Trump's Double Mission
I recently sat down with my friend and Paradigm colleague James Altucher on his podcast, The James Altucher Show, for a special two-part episode.
In part one of our chat, which you can view here, I explain to James why I believe the U.S. is careening toward a recession caused by Biden’s misguided policies (if we aren’t already experiencing one).
I also discuss whether Trump can successfully drain the swamp in his second term.
But first, a historical analog…
Reagan-Trump Parallels
When Reagan took the Oval Office, he inherited a recession from outgoing President Jimmy Carter that lasted from 1980 to 1982. Up until then, it was the worst recession since the Great Depression.
But get this: From ’83 to ’86, the economy grew 16%. We’re talking about a compound annual growth rate of over 5% a year.
I believe we could see the same pattern play out under the new Trump agenda.
However, I don’t expect Trump to achieve this growth by cutting rates. Too many people think the Fed controls everything through interest rates.
If you look at the longest economic expansion in U.S. history (2009-2019), you’ll see that interest rates were virtually zero but growth averaged a measly 2%.
That’s an almost incomprehensible waste. In my view, the U.S. has the potential for 3% to 3.5%. Those years of depressed growth add up to trillions of dollars of lost wealth that could have been generated.
Look, there’s nothing about stimulus that says interest rates to me. If you need further evidence, consider that we had low rates during the Great Depression.
The big question is not whether the Fed will cut rates. The Fed puts on a good show but it doesn’t really matter.
The big question is actually whether banks will start lending again and whether businesses will start borrowing again.
Because when neither side wants to dance, nobody’s dancing.
Trump’s Rematch With the Swamp
But the economy isn’t Trump’s only upcoming battle.
In my chat with James Altucher, I also touch on the increasing prevalence of fascism in modern America.
In its economic essence, fascism is defined as a partnership of companies and government.
You have private ownership… under the thumb of the government: CEOs and government ministers, arm in arm in the same program (under threat of retaliation).
For modern examples, we can look to Facebook, Google, and Twitter under Jack Dorsey.
When Anthony Fauci launched the COVID-19 lockdowns, shuttered the economy, and forced “vaccinations” upon Americans, these social media giants worked to deplatform anybody whose views didn’t align with the established narrative.
It was a massive effort; these social media platforms were even staffed at the top with former government employees. That way, Washington could control the national discussion.
That’s fascism. And it continues today.
Trump couldn’t successfully drain this fascist swamp during his first term. We all saw it. He started off with a good administration that was hollowed out by replacements who turned out to be backstabbers loyal to the fascist structure.
But, as I tell James in our chat, I (warily) believe a more experienced Trump and his newly picked cabinet could succeed where their predecessors failed.
Check out the video here for my full reasoning.
Also, stay tuned for part two of my chat with James in which I discuss my new book, MoneyGPT, which explores the financial aspects of AI and how it could affect the economy.
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