Publications: Notes at the Margin

This Will Not End Well (August 25, 2025)

 

Taken together, the Trump administration’s efforts to expand its influence into spheres that were once insulated frompolitical meddling pose a larger threat, potentially undermining the United States’ previously unshakable reputationas a reliable, predictable place to do business.

 

“These are all real components of why people would trust the United States, and if you start taking them apart, you start eroding that trust,” said Norbert Michel, an economist at the Cato Institute, a libertarian think tank. “At some point you’re no longer the thing that gives people confidence. You’re just another third-world country” [emphasis added].[i]

 

The paragraphs above appeared in a New York Times article titled “Trump’s Attacks on Institutions Threaten a Bulwark of Economic Strength” [emphasis added]. The authors, Ben Casselman and Colby Smith, explained that the Trump administration has removed the pillars that have made the United States a leader among world nations.

 

The economist quoted in the article, Norbert Michel, is Vice President and Director of the Cato Institute’s Center for Monetary and Financial Alternatives.[ii] His writings reflect the views of most Libertarians, a group that is strongly conservative and that has abhorred the policies pursued by Presidents Clinton, Bush, Obama, and Biden alike. To our knowledge, though, none ever previously suggested that these presidents would reduce the United States to a third-world country.

 

Since January 20, we have worried that Trump administration policies would accomplish just that, but we wanted someone else to come out and say it.

 

The keys to the US degeneration lie in how President Trump is destroying incentives to invest in the United States by his random actions and attacks on the quality of US economic data. His erratic decisions, which have made investments once viewed as safe seem chancy, are likely to have the greatest immediate impact. The ruin of data quality will have a more long-term effect.

The global fossil fuels sector will fall victim to this economic collapse. US growth will slow sharply, although a politicized US Bureau of Economic Analysis may not report the data. Domestic fossil fuel use will drop precipitously. The global economy will suffer as the United States, which the World Bank estimates accounts for 15% of world GDP, shrinks. Burgeoning populism will depress economic activity elsewhere, according to recent research. Many of the investments announced over the last few years will become stranded assets that will not generate a return on capital invested or a return of capital.

 

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