosperity could be legislated, we would have done it long ago.

Hawley is an interesting mix: socially conservative, economically populist. He has supported tax hikes on the rich, expanding the power of unions, capping credit card interest rates, expanding Social Security, imposing tariffs, and imposing prescription drug price controls. He’s frequently on the same side as such left-wing figures as Sens. Elizabeth Warren (D–Mass.) and Bernie Sanders (I–Vt.). In fact, he and Sanders, a self-described socialist, co-sponsored the bill to cap credit card interest rates.

What does it mean to be a Republican these days? What defines Republican economics? It used to be lower taxes or balanced budgets, but no longer. The Democrats are getting a lot of mileage out of being anti-tariffs, but that’s not because they are philosophically committed to free trade—most of them are reflexively opposing Trump. If a Democrat is elected in 2028, there’s a good chance they’ll maintain his tariffs. Voters don’t have many free market choices remaining.

We are a long way from 2005, when President George W. Bush and Treasury Secretary John Snow made an honest attempt at privatizing Social Security, or from 1998, when President Bill Clinton was pondering a bipartisan move along similar lines.

The camera loves Hawley; he’s handsome, articulate, and dangerous. When it comes to economics, there isn’t much daylight between him and the furthest-left factions of the Democratic Party. It is all about the packaging. If Hawley seems less crazy to the average voter than Warren and Bernie, that should worry us all.

Keep reading