Like many, I suspect, I was somewhat surprised that our GDP shrank a little during Q1, especially as the job market continues to grow (despite hundreds if not thousands of government jobs ending). However, we have to remember that we essentially started off the year in Q1 with the last remaining month of Bidenomics, and no doubt the hangover from four years of said stupidity was one hell of a handbrake to the start of the year.
Still, I refuse to be a slave to the “Q” mindset so beloved of financial types, where every fiscal quarter has to show growth even if market conditions make it impossible. Which, I suspect, is what happened here, for all sorts of reasons.
It’s short-term thinking like this which causes trouble in the longer term.
What we do know, however, is that large corporations are moving production back to the U.S. and away from Asia (especially from China yay) to the tune of some $5.2 trillion — but those are just planned investments, i.e. promises, which will take some time to be realized. In addition, there are planned growths in ship-building which are almost certain to revive once-moribund areas, not to mention making us both more independent in trade and more secure militarily. But those too are still in the planning stages.
Factories don’t just spring up overnight, in other words.
Listen: we all knew that to reverse the tide of red ink, both in government spending and the trade deficit, we would have to experience some discomfort. And while ICE is doing well — from all accounts, over 60,000 illegals (mostly of the career criminal persuasion) have been booted out in the past three months — but as I’ve said before, that still leaves many millions more that still need to be expelled: millions of whom, we all know, that are sucking up public money in healthcare and education, to name but two areas of ongoing concern.
The question is: are we on the right track?
I think so. The moves to reduce tax burdens on the majority of the population, the DOGE-inspired slashing of government spending and the efforts to cut deadwood and make both business and government more efficient — by stopping the inherent inefficiencies of DEI policy, for one — all mean that the long-term prospects for our economy look promising.
And to a large degree, the market swings caused by the tariff business are simply due to the fact that markets hate uncertainty, because they’re slaves to short-term thinking — remember, stock prices are tracked daily. These are very uncertain times we live in.
But we need to give the whole thing more time to develop. We didn’t sink into quasi- (and in some cases actual) socialism in a single quarter, either. That took decades of work by socialists like Bill Clinton, Barack Obama and their cohorts in Congress from even before then. And we’re not going to reverse this tide in a single quarter. Hell, it may take years.
It didn’t take that long for Javier Milei to effect massive changes in Argentina, but it should be remembered that taming an inflation rate of hundreds is considerably easier than doing the same to an inflation rate in the teens (as we experienced under Biden), let alone getting inflation into low single digits, which in today’s world is almost impossible and takes a supreme effort of will.
But although cheaper energy and the concomitant lowering of the prices of goods and services is going to make a difference, that’s not going to happen immediately because we still have to drill new holes, build new refineries and get more nuclear power generators online to replace the unreliable and fragile Net Zero-style solar- and wind-based power generators so beloved of the Eco-Nazis. None of that can happen in a single quarter, either.
We’re doing the right thing — and by “we” I mean the Trump Administration, whom we voted into power. We just need time to get it done, and not be swayed by short-term thinking.
