DeLong Twofer

I Have Reached My Limit. I Cannot Stand It. Too Much Sanewashing of the Trump Administration Has Broken My Brain
A huge number of journalists continue to talk about a “Trump administration” with things called “policies” that it “plans”. They know better. They should act better…

As the extraordinary tropism for pretty much everyone to sanewash Trump has taken over, I have been losing it more and more.

In the old days, one could at least count on the news pages of the Wall Street Journal —they were, as one old hand said, information so financiers could make money, while the editorial pages were balm for the right-wing plutocratic soul. But even before Gerry Baker the wall had clearly eroded, and add to it a desire to make sense of Trump (and perhaps a growing eagerness to please sources, and it is now distrust and verify).

Then it was the Financial Times , as Gillian Tett and others began to take an anthropological approach to the Trump administration—look at all these interesting beliefs of this tribe! we should respect their cognitive picture of the universe!

And now we have the very sharp John Authers of Bloomberg:

John Authers : Where's Mike Tyson With Advice When You Need Him? < https://www.bloomberg.com/opinion/newsletters/2025-04-25/trump-plan-where-s-mike-tyson-with-economic-advice-when-you-need-him >: ‘The great boxer Mike Tyson and once said that everyone has a plan until they’re punched in the face. Similarly, the Trump administration had one for rebuilding the world economy with tariffs. It’s been a rough first round. The plan was Stephen Miran’s A User’s Guide to Restructuring the Global Trading System , which must have been the most-viewed document by the financial world over the last six months. Stunningly ambitious, it helped earn its author a gig as chairman of the president’s Council of Economic Advisers, birthed the concept of the “Mar-a-Lago Accord,” and was widely taken as the road map for Trump 2.0’s bid to reshape the world using tariffs…

That is pretty much all a, well, completely out of contact with anything one might find her on God’s Green Earth:

• The Trump administration had no plan.

• Trump had grievances.

• Miran had a plan.

• Navarro had a very different plan.

• Trump says stuff.

• Bessent, Lutnick, Hassett, and others frantically try to retcon a small selected subset of what Trump says into a plan, and try to get Trump back on some kind of track.

• They fail, over and over again. And reporters sanewash the enterprise, over and over again.

Read a little bit further, and you get:

John Authers : Where's Mike Tyson With Advice When You Need Him? < https://www.bloomberg.com/opinion/newsletters/2025-04-25/trump-plan-where-s-mike-tyson-with-economic-advice-when-you-need-him >: ‘the “User’s Guide” reads differently now. Some of it has come to pass, Trump has deviated sharply from important recommendations, and certain assumptions now look tenuous at best…

No:

• It does not read differently now.

• It reads like it read last fall: as Miran’s plan, not Trump’s.

• Its “certain assumptions” do not “now look tenuous”. They always looked unhinged.

• Trump has not deviated sharply from important recommendations. Trump was never on course to follow those recommendations.

IT WAS NEVER TRUMP’S PLAN. TRUMP HAD NO PLAN EXCEPT TO VENT GRIEVANCES AND GET HEADLINES.

GROW UP, SHEEPLE.

And because he starts with sanewashing Trump as his foundational ground zero, very little of what Auther says makes sense. I could feel myself becoming dumber and losing brain cells by the minute as I read it:

(1) “If Europe has already decided that it cannot rely on US protection, as seems likely, then that makes life much easier for the US…”: No—it does not make life easier for the U.S. We used to have real allies, and as primus haud inter pares could count on their economic, diplomatic, moral, and geographic resources as a force multiplier to roughly double our weight in the world. Now, because of Trump, we have no allies. Life is not much easier for the US, it is much harder.

(2) “Miran expected the currency to rise… which he argued would have the effect of putting the burden on to the tariffed country...”: No—he argued that, but it was false. Imposed tariffs plus retaliation plus uncertainty plus the demonstration that everyone needs to derisk from the United States meant the even the threat of the tariffs was always going to put an enormous burden on the United States, with respect to which the effects of changes in terms-of-trade would be minor third-order corrections.

(3) “Miran acknowledged that… if the dollar were to weaken, then continuing inflation worries and the high budget deficit would put pressure on Treasuries…. The good news is that inflation numbers have improved in the last few months…”

What improvement in inflation numbers? The Fed watches the PCE. Given Trump’s desires to impose tariffs and blow up the budget deficit and the expectational consequences of same, all hope for any significant improvement in inflation numbers went out the window last November.

(4) “ Advice Ignored : Proceed Gradually …. Miran’s precise suggestion was to raise tariffs by 2% each month until an agreement was reached. That would have worked very much better than the chosen strategy of hiking the tariff on China to 145% in very short order. The exasperating twists and turns of the last three months mean that any forward guidance cannot be credible. That has had a massive effect on uncertainty , even for the administration’s natural constituency of small business owners…. It’s not yet clear how damaging this will be, but the administration has taken a big risk by acting in such an unpredictable way…” No: Not even . There is no even. ESPECIALLY . And it makes no sense to say “the administration has taken a big risk” in the hope of getting some return, because there is no way in which the Trump administration can be, even metaphorically, accurately described as an animal with a mind. Chaos-monkey did chaos. There was no thought about whether the risk was worth running. There is only chaos, and then a few people scrambling around hoping that they can convince John Authers and his ilk that it is all part of a plan, even if they admit it is not a particularly clever or good plan.

(5) “ Advice Ignored : Don’t Upset the Markets …. The White House is doing its best to look as unbothered by market selloff as it can…” Does anybody think that the White House as an entity is “unbothered”? Everyone in it is very borrowed. The most you can say with respect to “unbothered” is that Navarro hopes that at some point asset prices will stabilize, and then everyone will forget how much lower they are, and that Trump continues to say random chaotic stuff by day.

(6) “ Questionable: Tariffs Aren’t Inflationary…. This looks increasingly like over-learning the lesson from the very different environment of… 2018… [when] tariffs were imposed gradually and with due warning, against a backdrop of placid inflationary pressure…” No: The small tariffs of 2018 delivered about as much inflationary pressure as one would have expected: about 0.3%-points < https://www.aeaweb.org/articles?id=10.1257%2Fjep.33.4.187 > < https://www.bostonfed.org/publications/current-policy-perspectives/2025/the-impact-of-tariffs-on-inflation.aspx >. The claim that large tariffs would not be inflationary was always not “questionable” but unhinged. Always.

(7) “ Questionable: Demand for Treasuries Is Eternal . [Miran:] ‘Much (but not all) of the reserve demand for [dollars and Treasuries] is inelastic with respect to economic or investment fundamentals. Treasurys bought to collateralize trade between Micronesia and Polynesia are bought irrespective of the US trade balance with either, the latest jobs report, or the relative return of Treasurys vs. German Bunds…’ Demand may not be as inelastic as all that…. Effectively, the suggestion [from Miran] is that the US should charge foreigners a fee for the privilege of lending to Uncle Sam…” For the amount of Treasurys that collateralize trade between Micronesia and Polynesia is microscopic. Reserve and other demand for Treasury’s is HUUUUUGELY dependent on economic, investment, geopolitical, and—as we saw in the misadventures of Liz Truss and Kwasi Kwarteng—moron-premium fundamentals. And the proposal to “effectively… charge foreigners a fee” was never questionable, always unhinged. For it is the most basic principle of public finance is that it is always unwise to alter after the fact the terms of payment on bonds you have already sold.

(8) “ Questionable: The US Can Beat China in a Game of Chicken .… It looks at present like this is flat wrong. China retaliated swiftly... amped up the pressure… blocking… rare earths. Trump’s rhetoric is already swerving away from the confrontation…. The Chinese response is that tariffs have to come down first before talks can begin…. This game will be won by the player who can absorb the most pain. That appears to be China, even though it also stands to lose more…” No:

• China exports $500 billion a year to the United States—in billions: $125 of electrical and electronic equipment, $100 of machinery, $30 of toys, games, sports requisites, $30 of apparel, $20 of plastics, $20 of vehicles—which are pretty much all finished products: things, and things that are useful, for which there is demand elsewhere in the world.

• If China embargoed exports to the United States completely, it would over the next two years have to sell two years’ of stuff at half-off to others, and thus take a $500 billion hit.

• The $500 billion a year of Chinese goods exported to the United States feed into the value chains of the predominately service-sector US economy, and are crucial parts of $3 trillion a year of US GDP. Over the next two years, there is not manufacturing capability in the US or elsewhere to replace those. Apple cannot get iPhone hardware at scale other than from China, and without hardware there are no distribution or software or services revenues for Apple or for anybody else relying on their platform. So over the next two years $6 trillion of US GDP simply stops. (Except to the extent that we pay women in Bangladesh to cut “made in China” labels out of and sew “made in Bangladesh” labels into clothes.

• Trump has launched a trade war not against China but against the world.

• The US is a much bigger loser from a trade war in which the rest of the globalized world continues on its course, and only the US is frozen out.

(9) “ What Lies Ahead: So where does this leave us? A hundred days in, Miran’s “User’s Guide” shows that the administration entered the conflict with an inflated view of its own strength, and that it has been handled more abruptly and aggressively than the architects of the policy wanted. The response so far has not been what was bargained for…” No: THERE WAS NO “VIEW OF ITS OWN STRENGTH” THAT COULD BE DESCRIBED AS '“INFLATED”. THERE WERE NO “ARCHITECTS”. NOTHING WAS “BARGAINED FOR”.

(10) “We’re not keeping to the course laid out by Miran, but that doesn’t mean that we are irrevocably on the road to de-dollarization…” Again: NO!!! There was never a course. There are now, and will for the foreseeable future be frantic attempts to retcon things into a plan, a strategy, a course. We are not on any road. And we will not be on any road, absent the appointment of a Regent and universal accord that the Truth Social ravings of the president are in no sense to be understood as having anything to do with the policies of the United States of America.

Trumpist Chaos-Monkey Feces-Flinging in Trade Policy Continues. & It Is Turning into a Foreign-Policy Dumpster Fire...
Trump desperately wants to be on the phone with Xi Jinping, the dog has poked its nose into the steel trap, and corrupt media pretending to sanewash everything they can by pretending it is all 11-dimensional chess from people who think AI is a steak sauce…

In the left-hand ring of the chaos-monkey three ring circus that is the Trump administration, I see this AM that the Bessent Affinity within the Trump administration is trying to make something that might resemble a move of sorts.

The Bessent Affinity is now retconning all the Trumpist chaos-monkey feces-flinging in trade policy. They are going all-in. It all always was, they say, an 11-dimensional chess strategy to resurrect the Obama Trans-Pacific Partnership that Trump blew up on Day 1 of his first presidential term.

And I see four Politico reporters— Megan Messerly, Ari Hawkins, Phelim Kine, and Felicia Schwartz —pretending, unprofessionally, to take it seriously.

They ask no hard questions, but imitate lapdogs begging for treats:

Megan Messerly, Ari Hawkins, Phelim Kine, & Felicia Schwartz : Trump wants to make a deal with China. Here’s how he’s trying to make that happen < https://www.politico.com/news/2025/04/16/trump-china-trade-strategy-00291979 >: ‘The administration’s theory of the case is that tariff deals with other countries will isolate China — and urge them to come to the table…. [as] the U.S., will isolate China, disrupt the Chinese supply chain and threaten to cut the country off from the rest of the world…. Announcements from companies moving manufacturing operations to the U.S. and its broader sectoral-based tariff strategy… [are] key components in getting Xi to cooperate…. “Once you see a lot of countries — not just in southeast Asia or Asia, but all over — you’ll see that they’re willing to make deals with America, and that exerts pressure on China to hopefully come to the table,” the official said…. “Get all of Asia but China to the table, incentivize them with lower tariffs and U.S. companies will leave China,” said one person close to the White House. “And yes it makes sense. It’s happening already…”

And this naturally drives Dan Drezner—recently having moved from his job at Tufts in Medford to become Whateley Chair in Thaumatropic Energies and Dimensional Rift Studies at Miskatonic in Arkham—into Shrill Unholy Madness:

Dan Drezner : The Trump Administration Is Just Grasping at Trade Policy Straws Now < https://danieldrezner.substack.com/p/the-trump-administration-is-just > : ‘ Look who discovered a decade-old trade gambit!… Why… is this such an exasperating read?
Because the context is damning…. This is exactly what the Obama administration was attempting…precisely the argument President Obama made in a Washington Post op-ed that advocated for congressional approval of the TPP…. [And] prior to articulating it, the second Trump administration took about every conceivable action to sabotage this strategy…. As hard as this task would have been under normal circumstances, Trump has made it that much harder for the U.S. to corral any allies…. Trump officials [are] attempt[ing] to sanewash the epic clusterfuck of last week , but I ain’t buying…. China is better prepared to prosecute this trade war…. Trump’s madman gambits have, predictably , fallen flat. Other than that, everything is fine…

Plus, over in the right-hand ring, Duncan Black watches Bloomberg join in. Bloomberg, too, pretends that chaos-monkey trade policy really was actually always 11-dimensional chess to resurrect Obama’s Trans-Pacific Partnership strategy:

Duncan Black : Have They Seen a Map? < https://www.eschatonblog.com/2025/04/have-they-seen-map.html >: ‘Just completely dumbasses : “[Gavin Bade & Brian Schwartz:] The Trump administration plans to use ongoing tariff negotiations to pressure U.S. trading partners to limit their dealings with China, according to people with knowledge of the conversations. The idea is to extract commitments from U.S. trading partners to isolate China’s economy in exchange for reductions in trade and tariff barriers imposed by the White House. U.S. officials plan to use negotiations with more than 70 nations to ask them to disallow China to ship goods through their countries, prevent Chinese firms from locating in their territories to avoid U.S. tariffs, and not absorb China’s cheap industrial goods into their economies…”

While Xi Jinping and company say that that dog won’t hunt.

Or, rather, that if the dog wants to get its nose out of its self-inflicted trap—to not blow up U.S. inflation from trade supply-chain breakdown inside the United States—then what the dog needs to do is to come to heel, lie down, and be quiet:

Duncan Black : Has China Seen Donald Trump? < https://www.eschatonblog.com/2025/04/has-china-seen-donald-trump.html >: ‘[Bloomberg News:] I imagine China gets why this is hilarious, even if the people writing it up don't : “China wants to see a number of steps from President Donald Trump’s administration before it will agree to trade talks, including showing more respect by reining in disparaging remarks by members of his cabinet, according to a person familiar with the Chinese government’s thinking. Other conditions include a more consistent US position and a willingness to address China’s concerns around American sanctions and Taiwan, said the person, who asked not to be identified to discuss internal thinking…”

And Trump begs Xi Jinping to rescue him from his predicament. If you really think they have to make a deal with you, you don’t say “the ball is in their court” and beg them to reach out:

Duncan Black : CALL ME PLEASE < https://www.eschatonblog.com/2025/04/call-me-please.html >: ‘ Humiliating stuff : “President Donald Trump called on China to reach out to him in order to kick off negotiations aimed at resolving the escalating trade fight between the world’s two largest economies. ‘The ball is in China’s court. China needs to make a deal with us. We don’t have to make a deal with them’, White House Press Secretary Karoline Leavitt said Tuesday, reading what she said was a statement Trump dictated…”

And let me quote MOAR from the “China Open to Talks If Trump Shows Respect” piece. China wants not just Trump to say “never mind” about trade war and come to heel with respect to rhetorical China-bashing, but also to accept China’s position on the (hopefully long-run) ultimate status of Taiwan:

Bloomberg News : China Open to Talks If US Shows Respect, Names Point Person < https://www.bloomberg.com/news/articles/2025-04-16/china-open-to-talks-if-trump-shows-respect-names-point-person >: ‘Beijing also wants the US to appoint a point person… [to] help prepare a deal that Trump and Chinese leader Xi Jinping can sign when they meet…. Trump has hit China with tariffs of 145% on most goods since taking office, prompting Beijing to retaliate and threatening to wipe out most trade between the world’s biggest economies….

The rapid onslaught of US tariffs has engendered broad public support in China for retaliation, giving Xi a political incentive to rebuff Trump’s repeated demands for a phone call. The US leader on Tuesday again called on China to reach out to him in order to kick off negotiations to resolve the trade fight…. Trump’s demands remain unclear, and tariff levels on China would need to remain high to achieve his goal of balancing trade and attracting manufacturers to the US….

Michelle Lam… “There is a bit more clarity on what China is looking from: respect, consistency and a point person…. So now the ball is in US court on whether they can meet these demands. But that is still difficult — especially if the aim is to contain China’s rise.”… The most important precondition for any talks is that Chinese officials need to know such engagement will be conducted with respect…. Beijing has recently expressed notable displeasure with comments Vice President JD Vance made about “ Chinese peasants ”…. Lin Jian… called the remarks “ignorant and disrespectful,” in what was a rare direct rebuke of a senior US leader…. Officials in Beijing also want to know that Washington is ready to address… the prevailing perception… that the US has enacted policies designed to contain and suppress China’s modernization…. China also wants the US to address its national security concerns, particularly over Taiwan…

This may well turn into the greatest foreign-policy defeat for the United States since the end of the Vietnam War, at least.

It is very important to recognize how broad the stupidity, the cruelty, and the destructiveness is.

It is not just trade: it is everywhere:

Matt Yglesias : It’s not just trade < https://www.slowboring.com/p/its-not-just-trade > : ‘ Trump is addressing scientific research, public health, and other crucial issues with the same lack of care…. Trump’s extremely dubious ideas about trade policy…. But… Trump is a huge liar…. His business community allies [promised] that this was just populist chum…. Then came Liberation Day, on which his business allies learned that he is crazier than they thought. After several days of begging and pleading and stock market losses, he was persuaded to partially reverse course. But what will happen next with Trump and trade? I have no idea….

But I also know something… I wish his business allies would more seriously consider, which is that the slipshod manner in which he makes trade policy is not unique to trade policy….

Laura Loomer…is a nut job every bit as much as Peter Navarro…. During all the tariff drama, she scored an Oval Office meeting with Trump and purged six officials from the National Security Council , as well as the head of the National Security Agency …. There was no official explanation given by the White House for any of it, a true banana republic vibe…. Bill Ackman or the right-of-center members of venture capital Twitter view Trump… [as] doing lots of great stuff but just got it wrong on the reciprocal tariffs…. [But] we looking at Navarro-level personnel and Liberation Day-quality decision-making across a broad swathe of issues, except without … direct financial market feedback….

Killing poor kids in Africa: A recent analysis in The Lancet says that without stable PEPFAR programs, nearly 500,000 children in Africa are likely to die of causes related to HIV/AIDS over the next five years. That’s pretty bad…. I don’t really know why. Maybe they’re assholes. Maybe it got mixed up with abortion . Maybe they’re careless people who break things…. [But] the stock market doesn’t really care if poor kids in Africa die….

Kneecapping education research: Wrecking global trade is the craziest thing Trump has done in terms of touching a hot stove. Wrecking foreign aid is the most morally hideous thing he’s done. Somewhere in between is his administration’s frankly bizarre attack on program evaluation for American education… so crazy that Stuart Buck’s first reaction was that it must be some kind of mistake . But it’s not…. And the same is true for the administration’s broader attack on scientific research .

A parade of problems: Late last Wednesday, the Trump administration unexpectedly retreated from DOGE’s cutbacks to the Social Security Administration that had undermined basic customer service functions…. The point is that I do not think anyone’s takeaway from this should be that Trump is a prudent guy who corrects his errors. The lesson is that Trump is a reckless person who has empowered sloppy people to make sloppy decisions. Sometimes those decisions backfire in a way that is high-profile and obvious, in which case he may back down after days of controversy. Equally sloppy, equally bad decisions… fly under the radar….

Harms accrue over the long term, like the harms of gutting education research or basic science. Who knows what Loomer is doing to the national security apparatus beyond the fact that she’s already gotten a bunch of people canned and is now gunning for the general counsel at the Pentagon …. These guys really will do things that are incredibly crazy and stupid . They are, in fact, doing many such things…. We could be blundering into a war or fatally compromising counterterrorism efforts with amateur hour antics. This feels like eleven controversies ago, but the National Security Advisor did accidentally add a prominent journalist to a private group chat on which he and other principals were discussing detailed military plans….

The anti-Houthi military campaign appears not to be working , which is the kind of thing that happens when sloppy people are making decisions…. Linda McMahon seems to be confusing AI (artificial intelligence) with A1 (steak sauce) …. Yet another indication that the people making decisions in the Trump cabinet are perhaps not very well-informed. And that’s a problem that has broader and deeper implications than Trump’s business allies seem willing to admit…