U.S. won’t renew USMCA, opening door for negotiations with Canada and Mexico
... The USMCA was negotiated during Trump’s first term to replace the previous, 26-year-old trilateral trade pact known as NAFTA, which Trump frequently excoriated as a raw deal for the U.S.
When the new deal came into effect in July 2020, Trump touted it as “the fairest, most balanced, and beneficial trade agreement we have ever signed into law.” ...
The House Freedom Caucus is a joke, along with the rest of them: At least $20 trillion in new debt over ten years, increases the SALT cap for itemized deductions important in high tax Blue states, Green New Deal spending still in there, ratifies federal support for Medicaid's backdoor vehicle as insurance under Obamacare, etc.
The Chair of the House Freedom Caucus:
The White House’s push for for expanded presidential power threatens US economic stability
Donald Trump is systematically purging every US government institution, a pattern familiar to anybody who has studied the caudillo regimes of Latin America, or the playbook of today’s Putin-Orbán-Erdoğan prototypes.
It is a racing certainty that he will soon do the same to the Federal Reserve, forcing the central bank to cut interest rates into the teeth of rising inflation, with epic consequences for the world’s dollarised financial system and for €39 trillion (£33 trillion) of offshore dollar debt contracts and swaps.
Late last week he fired the head of the National Security Agency and its top officials at the behest of Laura Loomer, a fringe conspiracy theorist, who whispered into Trump’s ear that they were disloyal to the Maga movement.
He has already fired the heads of the FBI’s intelligence division, its counterterrorism division and criminal investigations division, as well as the heads of the Washington and New York offices.
He has fired the top brass of the US military, starting with a preemptive strike on the chairman of the joint chiefs of staff. An earlier chairman – General Mark Milley – refused to ratify Trump’s attempted coup d’etat on Jan 6 2021.
“We don’t take an oath to a king, or to a tyrant or dictator, and we don’t take an oath to a wannabe dictator. We take an oath to the constitution,” said Milley in his parting shot.
But Trump also fired the three judge advocates general, who are legally independent by Congressional statute and have the authority to decide which military orders should be disobeyed – such as Trump’s order to “just shoot” American protesters, on American soil, during the Black Lives Matter saga.
That obstacle will not recur. Pete Hegseth, the defence secretary, said the three judges had been sacked to stop them posing any “roadblocks to orders given by the commander-in-chief”.
You can go through the list, agency by agency, extending to the universities and private law firms, and even to the muzzled editorials of some of America’s once great newspapers: the purge is Bolshevik in ambition.
Does anybody in their right mind think that Trump will spare the Fed’s Jerome Powell as the two men gear up for an almighty clash over US monetary policy? “CUT INTEREST RATES, JEROME, AND STOP PLAYING POLITICS!” bellowed Trump in capital letters on Truth Social on Friday.
The Fed will indeed cut rates this year but not until it is able to see through the confusing blizzard of tariffs and the ricochet retaliation of an angry world.
Powell told Congress that the tariff shock is much bigger than expected and may set off “persistent” inflation rather than just a one-off jump in the price level. He came close to damning Trumponomics as a recipe for low-growth stagflation. That is a red flag to a bull.
The current debate over whether or not Trump has the legal power to fire Powell entirely misunderstands the character of the Maga revolution. America’s rule of law is for guidance only these days.
You could say it was ever thus. Franklin Roosevelt tried to pack the Supreme Court after it blocked the New Deal. He failed, and unleashed tax investigations to settle scores, as did Richard Nixon. But Trump is an order of magnitude more outrageous.
Powell will not go without a fight. “I will never, ever, ever leave this job voluntarily until my term ends under any circumstances,” he said during Trump 1.0.
Scott Bessent, the Treasury secretary, said the administration could sideline Powell by appointing a “shadow” Fed chairman, who could steer the markets by issuing forward guidance. But this does not overcome resistance from the Fed board and the hawkish regional presidents.
A secretive team of Trump loyalists drew up a 10-page report before the election proposing more radical measures. These include forcing the Fed to “align policy with administration goals” or even to make the president an “acting” member of the Fed board.
Trump could purge members of the seven-strong Fed board one by one until they get the message. The law states that the president can terminate the 14-year term of a Fed governor “for cause”, usually meaning malfeasance or neglect.
But Trump has just abused his tariff powers on an heroic scale by invoking fictitious “emergencies”. He could no doubt stretch the meaning of “for cause” to anything he wants. The Supreme Court has the last say, but Trump-appointed justices have already shown a strong leaning towards an imperial presidency.
In any case, there are other methods to bring the Fed to heel.
Maga vigilantes are intimidating American judges by having pizzas delivered to their homes – a mob tactic to say “we know where you live”. So we can assume that recalcitrant members of the Federal Open Market Committee will face this sort of treatment.
The major US banks are raising their inflation forecasts to 4pc or higher this year. This inflation will hit before the last three price shocks – Covid, the Putin commodity spike and Biden’s overspending – have faded from immediate memory. It is exactly how inflation psychology becomes embedded.
A variant happened in the 1970s. Nixon bullied the Fed into expansionary policies, with some choice language on “the myth of the autonomous Fed” that later surfaced in the Oval Office tapes.
Loose money stoked inflation, so Nixon ordered a freeze on prices and wages in 1971, declaring war on “gougers”. It was very popular. Illiterate policies often are.
If Trump succeeds in extracting rate cuts from the Fed and tax cuts from Congress, the same problem is going to arise. So my assumption is that he will blame the symptoms and will resort to price controls.
The elephantine difference is that US federal debt was 34pc of GDP in 1971. Today it is 122pc on the Fed measure, and galloping upwards. The fiscal deficit is over 6pc as far as the eye can see.
The US does not have the domestic savings to fund this debt appetite. The savings rate has collapsed to 0.6pc of national income. It was 12pc in the 1960s.
Foreign investors have been plugging the gap. This soaks up a large part of the world’s savings – the underlying cause of America’s trade deficit.
If you think the stock market gyrations of the last few days are terrifying, just wait until Trump destroys the credibility of the Fed and of US treasury debt, the anchor of the global system.
He could order a captive Fed to relaunch quantitative easing and buy the bonds, but to do that when inflation is running hot would be seen by the whole world as naked fiscal dominance. It would set off a price spiral and a collapse of the currency – the sort of outcome seen over the decades in Latin America, or Erdoğan’s Turkey.
The end destination is a return to US capital controls to stop foreign funds and US investors from taking their money out of America. A man willing to impose 116pc tariffs – including pre-existing ones – on Chinese goods and shut down the biggest bilateral trade relationship in the world as if it were a TV reality show will stop at nothing.
https://www.telegraph.co.uk/business/2025/04/08/trump-sell-off-is-bad-wait-until-wreck-us-bond-market/
But perhaps most ominous are signs that domestic manufacturing is on the cusp of a full-blown sectoral recession. Output has declined for five months, no doubt due to uncertainty over interest rates, as well as the debilitating shortage of skilled workers. The contraction, however, isn’t merely a reflection of Federal Reserve policy reinforcing supply-side choke points, which has undercut Team Biden’s efforts to reshore industry. In fact, production has been largely anemic since at least the slump of 2019; according to the Institute for Supply Management, a leading industry association, a 13-month stretch from 2022 to 2023 was the longest downturn since 2000-2002, when Permanent Normal Trade Relations with China went into effect. ...
These patterns should be of grave concern to progressives—as a matter of politics and policy. A similar, overlooked downturn late in President Barack Obama’s second term likely contributed to Hillary Clinton’s defeat in Pennsylvania, Michigan, and Wisconsin in the 2016 election. That, along with her campaign’s astounding indifference to the industrial Midwest, practically cemented the view among many working-class whites that today’s Democrats have abandoned their New Deal roots. Although the Harris-Walz ticket appears to be sustaining momentum and has trained its focus on preserving the “Blue Wall,” unanticipated headwinds in battleground counties could spell the same fate as Clinton’s. ...
The reality is that dozens of counties reeling from job losses have effectively experienced what many wage-earners rightly feared: stagflation. In more rural regions, peak inflation was higher than the national average, a trend which spread from the South to the postindustrial Northeast. Its toll undoubtedly compounded the sense of helplessness among rural households, who tend to pay more for groceries and other staples. Mainstream liberals seem reluctant to acknowledge as much. ...
An economy pockmarked by mini-regional downturns, moreover, belies headlines heralding a manufacturing renaissance.
More.
Here:
Will there come a day when fed-up Americans push back against all this stuff? Yes.
How long have I been hearing that one? My whole life?
Normie conservatives like Kass are hope peddlers little different from the utopians of the left, little different from those Christians who keep falsely predicting the Second Coming of Christ, heralds all of a future which never comes, or of one which at best miserably disappoints.
From time to time the hope of the left does become reality, but incrementally and dimly reflective of the real thing, now pallid in appearance (the New Deal), now grotesque as the case may be (happy Birthing Person Day), while the hope of the right never so much as impedes this interminable process slouching leftward.
The normie right never asks itself why this is so, why conservatism is so impotent.
The answer is the left has a stronger faith than the right. It is why the left is in the streets burning the place down and the right just sits on its hands.
How different were the people of the American founding era, who saw no contradiction with their religion in taking up arms against an unbridled king. Today's conservatives are the loyalists of the founding era, hiding in their homes lest the unbridled find them out.
America today has been turned on its head. Secular faith has replaced religious faith. Down is Up, Left is Right, Evil is Good, Bondage is Freedom. America is the Crown of 1776, ripe for a counterrevolution.
Shall it be prevented?
Americans like Thomas Jefferson called for watering the tree of liberty from time to time with the blood of patriots and tyrants.
By their fruit ye shall know them.
Joel Kotkin here in The New York Post:
If these Democrats win both houses of Congress as well as the White House, things could get far worse for the already beleaguered middle class, which has been rocked by the pandemic, with an estimated 100,000 small firms going out of business. Particularly hard-hit by the recent urban unrest are inner city and minority businesses. ...
If the Democrats win on Election Day, the future for the middle class could be bleak. As a lifelong Democrat, this is not easy to write, but most of the party’s initiatives — such as the Green New Deal — are directly harmful to those in the middle and working classes, who’d be forced to face increased housing and energy prices and fewer upwardly mobile jobs in industries like manufacturing.
Trump would be a fool not to make a Supreme Court appointment, of course, and he has done it, but the executive branch is co-equal and doesn't have an obligation to comply with the act of Congress from 150 years ago by appointing a replacement for RBG to make it nine if it doesn't want to make an appointment for prudential or even political reasons.
The executive can say the court costs too much and for that reason not make the appointment. The executive can say the court hears too few cases to require a ninth justice. The executive can say "eight is enough". Marbury v Madison, perhaps the most consequential decision ever, was decided by a Supreme Court 4-0 with a 6-member court (two were sick at the time). There was no magic odd-numbered formula which was required before that decision was made. No one today as a matter of politics views the decision as illegitimate for that reason, nor because the case was decided by too few members.
And FDR certainly is precedent for saying there were prudential reasons for believing the nine member court was inadequate for the historical moment. Just because he lost in this political quest doesn't mean it was illegitimate.
Consider that FDR wanted to pack the court in 1937 through a bill scheming to swell its numbers because the Supreme Court kept thwarting his New Deal legislation in Congress as unconstitutional from 1933. The Great Depression was a dire moment in American history, requiring, in FDR's mind, one attempt after another to alleviate it, no matter how unprecedented.
The other powers that be thought otherwise.
But eventually and fortuitously one justice on the Supreme Court, named Roberts !!! by the way, actually switched sides to favor a New Deal case pleasing to FDR, which ended up having the odd result of taking the wind out of FDR's court-packing sails.
The March 1937 5-4 decision came to be known for this reason as "the switch in time which saved nine". The court showed that it could, in fact, rule New Deal ideas constitutional. That removed the argument for packing the court, by effect if not by intent. The nine member court was adequate after all.
It's an interesting case showing the power of the Supremes, not just to rule, but to maneuver.
The presidential appointment power is a political matter because the president is elected.
But don't kid yourself that the court absolutely eschews politics when rendering its opinions. Though not politically conservative in nature, a March 1937 ruling upholding innovative, New Deal legislation, ended up preserving the traditional character of the Supreme Court reaching back to just after the Civil War. And it persists to this day.
The founders were genius in this respect, recognizing that political forces are inescapable and must be accepted, accounted for, and balanced in order to prevent a lurch into the absolute tyranny of a single one of the branches of government.
The imperative of the moment is the free exercise of politics within the constitutional framework, not tampering with the framework.
People think reparations is reparations for slavery, but really, economically speaking, reparations are for the damage done by the New Deal and redlining because that is where we saw a compounding of the existing inequity from the legacy of slavery, where we drew red lines around black communities. We said white communities will get home loans and they will get access to the basic bedrock of wealth in America and this will be your heirloom and we gave white America the heirloom that appreciated overtime — that people still benefit from today and we did not give to African-American and Mexican communities, Puerto Rican communities.
