Congressional Democratics need to be bolder, louder, and more disruptive!

March 4, 2025

In a rational world that operates according to time-tested principles of economics and politics, the Trump-Musk rampage should generate negative consequences in the financial and electoral markets. In a rational world, politicians would heed negative feedback and modify their behavior accordingly.

Since there is no evidence to suggest that Trump or Musk are capable of modifying their behavior in response to any feedback, the more likely outcome is that voters will modify their behavior to punish the Republican Party for letting the hounds of hell loose on a booming American economy and a functional federal government.

Strong evidence suggests that the financial markets are preparing for a significant contraction in the economy, a.k.a., a “recession.” In GOP-speak, “recession” means “the end times are upon us.” Republicans spend their time out of power constantly claiming that booming Democratic economies are evidence that a recession is just around the corner. On the other hand, Republicans spend their time in power creating nearly instantaneous recessions—which is what Trump's cuts and tariffs appear to be doing. See Fortune Magazine, US economy has suddenly been thrown into reverse.

Per Fortune,

The Atlanta Fed’s GDP tracker now indicates that the economy is headed for a 1.5% contraction in the first quarter, after showing 2.3% growth just days earlier. That also marks a sharp reversal from the fourth quarter, when GDP expanded by 2.3%. Several economic indicators have been raising alarms as consumers and businesses brace for Trump tariffs and federal job cuts.

As Josh Marshall of Talking Points Memo explains in his editor’s blog entitled, Ominous Economic Data, the 1.5% contraction reference in the Fortune article is old news. The Fed has re-revised its projection downward to negative 2.8% growth for the quarter. Per Marshall,

The Atlanta Fed has again lowered its projection for first quarter 2025 GDP. It had been predicting growth of 2.3%. At the end of last week that was revised to 1.5% contraction and this morning they were again down-revised 2.8% contraction, or in other words 2.8% negative growth. To be clear these aren’t final or official stats. We’re only two-thirds of the way through the quarter. They are a prediction based on current indicators

The double-whammy downward revisions come on the eve of 25% sanctions on Canada and Mexico that will go into effect on March 4, 2025. See NYTimes, No last-minute deal for Canada and Mexico to avoid tariffs, Trump says.

Marshall notes that the downward pressure created by threatened tariffs is being exacerbated by “extreme economic uncertainty” depressing consumer confidence and purchasing behavior. Random, arbitrary job cuts that ripple through the economy tend to depress consumer confidence in their future prospects.

The attempt to slash government spending is so alarming to consumers that Commerce Secretary Howard Lutnick says that the Trump administration will change the way it estimates GDP—by removing government spending! Candidly, I have no view on whether government spending should be included in the calculation of GDP. But I do know that changing how GDP is calculated to remove government spending as you are slashing government spending is like changing the scoring system in the middle of a baseball game. It stinks.

[I note that people who do know what they are talking about believe that government spending should be included in GDP. See Neil Irwin in Axios, Why government spending counts in GDP, as Trump admin mulls exclusion.]

As I write this edition of the newsletter on Monday evening in London, the S&P and Dow indices have fallen 500 and 600 points, respectively, for the day—the biggest loss this year. There is no hint that Trump will suddenly reverse course on dozens of economic policies to spur growth. Instead, it appears that Trump is hell-bent on turning the US economy into a kleptocracy like Russia.

For example, the US Treasury will end regulations that seek to prevent (or punish) US taxpayers who use shell companies to conceal taxable income. See ABC News, Treasury ends enforcement of database meant to stop shell company formation. Per ABC,

The U.S. Treasury Department announced it will not enforce a Biden-era small business rule intended to curb money laundering and shell company formation.

Trump is shutting down anti-money laundering regulations at the same time DOJ has announced that it will not enforce legislation that prohibits US businesses from engaging in foreign bribery.

Those worrisome actions must be viewed in the context of Trump's announcement that the United States will establish a cryptocurrency reserve—a move that will effectively grant government financial backing to cryptocurrencies that are (a) subject to wild volatility and (b) used to finance international criminal enterprises. The largest beneficiaries of a US crypto reserve will be current holders of cryptocurrencies (including Trump), many of whom are international criminals, tax cheats, assassins for hire, drug cartels, and smugglers.

Oh, perfect! Just the crowd that the US should legitimize by establishing a crypto reserve. See Reuters, Trump names cryptocurrencies in strategic reserve, sending prices up. The worst part is that the US will use taxpayer money to enrich criminals across the globe. I am not a crypto currency expert, but this move has disaster written all over it.

Finally, Republicans are realizing that their budget blueprint is a recipe for disaster in 2026. See Axios, Republicans fear their big budget win is actually a 2026 time bomb. The analysis in the Axios article is unsurprising to anyone with a television who has watched a recent Republican town hall. In 100% of those GOP town halls, the constituents are as mad as they have been in decades. And their ire is directed at GOP representatives who are allowing Trump and Musk to destroy the economy to extend a tax cut to billionaires and millionaires.

My point is not to suggest that Democrats can ease up because they have a lock on victory in 2026 and 2028. They do not. Rather, my point is to suggest that the laws of electoral and economic gravity still exist and are beginning to tug on the low-earth orbit of Musk’s ketamine high and Trump's teetering bouffant.

Millions of Americans are and will continue to suffer because of the reckless actions by Trump and Musk. Democrats must be smart and relentless in communicating the root causes of the suffering inflicted by Trump and Musk to voters who abandoned the Democratic ticket in 2024. If we can’t do that with the tragic motherlode of political riches that are being created every day, we do not deserve to win. We are up to the task, but we must be louder, bolder, and more creative in our approach.

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“Shut down Tesla” protests are spreading across America

Musk has turned himself into the evil billionaire everyone loves to hate. That is a bad look when you sell cars based on the notion that they are modern, cool, and virtuous. No more. Protesters across America are making the point that Elon Musk is singularly responsible for eviscerating government programs and decimating the ranks of federal workers who help deliver services to the American people and ensure their health, safety, and security.

Jessica Craven of Chop Wood Carry Water describes her experience protesting a Tesla dealership in Westchester, CA. See Chop Wood, Carry Water 3/3 - by Jessica Craven.

Jessica includes a description of the effectiveness of the organic protests:

These protests are working, by the way. The AP reports that “as of Friday, [Tesla stock] has dropped 37% since Inauguration Day, a loss of $550 billion in investor wealth.” GOOD! If you haven’t yet attended a Tesla Takedown event please plan to. You can find one here. We can really, really hurt Musk by tanking this stock. Let’s do it!

In addition to the Tesla protests, brave souls in Vermont protested JD Vance’s ski vacation, during which he apparently intended to celebrate his destruction of the NATO alliance by abandoning Ukraine on live TV. Congrats to the Vermonters who did a great job disrupting Vance’s vacation—a move that undoubtedly punctured Vance’s smug, self-satisfied grin after disrespected a global hero.

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Former NATO deputy commander says allies can no longer trust America

For anyone who believes I was hyperbolic in describing the effects of the Friday disgrace in the Oval Office, the former Navy deputy commander of NATO, General Richard Shirreff, said

I think we have to assume, after the events of the last 10 days, that we cannot in any way count on America as an ally.

That is exactly the result that Putin wanted—the dissolution of the NATO alliance by eroding the trust between the parties developed over 80 years of post-war cooperation.

And Trump is doubling down on his attack on Ukraine and cooperation with Russia. Trump is holding talks with senior advisors to discuss canceling military aid promised to Ukraine by the Biden administration but not yet delivered. And Trump has leaked to the press that he will not sign a minerals extraction agreement with Zelensky until the Ukrainian leader apologies to Trump on live TV. (Per Steve Doocy on Fox.)

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Ominous silence from the Supreme Court

Chief Justice John Roberts granted an “administrative stay” last week, which allowed Trump to continue withholding USAID payments. The purpose of the stay was to allow the full court to consider Trump's request to stay the decisions of the lower courts that effectively compelled him to comply with the law. To state the obvious, it should not take long for the full Court to decide that the president must comply with congressional statutes that appropriate funds (as permitted by Article I of the Constitution).

The longer the delay in hearing from the Supreme Court, the more likely (I believe) it is that the Court will find a way to say that the president can withhold funds appropriated by Congress. That would be a disgrace equivalent to the decision granting Trump immunity from criminal prosecution.

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Concluding Thoughts

There is more to cover, but we spent a full day walking every street in London (or so it seemed), and we are in transit tomorrow, so we have our hands full.

Trump will address Congress on Tuesday. Although the speech is not an official State of the Union Address, it is customary for new presidents to address a joint session of Congress during the first months of a new administration.

Democrats need to be bold, loud, and creatively disruptive—up to and including a mass walk-out. The old rules do not apply and the sooner that Democrats internalize that fact the sooner we can get on with the serious business of using every lever to shut down Trump's unlawful rampage of destruction and betrayal. Let’s hope that our elected leaders rise to the challenge!

Talk to you tomorrow!

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