Monday Links - April 7, 2025
On tariffs, and tariffs, also tariffs, Navalny's memoir on Russia, and my obsession with hybrid athleticism
Jamie Dimon Warns Tariffs Will Raise Prices, Slow Growth, Wall Street Journal, April 7, 2025
Some feel like business leaders who were once either enthusiastic for Donald Trump’s election (such as Bill Ackman) or suggestively supportive (such as Jamie Dimon, as highlighted in the link above), have no cause for complaint for the incredible turmoil in markets that President Trump’s policies have caused. I certainly sympathize with the White House in the face of these specific kinds of critiques: no set of policies was better advertised to the world than the President’s and his closest advisers’ profound affection for tariffs, so why are people acting so surprised?
I’m not very interested in the discourse of comeuppance. But I do think the tariffs should sound an alarm felt throughout the institutions of American power. They are a disaster and cannot be explained or defended on the basis offered. The basic thrust that these tariffs will be simultaneously inflationary and recessionary is as broadly held view among experts, right and left, as there is in the world. I fear, however, that they are much worse than that.
I am not a pessimist by nature. There are so many changes in the world currently underway that either fill me with optimism or leave me feeling mostly agnostic. I am optimistic about our future with AI tools, sometimes very enthusiastically so. I am neutral on the promise of crypto. But I am incredibly pessimistic about the course of macroeconomic policy that we are witnessing in 2025. The poor arithmetic logic at the heart of these bizarre and draconian tariffs is not even the major source of these concerns. The broader vision of converting through sheer brute force the American economy from the provider of the international reserve currency with stunning prosperity into a country that will—somehow—retool into a manufacturing juggernaut with wealthy enough foreign customers to afford what we have magically produced at a level of productivity that we have never before encountered is not credible policy.
So, yes, I am with Dimon that so-called Liberation Day will mark a turning point for the economy. My fear is that even if the Administration is replaced by the people in 2028 with more sensible policies (likely, given the low bar here), and even if the Administration honors the peaceful transfer of power (hopeful, but far from certain), I do not know how we can get back to a world of the kind of macroeconomic stability that, crises aside, characterized the Pax Americana.
No Fed 'put' when it's unclear which way the economy may pivot, Reuters, April 7, 2025
Some will think, well, surely the Fed can help. One of my favorite episodes of the Alan Greenspan era was an interview during the Clinton impeachments with Gennifer Flowers, one of the then-president’s chief accusers. Larry King asked her if Americans shouldn’t support the president because impeachment could be so economically destabilizing. “[M]y research tells me,” she said, “that if [Clinton] did resign tomorrow, we may have a little bit of a problem for a couple of days, but I would assure them that Alan Greenspan would step in there and make sure that our economy would become healthy right away.”1
The Fed can’t bail out the Administration on this one. The uncertainty is simply too high. We have no idea where this lands. Best case from the Administration’s point of few is a macroeconomic trauma while companies reshore their supply chains and replace Vietnamese workers with Tesla’s robots, who will be repaired by out-of-work steel workers. (I’m trying to invoke the hermeneutic of generosity here, but I am so genuinely baffled by nearly everything I am reading that I think I do have this argument right).
What is the Platonic, well-modeled central banker to do in this situation? The problem is that the inputs we use to set monetary policy in the best of times are projections about what we think but cannot prove is happening at the present. Powell elsewhere called this “navigating by the stars.” No one knows what these tariffs will be to the economy; that uncertainty itself is a major macroeconomic drag.
Alan Greenspan may or may not have been able to navigate a removal of a president by tweaking the federal funds rate. Jay Powell and his successors cannot manage the Trump Trade Meltdown with interests on reserve. It is macroeconomic uncertainty all the way down.
‘Stalled in the starting blocks’: Banks await certainty as Trump policies chill M&A, Banking Dive, April 2, 2025
As an example, this piece from Banking Dive. One of the primary causes among bankers to support Donald Trump’s return to power was a protest vote against the financial regulators of the Biden era. The hope was that abandoning reforms on bank capital, community reinvestment, crypto, and mergers would lead to a burst of activity in every domain of financial services.
It is generically true that banks and bankers prefer less regulation to more, less supervision to more, more risk-taking to less, more profits over fewer. That base case, however, requires two alternatives: stable macroeconomy with more compliance costs on the one hand versus a stable macroeconomy with fewer compliance costs on the other.
That is not our world. See point #2 above.
A good friend recommended this book to me. It was beautiful to read. I had mentioned my enthusiasm for Bill Browder’s duology on Russian corruption, which I hoovered in a couple of days. Navalny writes as a lover of Russia who believes against evidence and experience that it can become great in a way it had never done before.
We in the United States do not live in Putin’s Russia. What this book gave me, though, was a much better understanding for what Putin’s Russia actually is, reminded me why opposition to Putin was one of the places that the Republican Party was on the right side of history in 2012, and why that opposition remains for me one of my most firmly-held geopolitical views.
Fergus Crawley on What Hybrid Training Really Is and How It Has Changed the Fitness Landscape (For the Better), Men’s Health, January 8, 2025
On April 19, I will compete in my first Olympic triathlon, with a 1500 m swim (about a mile), a 40k bike, and a 10k run. I can do each component with no problems and great joy. Putting them together is the question. I have no idea how this is going to go.
I am also, as a consequence and separately, in a deep cut as I lower my body fat percentage to make such competitions plausible. I am keyed in to race in 2025, with more Olympic triathlons, a cycling century, and the Philadelphia Marathon all in my future. I have lost strength, but I’m not worried about this very much. The goal for now is muscle retention while I strengthen my heart, my joints, and lower my mass to make these endurance sports not only fun but sustainable.
But I have not lost sight on the ultimate goal. I want to join Fergus Crawley in the 1200Twelve challenge, with a caveat. The 1200Twelve challenge is, on the same day, to powerlift 1200 lbs while completing an Ironman in under 12 hours.
My twist would be to bump that number up to 1500 with a 600 lb deadlift, 500 lb squat, and 400 lb bench in a drug-tested, official powerlifting competition, in the same month as finishing an Ironman in sub 12 hours. So far as either I or ChatGPT knows, this has never been done before. And if it has, I will almost certainly be the oldest to do it (by age 50).
ChatGPT, for what it’s worth, thinks I can do it injury-free in the next six years. It is at present the dream I am chasing. I am not kidding when I say I think about this approximately 3-4 hours a day (which is about how much I train these days). More updates to come, including on whether I keep this goal after the Olympic!
I quoted this in my 2016 book on Fed independence, page 60