Trump's Great Depression
We can now look back on the first week of Trump's presidency having been inundated by his standard "flooding the zone" tactics. While much of his bullshittery is thus far a bit cloudy on efficacy, what hasn't been so murky are the intensified attacks on immigrants that have been getting a lot of headlines. The number of arrests by ICE, per the article, isn't actually that big of a jump from the norm–speaking to our treatment of immigrants being largely status quo–but this may not remain the case, and Trump's focus on immigrants is going to come with a cost to all.
Having largely chosen to ignore Trump's policies in the news until the last couple weeks, catching up on them was almost funny. For a minute there it looked like Elon Musk was going to be our real president, which has since resolved into a murkier and contentious relationship between the two. Even still, Musk will be running a department of "efficiency" named after a bitcoin. Less funny are the Project 2025-tainted orders, initiatives, and planners that are now in his administration–which of course comes along with the intensified persecution of immigrants which has just begun.
There's a lot to be worried about. I still think a certain amount of detachment from the media is the right move for the time being, if for no other reason than focusing your energies in the world around you is a good way to build a foundation on which all of our work will begin. For now, I want to zoom out a little bit and talk about some of the Orange Him's policies from a particular angle. It seems that Trump is going to bring a lot more 2016 energy to this administration than was previously thought, and that chaos, while funny, could have some real repercussions.
Headlining that 2016 vibe is Trump rekindling that he wants to buy Greenland. He's also threatened to bring the Panama Canal "back under US control," which is less funny ha-ha and more funny uh-oh. Perhaps the only grace we've gotten in his first week is that tariffs–the answer to all our problems, according to him–haven't yet become the sweeping law of the land*. Rounding out this bevy of ridiculousness is talk about doing away with the FDIC.
These policies would be problematic on their own, but they exist in the context of Biden's economy (no, I will never be done shitting on the Dems). Since he took office, Biden, the media, and basically everyone else has insisted that the economy has been going gangbusters. The last two elections speak to the contrary–as do the facts. You know, and can guess if you don't, that when people think (you know, generally by experiencing hardship) that the economy is going poorly, they tend to switch presidential horses–which is what happened in the last two elections. The above link is a breath of fresh air when it comes to economic coverage, plainly stating that while "the economy" is growing, well-being is not.
*Sorry, as of this re-writing Trump has issued a 25% tariff against Colombia due to their denying deportation flights from the US.
The Background
The elephant in the room of all conversations about the economy is still COVID. The world took a big hit, and, generally, without government intervention, people would be (and are in many cases) worse off than before. When those interventions ended, individual outcomes tanked even while the economy writ large recovered. And, of course, we all know about the rising costs of literally everything post-COVID. I imagine many of you are in my boat, which is the SS Makes-Less-Than-Last-Year-Thanks-To-Inflation (not a great name for a boat). And, to be clear, regular inflation is not the only culprit here–price gouging and other unfounded markups bear a lot of the responsibility as well.
There's not much of a point in getting into the minutia here, because eventually I will start to see red and the inevitable conclusion of all this is that capitalism is a bad system that should be thrown out and its purveyors become the final victims of a dismantled carceral state. But, I think it makes sense to look at some ground-level numbers to help quantify just what we're talking about here, because it's honestly pretty damning.
Homelessness in the United States rose 18.1% last year. This is due to a lack of affordable housing (which is artificial) and a spate of natural disasters (exacerbated, often, by climate change). This 18.1% rise comes after a 12% rise in 2023. Over the last four years, this is a nearly 33% increase in homelessness overall, with most of that occurring in the last two years–marked clearly by the end of COVID assistance programs. I don't have a smart thing to say about this; it is simply fucked up.
To return to Stephen Semler's work, here is a thoroughly fucked chart, as well:
But the economy is doing great!
Trump's Policies
Second verse, same as the first! A little more racist and a lot more fascist, probably.
It's likely, and I hope, that I don't actually have to explain these policies to you. We've heard most of them before and they are bad and wrong on their face. Take Trump's insistence that tariffs are the cure to all our ills–he actually said that the word tariff is "the most beautiful word in the dictionary." Tariffs are taxes on imported goods paid for by the consumer, not the exporter, and while there's a purpose to tariffs generally (otherwise they'd just be punishment and that'd be weird but not unheard of, I guess), they aren't the best tool in the chest at the moment. Trump's heavy tariffs will mostly drive up the cost of goods for households, which is, if you recall, sort of a big problem for folks already. The supposed good they do–directing local money to local goods and thereby bolstering US production–is not something that will happen overnight. Under Trump, the cost of energy, cars, computers, and appliances are almost certain to jump. Per that article, US consumers spent an extra $1.5 billion thanks to Trump's previous tariffs just on washing machines.
And while tariffs, on the tin, are supposed to help US jobs, the truth of the matter is that we live in a complex, interconnected global economy, and the increased cost of goods coming into the country can revitalize some sectors of US industry while kneecapping others. Famously, Trump's previous tariffs did breathe some life into US steel, but because US steel is more costly, workers downstream suffered–and per the link above, Trump's actions didn't actually make any more jobs in steel, but perhaps put a tourniquet on the job loss in the industry. So even the potential goods of tariffs are not without their negative complications.
When it comes to Trump's talk of taking over the Panama Canal, we can probably assume that he'll get distracted by something shiny, and he won't be buying Greenland because that didn't work last time. Should he actually try to do something in Panama (it wouldn't be the first time the US did), it would be fairly awful because that's probably a minor war and the obstruction of one of the most important pieces of infrastructure in the world.
Lastly, another unlikelihood, is the possibility that the FDIC will be sent behind the woodshed. I would say that we don't have to worry about this, except that the core of the problem is that nothing actually has to happen in Washington for something to happen to you–the problem manifests itself, you might say. I am, again, probably explaining something you already know about, but the FDIC is the Federal Deposit Insurance Corporation, which backs, as you'd guess, deposits in banks across the country up to $250,000–covering most Americans' savings. The FDIC was created shortly after the Great Depression, which saw a run on banks that caused many people to lose their proverbial shirts. The dissolution of the FDIC in the present, regardless of how it is reorganized or replaced, would likely cause another bank run, resulting in the loss of savings of folks unlucky enough to be in the targeted banks who didn't get there quick enough. This probably won't be system-wide, I wouldn't expect, but the problem with making predictions about this sort of thing is that I can't predict what might set off the herd–the right news piece at the right time could do the trick, or a series of memes for that matter–and all that really counts is that they do it. You might recall the collapse of Silicon Valley Bank (and then others) due to a run almost two years ago based on the whiff a decrease in portfolio value. When this starts, it tends to snowball.
Bury Your Gold, Hide Your Money Under Mattresses
Don't, actually. Instead, find a local credit union and start banking there. Credit unions are not backed by the FDIC, but rather another federal body called the NCUA. Provided your local credit union is NCUA-backed, you are in the clear—and credit unions do a lot more good than big banks, anyway. And not that this is in any way a financial newsletter, and not that I am in any way licensed or accredited for financial advice, but things are almost certainly going to get more expensive soon–I would even bet money on it. So, if you are thinking about a certain purchase, or have the cash to stock up on some non-perishables, now is the time, before that money doesn't buy quite so many beans.