Note: Behind the green door, there is a post about an old post I did on Vladimir Putin as the antidote to Peter the Great, a post about the Amazon series The Bondsman, and the Sunday podcast. Subscribe here or here.

Last week, Trump stunned the world by following through on what he has been promising since he came down the escalator in 2015. He imposed across-the-board tariffs on every country in the world—except Russia. The reason Russia was excluded is that they are already sanctioned to the maximum. The tariff knob does not go past one hundred, so they were not on the list. Every other country was hit with a tariff, even Israel, which should cause some people to rethink things.

This set off the Great Trump Stock Market Crash, which promises to continue this week as the rest of the world responds to the new world order. The old trading models no longer work, so the default fallback in these conditions is cash. The quants were working feverishly last week to update their models in order to find the bargains that will inevitably be sitting there, waiting for the lucky. The smart money thinks the floor is a twenty percent correction, followed by stability.

The yesterday men and the crazies are sure this is the Great Depression, because their history of the world starts in the 1930s. It is a stylized history, such that every modern event can be jammed into the 1930s, the 1960s, or the 1980s. Since they are sure Trump is secretly Hitler, this must be the 1930s—even though we have witnessed many stock market corrections in the last thirty years. The COVID crash, the mortgage bubble, and the dot-com bubble are easy examples.

In reality, what we are seeing is the long-overdue return to normalcy, where American economic policy is aimed at benefiting the American people, rather than abstract concepts from economics departments. If Canada has tariffs on American goods, then the United States should have tariffs on Canadian goods—unless it can be shown that the American people benefit in some way from the imbalance. The same is true for every other country in the world.

One of the weird things about decades of American trade policy is that it has created the same sense of entitlement as government racial policy. Just as nonwhites think they are entitled to be near white people without conditions, the world thinks it has a right to access the American market without conditions. This is most obvious in Europe, which has taken this lopsided arrangement for granted. They have also assumed they are entitled to American defense, while doing nothing in return.

The logic behind this arrangement has always been nonsense—but people love to believe in nonsense, especially their own. We see this with the free trade crowd, who are claiming tariffs will only harm the American people. If that were true, then the rest of the world should have been miserable for the last thirty years. Further, if that were true, then the rest of the world now has a chance to usher in a golden age for their people by eliminating their tariffs instead of raising them.

The truth of the matter is that all economic policy is about trade-offs—especially in global trade. This is why it is called trade, rather than “free.” Having a tariff-free relationship with Canada could make sense if the Canadian government could be trusted, as the American and Canadian economies are so similar. The same is not true for Mexico or Bangladesh. Trade is never just about money—it is also about culture and the national interests of the trading countries.

Of course, what we are seeing is not really about trade so much as it is about getting the American financial house in order. Scott Bessent, the Treasury Secretary and architect of the Trump economic policy, has made this clear. Normalizing American trade relations is just one arrow. Another is the mass reorganization of government that kicked off in January. For the first time in the life of anyone reading this, the size and scope of government will be reduced.

Another arrow is the changes in the tax code that are slowly working their way through both houses of Congress. The Senate passed its version of spending and tax cuts, so now it is on to the House. What is shaping up is a two-pronged approach: one is to put into law the cuts made by the DOGE boys, and the other is a radical revamping of the tax code to reflect the new economic approach. Removing taxes on tips and overtime, for example, is part of the Senate model.

What we are seeing is the most radical alteration to the American economic model since the 1980s. The reason for it is that the old model is unsustainable. As Bessent pointed out, there is a limit to borrowing. For a long time, the American model relied on creating unlimited credit money in the banking system and massive federal borrowing. We have reached the limits of this model. Now, that model threatens the integrity of the American economy, so changes must be made.

More important are the changes in how we think and talk about the economy. For the longest time, the economy has been treated as a god. Americans were expected to tolerate anything to please it. If the economy demanded Haitian cannibals in your town, you had to accept it. If the economy demanded that the quality of your hand tools decline, you just lived with it. If the economy required you to work two jobs to make ends meet, then you did it. The economy was a remorseless god.

This sort of thinking makes sense to an alien overclass that sees the United States as an opportunity to be exploited. It does not make sense if the ruling elite feels a connection and obligation to the people. Shifting from the old transactional model of economics to a nationalistic model requires a new language. Simply pointing at a graph that trends upward is no longer enough. The political class will now have to possess some economic literacy.

It is too soon to know if these changes can make it through Congress. The winners under the old exploitative model will not go quietly. No one knows if the American public will tolerate the pain that must come with the transition. It is not all bad news, though, so the pain may be limited. Energy costs are falling—crude is under sixty dollars a barrel. This could tame inflation enough for the Fed to cut rates. Low taxes and cheap energy will go a long way toward cushioning the transition.

In the end, Bessent is correct. America cannot continue to create credit in the financial system and borrow trillions to hire government workers. We either have an orderly transition back to a normal economy, or we have a disorderly transition. The name for that is collapse—and that is vastly worse than a stock market correction. This is the reason the economic elites are backing this move. They know that the people who suffer the most from failure are the elites.

If you like my work and wish to donate, you can buy me a beer. You can sign up for a SubscribeStar or a Substack subscription and get some extra content. You can donate via PayPal. My crypto addresses are here for those who prefer that option. You can send gold bars through the postal service to: Z Media LLC P.O. Box 1047 Berkeley Springs, WV 25411-3047. Thank you for your support!

Imagine a society made up of farmers who produce what they need to live but also trade extra to one another for things they do not produce. This is not the most efficient society, but as long as everyone is self-sufficient, it works. At the minimum, each farm produces enough food for the family, even in lean years. Perhaps like the Amish, they voluntarily come together on larger projects that are shared by everyone and individual projects that require a lot of hands.

One day, someone comes along with an offer to one of the farmers. Instead of that farmer trading with the other farmers, this stranger will buy the excess for what the farmer wants in trade. He makes this deal with other farmers and before long he makes his living as the middleman. He does the trades between the farmers, keeping a little extra for himself in the process. Before long there are others doing similar and they all live in what they call town.

Now, imagine all the farmers decide to quit farming altogether and move to town to be traders and merchants. Obviously, that cannot work as now there are no farmers to produce the things the traders are trading, and the merchants are selling. Some of the farmers can quit, but not all. Additionally, some can begin to specialize to the point where they are no longer self-sufficient. They now rely on the traders and merchants in town to get the things they need to live.

In other words, the original model works just fine, but it is not efficient. The farmers are all just above the sustenance line. The introduction of middlemen makes for more efficient use of farm labor, so everyone can do a little better. Specialization in farming and in trading increases productivity. Somewhere in this model there is a mix of farmers, traders, merchants, and specialization that attains the maximum amount of productivity for this society.

That productivity, however, must benefit everyone. Otherwise, we get the problem of the farmers looking at the townspeople and deciding they would prefer to be a trader, rather than a farmer. There also must be a balance with regards to specialization, as this could make the productive class overly dependent upon the middlemen, who can then maximize their profits from the productive class. A society with a small number of people controlling all the profit is inherently unstable.

Therein lies the problem Trump inherits in terms of the economy. Starting in the 1970’s with the microprocessor revolution, the American economy has been hellbent on maximizing efficiency. Wherever technology can increase the output from labor, it has been done, often overdone. In fact, the data shows that efficiency has gone up far faster than wages, so we tipped past the happy balance long ago. While the overall economy continues to grow, it grows only for a minority of citizens.

On top of that, we long ago blew past the balance between producers and middlemen described in that prior scenario. A couple of generations of Americans have been trained to work in the middleman economy, often doing busy work related to boutique beliefs like diversity of climate change. Meanwhile, the productive sector atrophied or was shipped off to other parts of the world. The American economy is more like a global counting house now, rather than a self-sufficient economy.

The global bank model has run its course. The rest of the world, for various reasons, is disconnecting from the American model. The rest of the world is unwilling to do like the farmers in that model and turn everything over to the middlemen. That town full of merchants and middlemen is noticing that the farmers are not coming to town to trade their goods as much they did in the past. Suddenly, the skim from the work of the farmers is getting too small to sustain the townsfolk.

It is not a perfect way to think about it, but it helps understand the economic problems Trump inherits as president. It is why he is convinced that shifting from a tax system focused on labor to one focused on trade is a winner. It will help shift labor from busy work in cubicles back to doing productive things because the cost of imports will rise relative to locally produced items. Foreign producers will adjust by investing in production inside America.

The practical problem Trump inherits is the American economic model evolved to favor the middleman over the producer. Over time it led to the imbalance we see between producers and facilitators. It also led to a narrowing of profit to a shrinking number of players in the economy. In some ways, the American economy has become a digital version of the Bronze Age palace economies in that everything flows through financial and information centers that operate as skimming houses.

Fixing the imbalances within the rules of the system is impossible. This post by an economist calling himself Jack Rasmus explains how the tools available to government no longer work to address the practical imbalances. The people controlling Joe Biden poured almost four trillion in extra money into the system, but it did nothing to mitigate the problem of shrinking middle-class budgets. Prices keep rising while wages remain static, which means most people are getting poorer.

The only way out of the current trap is through systemic changes. That is why Trump is fixated on tariffs as an economic and policy tool. On the one hand this brings costs back in line with prices, so the market regains some coherence. If the real cost of an item is in the price of the item, then people will reward the genuinely lower cost items. In the current model, the cost of cheap goods turns up in the loss of social capital, delayed family formation and, of course, high crime.

A simple example is prepared food. These are cheap for the consumer but are packed with hidden costs. The refrigeration units used to be made in America, but those plants were shipped abroad by the miracle or tariff free trades deals. Of course, the plants are often staffed with cheap foreign labor, the cost of which turns up in your property taxes, the crowded schools, and the healthcare system. That frozen pizza turns out to be vastly more expensive than the price on the box.

Multiply this out all over the economy and it is easy to see the problem. Fifty years ago, middle-class families could get by on one income. Today, it takes two-incomes which is why there are far fewer families. Ours is an economy that looks prosperous on the outside, but the internals are littered with hidden costs. The only way to remedy this is to bring the costs back to the front of that frozen pizza and that can only be done through systemic change.

There are three challenges. One is the small number of people profiting from the current model will fight reform. That is not insurmountable. Trump having some of the richest men on earth in his corner will help a great deal. The bigger problem is the transition cost, which will come in the form of recession. There is no escape from it. The early 1980’s were the cost of transitioning from the productive economy to the middleman economy, so expect similar as we transition back.

The biggest challenge in this project is a dysfunctional managerial class that sees any change as a challenge to their position. The middleman economy was very good for the sorts of people who have a long list of impressive sounding credentials but view tangible accomplishment as a disqualifier. The army of managers in the managerial state cannot survive a transition out of a middleman economy. Like the aristocracy in 18th century France, they will not go quietly.

If you like my work and wish to donate, you can buy me a beer. You can sign up for a SubscribeStar or a Substack subscription and get some extra content. You can donate via PayPal. My crypto addresses are here for those who prefer that option. You can send gold bars through the postal service to: Z Media LLC P.O. Box 1047 Berkeley Springs, WV 25411-3047. Thank you for your support!

An interesting subtext to the election of Donald Trump is one that has been largely ignored by the usual sources. It was not cultural issues, foreign policy or the ineptitude of Kamala Harris that drove the election. It was the economy. Widespread anxiety over the economy is what drove down support for Harris, despite the billion-dollar campaign and the billions spent in media gaslighting. No amount of jawboning could convince the public that the economy is doing as good as claimed.

There is a good reason for this. As some have predicted, inflation has been creeping back up after having moved down for a period. The American economy is experiencing what happened in the 1970’s. Contrary to popular belief, inflation did not rage for the entire decade but ran in spurts. There were periods where inflation rose, plateaued and then fell to a tolerable level. The latest data on the CPI and the PPI indicate the current economy is stuck in a similar pattern.

Regime media dismisses this as a minor blip in an otherwise glorious economy, managed by the wise and noble Biden administration, but that has not convinced anyone who buys things. The government does not measure inflation the same way it used to measure it in the 1970’s, so no talk of stagflation. If they used the old methods, inflation would be a daily feature. Of course, you also have the fact that the government now lies about all of the economic data.

This is why the gaslighting failed so miserably in the election. One of the secrets to trick people is to overcome the expectations gap. This is the difference between what people expect to be the basis of the argument and the actual basis of the argument. If you confirm what people think is true and make your argument from that basis, you can convince people of most anything. If you start from an alternative reality as your basis, then you have little chance, no matter how clever the argument.

That does not alter the fact that the economy may be in worse shape than the government and media are willing to admit. There are systemic problems that go back a long way that may finally being coming to the fore. Twenty years ago, everyone talked about what would happen to the labor force when the baby boomers started to retire, but no one talks about it now that they are retiring. Of course, no one dares talk about is replacing those baby boomers in the workplace.

For his part, Trump talks about the need to reform the economic model away from everyone doing each other’s laundry back to building things again. Part of his approach to China is to bring back important parts of the industrial base. Trump is committed to a form of Abenomics which means massive new spending to attract private capital, along with policies to coerce those investments. He will come to office just as government spending is setting new records.

This sort of worked in Japan because they have a strong industrial base that supports their export economy. They also have a homogenous culture with a commitment to self-sufficiency and a savings rate to prove it. For America, this can only work with low interest rates and that can only happen if the dollar returns to its dominant position in global trade and investment. It is why Trump is threatening to nuke any country thinking about going off the dollar.

The trouble is, people will trade in a currency if it is backed by something accepted everywhere like gold or the issuing country produces things that the rest of the world covets, like food, manufactured goods and energy. Alternatively, as has been the case for decades, countries will transact in a currency if it is viewed as a stable store of value by the rest of the world. The dollar has been the reserve currency because of the petrodollar and because it came with a stable set of rules.

Constant rule breaking by Washington has depressed the trust in the dollar because the rules behind it have collapsed. The only reason that the BRICS countries are working on an alternative payment system is they fear dependence on the dollar makes their governments unstable. Added to this is the fact that the Saudis have not renewed the petrodollar agreement signed in the 1970’s. This has not resulted in a change in policy, but China just sold dollar-denominated bonds in Riyadh.

This is one reason the foreign policy establishment is committed to creating chaos in the Middle East. The United States is not just the world’s banker. It is also the world’s protection racket and the countries that need protection the most are those near places with lots of instability. You can be sure that the collapse of Syria is keeping the sheiks in Riyadh tossing and turning at night. Here you see the connection between foreign policy and economic policy. In the end, it is always about money.

This is what Trump will inherit next month. On the one hand, the economic model of the American empire relies on the world being a dangerous place. This is what makes the world willing to put up with Washington in exchange for protection. At the same time, that model is slowly hollowing out the American middle-class. The imperial model works just fine if American citizens accept being mere subjects alongside the rest of the world’s population. Clearly they do not like this.

To some degree you can understand why permanent Washington has reacted to Trump and the populist movement that has made him possible with such fear. They understand the risks that come with putting the American people first. It is not just the cultural stuff or the paranoid fear of the past. It is the understanding that the imperial economic system cannot prioritize Americans over the others getting protection. Protection rackets must protect everyone inside the racket.

Whether or not Trump understands this is a mystery, but he is committed to an American form of Abenomics. It was not an accident that he hosted Abe’s widow last week at Mar-a-Lago. Scott Bessent, Trump’s pick to run Treasury, is known as “The Man Who Broke the Bank of Japan” because his hedge fund made billions from Abenomics by understanding it in great detail. Whether it can work in America is unknown, but we will know soon enough.

That is the irony of the Trump election. He was elected in large part to fix the economy, by which people mean lower inflation and increase wages. Republicans have done this with tax cuts and corporate giveaways and Democrats have done it with spending programs and corporate giveaways. The Trump plan is to restructure the economy, which will require massive spending and a considerable amount of pain. It is a radical departure from what people have come to expect.

If you like my work and wish to donate, you can buy me a beer. You can sign up for a SubscribeStar or a Substack subscription and get some extra content. You can donate via PayPal. My crypto addresses are here for those who prefer that option. You can send gold bars through the postal service to: Z Media LLC P.O. Box 1047 Berkeley Springs, WV 25411-3047. Thank you for your support!

Promotions: Good Svffer is an online retailer partnering with several prolific content creators on the Dissident Right, both designing and producing a variety of merchandise including shirts, posters, and books. If you are looking for a way to let the world know you are one of us without letting the world know you are one one is us, then you should but a shirt with the Lagos Trading Company logo.

Minter & Richter Designs makes high-quality, hand-made by one guy in Boston, titanium wedding rings for men and women and they are now offering readers a fifteen percent discount on purchases if you use this link. If you are headed to Boston, they are also offering my readers 20% off their 5-star rated Airbnb.  Just email them directly to book at sa***@*********************ns.com.

The next few weeks will bring a flurry of news regarding various names for jobs in the next Trump White House. Some of it will be gaslighting from people who just make things up for regime media. Some of it will disappoint Trump supporters hoping to get something from their efforts this time. One area that has gotten no coverage, but will be one of the most important, is the economy. Trump appears determined to fundamentally change how Washington controls the economy.

That is the first thing to understand. The United States is not a free-market economy or even close to one. There are millions of lines of regulatory code covering every aspect of economic activity. It is not exactly a command economy and in no way a centrally planned one, but it is a tightly controlled economy. Washington has its tentacles in every nook and cranny, even the black markets. Therefore, a president’s view on how to control the economy matters a great deal.

When it comes to economic policy, the placed to start is former Japanese Prime Minister Shinzo Abe. Trump was a fan of Abenomics, in addition to be on very good personal terms with him. Trump has often spoke highly of what has come to be known as Abenomics. Reportedly, Trump has talked to Scott Bessent about a position in the administration, maybe even Treasury Secretary. Bessent is also a proponent of the “three arrows” approach to the economy.

The “three arrows” term is how Shinzo Abe described his approach. One arrow or prong was loose money. Get as much money into the economy as quickly as possible, even if it creates inflation. The second arrow is to direct that new money into areas of the economy that either need revitalization or startup capital. If this means growing the budget, then so be it. The third arrow is to encourage (compel) private investment in the domestic economy over yield chasing.

Applied to the American economy, it probably means a blend of loose money, the slashing of regulation and tariffs to direct investment into the domestical economy, especially the supply chain and industrial base. One obvious lesson of the Covid panic, one entirely ignored by Washington, is complex supply chains, especially those flowing through Asia, are highly fragile. The growing rift with China makes untangling those supply chains even more important going forward.

Trump has made it clear that he wants to use tariffs to redirect investment into the domestic economy. Another name turning up as a possible addition to the Trump team is Robert Lighthizer, who is both a China hawk and the architect of Trump’s trade policy in his first term. It is important to note that the changes Trump ushered in were not rolled back under Biden. Taken together, it is a clear sign that Trump 2.0 will be much more hawkish on the trade front.

Those familiar with the regulatory world remember the wild ride it was in Trump’s first term as they went on a deregulation spree. Expect Trump 2.0 to be even more aggressive, especially on the environmental front. His nominee for the EPA is Lee Zeldin, who the Gaia worshipers detest. Trump made it clear with the announcement that his job will be to clear the dense thicket of environmental regulations that make it hard to put a shovel in the ground for any reason.

Trump 2.0 will be helped by the courts in this regard. This year the Supreme Court ended what had been termed the Chevron deference. This was the rule that said the courts should defer to the regulatory agencies whenever there was ambiguity in the laws passed by Congress. Of course, this meant that everything passed by Congress was as vague as possible, to give total control to the agencies. This has been turned on its head by the courts.

What we are likely to see is a three-pronged assault on the administrative state in Trump’s second term. One prong will be the aggressive slashing of regulations that we saw in Trump’s first term. The second prong will be a flood of litigation aimed at the vagaries of the enabling legislation. There are many cases in the system. The final prong is an effort by Congress to clean up the language to both limit the agencies, but also reassert oversight.

Where things get interesting is fiscal policy. Inflation remains an issue, despite claims to the contrary, but the Fed is signaling cuts in interest rates. Will Trump demand big new spending on infrastructure? This would be one way to soak up some of the extra money being generated by lower interest rates. Anyone who goes outside knows there is a desperate need to rebuild the infrastructure. Go to an airport and you are suddenly embarrassed to be an American.

All this stuff is boring and does not get the same attention you see with some of the other stuff allegedly on Trump’s agenda. Catapulting left-wing crazies into the sea provides a much bigger dopamine rush than deregulation. On the other hand, Trumponomics is the most radical part of his agenda. Those old enough to remember Ross Perot and Pat Buchanan see the point. Trump is repudiating half a century of conservative economic dogma.

The Trump economic agenda is not without its problems. In Washington, every mortgage payment, college tuition bill, access to elite schools and universities depends on nothing changing in Washington. Trump 1.0 was largely undone by his own party, who is as invested in the status quo as the Democrats. The lawfare industrial complex is also gearing up for round two against Trump. Maybe his team is ready this time, but even if they are prepared, it will be a long slog.

The bigger question is if it will work. What Trump is proposing sounds a lot like old fashioned liberal economics from the last century. Instead of tax and spend it will be print and spend. The difference is the deregulation and tariffs. The point of this approach is to redirect investment back into the American economy and direct it to tangible things like supply chains and manufacturing. It is the approach we saw with growth economies last century.

Another thing he has on his side is the economic elites have come around to this approach to the economy. Investors love cheap money and deregulation, but Wall Street also sees it needs a replacement for Asia. The days of getting rich from the China trade are gone. If the United States replaces China as an investment option, they will get onboard with it. As we saw with the election, it is always good when the rich people are backing your play.

If you like my work and wish to donate, you can buy me a beer. You can sign up for a SubscribeStar or a Substack subscription and get some extra content. You can donate via PayPal. My crypto addresses are here for those who prefer that option. You can send gold bars through the postal service to: Z Media LLC P.O. Box 1047 Berkeley Springs, WV 25411-3047. Thank you for your support!

Promotions: Good Svffer is an online retailer partnering with several prolific content creators on the Dissident Right, both designing and producing a variety of merchandise including shirts, posters, and books. If you are looking for a way to let the world know you are one of us without letting the world know you are one one is us, then you should but a shirt with the Lagos Trading Company logo.

Minter & Richter Designs makes high-quality, hand-made by one guy in Boston, titanium wedding rings for men and women and they are now offering readers a fifteen percent discount on purchases if you use this link. If you are headed to Boston, they are also offering my readers 20% off their 5-star rated Airbnb.  Just email them directly to book at sa***@*********************ns.com.