All posts tagged "economy"

'No talking him out of it': Analyst warns US stuck with Trump's tariff policy

Donald Trump is refusing to back down from his controversial tariff policy and cannot be convinced otherwise, according to a political analyst.

The tariff policy was deemed to have breached the International Emergency Economic Powers Act, a 1977 law governing presidential emergency authority over economic matters. Heather Digby Parton, writing in Salon, suggested that Trump will not be talked out of using tariffs during his second administration, and nothing will talk him out of this economic plan.

Parton wrote, "His impulsive use of tariffs to punish anyone who looks at him sideways and to reward friends who, say, gift him with gold bars and expensive airplanes, became a game of expectations and market manipulations that continues to this day.

"People are openly trading on what can only be inside information about the U.S.-Israeli war in Iran, and it appears that nothing will be done about it. The well connected are now making big bank on the TACO dynamic.

"The immediate consequence of the tariff regime [has] put the American economy into suspended animation."

This halt to the American economy, Parton suggests, is because Trump cannot be convinced that his plan is a poor one. Parton continued, "Trump’s understanding of trade deficits is poor; he equates them to the budget deficit, and he has never understood that you don’t trade equal amounts of the same things to each country.

"He believes that if a nation exports cars to the U.S., they should be obligated to import the same number of cars, or pay a huge tariff to make up for it. This is something he’s believed for over 40 years, and there’s no talking him out of it.

"The announcement immediately triggered a global stock market panic, resulting in the largest decline since 2020, when the stock market crashed during the Covid-19 pandemic.

"Over the next two days the Dow fell 9.48%, the S&P 500 dropped 10% and the Nasdaq declined 11%. Everything fell: oil prices, the dollar, even gold, because investors were shocked by how unsophisticated and draconian the policy was. Trump had only been in office a little over two months."

Trump's 'on the nose' statement shows president has finally lost it: analysis

Donald Trump has made a rare statement that lines up with reality, according to a political commentator who says the president has "lost his mojo".

Jonathan Cohn, writing in The Bulwark, suggested Trump had "lost his mojo" during a recent speech where the usually flippant Commander-in-Chief called out cold, hard facts. Whether he did so intentionally remains unclear, but Cohn believes that Trump's usually braggadocious, reality-bending manner was nowhere to be found when he addressed his plans for the future of Iran.

Trump surprised political analysts earlier this week when he made a speech at the Easter luncheon at the White House on Wednesday.

He said, "We’re fighting wars, we can’t take care of daycare. You’ve got to let a state take care of daycare, and they should pay for it, too. They should pay—they’ll have to raise their taxes, but they should pay for it. And we could lower our taxes a little bit to them, to make up for—but we—it’s not possible for us to take care of daycare, Medicaid, Medicare, all these individual things.

"They can do it on a state basis. You can’t do it on a federal [basis]. We have to take care of one thing: military protection. We have to guard the country."

Cohn believes this talk from the president is a rare sighting from Trump, who is aware of the economic crisis his government is facing.

"Typically, Republican leaders try very hard to deny they are starving social programs to fund the military, leaving Democrats to make the case on their own," Cohn wrote. "Yet here was Trump coming right out and saying it.

"And while the president frequently blurts out statements that have no bearing on reality, in this case his description of how he’d like to rearrange federal spending priorities was pretty much on the nose.

"In fact, just two days after he made those remarks, his administration released its budget for fiscal year 2027. It envisions $1.5 trillion [in spending] for defense, then proposes to offset that cost with a 10 percent reduction in domestic spending.

"Among the casualties would be a program that helps low-income Americans pay for heating and cooling—yes, right at a time when electricity prices are on the rise."

'Whiff of 2008': Nobel laureate pinpoints overlooked economic problem brewing

An economic issue which has so far gone unnoticed could be the makings of a 2008-level crisis, a Nobel Prize winner has warned.

Paul Krugman believes that, while there is no immediate danger of an economic collapse, there is an issue present that has not yet been addressed by Donald Trump's administration. In his latest Substack, where he noted a "whiff of 2008 in the air," the economist highlighted private credit loans as a future problem for the United States.

He wrote, "What happens with private credit is that investors entrust their money to managers who promise to lend it out in smart ways — typically loans to private businesses, that is, businesses that aren’t listed on the stock market.

"Such lending is effectively hidden from public view. Unlike banks, private credit companies don’t have to disclose their loans. Unlike listed companies, privately owned firms don’t have to disclose their finances. And unlike bonds, private loans don’t have to be disclosed to the Securities and Exchange Commission.

"In effect, private loans are treated as interactions between consenting adults. The rest of us have no legal right, and, presumably, no need to know what took place.

"Indeed, there are no official numbers on the size of private credit, although industry sources put it at something like $1.5 trillion. What’s clear is that it has grown explosively in recent years."

The trouble with private credit companies, Krugman says, is where said companies get their money from. Though the collapse of private credit alone would not be enough to cause a crash, compounded with other economic issues, it could be enough to trigger a crash, the veteran economist suggested.

"...private credit companies have in fact borrowed large sums from banks, mostly in the form of revolving credit lines," he wrote. "This means that banks might suffer losses if private credit companies fail.

"But these loans are generally senior to credit companies’ other obligations, so bank losses will be minor unless private credit suffers very badly.

"For those who remember 2008, arguments like the one I just made — that private credit may be troubled, but it’s not big enough to cause an overall financial crisis — sound a bit like famous last words. After all, similar arguments were made in 2007 about why we shouldn’t worry about the effects of the subprime crisis.

"While it’s important to get a handle on what is happening with private credit, it will only be truly destructive if problems with private credit are part of a broader story involving complacency and over-extension across financial markets. The question is, how big is the overall story of overreach? Or to put it another way, how many cockroaches are there?"

'Abandoning Donald': CNN data guru reveals Trump's lost crucial voting bloc

CNN data expert Harry Enten revealed how working class Americans have turned on President Donald Trump.

Enten described during a live broadcast on Friday how polling shows working class voters — classified as people who make $50,000-a-year or less — were a major swing vote bloc that helped elect Trump in 2024. But now, they've been left disappointed.

"That was a very important part of his coalition," Enten explained. "But look at this now. Look at the net approval rating that he has with those making under $50K. Down it goes. Look at that. That's a 26 point switcheroo in the latest average of polls. Look at that -24 points. The working class voters are abandoning Donald Trump. Those who helped put him over the top in 2024 are saying, you know what? Not for me right now."

The struggling economy has left them dissatisfied with the president.

"His net approval rating with them right now is absolutely atrocious when it comes to the economy," Enten added. "They have seen what has happened. They have seen what has happened on tariffs. They have seen what has happened with the war. They have seen the gas prices go up. And you just say to yourself, if you're a voter making under $50K, you know what the economy, it is not where we want it to be. And therefore we are turning against Trump on the economy and we are turning against him overall as well."

Stock markets tank to Iran war lows after Trump threatens to 'blow them away'

U.S. stocks plummeted on Thursday to their lowest since the war in Iran broke out following Trump administration comments.

The largest daily decline hit as oil prices skyrocketed after President Donald Trump signaled he was turning up the pressure on Iran to accept his terms to end the ongoing war, The New York Times reported.

“We’ll just keep blowing them away, unimpeded,” Trump said during his cabinet meeting, which was the first gathering of his top administration officials since military strikes began.

The drop sank even lower after the meeting, just after the S&P 500 opened lower.

The index slipped 1.7 percent, which was the largest daily drop since January. That set the index now for the fifth straight week of losses — the first time in four years that has happened.

Economic uncertainty, climbing gas prices, and higher interest rates, combined with ongoing negotiations with Iran, had set the market on a downward spiral. The factors were all part of the continued concerns among investors over when the Iran war would end, according to The Times.

Trump losing top Fox News ally as MAGA host warns of 'cascading problems'

President Donald Trump has apparently started to lose support from one of his loyal Fox News allies as doubts rise over his decision to continue the war against Iran, according to reports on Thursday.

Fox News host and conservative ally Laura Ingraham had a skeptical response to the Trump administration's war on Wednesday night during a live broadcast, Media Matters for America reported. Ingraham warned that as the United States escalates its military action in the Middle East, it could prompt dire and "unintended consequences." She argued that Trump and his administration should focus on America's economy and political situation.

" Iran knows it cannot win militarily, so it's using the leverage it has by prolonging the conflict," Ingraham said during her monologue leading the show. "Now, what do they want to do? They want to inflict maximum economic pain on the region, on the U.S., [on] the global economy as much as possible until they think Trump relents. But the White House doesn't seem to be blinking."

The host pointed to a clip featuring White House Press Secretary Karoline Leavitt, who said during a press briefing on Wednesday that "President Trump does not bluff, and he is prepared to unleash hell."

Ingraham described why Leavitt's comments were problematic and what that could mean for not just Iran, but the region as a whole, especially as Republicans anticipate tough midterms ahead.

"Well, the problem is obviously unleashing hell means destroying infrastructure, which itself causes a series of cascading problems for the region, including maybe outside the region — political problems for the president in a midterm election year," Ingraham said.

Trump has often looked to Fox News and its voices to gain further insights and potentially influence his next moves.

"The power struggle is significant — it is not an exaggeration to suggest the course of the war might hinge on which Fox shows the president is watching," according to the outlet.

And although Ingraham could be one of the few Fox News broadcasters expressing concerns about the Iran war, her voice could carry some weight.

"Ingraham is inching toward the type of dissent that has been virtually absent from Fox’s coverage of the war, even as the broader right-wing media has split," according to Media Matters for America. "Her colleagues have played key roles in convincing Trump to attack in the first place and are pushing for risky escalations. Ingraham herself briefly quibbled with Trump’s handling of an apparent U.S. strike that leveled an Iranian school, killing scores of children, but had supported the war itself, which she declared three weeks ago that Trump had already won."

Red state citizens beg to pay more taxes as Big, Beautiful Bill starts to hurt: Republican

Republican Party representatives warn new tax cuts brought in by Donald Trump's administration grinding up the operation of America's deep red states.

Party members from across the country aired their grievances against Trump's signature tax and spending bills, with some suggesting red-state citizens would prefer to pay more tax if it meant maintaining a better quality of infrastructure. Idaho GOP Sen. Jim Guthrie told Politico it's now harder to fund developments and maintain necessities like education and health.

He said, "The feedback I’m hearing from citizens is that extra few bucks on their [return] at the end of the year, because of the taxes they didn’t have to pay, comes secondary to wanting us to take care of the things that government needs to be invested in. Which is your infrastructure and your roads and bridges and schools and also your Medicaid population."

Fellow GOP rep, Oklahoma Republican House Appropriations and Budget Chair Trey Caldwell, believes the first example of Trump's tax cut impact will be seen in the first fiscal quarter of 2027.

Caldwell said, "We’re going to take the first hit in [fiscal] ‘27." He went on to note the economic impact will be "another direct cost of H.R.1." Trump's admin signed H.R.1 into law in May last year.

A Congressional act overview confirms Trump's Big, Beautiful Bill, "Reduces taxes, reduces or increases spending for various federal programs, increases the statutory debt limit, and otherwise addresses agencies and programs throughout the federal government."

These changes could cause problems as early as next year, according to Caldwell, who says red states in particular are having to shell out tens of millions now to avoid penalties of hundreds of millions in the future.

Politico writer Natalie Fertig explained, "Many red states are funding technology and additional staffing to process new Medicaid work requirements and improve the accuracy of their SNAP payment system.

"If they don’t spend tens of millions of dollars now, Oklahoma Republican House Appropriations and Budget Chair Trey Caldwell said, it could cost his state hundreds of millions in future years due to penalties imposed by the megabill".

CNBC warns Trump Americans aren't about to cancel Netflix and Spotify to pay for his war

President Donald Trump got a harsh reminder on Friday as gas prices soared amid the ongoing Iran war.

CNBC anchor Brian Sullivan suggested that as the economy takes a hit amid the conflict in the Middle East, people are still not likely to cut back on things such as subscriptions for Spotify and Netflix.

"I find it hard to believe that people are going to cancel their Spotify account at 19 bucks a month or Netflix at 22 bucks a month because of the war in Iran and slightly higher gas prices, which, while painful, I don't think they're enough to change people's behavior over a couple of dollars here and there," Sullivan said.

Tom Lee, entrepreneur and financial analyst, described how the economic downturn wasn't just temporary.

"Absolutely not," Lee said. "I mean, people do need to realize that volatility is here to stay simply because the options markets have gotten too big to ignore. They are the story. And so they have a there's a lot of mechanical volatility that gets created that has nothing to do with fundamentals."

Trump's war is just days away from causing economic chaos in US: business experts

Economists have warned that the U.S. will stagger economically into the next month as the war with Iran causes ongoing financial trouble.

It is not just consumers queuing up at gas stations set to be affected by the economic crunch, but businesses that are trying to keep their margins as thin as possible. Oil price rises as a result of the blockage in the Strait of Hormuz and ongoing war with Iran will affect shipping and logistics for many companies, experts have warned. These costs will likely be passed onto the consumer.

Stew Leonard, owner of an East Coast grocery chain with annual sales of more than $500 million, told CBS New he's expecting it to be harder still to balance the books the next month.

"Stew Leonard's has not felt the impact of rising oil prices, but our farmers, ranchers and fishermen are knocking on the door right now with fuel surcharges," Leonard said. "We're caught between a rock and a hard place.

"Customers are already feeling the pain of food, energy and insurance bills in their personal lives, and I'm going to resist raising prices until the cows come home," he added.

Diane Swonk, chief economist at KPMG, said that "all of those shifts are adding to costs, a portion of which will be passed along to consumers. The costs that are not passed along show up as a squeeze in profit margins and employment."

Logistics expert Satish Jindel of ShipMatrix believes lower-value items will be affected most of all by the economic stagnation, with businesses potentially raising the price on usually cheap products.

"They don't have enough in margins — they'll need to raise prices," Jindel said. Despite the price rise for in-store items, online shopping may suffer worse than stores.

"Most people ordering online, they expect normal delivery for free — the moment you ask them even for five dollars, they will abandon the cart," Jindel said.

'Madman' Trump warned he may end America's 52-year reign as globe's financial king

President Donald Trump's bet on war with Iran could have a significant impact on the United States' global financial standing, an analyst explained Monday.

The Bulwark's Jonathan V. Last described how Trump's decision "could speed up de-dollarization" and challenge the American currency's dominance, ultimately altering the 52-year history of the petrodollar system.

"I have been saying since the beginning that America is playing checkers while Iran plays chess, but it’s worse than that," Last wrote. "American leadership is utterly incoherent: We won, but we need help. We hate our allies; but will our adversaries please come bail us out?"

"Meanwhile Iranian leadership survived a transition of power in the midst of war, achieved its strategic objective in closing the strait, and is now looking to leverage China’s rising economic ambitions against the United States," Last wrote.

Last argued that as the rages on, Iran and China could reach an agreement to allow oil transport through the Strait of Hormuz, but under the condition that the currency switch from the dollar to the yuan.

"I don’t know how to make people care about this except to say that if Iran and China made this deal it would absolutely be the beginning of the end of the dollar backstopping the global financial order," Last wrote. "The long-term cost to America would be incalculable."

"The fact that Iran is making this overture ought to scare the crap out of us because it’s another sign that America’s political leadership is completely out-classed," Last added. "We have an illiterate madman tweeting contradictory bullshit every ten minutes. Meanwhile, the Iranian regime is calmly and methodically probing the structural weaknesses of the American-dominated global financial order."