Prelude before the fall: Imports jumped up significantly in February and March 2025, increasing the trade deficit as many importers stocked up in anticipation of higher tariffs. April data comes out June 5, but you should expect BOTH exports and imports to start falling. And to keep doing so.

Here is Part 2 of my interview: www.2news.com/video/face-t...

If you are ever having trouble falling asleep, an economist talking about trade and the economy should do the trick. I was interviewed on Face the State. Here is Part 1: www.2news.com/video/face-t...

Did an interview tonight with Arianna Bennett of Reno's Channel 2 News, the CBS affiliate KTVN, for a program called Face the State. It should air this weekend, if you have nothing better to do than listen to an economist talk about tariffs. See www.2news.com/features/fac... for past shows.

What is average growth? It's noisy data, so here I show the annual average growth rate per presidential term. It averaged 3.6% under Democratic presidents and 2.6% under the GOP. Adjusting for population, that's 2.5% under Dems and 1.5% under Reps. The pattern holds if you consider the time trend.

Rising deficits in 2023-24 was partly a function of rising interest payments on the national debt. Another gift the Federal Reserve gave Pres. Biden, following on the inflation created by an excessive monetary stimulus in 2020-21 and delaying the tightening until Powell was reappointed.

I read a breathless story about all the new tariff revenue coming in to federal coffers: projecting forward, they will more than double, from 1.6% to 3.7% of federal revenues. Wow. Meanwhile, slower growth will reduce other revenues by more that 2.5% even if we avoid a recession. Such BS.

Annualized real GDP growth in Q1 of 2025 was -0.3%, compared to an average of 2.5% over the last eight years. The rate in Q4 of 2024 was 2.4%, more or less average but a bit less than the 3.1% rate in Q3. By itself, no big deal. Combined with other bad economic news, worrisome.

The AAC&U letter “refers to the essential role that our colleges and universities play in our society in educating students to sustain our democracy,” said the former Nevada Republican governor and current UNR president.

I had a TV interview today on Channel 8, discussing what bonds are, why they matter,and what happened last week regarding the tariffs. www.kolotv.com/2025/04/15/w....

Republicans Smoot and Hawley got their bill passed 95 years ago, and Hoover signed it even though more than 1000 economists said don’t. Average tariffs rose, imports fell, exports fell, and the Depression became Great. We trade more now and these tariffs are much bigger. It is insane.

Hundreds of citizens on Wednesday came together for a town hall meeting to discuss federal government actions. Greg Kidd, who was unsuccessful in unseating Mark Amodei in Nevada’s second congressional district, criticized the Trump administration’s recent tariffs and budget cuts.

If the University of Pennsylvania wanted to get back at the Orange Felon for cutting federal funding, they could always accidentally release his transcripts. "Donald Trump was the dumbest goddam student I ever had." -Professor William T. Kelley, Wharton School of Business and Finance, U Penn.

Trump and Mao and lessons from the Cultural Revolution. blogs.soas.ac.uk/china-instit....

I had a postcard from our visit to the D-Day beaches that I found a good use for.

Am I right in thinking that this website is a legitimate way of saying that the Orange Sociopath does not represent me on Ukraine? war.ukraine.ua/donate/.

Going back to 1970 with BEA.gov data, it is easy to see that the only part of federal government spending that has really increased is social insurance benefits.Why? We live longer than we used to, we have more old people, and we have the most expensive healthcare in the world.

State and local governments get a large percentage of their budgets from federal government transfers. Here they are as a share of potential GDP compared to other revenue sources. If you cut federal grants, how likely is it that other taxes will rise to replace them?

Musk and the Orange Felon think taxes are too high. For perspective, here is a chart from BEA data showing annual federal receipts relative to potential GDP.

I think we should investigate who shorted the market and then bought back in today. Any insider information at work?

Carlo Cipolla, an Italian economist who used to teach economic history at Berkeley, wrote an amusing little essay called "The Basic Laws of Human Stupidity" in 1976. See harmful.cat-v.org/people/basic... . Obviously, it has relevance for today.

A graph showing that the Orange Narcissist won the election because blue voters stayed home. Here is the share of the voting-age population that voted blue and red in each state, in 2020 and 2024. The Trump share did not rise, but the Dem share fell. Apathy destroys democracy.

Import tariffs reduce imports but they also reduce exports. This image shows how tariffs correlate to the ratio of exports over imports. The correlation is -0.12, which is negative but not very significant. Higher tariffs reduce exports at least as much as they reduce imports. Maybe even more.

On average, a good rule of thumb is that 25% tariffs will increase import prices by 20% at home while driving them down 5% abroad. Domestic goods competing with imports will also become more expensive. And when we import less, we also export less -- even without retaliation, which is almost certain.

What caused the Baby Boom? Mostly, it was due to the drop in infant mortality rates during the first half of the Twentieth Century, due to things like vaccines and pasteurized milk, while most of the increase in the fertility rate was a recovery from the Depression. Miss those good old days?

I teach international trade at my university, and struggle to find a modern-day example for Trump's declaration of a trade war with our largest trading partners. The closest I can come is Brexit, which was by far a much smaller deal. Anyway, growth in the UK since then has not been impressive.

I had the good fortune to meet President Carter once.

I was told that underneath this spot in the White House, there are four time capsules.

The US government – federal, state, and local -- spends a lower share of our economic output on goods and services than almost all other major economies. You wouldn't know that listening to Trump's billionaire club.

Musk and Ramaswamy say that federal employment has grown out of control. Uh, compared to what?

Article I, Section 8, Clause 7 of the U.S. Constitution empowers Congress "To establish Post Offices and Post Roads." Can the President privatize the USPS? Congress can repeal past laws on it and choose not to use this enumerated power, but it will mostly hurt rural folks if that's what they want.

Since Truman, the average annual increase in the Dow Jones Index (adjusting for inflation) has been around 5.0% per year under Democrats. Under Republicans this averaged 4.4%, in spite of the effect of their regular corporate tax cuts. Hmmm.

Since Truman, the unemployment rate has increased by 1.4% on average under Republican administrations, and decreased by an average of 1.6% under Democrats. It was also lower on average under Democrats. In the graph, notice that the red parts tend to be rising more often than not.

I got asked at the last minute (ok, actually 11:30) if I would read names at graduation this afternoon. It was fun, and the staff was very helpful and grateful since apparently this morning was a disaster.

The USA spends significantly more than other developed economies on health care, and setting aside the pandemic, the growth in this sending took place before the Affordable Care Act went into effect.

The USA spends the most by far of any developed economy on health care. Whatever Trumpistas say, it is NOT because the private sector does not play a big enough role.

Corporations used to pay a higher tax rate, on average, than individuals. Those days are gone, but of course Trump is promising even more cuts for his big donors. Also notice that the average federal rate (dark blue) has not risen much in 80 years, while the top marginal rates have plummeted.

Since Truman, the average annual growth rate for real GDP per capita has been 1.4% for Republicans and 2.6% for Democrats. So much for Republicans being better for the economy.

Just received our last Christmas Card from the first family. It was nice while it lasted.

Payroll employment relative to the working-age population was higher at the end of the last four Democratic administrations than at the start. For three out of four Republican administrations it ended up lower than it began.

Jerome Powell and the Fed avoided blame for the inflation of 2021-22, but the money supply grew at record levels during the pandemic. It should not surprise us that prices rose to eventually close the gap between money and GDP.

Many voters thought the economy was not good under Biden. Compared to the rest of world’s largest economies, however, GDP per capita tells a different story. I’ve adjusted for inflation and purchasing power parity.

Since Truman, the federal budget deficit under every Republican president was a larger share of GDP when they left office, and it was a smaller share at the end of every Democratic presidency. Any bets on the next four years?

At the end of 2024, average wages have grown 11% more than prices, compared to 2006.