Trump’s Paradoxical Path to a Popular Presidency

Donald Trump’s best strategy for his second term might be to do... nothing. If he adopts an “inactive executive” approach—focusing on rallies rather than policy—he could leave office boasting of presiding over one of the strongest economies in recent history.

Here’s why: Trump is inheriting what may be the most remarkable economy of our lifetimes, certainly since the late 1990s. The forces driving this prosperity have built-in momentum that could generate stellar results—if Trump doesn’t derail them with his campaign promises.

The private sector is creating new businesses at double the rate it was in 2000, even in the face of high borrowing costs. As interest rates fall, we can reasonably expect that rate of new business formation to accelerate further. Private sector R&D spending is also at an all-time high, growing nearly twice as fast under Biden as it did during Trump’s first term. These investments are the seeds of future growth, sparking breakthroughs that will compound over time.

The public sector, too, is contributing. Biden’s extensive infrastructure plan is stimulating the economy and creating jobs on a scale never before seen. With over 60,000 projects underway, the effects of these investments will ripple through the economy for years, much like Eisenhower’s interstate highways did in the 1950s.

This combination of research, entrepreneurship, and public investment creates a virtuous cycle. Wealth, knowledge, and innovation all compound over time. Consider how mapping the human genome has enabled thousands of new projects, each one paving the way for tens of thousands more breakthroughs. Or how Amazon’s success didn’t just enrich Jeff Bezos—it empowered millions of small businesses to grow. Growth begets growth.

If Trump simply stays the course, GDP growth and job creation are poised to shine. A strong stock market and falling interest rates could provide further fuel, making the economy virtually self-sustaining.

But Trump’s campaign promises—tariffs and mass deportations—could wreck this golden opportunity.

A 10% tariff would add hundreds of billions in consumer costs, cut GDP growth in half, and stoke inflation. Mass deportations would be even worse: removing 16 million workers and consumers could shrink GDP by 4-7%, a blow greater than the Great Recession. Beyond the economic devastation, these policies would uproot families and communities, triggering public outrage—and for a president who thrives on adulation, that could mean a steep decline in popularity.

Ironically, the most effective path for Trump might be inaction. By allowing private investments and the long-term benefits of Biden’s infrastructure projects to work their magic, Trump could ride the wave of economic growth without lifting a finger. For a man whose greatest strength is holding rallies and energizing his base, doing less might actually achieve more.

In short, Trump’s best chance at a successful and popular presidency is to resist the urge to meddle. The economy’s trajectory is already set to thrive—if left undisturbed. He might do best if, instead of implementing policy, he just travels the country holding rallies. And given he’ll soon once again be our president, we, too, will benefit from him doing his best – even if it comes from him doing very little.

Elections as a Choice Between Exploring New Frontiers or Settling Into the Past

Every four years, 338 million Americans—roughly 160 million of them voters—engage in the process of choosing the next president. It’s remarkable that such a diverse electorate can narrow its choice down to two candidates, much less settle on one. But beyond selecting a candidate, this choice represents something deeper.

Embedded in the national conversation is a debate over which future is desirable: one grounded in familiar tradition or one open to progress. Louis Menand explores this contrast between premodern and modern life: “The problem of change is the problem of modern cultures. In a premodern society, the ends of life are given at the beginning of life. When you are born you understand what your tasks are because it is given to you by your family, your community, your nation. And the task of the community and the task of the nation is the same as your task – which is to reproduce the customs, the practices and the values of that group. So at the end of life you can look back and see that you have fulfilled this role that you were born into, with the understanding that if you have been successful in reproducing the customs, you are successful in life.”

“In modern cultures,” Menand continues, “you don’t have that assurance because the ends of life are not given at the beginning of life.” Modernity replaces certainty with choice, creating a life path that is less defined by the past and more open to the future.
Each election, Americans vote not only for a leader but for a vision of the future—whether to reach toward a familiar past or to embrace an uncertain future. This tension represents an ongoing national decision between the comfort of tradition and the potential of change. 

Tradition offers a certain future, where continuity defines success, while progress introduces the potential for a better, if unpredictable, future.

In 1800, when Thomas Jefferson—who would double the size of the country through the Louisiana Purchase—was elected, America’s frontier faced uncharted lands. By moving the frontier westward by a thousand miles, he expanded the nation's horizon physically. Today, in 2024, our frontiers are less geographic and more conceptual. They encompass unexplored ideas, evolving lifestyles, innovative policies, new business models, institutions, products, and cultures. The American choice is no longer simply a physical frontier but one that asks whether we embrace unknown ideas or cling to familiar ways.

Do Americans put their trust in tradition or innovation? In the familiar or the unknown? In nostalgia or hope? Are they eager to make the country great again or to make it great in genuinely new ways? This is one of the defining choices of each campaign: a vote for a culture rooted in continuity or one committed to progress. Every election reopens this profound choice—a cyclical conflict between preserving what we know and daring to move into an unknown frontier.

How the Election Could Impact the Stock Market

All the usual caveats apply to this stock market forecast. [which is to say, this is speculation not prophecy]

November could be a tough month for stocks. At the end of this post, I’ll share a tip for those of you who feel like you’ve missed out on the past year’s bull market and are wondering if now’s the time to jump in.

Election Impact on the Market

A Trump Victory: A Trump win could trigger a sell-off due to the potential for aggressive policies like mass deportations and tariffs. Deporting 16 million people would likely reduce GDP, and tariffs would disrupt supply chains and foreign markets critical to major companies like Apple and NVIDIA. Given that these top companies are deeply integrated into a global market, tariffs and retaliatory tariffs would threaten their supply chains and earnings. If the market believes Trump will pursue these policies, it may price in this risk, leading to a drop.

A Harris Victory: Harris’s election, on the other hand, might prompt a temporary sell-off but for different reasons. While she hasn’t proposed wealth or estate taxes explicitly, some investors might anticipate future tax changes and choose to lock in gains under the current tax code. However, her policies aren’t expected to disrupt economic fundamentals. Harris advocates for trade continuity, foreign investment, and tax policies favorable to new businesses, suggesting stability for the global brands driving the stock market. Any initial sell-off would likely be short-term.

The Opportunity
Here’s the tip: If Harris is elected, any post-election drop could be a good chance to buy in at a discount, as the long-term trajectory of the market is likely to stay positive. Her policies aim to sustain growth by supporting trade and investment, so a brief sell-off could offer a smart entry point.
If Trump wins, the market will face a different scenario. His policies would likely shift the economy away from the global approach that benefits major corporations. U.S.-based global brands depend on open trade, supply chains, and diverse talent pools, so immigration restrictions and tariffs would put strain on these companies. For investors, this could mean a stagnant or declining market if Trump follows through on his anti-globalization policies, as the values of globally oriented companies could suffer.

The MAGA Coalition and Next Week's Potential Reversal of Progress

MAGA is essentially a coalition of losers from history: those who opposed FDR’s regulation of capital, Lincoln’s shift from tariffs to income taxes and public investment, and Jefferson’s push to separate church and state. Each was a minority in its day, but together—and fueled by disinformation—they’ve turned next week’s election into a coin flip. Now, they have a real shot at overturning the three most defining and positive political transformations of the modern world.

What Was Possible With Even An Average COVID Response

In the first year after the outbreak, COVID fatalities in the U.S. occurred at roughly twice the rate of the average OECD country. This suggests that, had the pandemic been managed as effectively as in other countries, around 40% of the Americans who died from COVID in that first year might have survived.

Pennsylvania - Still a Swing State 224 Years Later

In the 1800 election between Federalist John Adams and Democratic-Republican Thomas Jefferson, Pennsylvania was the swing state that tipped the scales. 224 years later, it’s still a swing state with the power to deliver the presidency. (A client from Philadelphia once told me, 'Pennsylvania is Philadelphia on one side, Pittsburgh on the other, and Alabama in between.' That's a formula for a purple state.)


It’s almost as if the ghosts of the Founding Fathers are making sure the state that hosted the creation of the Declaration of Independence and the Constitution still has the final say in this country’s direction. (And if ghosts are haunting the country, it might explain why Election Day is just a week after Halloween.)

Zero-sum Thinking and Resultant Slowdown at the Heart of Economic Stagnation, BREXIT, and MAGA-nomics

The UK's GDP growth per person slowed dramatically from 2.5% to around 0.5% annually following Brexit—a drastic change, largely attributable to the economic effects of Britain's withdrawal from the EU and the global economy.
Just as Britons narrowly voted for Brexit, we Americans might similarly (and narrowly) vote for Trump, potentially embracing policies that involve withdrawing from the global economy through tariffs, deportations, and other isolationist measures. If so, we could experience a comparable economic slowdown, starkly contrasting with the thriving economy of recent years.
This isn’t surprising. While economies are complex and unpredictable, one certainty is that zero-sum thinking—where gains are seen only at others' expense—leads to economic decline. The mindset behind Brexit was that Europe was prospering at Britain's expense, just as Trump's supporters believe that the world is prospering at the expense of the U.S. Zero-sum thinking is not only the root of conflict but a path to scarcity. Unfortunately, it’s also at the core of both Brexit and "MAGA-nomics."

Acemoglu, Johnson and Robinson - A Couple of Key Ideas Behind Today's Nobel Prize in Economics

Today, Daron Acemoglu, Simon Johnson, and James A. Robinson won the Nobel Prize in Economics. That pleases me. I’ve mentioned Acemoglu in 20 of my Facebook posts, and I believe his two most popular books (one co-authored with Johnson, the other with Robinson) are profoundly important. For those who haven’t read his longer works, here’s a simple summary of his key ideas.

In Why Nations Fail: The Origins of Power, Prosperity, and Poverty, Acemoglu and Robinson emphasize that the design of institutions is fundamental to economic outcomes. They illustrate this by contrasting British and Spanish colonies in the Americas. Why did one set of colonies lead to economic abundance, while the other led to relative poverty?
In the British colonies, institutions were more inclusive. This meant that not only did the sponsors back in Britain receive a share of the returns, but those actually living and working the land in North America benefited even more. If the colonial settlers worked harder or innovated, they reaped the rewards, fostering a culture of productivity and improvement.
In contrast, the Spanish colonies were designed as extractive. The Spanish elites back in Spain extracted nearly all the wealth from the colonies’ mines and plantations, leaving the native laborers destitute regardless of their efforts. These workers had little incentive to work harder, innovate, or improve their conditions since they wouldn’t benefit from any additional effort or creativity.

The extractive institutions stifled growth and innovation.

Acemoglu’s more recent work with Johnson - Power and Progress: Our Thousand-Year Struggle Over Technology and Prosperity - builds on this by examining the role of technology in economic outcomes. They argue that there is nothing automatic about technological advancements benefiting the majority. History shows periods where the elites captured the overwhelming share of productivity gains, and other periods when those gains were more broadly shared, improving the lives of workers as well as capitalists.

Focusing specifically on AI, Acemoglu is skeptical about whether its potential gains will be shared widely or remain concentrated among a few. He argues that the outcome—whether gains are broadly shared or narrowly held—will depend on deliberate policy decisions, not on the simple evolution of the technology itself or market forces.

I share Acemoglu’s sense that with economics’ small 1 to 3% annual changes, all the really fascinating progress plays out over generations and not months or years. Economic progress has deep causes and the design of institutions is even more important than the design of tools or products. It's gratifying to see that recognized by the Nobel Prize committee.

Well It Seemed Funny at the Time

 "He’s the kind of guy who’ll pee on your leg and call it trickle-down economics."

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"I'm cooking, Jerome! You said this hike would be shady!"

"Shady? No, I said this hike is hotter than Hades."

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What are the odds that Miss Universe actually is?

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I’m so tired of Southern California being overrun with illegals. You see them everywhere—on the freeway, where the speed limit is clearly 65 mph, and yet at least a third of the cars are driving faster than that! Illegals... shamelessly speeding in plain sight.

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They keep saying the stock market is booming, but I'm not convinced— the S&P has been stuck at 500 for so long that it's now reached the point of absurdity.

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Manny Machado.
Is there a name with a higher testosterone count?

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I've defined a new kind of economic cycle: Buliminomics.

In Buliminomics the economy undergoes a binge (excessive spending, often fueled by borrowing or credit) followed by a "purge" phase (where consumers cut back on spending to manage or pay off debt), before returning to another cycle of splurge.

Buliminomics: the splurge and purge that leads to dangerous economic excess.

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My economic plan is bold, visionary, and - with a positive attitude - achievable: get everyone into the top 1%. Because even the average person deserves to be better than average.

"Some are born great, some achieve greatness, and some... well, they vote for me."

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I get that the label "all natural" helps sell products, but honestly, if I saw something labeled “10% supernatural,” I’d probably buy it—at least once.

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Sobering to think that I’ve reached an age where if I say, “I’m literally dying,” people really would take me literally. Which is kind of ironic.

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But enough about me, he said. Now I'd like to tell you about my hobbies.

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"I was really surprised that our relationship didn't work out," he said.

"Oh? Why was that," I asked.

"Well we were both Geminis. I felt like we would totally understand each other. I mean, I've been reading her horoscope every day for years."

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It is all well and good to dream big but a chicken who never accepts the fact that he can't fly is just going to create a lot of squawking and mad flailing of wings and rob the whole barnyard of peace.

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Sitting in Costco with 3 vaccinations freshly coursing through my veins wondering if medieval peasants would be more amazed by immunizations against plagues or a vast building with stacks of food 20+ feet high in every direction.

And progress isn't even done yet.

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All this talk about “utopia,” but what he really meant was “me-topia”

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After a few too many drinks, he tried to say he was a policy analyst, but what came out was "Pollyanna-ish." Given what we'd heard from him all night, it seemed like an apt confession.

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He woke up confused, having slept in latte and hastily splashed pumpkin spice cologne on his face. Fall always left him feeling a little disoriented.

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“The best material model for a cat is another, or preferably the same cat.”

- Norbert Wiener

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He was really excited to hear that the Fed was planning a hate cut ... until someone corrected him to point out that they were actually talking about a rate cut ... which somehow seemed less imperative to him.

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In 2025, Pluto goes into the public domain. In 2028, Goofy does.

I'm looking forward to a heartwarming story in about 2030 in which Pluto and Goofy look at each other soberly and Goofy says, "I don't know why we go through this charade. You're his pet and I'm his friend and nobody can explain why he treats us so differently and we pretend to be so happy about it. This has to stop. Either you join us at the dinner table or I join you at the doggy dish but we have to stop letting a manipulative mouse come between us like this."

It'll be a heartwarming story about rising above the scripts we've been handed and living life as our true self, of treating others as equals.

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Waiter or waitress has always connotated waiting. I think there was a time in history when it referred to the server waiting on the diner and not the diner waiting on the server. But I'm not sure. I'll wait for you to look that up.

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I'm going to call my AI model "elves on the Internet" and cater to the market of folks too savvy to fall for the notion that so-called algorithms are sufficient to generate such results.

I expect that I'll capture nearly half the market.

If you would like to be an early investor, there are two options:

1. Invest $100k into the startup.

2. Provide job references for at least 2 elves.

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I have strong opinions about everything. Except, you know, strong opinions. I'm not sure if it's a good or bad thing to have so many strong opinions.

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John Gray points out that Freud wasn't intent on transforming people or their potential or sense of self. Freud stated, “the goal of psychoanalysis is to turn neurotic misery into ordinary unhappiness.”

Probably harder to sell as a promise but ordinary unhappiness does sound like an attainable goal.

What are your goals for 2025, Fred?

I'd like ordinary unhappiness for a change.

Oh, well good luck with that.

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The promise of social security seemed both noble and absurd to him… until he discovered it was just about monthly payments, and had nothing to do with alleviating social anxiety or tackling the tougher issues of status, acceptance, or belonging.

Christian Nationalists - People Who Would Like You To Think They Understand Christianity More Than Christ and Government More Than the Founding Fathers

In the four Gospels, Jesus doesn’t mention abortion or homosexuality—not once.

But in three of the four, He gives the same advice to a rich young man who wants eternal life: sell everything you have and give it to the poor. Also, in three of the four, He says it’s easier for a camel to go through the eye of a needle than for a rich person to enter the Kingdom of Heaven.

The Bill of Rights has 10 amendments, and the very first begins with, "Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof..."

So, if you don’t want to sell all your possessions—despite the fact that Jesus explicitly taught it—the First Amendment suggests you don’t have to. And if you don’t want to lose your right to decide whether or not to have a child, not only does the Constitution forbid others from legislating their religion onto you, but the religion they want to impose on you isn’t one Christ taught anyway.

I suppose it’s possible that Christian nationalists who want to legislate their beliefs understand politics better than the Founding Fathers who gave us the First Amendment and understand Christianity better than Christ. Possible—but unlikely. Because if they did, the real Christian nationalists would be out here pushing for a 100% wealth tax. And I guarantee you, when that happens, these faux Christian nationalists will be waving the First Amendment faster than you can say, “seize the means of reproduction!”