Tag: bloomberg
'Sudden Stop': A Trump-Branded Crisis Hits US Economy (And Dollar)

'Sudden Stop': A Trump-Branded Crisis Hits US Economy (And Dollar)

Bloomberg posted an article titled “Markets Are Discovering the Real Trump Trade Is ‘Sell America’.” That’s about right. Look at the value of the dollar on international markets, shown at the top of this post. For a while after the election investors loved Trump, not wisely but too well. But in the face of one idiotic policy move after another, they’ve gradually fallen out of love, and now seem to be capitulating. I think they still haven’t faced up to how bad it is, but they’re figuring it out.

What we’re seeing now is something familiar to those of us who have studied economic crises in other countries, usually but not always emerging markets. For this is looking more and more like a “sudden stop.” That’s what happens when a country that has relied on large inflows of foreign capital loses the confidence of international investors. The inflow of money dries up — and the economic consequences are usually ugly.

Trump inherited an economy in remarkably good shape. We’d had “immaculate disinflation”: The inflation spike of 2021-22, largely caused by Covid-related supply chain disruptions, had faded away without a large rise in unemployment:


Source: St. Louis Federal Reserve

But Trump wasted no time in squandering the hand he’d been given. It’s not just the destructive tariffs. It’s also the chaos, as policy zigzags wildly, and the craziness. If you were a foreign investor, would you want to bet on America right now? Would you even want to visit to look at investment prospects, given the risk that you might be imprisoned by ICE because you once sent a text critical of Trump?

The economic consequences of sudden stops are, as I said, usually ugly. I’m writing this from Portugal, which — along with other southern European nations — was hit by a sudden stop in capital inflows just as it was recovering from the global financial crisis of 2008. The result was another severe economic slump that produced immense misery:


Can the United States suffer comparably? We have some big structural advantages that, say, Portugal in 2011 or Argentina in 2001 lacked. Above all, America’s foreign debt is overwhelmingly in dollars. This means that a plunging dollar won’t cause the domestic-currency value of our debt to explode, the way it typically does in emerging-market crises. And U.S. businesses and individuals have large overseas investments that will become more valuable in dollar terms as the dollar falls. As a result, the Trump slump in the dollar will, at least temporarily, lead to an improvement in our international investment position, the difference between U.S. assets and liabilities.

On the other hand, Portugal in 2011 or even Argentina in 2001 had mostly sane leadership. We don’t. As a number of people have pointed out, there may be no other government in the world that would have kept Pete Hegseth in office given his performance so far.

And as things get worse, there’s no reason at all to believe that Trump and those around him will look for policy solutions. Instead, we’ll see a combination of denial and efforts to blame someone else. Trump has already declared that reports of rising prices are “fake news.” And he’s already setting the stage for making Jerome Powell — “Mr. Too Late” and “a major loser” — his scapegoat for everything that goes wrong.

Coming next are conspiracy theories.

[Screengrab may have been fake?]

None of this was necessary. The U.S. economy was doing well before Trump came into office. Trumponomics isn’t a response to real problems. It’s a president who has waged a war on competence indulging his personal obsessions.

But America and the world will suffer the consequences.

Paul Krugman is a Nobel Prize-winning economist and former professor at MIT and Princeton who now teaches at the City University of New York's Graduate Center. From 2000 to 2024, he wrote a column for The New York Times. Please consider subscribing to his Substack, where he now posts almost every day.

Reprinted with permission from Paul Krugman.

Reprinted with permission from Substack.

Russian Government Launches Western ‘Fake News’ Tracker

Russian Government Launches Western ‘Fake News’ Tracker

IMAGE: Pedestrians cross the street behind a billboard showing a pictures of  US president-elect Donald Trump and Russian President Vladimir Putin in Danilovgrad, Montenegro, November 16. 2016. REUTERS/Stevo Vasiljevic

McConnell To Trump: ‘Stick To The Script’

McConnell To Trump: ‘Stick To The Script’

Senate Majority Leader Mitch McConnell says that while Donald Trump should “stick to the script,” he remains comfortable backing the presumptive Republican nominee.

In an atypically candid interview with Bloomberg’s “Masters in Politics” podcast, McConnell expressed caution over Trump’s racist comments towards Judge Gonzalo Curiel but maintained that a President Trump would need to answer to the center-right voters necessary to win the presidency.  

“It’s pretty obvious he doesn’t know a lot about the issues,” McConnell said. “You see that in the debates in which he’s participated. It’s why I have argued to him publicly and privately that he ought to use a script more often—there is nothing wrong with having prepared texts.”

Both literally and metaphorically, he said that Trump — a vocal critic of teleprompters — should begin using pre-written speeches as a way to avoid blunders like his comments on Curiel, which will alienate the minority voters that the GOP must focus on.

“I think he’d have a much better chance of winning if he would quit making so many unfortunate public utterances and stick to the script,” McConnell said.

He later added that during a meeting at the National Rifle Association convention, McConnell told Trump that this more reserved tactic “indicates a level of seriousness that I think is important to convey to American people about the job you are seeking.”

McConnell, who is known for being tight-lipped on candidates and controversy alike, said that Trump needs to change his approach to the campaign and pick a running-mate who is well-versed in policy.

“Now you need to demonstrate you have the seriousness of purpose that is required to be president of the United States, and most candidates on frequent occasions use a script,” McConnell said he told Trump.

At a time when many conservatives have questioned the legitimacy of Trump’s candidacy, McConnell, the top Republican in the Senate, seems like he might be a worthy judge for right-wingers unsure of how to feel on Trump.

“I’m not going to speculate about what he might say, or what I might do. But I think it’s pretty clear and I’ve been pretty clear publicly about how I think he ought to change direction and I hope that’s what we are going to see.”

Listen to the full podcast here.

Photo: U.S. Senate Majority Leader Mitch McConnell (R-KY) arrives to talks to the media after a weekly Senate Republican luncheon on Capitol Hill in Washington, U.S., April 19, 2016. REUTERS/Yuri Gripas 

Texas Woman Gets 18 Years For Obama Ricin Plot

Texas Woman Gets 18 Years For Obama Ricin Plot

Washington (AFP) — A U.S. actress who tried to blame her husband for sending ricin-laced letters to President Barack Obama, then-New York mayor Michael Bloomberg, and a gun control activist got 18 years in prison.

U.S. District Judge Michael Schneider sentenced Shannon Guess Richardson to 216 months in federal prison on a biological weapons charge and ordered her to pay $367,222.29 in restitution.

In December, Richardson pleaded guilty to possession of a toxin for use as a weapon, after being named in an indictment that charged her with threatening Obama, and mailing a threatening letter to Bloomberg and Mark Glaze.

Glaze had worked closely with Bloomberg in the then-New York chief’s drive to increase gun control.

“Today’s sentencing brings an appropriate and just end to what is surely one of our most unusual, even bizarre cases,” U.S. Attorney John Bales said in a statement.

He noted the investigation had been “very challenging.”

Prosecutors told the court Richardson, 35, had bought between April and May 2013 castor bean seeds, sodium hydroxide (lye), and other ingredients online to manufacture ricin, a deadly biological poison for which there is no known antidote.

She subsequently placed ricin onto three threatening letters addressed to Obama, Bloomberg, and Glaze that were posted on May 20.

Ten days later, Richardson traveled to Shreveport, Louisiana and told police her husband was responsible for sending the letters.

She was arrested in June 2013 in Mt Pleasant, Texas.

A copy of the letter sent to Bloomberg posted online showed a stained, type-written document that contained numerous spelling errors.

“You will have to kill me and my family before you get my guns. Anyone wants to come to my house will get shot in the face,” it read.

“The right to bear arms is my constitutional God given right and I will excersice that right til the day I die. whats in this letter is nothing compared to what ive got planned for you.”

Richardson has had a piecemeal acting career, including a minor role in the hit zombie television show “The Walking Dead.”

AFP Photo/ Brendan Smialowski

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