Data released today showed the economy getting weaker, with the prices Americans received for exports falling, while the price Americans paid for imports (before Tariffs) increasing. Meanwhile, Republicans, doing what they do best, have put together an extremely regressive bill that will, by even the most generous interpretation, make life harder for a majority of Americans at the expense of wealthy “job creators.”
At the same time, Trump’s immigration policies are making the economy weaker, while his cronies have started looting the financial system now that his administration has stopped enforcing the law against them.
Releases
Capital Flight and Inflation
Code
# Set custom plot themeinclude("../scripts/oxocarbon-plot.jl")theme(:oxocarbon)# Load Necessary PacakgesusingFredData, DataFrames, Dates, StatsPlots# Set Up The Fred APIkey =ENV["FRED_API_KEY"]f =Fred(key)# Gather The Necessary Dataexports =get_data(f, "IQ"; observation_start ="2023-05-01", observation_end ="2025-05-02", units ="pch", ).dataimports =get_data(f, "IREXPET"; observation_start ="2023-05-01", observation_end ="2025-05-02", units ="pch" ).data# Make the Plotbar(exports.date, exports.value .- imports.value; xlabel="Date", ylabel="Percentage Points Change", label="Gross Change", alpha=0.65, title="Trump's Tariffs Have Squeezed Americans", )scatter!(exports.date, exports.value; label="Exports" )scatter!(imports.date, imports.value; label="Imports ex Petroleum" )hline!([0.0], label="", color=:black, linestyle=:dash, linewidth=2 )vline!([Date(2025,1,20)], label="Inaguration", linewidth=2, linestyle=:dash )vline!([Date(2025,4,2)], label="Tariffs", linewidth=2, linestyle=:dash )
NOTE: The Import price index accounts for changes before Tariffs are assessed. As best as I can tell, the weakening of the Dollar in response to Trump making the United States a less attractive place to put capital (despite our relatively high interest rates) contributed to the fact that the price received for our exports dropped, while raising prices for importers.
Given that most companies involved in global trade both import and export, this is a major squeeze on profitability, especially as imports are more expensive than the Gross measure here.
Trump’s BBB
Regressive Structure
Republican Senator Justice: “The Wealthy Are Job Generators, Too. And If They Reinvest Those Dollars, We Know How Valuable That Is To All of Us. According to the Washington Post, “Even as Republicans have talked up the bill’s populist provisions, some have also made a more traditional GOP case for it, arguing that it will create jobs and turbocharge the economy for rich and poor Americans alike. ‘The wealthy are the job generators, too,’ Sen. Jim Justice (R-West Virginia) said. ‘And if they reinvest those dollars, we know how valuable that is to all of us.’” [Washington Post, 2025-06-16]
Yale’s Budget Lab And The Penn-Wharton Model, Despite Using Drastically Different Methodologies, Found The Bill Would Make The Bottom 60 Percent Of American Households (At Least) Worse Off. According to the Washington Post, “Another analysis of the bill conducted by the University of Pennsylvania’s Wharton Budget Model found it would hurt the bottom 60 percent of households financially when taking into account how much it would force the government to borrow over the next decade. A third analysis conducted by Yale’s Budget Lab found the bill — when combined with the effects of Trump’s tariffs — would make all but the top 20 percent of households worse off. The tariffs wipe out any gains that middle-income Americans would see from the bill, according to the analysis — although it’s tough to measure the effect of the on-again, off-again tariffs because Trump has repeatedly changed them and some are under challenge in court Wharton’s model considers economic growth from the tax cuts as part of its analysis. Yale’s does not.” [Washington Post, 2025-06-16]
Washington Post: Republicans Did Not Include Two Measures To Raise Taxes On The Rich Trump Had Floated: Closing A Tax Break For Private Equity And Raising Rates On Top Incomes. According to the Washington Post, “Republicans have not included two populist ideas that Trump pitched to help pay for the legislation: closing the “carried interest loophole” and raising taxes on the wealthiest Americans. The first provision allows private equity partners and hedge fund managers to pay the lower capital gains tax rate on most of their compensation, rather than higher rates on earned income. (Democrats tried and failed to close it during the Biden administration when they controlled Congress.)” [Washington Post, 2025-06-16]
Structural Weakening
Population Loss
Brookings And AEI Economists: Trump’s Policies, If Fully Executed Would Lead To Net Negative Migration. According to the Washington Post, “For the first time in at least half a century, more people may leave the United States than arrive this year, an abrupt shift in immigration patterns with potentially significant implications for the U.S. economy. Economists at two Washington think tanks expect President Donald Trump’s immigration policies to drive this reversal: from the near-total shutdown of the southern border to threats to international students and the loss of legal status for many new arrivals, according to a forthcoming paper. A rise in deportations — the aim of recent workplace raids that triggered protests in Los Angeles and other cities — also plays a role. A net outflow of migrants could stoke inflation, a risk economists already expect from Trump’s tariff policies. It also could renew the type of labor shortages the country experienced during the pandemic. Longer term, it could even have implications for fiscal policy, with fewer immigrants paying taxes and supporting entitlement programs such as Social Security, said one of the economists, Wendy Edelberg. ‘For the year as a whole, we think it’s likely [immigration] will be negative,’ Edelberg said. ‘It certainly would be the first time in more than 50 years.’ Edelberg and her colleague Tara Watson at the center-left Brookings Institution are working with Stan Veuger of the conservative American Enterprise Institute on the paper, which is due out this month. Their projections point to an increased likelihood of negative immigration in 2025, compared with the economists” last projections published in December.” [Washington Post, 2025-06-15]
Mostly Driven By The Closing Of Legal Programs, Inflows Could Drop Below Their 2008 Lows. According to the Washington Post, “Economists across the political spectrum expect the United States this year will experience the lowest immigration levels in decades, and some agree there’s a real possibility that migrant outflows will eclipse inflows. Migration levels last reached a longtime low during the 2008 financial crisis, which sparked a mass departure of Mexican immigrants. ‘It’s not about deportations so much,’ Veuger said. ‘It’s really just that inflows are down so much; not just at the southern border, but also through various legal programs.’” [Washington Post, 2025-06-15]
Mass Deportation
After Being Raided, Glenn Valley Foods In Omaha Saw Operations Drop To 15 Percent Of Capacity. “Without [Immigrants], There Wouldn’t Be A [Meat Processing] Industry.” According to the Wall Street Journal, “When federal agents raided Glenn Valley Foods in Omaha, Neb., last Tuesday, they arrested about 75 of the meat processor’s workers, roughly half of the production line. The following day, the plant was operating at about 15% of capacity, and a skeleton crew strained to fill orders. Chief Executive Gary Rohwer can’t see a future that doesn’t include immigrant workers. ‘Without them, there wouldn’t be an industry,’ he said.” [Wall Street Journal, 2025-06-16]
Despite The Department Of Agriculture Raising Concerns About The Vital Role Of Immigrants, Homeland Security Has Continued To Impose Quotas On Agents. According to the Wall Street Journal, “The conflict could be difficult to untangle—and public signs are emerging of a clash within the administration. The Department of Homeland Security late last week directed immigration officers to pause arrests at farms, restaurants and hotels, stressing that sweeps should focus on people in the U.S. illegally who have criminal backgrounds. ‘Severe disruptions to our food supply would harm Americans,’ wrote Agriculture Secretary Brooke Rollins on X Sunday. ‘It took us decades to get into this mess and we are prioritizing deportations in a way that will get us out.’ At the same time, DHS appeared to walk back its own directive from last week. In a letter to Immigration and Customs Enforcement leadership over the weekend, Homeland Security Secretary Kristi Noem doubled down on the administration’s efforts to deport millions of people living in the country illegally. ‘[W]e must dramatically intensify arrest and removal operations nationwide,’ she wrote in the letter, which was reviewed by The Wall Street Journal. ‘This is a nonnegotiable national priority.’ ICE agents will be judged ‘every day by how many arrests you, your teammates and your office are able to effectuate,’ she wrote, adding, ‘Failure is not an option.’ She also said worksite enforcement—the types of raids that had been exempted for some industries in guidance issued days earlier—remained ‘a cornerstone’ of the president’s deportation plan: ‘There will be no safe spaces for industries who harbor violent criminals or purposely try to undermine ICE’s efforts.’ A Homeland Security spokeswoman said on Monday that ICE isn’t ruling out worksite enforcement at farms, restaurants, and hotels, and will give priority to places that are thought to be employing people with criminal records.” [Wall Street Journal, 2025-06-16]
With A Shortage Of Half A Million Construction Workers, Companies Have Been Forced To Hire Immigrants. According to the Wall Street Journal, “The U.S. construction sector is facing a major labor shortage, with a need for about 500,000 more workers, by some estimates. That gaping shortage is part of why undocumented workers have become a vital part of getting construction done. ‘I don’t want anybody to think that people are hiring undocumented people to save money,’ said Caliendo, who added that the workers hired by his subcontractors get paid between $20 and $50 per hour on average. ‘They hire them because nobody else will do the work they do or work as hard as they do.’” [Wall Street Journal, 2025-06-16]
Tallahassee: ICE Agents Disrupted Concrete Pouring Causing Millions Of Dollars In Additional Costs. While Many Workers Who Were Arrested Were Released, Many Did Not Return To Work, Afraid Of Similar Activity. According to the Wall Street Journal, “At a construction site in Tallahassee, Fla., workers were pouring the concrete foundation for a 220-unit student housing development the morning of May 29 when federal authorities swarmed the 5-acre site, according to project supervisor Joe Caliendo, who saw the chaos unfolding from an elevated deck. Federal agents climbed over fences and ordered everyone to form two lines: U.S. citizens and noncitizens. Those who could prove their citizenship or legal status were released. Noncitizens who didn’t have their paperwork with them—or said they had it in their cars across the street—were loaded onto buses and driven away. The agents from ICE, the Federal Bureau of Investigation and other agencies arrested more than 100 of the 175 workers on the site. The raid interrupted the work, and soon the concrete in the unfinished foundation was at risk of hardening. Caliendo called his subcontractors in a panic to find replacement staff to complete the job. It would have cost millions of dollars to redo the process. The next day, about 20 employees showed up to work, several of whom had been detained and then released the day before. A few dozen more came back over the next week. Many were scared to return.” [Wall Street Journal, 2025-06-16]
Trade War
Leading With Bullying, After Having Shown So Frequently That No Deal, Once Struck, Is Permanent, Other Countries Have Not Been Folding To Trump In His Trade War At Nearly The Rate He Expected. According to Bloomberg, “Malhotra says pressure tactics do sometimes get results. ‘It’s not that there is never a role for coercion. But it has been applied without careful thought or nuance, and so it comes with negative consequences that could have been avoided.’ Trump’s penchant for leading with anger and grievance in both domestic politics and international diplomacy can needlessly stir up resentment, pride and resistance that weigh down negotiations and leave a long-lasting residue of mistrust. As Malhotra puts it, ‘If somebody is a bully and gets away with it, should we conclude that bullying works? Or should we say, “Wait a second, did they perform better by bullying than they would have without bullying?”’ When Trump announced punitive tariffs in April on trading partners around the world, stock and bond markets sank—and he quickly reversed course, pausing the duties for 90 days. The White House tried to sell the setback as a win. ‘This is unfolding exactly like we thought it would in a dominant scenario,’ Trump’s trade adviser Peter Navarro told NBC’s Meet the Press. The administration predicted nations would come rushing to offer concessions. ‘We”ve got 90 deals in 90 days possibly pending here,’ Navarro said. That hasn’t happened. Many trading partners have done the opposite and dug in. The European Union has approved retaliatory tariffs on $24 billion worth of US poultry, soybeans, motorcycles and other products in response to Trump doubling tariffs on aluminum and steel to 50%. Other nations are taking a wait-and-see approach as US courts weigh whether the president has exceeded his power. The spectacular flameout of Trump’s onetime alliance with Elon Musk gave US trading partners a fresh reminder of the precariousness of dealing with the impulsive president. His goodwill is transactional and fleeting, and every deal he makes is subject to renegotiation at any moment, and on his terms. Aside from a tentative, limited trade agreement with the UK, the administration has been slow to force nations to the table. Xi initially rebuffed Trump’s public attempts at pressure and flattery and took his time before agreeing to a phone call. Two days of trade negotiations in London this month ended with no major breakthroughs. Instead, the two sides agreed to a truce that essentially returned the US-China trade relationship to where it was before Trump escalated tensions.” [Bloomberg, 2025-06-16]
Corruption
Trump Crony Takes Crypto Treasury Company Public Via SPAC
After The Trump Administration Paused A Fraud Investigation Into Him, Justin Sun Announced Plans To Launch A Crypto-Treasury Company Through A DeSPAC Run By Trump-Linked Dominari Securities. According to the Financial Times, “Crypto billionaire Justin Sun’s digital asset platform Tron is set to go public in the US, four months after market regulators agreed to pause a fraud investigation into several of his companies. Tron will go public in a reverse merger with Nasdaq-listed SRM Entertainment in a deal orchestrated by Dominari Securities, a New York-based boutique investment bank with ties to Donald Trump Jr and Eric Trump, according to two people briefed on the matter.” [Financial Times, 2025-06-16]
After Trump Dropped The Charges Against Him For Unregistered Securities Offerings And Market Manipulation, Sun Has Poured Millions Into Trump’s Crypto Projects. According to the Financial Times, “In 2023, Sun and three of his companies, including Tron, were charged by the Securities and Exchange Commission, the US markets regulator, over allegations that they had sold unregistered securities and manipulated the market. After Trump signalled his desire for a lighter-touch regulatory approach to crypto, the SEC and Sun in February filed a court motion to pause the lawsuit to explore a potential resolution. Sun has since moved to strengthen his relationship with the Trump family. In May, Sun and the other 24 top holders of the $Trump memecoin attended a banquet with the president at the Trump National Golf Club in Virginia. Sun has also poured $75mn into World Liberty Financial, a Trump family crypto company from which the president has derived income of $57mn. World Liberty last week issued its first stablecoins, a type of digital dollar, on the Tron blockchain founded by Sun.” [Financial Times, 2025-06-16]