Bill Bonner, Bonner Private Research
We were cheerfully explaining what would happen in the second Trump administration. But first…
Here’s the latest from the Musk/Ramaswamy duo. Business Insider:
The Biden administration said Monday it would help finance two battery factories in Indiana being built by a joint venture involving Jeep owner Stellantis and Samsung.
The announcement provoked a furious reaction from one of the incoming Trump administration’s chief cost-cutters.
Vivek Ramaswamy, who was tapped to lead a ”Department of Government Efficiency” (DOGE) alongside Tesla CEO Elon Musk, called the Stellantis loan “illegitimate” and said it should be rescinded.
The former Republican presidential candidate, who has been one of Donald Trump’s most vocal supporters, also criticized a $6.6 billion loan to help finance a Rivian EV plant in Georgia announced last week.
A reader might wonder: what are the feds doing… lending money to auto companies?
But as the elites become more and more corrupt, they put their fingers in more and more pies. From the taxpayers’ standpoint, these ‘investments’ — along with almost all other federal outlays — are costly losers. And when there are enough of them, economic growth comes to a halt.
Real wealth and progress result from the efforts of ‘The People.’ Not from laws, edicts, bullying or threats from the feds… or from the folks George Wallace called ‘pointy headed intellectuals’ who put them in place.
So, a president can only boost an economy, but only by cutting off their hands. Whack off regulations. Smack down agencies and departments. Hack away at payrolls and reduce expenses. There is no other way.
That’s the way to help the 90% of the population that has to do real work for a living. But it’s not necessarily the way to help Trump’s many special pleaders and rich guys. Bloomberg sees the challenge: Trump’s Impossible Task: Delivering for the Working Class and Billionaires
When Donald Trump won in November the voters felt they were being dissed… betrayed… and ripped off by their elites. He promised, convincingly, to smite them… and smite them hard.
On that score, the president-elect is not likely to disappoint them. The Establishment hates him. He returns the favor. And now headed back to the White House, he can use the powers given to him by Democrats and Republicans to smite just about whomever he wants…and put his own elites in power.
That thought must have been in the back of a lot of minds when the rich and powerful decided whom to get behind before the election. Do they need licenses? Do they need permissions?
Do they want contracts, deals, and special arrangements? Do they fear the wrath of an all-powerful government? Do they expect loans… grants… tax breaks?
Yes, they do.
Hunter Biden just saw what a chief executive can do for you. Others are eager to see the bounty come their way too.
We continued our exposition to our grandson:
“[Musk and Ramaswamy] say they’re going to reduce the payroll and erase years of regulations. And our friend David Stockman, former Budget Director for Ronald Reagan, is making the lists and checking them twice. He’s identified dozens of agencies… and hundreds of billions of dollars of spending… that could be cut with no real loss to the commonwealth.
“It’s easy to find ‘fat’ in federal finances…it’s almost all fat. But all of that money goes somewhere. And the people not getting it will resist. Team Trump will be taking on the intelligentsia, the press, the bureaucracy, Wall Street, the foreign policy establishment and the firepower industry. Even with a determined budget cutter at the head of the government, it would be an uphill battle. And probably, at this stage in the Primary Political Trend, impossible to win.
“Plus, all that money that the DOGE says it is going to save is part of GDP. Cut it out and GDP would go down by $2 trillion… or about 7%. Over the long run, this would be a good thing, because the money would be better spent and invested by the people who earned it. But in the short run, it would seem like a catastrophic economic collapse.
“Then what would happen? Would Trump and the Fed sit back and let the economy sink into depression and then recover on its own? Would they permit a 50% sell-off in the stock market (how would that affect his rich backers)?? A 10% unemployment rate ($2 trillion = 28 million jobs!)? Or, would they cut interest rates, print money, and hand out stimmie checks to get the economy moving again?
“Trump wasn’t elected because he quoted Madison, Jefferson, Smith or Bastiat. He’s no Thatcher. No Milei. Not even a Reagan. He is no free market purist and has no commitment to making the government smaller. He only wants it to do what he wants it to do — smite his enemies and reward his friends.
“Musk and Ramaswamy are smart guys. They want to be his friends. At first, we misjudged them. We thought they might lack the ‘cynicalism’ essential to understand the world of politics. On second thought, they may be even more cynicalist than we are.
“Rich people naturally turn to politics. But not to cut it down to size. Instead, they look to politics for aggrandizement.
“The Musk/Ramaswamy duo probably realize that they’re not really going to change the direction of the Primary Political Trend. If they push too hard for real cuts it will sink the economy and blow back onto Trump’s other backers. The idea is to give the impression that they are leading a revolution… but not actually change anything.
“What will happen? They will save a few bucks. But the government will still get bigger. It will go further into debt. And it will depend on high levels of inflation.”
Having summed up the situation to our satisfaction, we were ready to do real work.
The wind had picked up. And the temperature was barely above freezing. Leaves rose in whirlwinds. But the sun was still warm.
We took our grandson outside… gathered up the chainsaws… and prepared for the first cut.
“When you take down trees like this,” we continued our practical pedagogy, looking up the trunk of a 60-foot beech, “you gotta know what you’re doing.”
We cut a wedge out of the side… where we hoped it would fall.
“Granddad, aren’t you afraid it will fall on you?”
“Nah… I cut the wedge out. Now, I’ll cut into the other side and it will fall over.”
“Yeah… but what if it doesn’t?’’
“If it falls on me, just call 9-11.”
“Granddad, you’re making me nervous. I don’t want to stand here and see the tree fall on you.”
“Keep an eye on it. If you see it moving the wrong way… let me know.”
The big saw went deep into the wood. The tree didn’t move. When we were almost through to the wedge, we withdrew the saw… and stepped back.
“It hasn’t moved, Granddad.”
We started to cut deeper.
“Granddad… it’s going the wrong way.”
We pulled out the saw quickly and moved away. But the young man had been misled by passing clouds; if the tree had actually been falling towards us it would have pinched the blade and made it difficult to pull out the saw.
We looked up. The top of the tree was moving very slowly. But it was actually going as intended… it creaked over by inches, like a dying empire, and then it suddenly picked up speed…
And crashed to the ground.
Regards,
Bill Bonner
