Chaos and More Chaos

I attended Radius Commercial Real Estate’s 15^th excellent annual forecast at the Hilton. One of the presenters was economist Christopher Thornberg who gave an optimistic view of the economy, much of which I agreed with.

Regarding the world since Trump took office Dr. Thornberg’s rosiness hit a wall. The current state of things? “Chaos,” he said. Confidence/optimism indices are sinking because we don’t know what Trump will do next. 

Chaos is a good word right now. Things are moving very fast. Every day new gems come out of the Trump Administration. Massive cuts in federal workers and programs. Crackdowns on campus protesters. Turmoil in Ukraine policy. More trade war threats. Raids and deportations of illegal immigrants. Stock selloffs. 

It’s difficult to make plans while you’re waiting for Trump to exhaust himself.

In my penultimate article on tariffs and foreign trade I argued that once tariff walls go up it’s not so easy to take them down. Our economy has thrived under free trade. Most people believe that Trump is just using tariffs as a negotiating tool. Taking Mexico and Canada as an example I haven’t seen evidence of it. If the history of Donald Trump means anything, he believes, despite the historical record, that tariffs are good for the economy. As expected our trading partners are reciprocating by erecting tariff walls against U.S. goods, a preliminary step to global trade wars and recessions. 

Massive firing of federal employees and program cuts are an attempt to cut spending and reduce the heavy hand of government on the economy. The impact to the economy is uncertain. What the savings are from DOGE so far are difficult to estimate and the reliability of data coming from the Administration is suspect. Current estimates range from 70,000 to 100,000 workers out of 2.4 million (excluding the military and the USPS) have been fired. Much is being made of academic research programs that have been cut. 

This is a heavy-handed approach to the problem of excessive government spending. Even if the savings could be as much as $100 billion, that is still a drop in the proverbial bucket when we are facing a $2.1 trillion deficit this fiscal year. I think much of DOGE’s efforts are mostly theater to show that Trump means what he says: bold action. I’m all for cuts, and good riddance to some departments, but the sudden upheaval creates more uncertainty.

Then there are government threats to campus protesters whom the Administration deems a danger to America. This comes down to free speech. In America the Constitution and the courts have ruled that we can say whatever we want. If you don’t like Jews, Blacks, Whites, Muslims or whatever or whomever, no one can prevent you from saying it, as offensive as it may be. There are limits to free speech such as inciting violence or yelling fire in a crowded rock concert, but generally you can say what you think. 

Mahmoud Khalil, a Green Card resident, has been made a symbol of our collective disdain of campus unrest, especially protests against Israel’s war against Hamas. He was arrested and is threatened with deportation because he was a leader of Columbia University protests of Israel’s war against Hamas and the destruction of Gaza. As a Green Card holder he is entitled to Constitutional protections. He could be deported only if they can prove he materially supported Hamas, a terrorist organization, but not if he praised them in his campus speeches. Speech doesn’t make him a “fellow traveler” (see McCarthyism). The government has presented no evidence that he has committed a crime or that he is a material supporter of Hamas. “Material” means giving them money, weapons, or being a member of their organization. This is an egregious violation of his rights. 

Stretching or ignoring the law to make an example of Khalil is a bad precedent. Recall the internment of Japanese American citizens by Franklin Delano Roosevelt. Because of racism and panic they became a disfavored group and the cry of the mob put them in concentration camps. These are the things that tyrannical governments do. Stretching the law to persecute the disfavored is a dangerous slippery slope. If they can do it to them they can do it to you.

All these things remind me of the movie title, Everything Everywhere All at Once. You never know where you are, when you are, or why you are. Crazy, no? I like the idea of reforming government and bold action. You’ve got to start somewhere. But why do I get the feeling that this is a haphazard romp through Trumpland. The fallout is yet to come. In the meanwhile, brace yourself for more chaos.