CAPITULATION & ENTROPY
On Monday, the stock market fell precipitously as Trump attacked Powell as a “major loser,” fueling speculation that the president would move to fire the Fed chief. But by Tuesday afternoon, Trump appeared to dial back his rhetoric, saying he had “no intention of firing” Powell and arguing that the “press runs away with things.”
- Top Trump aides urged president to tone down attacks on Jerome Powell, WAPO
Gregg Wall (4-26-2025)
April has been an eventful month and not exactly a winning month for U.S. dollar hegemony, superpower status, and the Trump administration. As I wrote two weeks ago, Trump was forced to capitulate on reciprocal tariffs, as the dollar and Treasuries were dumped and interest on ten-year notes began to spike. America’s spiraling national debt and debt service loads were obviously on Trump’s mind when he backed off on reciprocal tariffs for at least ninety days.
This week, the Washington Post reported Commerce and Treasury secretaries met with Trump to talk him off the ledge on the president’s harassment and nascent moves against Federal Reserve chair, Jerome Powell. Treasury Secretary, Bessent, also indicated the triple digit tariffs against China were not sustainable, which Trump confirmed along with the comment that America planned to be “very nice” to China. Once again, the President’s favorite benchmarks, the nice index and the stock market, were cratering and ten-year yields were climbing as all of this was announced. This, and the highly unpleasant reality that the U.S. is dependent upon China for so much that it critical … from antibiotics, medicine, rare earths, and weapons components, all the way to the purchase of Treasuries and debt, et al. ... likely, focused Trump’s attention & super hasty retreat. Other factors entering into the administration’s collective mind: China says they are not meeting with the American gov on trade, despite Trump’s claims to the contrary; and China has used Trump’s global tariffs war to reach out to America’s traditional allies in the spirit of cooperation and goodwill. Say, versus Trumpian bombast, contempt, rage, and purported “ass kissing” orgies.
This is what forty-five years of Reaganism, failed duopoly governance, globalization, laissez-faire – anything goes capitalism, $40 trillion in national debt, and the accompanying oligarchy formation have wrought. America finally humbled on the world stage and looking more defeated and exhausted by the second, poorly led and poorly managed by America’s repugnant & ultra-violent gerontocracy. Dems, GOP, the oligarchy, and Wall St. own this moment… as do America’s business leaders.
Of course, $40 trillion in national debt brings us back to Jerome Powell. Trump was in the process of attempting to put the screws to Chair Powell and was even looking into whether he could fire the head of the FED. And he still might. Trump is fixated, of course, on bringing interest rates down because America is leveraged to the hilt and not just the government. Private equity, Wall St M&A, the grossly inflated stock market, asset classes of the catastrophically wealthy, trillions in derivatives transactions, even smaller to mid-sized businesses that have front run future earnings and borrowed off their credit lines to pay themselves bonuses and cash are all dependent, to varying degrees, upon cheap debt & debt service loads. Conveniently left out of the discussion on why interest rates are higher, than the extraordinarily low yields the FED and other central banks have often produced since the ’08 crash, is inflation. Inflation has not come down, gas is still 30% higher than when Trump left office in January 2021, food and eggs are catastrophically elevated, and rents are high enough to put people on the streets. And of course, bankruptcy (biz & personal) and homelessness are soaring. All these factors are, likely, on Trump’s mind as well as the pending recession as the result of Trump’s tariffs. This, at a time Congress should be tying themselves in knots over whether or not extending and expanding the Trump tax cuts for the rich are really a smart move. It’s not an intelligent move but that won’t stop the hideously corrupt GOP members of congress from passing tax cut legislation.
As we can see, there’s a lot of moving pieces here, but what it really comes down to is the Federal Reserve has bankrolled all manner of fatuous behavior going back to the Bush (W) administration, which includes but it not limited to: empire, the Gulf Wars, the Iraq invasion (remember WMD), AIPAC and the State of Israel (seemingly, every war Bibi can dream up), 700 to 800 military bases around the globe, a hot war with Russia in the Ukraine, new Cold Wars with China & Russia, billions for America’s genocide in Gaza, our entirely worthless and useless Congress has been given a blank check by the FED for decades (which struggles to put together a formal budget), there are those financed tax cuts for the rich, the oligarchy tax code, endless corporate welfare, there’s the bailouts for Wall St (which seemingly never end), et al. My… America’s central bank and FED chairs have been very busy boys and girls, transferring all that wealth to absolute pigs and leaving the American people with the IOU. And if we are completely honest the FED is essentially bankrolling & backstopping our failed dereg, neolib/neocon command economy, our laissez-faire/monopoly economy. The entire BS economic paradigm of the U.S., from empire to financialization, mainlines endless monetary welfare. In short, the FED chair basically is the sugar daddy of last resort and the most powerful individual on the planet, at least for the moment. Which, one is to gather from Trump’s behavior, absolutely infuriates the president to no end. Presumably, Trump would like Chair Powell to adopt a more Arthur Burns approach to his job… Burns, of course, was Nixon’s FED chair and was said to be responsible, in part, for a decade of American inflation & malaise.
The FED has been allowed, since America’s entrance into WW2 and Bretton Woods, to underwrite and provide endless monetary policy support for corruption, economic and governmental malpractice, economic and military violence around the globe (including within the United States itself), and again, the transfer of unimaginable sums of wealth to a privileged few and the disaster we call: American oligarchy. Lower interest rates, presently, would buy the American economy and government more time to get its act together, negotiate on tariffs and trade. Or lower interest rates would give American leadership more time to do what it generally does: screw up, delude itself, finance more fraud – like tax cuts for billionaires & multinationals, carry on with business as usual, do more colonialism, genocide, and wars, etc., etc. All this, while leaving essential Americans with an ever-growing IOU of $40 trillion and counting. You get the picture. All roads to the billionaire welfare state, chaos, colonialism & empire, and fiscal, monetary, & regulatory malpractice run through one destination, the Federal Reserve.
But after Trump basically started up a world war on trade with such a high-handed approach, even our allies and former allies have to be asking, why does the U.S. enjoy exorbitant privilege again? Macron, obviously, believes the Euro should or could replace the U.S. dollar. To the FED’s credit, Powell has, to date, resisted Trump’s calls for lower rates. Not to put too fine a point on it, but endless bailouts, endless tax cuts for the rich, the blank check handed to congress, America’s money sucking Israeli friends & empire, the lack of regulatory controls and oversight over Wall St & other industries … and the FED constantly engaged accommodative monetary policy, expanding the national debt, interest rate suppression, QE, debt monetization, etc. … are exactly why America finds itself in the mess it’s in today.
That and the FED's inexplicable inability to simply say, “No.”
Meanwhile, despite some disinflation, there’s zero signs of deflation, and prices – post pandemic – are stubbornly resistant to decreasing and falling (despite record profits reported out by essential industries). Trump’s tariffs will undoubtedly make things worse.
Trump wasn’t the only billionaire to shrink a couple of inches this week. It came out that Tesla’s income took a 71% hit in the first quarter, as Musk salutes, bankrolls right-wing political parties globally, and DOGE’s malevolent efforts began to catch up with the prodigal billionaire. The damage that Musk has done to his personal image, as well as the reputations of American oligarchs is incalculable. DOGE’s reckless attack and destruction of the federal government, particularly programs that Americans need and count on, perhaps more than ever given the state of the economy, have caused the American people to reassess & reconsider Musk … to such an extent that even republican voters are now open to taxing oligarchs. It took 45 years but Americans, in increasing numbers, are finally waking up to the fraud and scam that is globalization, neoliberalism, supply-side, trickle-down, and oligarchy. DOGE’s apparent goal all along was to gut public programs, portray gov as a waste, privatize gov, and transfer greater wealth to a repugnant billionaire class.
Like so many of Trump’s & Musk’s promises, DOGE is a far cry from achieving the $2 trillion in savings it promised, even the $1 trillion in savings it promised; and, if we factor in the true costs to the public for DOGE taking a chainsaw to the federal government, even the recently claimed savings of $150 to $160 billion seems, increasingly, suspect. The costs to Americans of Musk’s and Trump’s reckless behavior… poorly planned, poorly thought out, poorly executed… could and likely will be felt for decades. It’s quite a comedown for Messrs. Musk and Trump. With both camps at this point looking for a break and a timeout… Musk plans to return to Tesla next month but has no plans to let go of his chainsaw & sledgehammer, DOGE. So much winning, Republican politicians are now afraid to meet with their constituents. Coincidence? The reality, Musk’s actions scream private equity model. Where a handful of individuals loot corporate balance sheets, strip the company of assets, front run profits, borrow to pay extravagant dividends… lay off workers, cut customer service, diminish products & services to pay for it all. Except the PE template is being applied to Social Security, Medicare, public schools, and Medicaid.
The question remains, how much destruction to America’s brand and reputation thanks to Trump’s and Musk’s egregious conduct? Libertarian ideology, that Musk champions, has been revealed to be a complete fraud (may it forever rest upon the ash heap of history). There is, however, some good news: at least for a generation, the American people and the world have finally seen through the veil of U.S. exceptionalism and the world will probably never look upon this nation the same again. America, & its leadership, is a genocidal monster, a bully, angry, deeply racist and misogynistic, narcissistic, petulant, and not to be trusted. Whatever you do… don’t turn your back. And the exact same can be said of the lies, myths, and MSM spin surrounding the billionaire class. We can thank billionaire arrogance, greed, hatred for all peoples, and hubris for that.
The Oligarchy’s hypocrisy surrounding its own addiction to government & welfare from the state… while simultaneously, holding complete anger & hate for essential citizens and gov programs that help Americans (even programs workers paid into, like Social Security) … has never been more obvious.
Copyright JM Hamilton Publishing 2025
