Tim Price on Trump's use of executive orders

Another dark cloud hanging over the political landscape is the, for want of a better phrase, imperial nature of the entire executive order process.  To an admitted outsider, rule by executive order fiat seems to run a coach and horses through the idea of a constitutional framework for democratic government, and the concept of checks and balances against Presidential overreach.  It also seems to refashion the Presidential role to something akin to a ‘primus inter pares’ amongst a cadre of philosophically and morally unreliable tech bro robber barons. 

But let’s not allow the best to become the enemy of the good.  Given what’s at stake, we’ll take robber barons over doctrinaire Communists every day of the week.

~ Tim Price, "War of the Worlds," Price Value Partners, February 3, 2025

Kevin Duffy on who pays for tariffs

All taxes are taxes on production.  Ultimately the consumer pays the tariffs, but that doesn't measure the true costs.  If there were 100% tariffs on Chinese EVs (there are, they were quadrupled under the Biden administration), no Chinese EVs will be sold in the U.S.  This harms American consumers without raising a penny for the government.  

Poverty requires no explanation.  Just go live on a desert island and try to make everything yourself.  Wealth creation requires specialization (getting the highest value for your time) and trading the fruits of your labor with others.  Trade, as long as it's peaceful and voluntary, is win-win.  Both sides benefit, otherwise the exchange wouldn't take place.  The more people we can trade with and the more they produce, the wealthier we become. 

In other words, tariffs are a tax on wealth creation. 

Economists disagree on a lot of things, but the case for free trade is not one of them.

~ Kevin Duffy, Facebook post, February 2, 2025

Charles Hugh Smith on the AI race, innovation and open societies

Charles Hugh Smith: A lot of people are saying, "Wait a minute, does this mean China has got the lead in AI?"  I don't think it's a state or governments-run option here to say, "We're going to control the world's AI."  I think the dominance here is which economy is more open, more transparent, more open to sharing information and is going to allow the greatest number of people to start innovating with these new tools.  And so that's really what it boils down to.

Adam Taggart: How weird would it be if that country were China.  It's just not historically, culturally, those are not adjectives that are used around China.

Smith: What's interesting is the whole world has an equal opportunity here.  There's systemic issues here.  It's not just the software or the hardware.  It's which economy, as a system, is more open, more transparent, more adaptable, more flexible and is going to give rewards to somebody in their garage famously that comes up with a product that people love.

~ Charles Hugh Smith, "Did China's DeepSeek Just Pop the AI Stock Bubble?," Thoughtful Money, January 27, 2025

Tom DiLorenzo on Donald Trump's admiration for William McKinley

Lo and behold, President Trump has discovered a new political hero to idolize: President (1897-1901) William McKinley of Ohio whose election was orchestrated by the wealthiest man in Ohio (and the U.S.), John D. Rockefeller, who ran the Standard Oil Company out of his Cleveland home.  McKinley is President Trump’s new hero because he was known as a congressman as the most rabid Republican party protectionist in a party that was founded on the principle of protectionism (and of corporate welfare and a national bank) in the mid 1850s.  The 1890 McKinley tariff was named after Representative William McKinley because of his notoriety as a tool of the Northern manufacturing plutocracy.  It created the highest average tariff rate in U.S. history up to that point and targeted such items as wool and tin with especially high tariff taxes, some exceeding 100 percent.  It caused such a spike in the prices of such items that in the next election the Republican party was wiped out, losing both houses of Congress and the White House, with the Democrat party having a 2-1 advantage in the House.  Free trader Grover Cleveland became president.  McKinley himself was defeated and was installed by the Rockefeller machine as the governor of Ohio. 

The Rockefeller machine got McKinley elected president in 1896.  One of his first “accomplishments” in 1897 was to repeat the political disaster of the McKinley Tariff Tax by signing the Dingley Tariff Tax which created another highest average tariff rate in history.  The people be damned; by that point the Republican party had created a government by the Northern corporate plutocracy, for the corporate plutocracy, of the corporate plutocracy.  President Trump’s kind of people.

McKinley was also a notorious imperialist, waging an imperialistic war against Spain (the Spanish-American War) during which the U.S. government conquered Cuba, Puerto Rico, and the Philippines, leading the great Yale University libertarian scholar William Graham Sumner to author his famous article, “The Conquest of the United States by Spain.”  The Spanish-American War, Sumner wrote, turned the U.S. into an imperialist power, just like the thoroughly corrupt and bankrupted Spanish empire.  (All empires, by the way, view their populations as good for two things: as taxpayers and cannon fodder in the empire’s wars.  Fast forward to today’s world and the incoming president is proposing a takeover of Greenland, part of Panama, and Canada “for national security reasons.”

~ Thomas DiLorenzo, "How the McKinley Tariff Almost Destroyed the Republican Party," LewRockwell.com, December 31, 2024

Tom DiLorenzo on Donald Trump's "populism"

President Trump’s election is said to be a “populist” victory against the deep state establishment, but there is nothing more anti-populist than protectionist tariff taxes.  Protectionist tariff taxes are nothing more than a price-fixing conspiracy orchestrated by the state that enriches a relatively small group of politically connected corporations (and their unions) by plundering their consumers with higher prices.  After all, if it is possible to use tariffs to force foreigners to pay a county’s taxes, every government on earth would be doing it.  Yet President Trump apparently believes that he has discovered some kind of holy grail of economics that proves you can get something for nothing after all. 

~ Thomas J. DiLorenzo, William McKinley: Prostitute of Protectionism, Mises Wire, January 29, 2025

Ronald Reagan on balancing the budget

Ronald Reagan: When budget deficits are what's causing inflation, I don't see that there's any room to be on either side of that argument.  I think the answer to curing inflation is a balanced budget.  

Johnny Carson: Now how do you do that?  How do you balance the budget?  You don't spend more than you take in...

Reagan: Balancing the budget is like protecting your virtue.  You have to learn to say "no."

Carson: There's gotta be another way.  What's the second option?

~ Ronald Reagan, interview with Johnny Carson, The Tonight Show

Sam Altman on OpenAI's lead in generative AI (2023)

Look, the way this works is we're going to tell you, "It's totally hopeless to compete with us on training foundation models, you shouldn't try and it's your job to, like, try anyway."  And I believe both of those things.   It think it is pretty hopeless, but...

~ Sam Altman, CEO of OpenAI, June 8, 2023

Bill Strong on the rise of Donald Trump

The ascension of a Donald Trump administration seems to represent a genuine and meaningful disruptive force in American government—and indeed maybe in society at large (given the growing severity and duration of America’s problems, it is not surprising that such a political reaction has finally occurred).  Obviously, we cannot predict how much of the agenda for change will be implemented--but history suggests much of it will be difficult.  Nor can we say for sure what its net outcome will be. 

However, we would note that Trump’s optimistic populist prescription for addressing America’s decline does NOT include a call for popular sacrifice.  There is no acknowledgement that total debt (and the burdens of servicing it) in our country, and the world, is unsustainable.  In other words, there is no call for Americans to reverse our decades-long habit of living way beyond our means, as huge imbalances in borrowing and the current account show.  Rather, suggestions of further gains are legion. 

In addition, I doubt if Republicans’ call for a return to “common sense,” is referring to stock market valuations.  As chronicled below, stock valuations in the US are beyond “manic”.  In other words, we see no evidence that new leadership acknowledges the massive valuation anomalies in markets.  A renaissance of faith in “American Exceptionalism” seems to justify the severe over and under-pricing of assets and currencies in the global marketplace. 

~ Bill Strong, co-portfolio manager, Eschaton Opportunities Fund, Quarterly Letter Q4 2024, January 27, 2025

Joseph Quinlan and Lauren Sanfilippo on American exceptionalism vs. isolationism

Globalization is in remission, while its opposite, isolationism, is being rekindled by nationalists around the world, including in the U.S. 

[...]

Most at risk will be open, trade-dependent economies across Europe, Asia, and much of the emerging market universe. These states are the most exposed to an inward-looking world losing its appetite for cross-border commerce. This is a key reason investors remain lukewarm on the export-oriented markets of Europe among the developed markets and on China and Mexico in the emerging world. 

In contrast, the preference for—and outperformance of—U.S. equities remains in place in part due to the simple fact that no country is better disposed toward economic autocracy and isolationism than the U.S. 

[...]

If there were ever an economy built for isolation, it is the United States. If the nation does become a global dropout and opts for retrenchment, the world will become a messier place, but with the U.S. still on top. Stay long America.

~ Joseph Quinlan and Lauren Sanfilippo, "U.S. Exceptionalism Will Thrive in a World in Retreat," Barron's, January 4, 2025

Donald Trump on McKinley's tariffs, Gulf of Mexico and Panama Canal

America will reclaim its rightful place as the greatest, most powerful, most respected nation on earth, inspiring the awe and admiration of the entire world. 

A short time from now, we are going to be changing the name of the Gulf of Mexico to the Gulf of America — (applause) — and we will restore the name of a great president, William McKinley, to Mount McKinley, where it should be and where it belongs. (Applause.) 

President McKinley made our country very rich through tariffs and through talent — he was a natural businessman — and gave Teddy Roosevelt the money for many of the great things he did, including the Panama Canal, which has foolishly been given to the country of Panama after the United States spent more money than ever spent on a project before and lost 38,000 lives in the building of the Panama Canal.

~ Donald J. Trump, 47th president of the United States, inaugural address, January 20, 2025

Donald Trump on the military

This week, I will reinstate any service members who were unjustly expelled from our military for objecting to the COVID vaccine mandate with full back pay. (Applause.) 

And I will sign an order to stop our warriors from being subjected to radical political theories and social experiments while on duty.  It’s going to end immediately. (Applause.)  Our armed forces will be freed to focus on their sole mission: defeating America’s enemies. (Applause.) 

Like in 2017, we will again build the strongest military the world has ever seen.  We will measure our success not only by the battles we win but also by the wars that we end — and perhaps most importantly, the wars we never get into. (Applause.) 

My proudest legacy will be that of a peacemaker and unifier.

~ Donald J. Trump, 47th president of the United States, inaugural address, January 20, 2025

Donald Trump: "We stand on the verge of the four greatest years in American history" (2025)

After all we have been through together, we stand on the verge of the four greatest years in American history. 

[...]

America will be respected again and admired again, including by people of religion, faith, and goodwill. We will be prosperous, we will be proud, we will be strong, and we will win like never before.

We will not be conquered, we will not be intimidated, we will not be broken, and we will not fail. From this day on, the United States of America will be a free, sovereign, and independent nation.

We will stand bravely, we will live proudly, we will dream boldly, and nothing will stand in our way because we are Americans. The future is ours, and our golden age has just begun.

~ Donald J. Trump, 47th president of the United States, inaugural address, January 20, 2025

Jeremy Sargent on the Chinese government

In terms of what a lot of people in the West don't understand about China, although China is sort of top down in its administrative system, it's very layered: you've got your leader, your second, your third, your fourth, going right down to the street level.  That being said, and no, it's not a democracy: you don't vote these people in and out, but they are highly accountable and it's become very accountable based on performance.  So if you're a medium level government official in Guangzhou here, or even a street official looking after this street here, if you don't deliver what you've pledged, you might lose your job.  If you screw up, you go down for it.  And the Chinese government is constantly seeking feedback, gauging opinion, understanding how communities, how people feel about what's going on.  And if people are feeling a certain way about something, they will take action.

So in that sense, there is direct accountability.  If you're the Guangzhou Environmental Protection Department and you pledge to clean up the air or plant ten trees down the street, if you don't do it, you've screwed up and you will suffer the consequences of that.  So there is that accountability, sort of executive-led accountability.

What I feel, sometimes talking to friends back in UK and other countries, that side of China doesn't make headlines in the media.  People don't realize and they think that China's very much a top-down, "do what you're told" and that's the end of it.  But it's not that simple.  It really isn't.

[...]

And I think that's one reason China's modernization has gone pretty well in most senses.  It's because of that accountability.  There's almost an unwritten contract between the government and the people.  "We're going to make things better and if we don't we're screwing up.  We've got no legitimacy left any longer."  That works quite well.

~ Jeremy Sargent, Brit who has lived in China for 25 years, "This walk with Brit in Guangzhou changed my view of China," Max Chernov, 7:15 mark, January 20, 2025

Rep. John J. Duncan Jr. on Israeli genocide

Genocide is defined as "violence that targets individuals because of their membership in a group and aims at the destruction of a people." 

The United Nations Convention on the Prevention and Punishment of the Crime of Genocide, adopted in 1948, established genocide as an international crime.  The US was one of the signers to this agreement.

This was done primarily in response to what had happened to the Jews in Europe during World War II.  In fact, because of what happened then, you would think that the Jewish people would be the strongest opponents to genocide anyplace.

I think everyone realizes that the United States would be the first to act and would lead the campaign against this genocide if it was being done by any other country than Israel. 

~ Rep. John J. Duncan Jr., "Israel Against The World – With US Aid," The Knoxville Focus, January 18, 2025

Tony Deden on the investment business

There's a difference between an investment practice and an investment business.  In a business, you seek to do what the customer wants.  A practice is that you do the right thing by the customer regardless of what he wants or what he thinks he needs.  You seek to do the right thing.  And that's very difficult, actually.  It's not very popular.

~ Tony Deden, "Tony Deden - Master Value Investor," State of the Markets, 40:50 mark, January 10, 2025

Tony Deden on investing

I'm not so sure that the business of deploying your capital is something that anybody could do just because they want to or because they're intelligent and smart and they have a medical degree or whatever it is they do.  I think it's a matter of common sense and temperament more than it is one of knowledge and intellect.

~ Tony Deden, "Tony Deden - Master Value Investor," State of the Markets, 1:14:50 mark, January 10, 2025

Tony Deden on high time preference in the Western world

We're no longer a culture of production.  We're a culture of consumption and thinking about today.  We've eaten the seed for tomorrow, completely.  Look, there have been difficult times in the past, many many and even worse, but we've never had this universal, more or less global - well, I should exclude parts of Asia, I suppose and parts of the world - but at least in the Western world, we've never had such a disintegration in every respect as we face today.  I'm not sure what impact that has long-term on many of the things we take for granted.

~ Tony Deden, "Tony Deden - Master Value Investor," State of the Markets, 40:50 mark, January 10, 2025

Connor O'Keeffe on why many victims of LA wildfires were uninsured

Making matters worse, many of the homes destroyed last week were uninsured.  Progressives and establishment media outlets seized on this fact to blame climate change for driving insurance providers out of high-risk areas. 

This talking point is complete nonsense.  If the risk of natural disasters in an area people want to live in increases, that’s good for insurance companies.  It drives up the demand for their product.  It’s true that home insurance providers have been fleeing the areas affected by these fires—with one provider canceling thousands of policies in the Pacific Palisades in the last year alone.  But that’s not because of climate change, it’s because of government intervention.

[...]

When governments mess with insurance prices—either through subsidies, cheap public insurance, or price controls—the result is always the same. More people move to dangerous areas that are highly susceptible to natural disasters. 

In 1988, California passed a law that forced insurance prices down by 20 percent, banned providers from using forecasts of future risk to set prices, and subjected all future price increases to government oversight. With rates severely decoupled from risk, the state saw extensive development in some very fire-prone areas. Then, after an exceptionally bad fire year in 2017, insurance providers tried to get approval to raise premiums to account for the high level of risk across the state. The government said no. 

As a result, seven of the twelve largest home insurance providers pulled out of California. And that trend is continuing today. 

~ Connor O'Keeffe, "Climate Change Is Not the Cause of California’s 'Insurance Crisis'," Mises Wire, January 14, 2025

Kevin O’Leary supports tariffs on China

China's a different issue completely to Canada or any other country.  Since they came into the World Trade Organization, they have broken the rules with every country, including the U.S. 

I'm an individual who does business there.  My businesses have been absolutely screwed.  I've said it countless times.  They don't play by the rules.  There's nothing reciprocal in our relations. 

The only way to put [Xi] at risk is to say, look, if you want to mess with the largest economy you trade with, then we're going to force a lot of people that make yoga mats or electronics or whatever else it is to be unemployed in your cities, and they'll be rioting in the streets, they won't have any bread, and you will be out of power.  That is the only way it's going to work — so very selected high-impact weaponry like tariffs, but you've got to be hardcore. 

[Xi] only understands the stick.  That's all he understands.  Any weakness at all, he plays off and he has done so for years.  So I'm hoping this is the administration that fixes the problem.  I have really been hurt by China, and there are millions of other businesses in America in the same boat I'm in. 

~ Kevin O’Leary, interview with Fox Business, "'You've got to be hardcore': Kevin O’Leary warns Trump tariffs on China could trigger ‘riots in the streets’ — says this ‘high impact weaponry’ is only solution. How to bet on the US in 2025," msn.com, January 11, 2025

Mark Zandi on the U.S. economy

President Trump is inheriting an economy that is about as good as it ever gets.  The U.S. economy is the envy of the rest of the world, as it is the only significant economy that is growing more quickly postpandemic than prepandemic.

Mark Zandi, chief economist at Moody’s Analytics, "Is Donald Trump inheriting the best economy in history?," MarketWatch, January 11, 2025

James Bovard on liberty in America

If you look at the rhetoric of the presidential campaign this year, you had Biden promising to make America more woke, you had Trump promising to make America great again.  What you didn't have is anybody promising to make America constitutional again or to make America free again.

So I really wonder how much love of liberty Americans still have, because it doesn't come up that often as a pure issue in presidential campaigns.  It really hasn't been a primary issue, I don't think, by a major candidate since the 1980s, since Ronald Reagan.

~ James Bovard, "Draining the Swamp with Jim Bovard," Competitive Enterprise Institute, 23:30 mark, January 9, 2025

James Bovard and Trump's tariffs

There is a huge danger.  If you look at Trump's trade policy, it's just turning back the clock to President McKinley.  I don't know why anybody would think that's a good idea.  People forget the devastation from McKinley's tariffs, how it helped spur the Spanish-American War, how it left the U.S. with control of the Philippines and thereby helped drag us into World War II.  There were so many follies...  

The Trump policy makers seem to think that you can put a 10% tariff on bananas and somehow it's not going to have an adverse effect on consumers and everything else.  It's like that they have no idea.  Trump likes to talk about the art of the deal, but he doesn't have a magic wand.  If you look at his first term, at the devastation he inflicted on American agriculture, with his trade wars and how it boosted dependency.  People forget, in the 2020 election, Trump tried to buy a lot of farmers' votes by showering extra money on the Midwest.  He bought some farmers' votes; it wasn't enough because Biden was buying other votes.

~ James Bovard, "Draining the Swamp with Jim Bovard," Competitive Enterprise Institute, 8:00 mark, January 9, 2025

Thomas Sowell on socialism

The strongest argument for socialism is that it sounds good.  The strongest argument against socialism is that it doesn’t work.  But those who live by words will always have a soft spot in their hearts for socialism because it sounds so good. 

~ Thomas Sowell

Aunt Jane: "There once was a man named Trent"

There once was a man named Trent

Who hated to part with a cent

Until he met a spender of the opposite gender

Now he's not saving, he's spent

~ Aunt Jane, cousin of Ernest Duffy (my grandfather), at the age of 98, December 13, 2010

Scott Kennedy on rebuilding semiconductor manufacturing in the U.S.

The economic security concerns are paramount, but there's also the question of jobs and rebuilding America's own manufacturing prowess, which has both economic and national security benefits to it.  But the facts are that you can friendshore, onshore some semiconductor manufacturing capacity, but the U.S. right now is about 12% [of global chip production], Taiwan's at 60%.  You've got China and others making up the rest.  Even at the pace which the U.S. is adding capacity, that 12% number is not going to radically change because everyone else is also adding capacity as fast as possible.  We are going to be in a globalized semiconductor industry as far as we can see.

~ Scott Kennedy, China Expert, Center for Strategic and International Studies, "Under Threat! How New Semiconductor Plants Are Facing Big Problems," Interesting Engineering, 9:05 mark, January 6, 2025

Herb Greenberg on investing and being willing to make mistakes

When I look back I think "gosh, what I've learned."  Because of the mistakes I've made.  It's all because of the mistakes.  That's how you learn.  I think that's how you learn how to be an investor.  And if you approach it thinking, "oh my god, I'm going to make a mistake," you're not going to move forward.

~ Herb Greenberg, "Gunslinging Gambler or Cautious Investor: Which One Are You?," Stansberry Investor Hour, 10:00 mark, December 30, 2024

Albert Einstein on marriage

Men marry women with the hope they will never change.  Women marry men with the hope they will change.  Invariably they are both disappointed. 

~ Albert Einstein

Jesse Schreger on Trump's tariff plans

The desire to put high tariffs on China seems credible, if you think back to the first Trump administration and its willingness to use [tariffs] for geopolitical ends.  The Biden administration didn't undo that — in fact, they professionalized it.  The Trump administration's rhetoric might have been stronger, but the Biden administration took this economic battle to the next level. 

~ Jesse Schreger, associate professor of Macroeconomics at Columbia Business School, "China hits dozens of U.S. companies before expected Trump tariffs," CBS News, January 2, 2025

John Michaelson on the trouble with ultralow interest rates

Superlow rates function like Robin Hood in reverse.  They take from retirees and frugal working people who can’t get a decent, risk-free return on their savings and give to the rich, who own most of the appreciating assets.  Would-be home buyers might be clamoring for rate cuts, but low mortgage rates don’t make homes cheaper when we can’t (or won’t) increase supply.

Cheap money promotes unhealthy consolidation in the business world, sustains staid corporate incumbents at the expense of innovative newcomers, and promotes the financialization of the economy.

In short, bankers and private-equity firms love cheap money.  The rest of us get very little out of it.

And yet the Fed’s every instinct is to return to low interest rates.  Its decadelong adherence to low rates and quantitative easing wasn’t based on empirical evidence.  Rather it was based on theoretical models and untested academic dogma.  Unfortunately, the Fed is still dismissive of real-world evidence that ultralow real rates are associated with anemic growth.

~ John Michaelson, Michaelson Capital Partners, "The Era of Low Interest Rates Is Over. Good Riddance.," Barron's, December 7, 2024