The Talking Heads have a great song for what’s going on in American right now. Where ever you look, everything is coming down. The erratic tariff policy has been a blow torch to the economy. The stock market is reeling. Inflation is up. Unemployment is up and job openings are down. The R word is on economists’ lips again. Now we know why Warren Buffet was hoarding large amounts of cash instead of reinvesting. Much as the current administration wants to blame Biden, they own this. The Trump Bump, has officially turned into a Trump Slump.
“Ah, watch out
You might get what you're after
Cool babies
Strange but not a stranger
I'm an ordinary guy
Burning down the house
Hold tight
Wait 'til the party's over
Hold tight
We're in for nasty weather
There has got to be a way
Burning down the house”
It's not just the economy. Our political allies have been completely torched since the inauguration. Ukraine in particular and NATO in general has been left to fend for themselves. Canadians are hating America right now with a new poll showing 27% of Canadians consider us our enemy. 65% of Mexicans view the US unfavorably. China, not a US ally, is ‘ready for any type of war with the US’. I don’t think Americans knew what they were getting into when they pulled the levers for Donald Trump, but watch out, we are getting what we’ve gone after.
Government workers who voted for Trump are likely having buyers remorse as they apply for unemployment and work on updating their resumes. Likewise auto workers, whose industry make be fast heading for a recession, are likely having second thoughts. Veterans whose satisfaction with the VA was at an all-time high under Biden, have reason to fear for their benefits which Project 2025 put on the chopping block. If you thought Project 2025 wasn’t going to be the playbook for this administration, I’ve got a Golden bridge I’d like to sell you that spans our bay.
It gets worse before it gets better. In order to subsidize tax breaks for the richest Americans, benefits to the poorest Americans are also under threat in order to balance the budget. The administration is saying that social security benefits will not be touched, but at the same time our shadow president Elon Musk is calling social security a Ponzi scheme. I’m still a couple of years away from being about to collect social security, or whatever is left of it.
Fortunately the housing market is still healthy for sellers. Inventories are low, demand has been picking up with the warmer weather and interest rates have dropped into the mid 6’s this week. Because higher inflation also negatively effects mortgage interest rates, I’m not sure how much longer we’ll be enjoying these rates. Our chronic housing shortage should continue to support property values even if rates approach and breach 7% again.
In 1932 during his first inaugural address FDR said, “The only thing we have to fear is fear itself.” I’m not afraid of the direction our country has taken in less than 2 months of the new administration, but I concerned. Deeply concerned. I’m going to keep holding tight though. At some point this nasty weather will blow over.