Trump can't stop the incoming fiscal storm about to sweep America

For the first time since entering the White House, Trump is about to experience real unrest. How will he react to this self inflicted disquiet? More importantly, will Dems seize the opportunity?

As with all hangovers, they are preceded by the madness of bad decision making while intoxicated. A madman drunk on power is about to face the consequences of decisions born of greed and self enrichment. The BIG question is, are Democrats ready to seize the moment to unite the population against a man prepared to burn down the government to rule America as a king?

I want to attempt today to unravel the complicated threads of the pain and suffering hard working Americans will now be forced to endure as a result of ideology over responsible fiscal management. This is an unapologetic long post, which requires me to walk you through the last few months of the Biden Administration to demonstrate just what an egregious act of self harm Trump has inflicted on the US population. As with all things Trump, he did this with other people’s money i.e. taxpayer dollars. Now those taxpayers are about to pay for the most egregious act of gross fiscal incompetence in recent memory. His actions deliver almost a sense of colonial déjà vu. The founding fathers must be turning in their graves.

This is going to be a complex assessment, so I’ve include some links to important illustrative points. These are inserted simply to cut down on the length of the post, in an attempt to help you refresh your memory, beyond the false narrative constantly dominating the social media space. It’s important to explain not just the lies and disinformation that created the Trump fantasy of a failed Biden economy, but the mistakes Democrats made by not countering that narrative. To set the scene I think this is a great clip from MSNBC from February 2024 8 months out from election day.

Why is this clip important? Because the only change from this point forward was the constant MAGA drumbeat of the US being labeled by them as a failed economy, despite further economic growth, ever increasing job numbers, the reshoring of hi tech chip manufacturing and expanded green energy jobs.

SO WHERE DID IT ALL GO WRONG?

While I don’t wish to dwell, it is I think important to get a basic understanding of the failings, if only to learn what not to do in the future. I believe Joe Biden was undoubtedly the man for the moment in 2020. However, the first mistake was to interpret his victory as an indictment on Trump as a failed president. Had that been the case, given Trump’s handling of the pandemic, Biden would unquestionably have won by a massive landslide. The truth is, it was a close election.

That should have been a HUGE red flag for Dem strategists. However, ego dictated they take a victory lap, patting themselves on the back for an outstanding result. A victory over a pathological liar, who had unnecessarily killed over 230,000 Americans, as a result of his abject failure to manage a pandemic. There are some who might even say Biden didn’t win it, Trump lost it. I’m not sure I would agree with that assessment. For me, from a messaging perspective, Dem messaging was on life support before Biden even entered the Oval Office.

Never was there a bigger warning than the 2020 election, for what was to come. As the midterms approached, it’s sad to say, hubris got in the way of vision and dare I say, common sense. In 2019, Joe Biden had said he was going to be a bridge to the next generation of Democratic leadership. I believe that the decision to run again was an absolutely FATAL one which directly led us to where we are today. It’s clear, Biden was a transformative president, his achievements were nothing short of remarkable given the economic wasteland he inherited. Sadly, his legacy is now blighted by his party handing the country to a narcissistic criminal madman.

Democratic leadership have to own this mistake as I’ve said many times before. But time and time again they have failed to do so, preferring instead to blame ‘stupid voters’ who chose against their advice to vote for Trump. There are many that will say this is overly harsh criticism, to which I say, ‘Explain to me how Democrats lost the House, the Senate, the White House and THE POPULAR VOTE. The usual lazy response is because Trump stole the election. This is when you know you have a fundamental problem.

We can’t go back and change things, so there is little benefit to be had from dwelling on the past. However I will say this, Democrats were frankly idiots to think Trump would not use Immigration as a baseball bat to hit them with. In June 2024 after the failure of the bipartisan immigration bill, Biden took executive action which dramatically reduced illegal border crossings. Had he taken that same action the year previous, he could still have attempted to pass legislation to supercede his executive action, but Trump would have been denied access to the baseball bat.

The other attack angle was inflation. Democrats kept messaging that the economy was booming and that families just didn’t understand economics. The reality was, THEIR VOTERS were finding it difficult to feed their families, but why would you be bothered if you’re collecting a $174,000 salary and can inside trade to your heart’s content? Sorry to be so blunt, but the truth can hurt sometimes. The answer was not to call voters stupid, but to look at why inflation was still high despite a booming economy?

This is where we bump into dark money once again, along with corporate interests. Let’s not forget, Dems are just as guilty of being on the payroll of the likes of AIPAC, the fossil fuel industry and big pharma, to name but three. The fact was, inflation was being pushed up not by supply chain issues, which had all but been resolved. It was being pushed up by corporate price gouging from corporations padding their profits with cynically inflated food and other consumer pricing. As a result, Trump was able to create a narrative based on the corporate manufactured inflation of his own donors.

With the permission of the court of public opinion, I’d like to place this next clip into evidence if I might?

This was the truth, so even if we give corporate America the benefit of the doubt and say they only gouged by 40% rather than the estimated 53%, this was the whole inflation ball game right here. Families were feeling poorer because they WERE poorer. It wasn’t as Dems were suggesting (with the exception of Katie Porter), that they just didn’t understand. It was a harsh reality in every home which was struggling to make ends meet. The truth was, the benefits from the fastest post pandemic recovery in the world, were being diverted away from American families into the pockets of corporate shareholders. Just to add gasoline to the fire, because Democrats failed to hammer home this key message, Trump was able to claim Biden was responsible for this manufactured inflation.

Jesus, I can barely contain myself as I write this, especially as my little voice on X at the time, could not help the message cut through despite repeating it time and time again. Dems should have been on every network and posting messages every day on social media platform, but the only person doing it was Katie Porter.

In my personal opinion, the Biden comms team should have jumped on it very early. After all, price gouging is illegal. The problem is, the legislation to deal with it is clearly not fit for purpose. What they should have done is at least try to instigate a windfall tax. Biden was already considering one on the huge profits energy companies were making as a result of the war in Ukraine. He could have drawn up legislation, just as Trump has done with ‘No tax on tips’ with no intention to pass it. He could at the very least have released a text summary of the bill to the public. While he may not have been able to pass the bill, a clever legislative strategy could have put Republicans on record as voting against a bill that would have had overwhelming public support. It would have provided a huge and vital messaging win on inflation.

These two issues were the major cause of death to the Harris campaign in the end, but it doesn’t stop there. Polling was telling Dems that the dangers to democracy was a BIG issue and Lord did Dems embrace it. Hence ‘Don’t vote for the other guy he’s a fascist’ was born. The problem was, if this had to be spelled out to people, there was already a big problem, but nevertheless, Dems nailed it to the mast along with abortion rights and that was the campaign. Meanwhile immigration and inflation sat in the corner of the room rotting, but nobody could smell it.

After Biden was dragged kicking and screaming from his leadership role following the now infamous catastrophic debate performance, there really was no way back. To be clear, I had never been a Kamala Harris evangelist and while she would not have been my choice, she absolutely blew me away by the way she picked up the baton and ran with it. It was quite a remarkable sight to see. Nobody can accuse me of not being all in. I created Ad after Ad, some went viral and one even made its way onto Australian prime time news because I’d used John Farnham’s The Voice as the soundtrack.

Watching the above Ad even now made me cry and I’m not ashamed to admit it. If she was president today, we would not be waking up in the middle of the night with terror sweats and the economic global order would still be intact.

I would say that she lost not because America wasn’t prepared to vote for a woman of colour. It was simpler than that. Despite her best efforts and those of the campaign, 100 days was simply not enough time to sell her hastily authored proposition to the American people, in a hostile environment dominated by MAGA lies. She was carrying too much of the false narrative Republicans had tagged her predecessor with. Her economic plan had great merit, but she was also burdened by the Gaza conflict which she simply could not escape, despite valiant attempts to walk the tightrope. Sadly, it didn’t matter to a significant number of voters that Trump would be worse on Gaza. It was that the administration in which she served as Vice President, was in their mind, complicit in the deaths of thousands of innocent Palestinians. In Michigan in particular, this was the kiss of death.

There is little point having an autopsy on the campaign. I think it did an admirable job in very challenging circumstances, lulled into a false sense of security by large adoring crowds. To be fair, these crowds also put the fear of God into the Trump campaign too. If I had one observation aside from her voice could at times be somewhat of an irritation, it would be that she spoke endlessly about the middle class, but rarely spoke about the working class. It was their votes which bled over to Trump and for me, they were the difference. It’s for others to make the case that she really won and Trump stole the election. It’s not something I want to engage with. But if that’s your thing, there are plenty of Substacks to feed your obsession. I’m a pragmatist and we are where we are, so I’ll leave that rabbit holes to others.

If you’ve managed to stay with me so far, I’m impressed. This might be a good time to grab a drink and come back to it? Otherwise, we’ll continue

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SO WHAT NEXT FOR DEMOCRATS?

Yesterday I spoke of the opportunity this self inflicted wound from Trump presents. I’ll preface my remarks by noting that aside from a few warriors, I’m not convinced that Democrats have the ability to fully exploit what’s about to happen. In addition, this is a constantly moving target as Trump changes his mind every day.

Let’s begin with a clip of Jerome Powell that I think is highly relevant given Trump is clearly intent on replacing Powell with yet another yes man, or better still, simply seizing control of the Fed.

While the first half of this post adds important context, what happens next in my view will truly be a make or break moment for the US. I really don’t think the average American understands the peril of this moment. There are so many moving parts that most simply struggle to make sense of it all. As a result, they don’t take much notice of the day to day chaos because it’s exhausting. They simply don’t understand the dire impact it will have on their lives and the lives of their loved ones.

Having listened to the above clip I just want to very quickly summarise what Powell said in his latest report on the US economy. Let’s start with the good bit. He said:

"Despite heightened uncertainty and downside risks, the U.S. economy is still in a solid position,

Translation: The economy Biden left behind is still holding up despite the idiot now driving the bus. He went on to say:

"Tariffs are highly likely to generate at least a temporary rise in inflation. The inflationary effects could also be more persistent."

Trump’s response was typical:

"Jerome Powell of the Fed, who is always TOO LATE AND WRONG, yesterday issued a report which was another, and typical, complete 'mess!' Trump wrote. "Powell's termination cannot come fast enough!"

I think Powell’s statement is best described as a hedging statement if ever there was one. The problem Powell faces at this stage, is the data for the first quarter will not be available for a couple of weeks and it’s unlikely to reflect the latest more damaging actions taken by Trump. One thing is clear though, consumer sentiment i.e. how the public feel about their future economic well being, has plummeted as recorded by Michigan University who report:

‘Consumer sentiment fell for the fourth straight month, plunging 11% from March. This decline was, like the last month’s, pervasive and unanimous across age, income, education, geographic region, and political affiliation. Sentiment has now lost more than 30% since December 2024 amid growing worries about trade war developments that have oscillated over the course of the year. Consumers report multiple warning signs that raise the risk of recession.’

It goes on to say;

‘Year-ahead inflation expectations surged from 5.0% last month to 6.7% this month, the highest reading since 1981 and marking four consecutive months of unusually large increases of 0.5 percentage points or more. This month’s rise was seen across all three political affiliations.’

Look, the truth is, if it waddles like a duck and it quacks, it’s probably a duck. All indications are, the US is flirting with recession. Or as Trump prefers to call it, “A little turbulence”. The bottom line is, most people are very concerned about what’s coming down the track and so they should be.

THE REAL IMPACT ON EVERYDAY AMERICANS

This is a multidimensional question, because the way Trump is reimagining the government has a wide array of impacts on individuals, small businesses and families. Let’s first of all deal with rising prices and bear in mind, Trump is constantly changing his position depending on how he feels when he wakes up each morning, so I’ll give it my best shot.

The important thing to bear in mind here is it’s not just about the impact of tariffs which at the moment have a baseline of 10% globally. There is also a myriad of other tariffs and measures not just on China (which incidentally Trump is now threatening raise yet further to 245%). Frankly, he’s like a wounded animal thrashing around in a fiscal death spiral. He’s now falsely claiming to be bringing in $2 billion a day in tariff revenue, when the actual amount is around $500 million.

Regardless of the numbers, this represents a half billion dollar daily tax rise on AMERICAN importers. It’s a diversion of a percentage of the importer’s revenue to the US treasury. In other words, it’s A TAX.

The next step is to look at how tariffs apply to the supply chain from importer to wholesaler and finally the retailer. Please be mindful, there can be more hands in the pie on the way to the retailer. The thing about free market capitalism is every step that softens the consumer up for a price rise is regarded as an opportunity. It’s important to understand, the only party paying the IMPORT TAX, (tariff) is the importer. Each party between the importer and the consumer has the opportunity to profit under the cover of the tariff label. You might want to have a stiff drink before starting the next paragraph.

We’ll take a look at an example, so you can see just how predatory corporate brands can be and often are. We’ll use the Nike sneaker as our example. Chinese content creators are currently claiming Nike are paying a couple of dollars for a shoe that they then sell to you for $100. In the interests of fairness, I’m going to use the costs from Weartesters who appear to have documented costs based on a $100 Nike shoe.

Nike are apparently paying around $25 per unit for manufacturing and $1 for sea freight including insurance. Remember the tariff is charged on the manufacturing cost NOT the retail cost. Assuming duty was 10% (pre tariff increase) the landed cost per unit would be $28.50. This price would be marked up, (for this example at 43%) giving a wholesale price of $50. The retailer then adds a 100% markup and you arrive at your $100 Nike shoe. So far so good. You can apply the same formula for whatever manufacturing cost you want to apply, if you doubt my source.

The point is, there’s scope across the supply chain to pass on misleading perceived tariff costs. The public perception now is that a 145% tariff would make that $100 Nike shoe close to $250. In reality however, the 145% tariff is applied to the $25 production cost NOT the retail cost. Still with me?

The revised landed cost with the newly applied tariff would be $62.25. If you then add the same 43% wholesale markup, let’s round it up to $27, this makes the shoe around $89 at wholesale. If you then add the usual 100% retail markup, this would make the shoe’s retail cost $178.

If the customer incorrectly believes the shoe to now cost $250 based on it being 145% higher that the normal $100 cost, you can easily see the scope for a little price gouging. If the retailer offers the shoe at $178 , the customer believes they’ve actually got a good deal. In reality however, neither the wholesaler or the retailer have lost a cent in the transaction, but the US treasury has received their tariff of $36. In this scenario, because of the large markup, the only loser in the transaction is the consumer. No surprise there then?

There is of course one other element that could come into play here. The Chinese government could devalue their currency as they have been known to do in the past. Alternatively, they could instruct the manufacturer to say discount the manufacturing cost by say 25% to retain customer orders. There are all sorts of equations that can be applied, but rest assured it will always be the consumer that is the loser from additional margins added in the supply chain.

I’ve documented this example because you can apply it to any large brand whose business model is based on low cost manufacturing with high markup retail values. You can see this across a whole raft of luxury goods.

When it comes to groceries and food produce, these will likely reflect the 10% increase, but don’t be surprised to see prices rising above 10% using tariffs as cover, just as they did during the pandemic. Of course when it comes to cars, electrical goods, mobile phones and tech, Trump is very aware that price increases on these items will be glaringly more expensive which will instantly convert to public disquiet and low poll numbers. This is why he’s been forced to pause. The HUGE problem he’s overlooking is small businesses. 99.9% of American businesses are not large corporate entities, they are small to medium enterprises that have less than 500 employees and half of these have 4 employees or less. These are the economic backbone of America.

If you are a small business that relies on Chinese manufacturing to keep the lights on, Trump has literally just thrown you under the bus without a second thought. These businesses are either abandoning goods in China, or don’t have the cash to pay the duty on goods that have arrived or are in transit. These businesses will simply fold with all the economic consequences that follow. Add to that, no tariff revenue will be realised from the goods either. Every day Trump sits around thinking he’s teaching Xi a lesson, the economic spinal cord of the country is fracturing, rendering the US economy paraplegic.

Every failed small business equals shattered lives, lost jobs and an exploding social welfare bill. These aren’t just numbers, they’re REAL PEOPLE who months ago under Joe Biden were worried about the price of eggs. Now they will be waiting for vehicles to be repossed and homes to be foreclosed on. America DOES NOT have the ability to decouple from China for a million and one reasons. I’m afraid China is more psychologically resilient and Xi can get his people to eat grass before Americans will tolerate it.

Trump has utterly failed in a completely botched power play where he has alienated all his allies and trading partners. He quite literally has nowhere to turn. In a crushing statement Ursula von de Leyen, President of the European Commision said on 16th April:

“Europe is still a peace project. We don't have bros or oligarchs making the rules. We don't invade our neighbours, and we don't punish them," She went on to say “The West as we knew it no longer exists,"

The message is VERY clear, the US is a valued trading partner, but not at any cost. The harsh reality is, Europe is now giving careful thought to its relationship with the US. Meanwhile, China is actively seeking to fill the void and expand it’s already substantive trading relationship with the EU. This represents an existential threat to America’s global influence. That’s before Marco Rubio today announced the closing neary 30 US Embassies around the world. They are literally searching for coins down the back of the global sofa to fund tax cuts for the rich.

World leaders have had enough, yet Trump now making a desperate futile attempt to strong arm trading partners and insist that Europe sides with the US against China in order to get a trade deal. He’s a busted flush. It’s embarrassing and will simply not fly with the larger trading partners. If the EU were to fully embrace China in terms of trade, that would be a catastrophic loss to the US economy and actually threaten the future of the dollar. Trump is treading on VERY thin ice.

One other dynamic I would like to add. If Mark Carney is elected Prime Minister on 28th April, as looks likely, the situation gets even worse for Trump, because his relationship with the EU and the UK means that Canada will take full advantage of the opportunities this presents. I believe we will see a huge shift towards increased Canada European trade. It’s worthy of note that it’s believed Mark Carney was the architect of the bond market crisis last week, I understand it may well have been at his direction that a number of partner countries that held US treasuries instigated a slow bleed of those treasuries which scared the bond markets and forced Trump to capitulate.

Trump knows traditional low cost manufacturing has no place in America. Modern manufacturing is NOT people intensive, it’s highly automated and China is already on the leading edge of manufacturing technology. It requires HUGE infrastructure investment which the US simply can’t afford to fund because of the economic volatility he’s created himself. Capital is fleeing the US and investing instead in Europe and Asia where investors feel safer and less likely to be affected by secondary market volatility, other than that introduced by Trump.

From a tech perspective the US has been forced to restrict China’s access to key chips and technologies in an attempt slow their technology advance. This has simply forced China to innovate which has resulted in Deepseek and yet more advanced AI tools. They have simply invested in creating their own chips to the point where they are about to promote a new chip called RISC-V, which like Deepseek will be open source. Chinese chip design firm stocks are now rising as a direct result. As reported by Reuters:

RISC-V is an open-source technology that is used to design a range of less-sophisticated chips, from those in smartphones to CPUs for artificial intelligence servers.

It competes globally with proprietary and more commonly used chip architecture technology including x86, dominated by U.S. firms Intel (INTC.O) and Advanced Micro Devices (AMD.O), and Arm, developed by SoftBank Group-owned Arm Holdings (9984.T).

It’s just a matter of time before China no longer needs to rely on US chips. To be clear, they are not there yet, but I certainly would not bet against them.

Trump is selling a manufacturing fairytale to low educated yesteryear believers and they are lapping it up. The only problem with lies is, eventually truth comes knocking at the door and that leaves the people you have conned seeking payback. In my opinion. There is absolutely no question Trump is digging a deeper hole and he’s going to find difficult to extricate himself within the framework of a representative democracy. I hate to say it, but it seems to me his options are narrowing by the day. My deep concern is that he comes to believe the only way out, is to take control of the Fed and rule the US under martial law. I genuinely think that this is a distinct outside possibility. He can’t survive without absolute control of all the levers of government to crush dissent and I believe he’s being told by those around him ‘You can do this Mr President’

Tomorrow we’ll drill into the actions Democrats need to have in place to fight Trump’s charge towards absolute power. This piece today only examines the opening moves on a chess board that will set the tone for a battle to be publicly played out in the coming months. What I want to do tomorrow is take a much close look at the big picture impact on American families and why this will provide the launchpad for an attack on this attempted destruction of democracy.

Again, I apologise for the verbose nature of this post, but I hope it will prepare the ground for a more focused piece tomorrow on the Democrat response that is so desperately needed in this moment.

I just want to say a big thank you to those who have chosen to support my work here on Substack. Your generosity is what helps fuel my daily content and is providing a funding pot to produce some exciting upcoming original video content. It helps with the cost of multiple publication subscriptions and access to stats etc that I sustain. This in turn helps me to gift articles from respected news sources within my posts, so my community can access them for free. 2026 is a critical year and the current election cycle provides Truth Matters with an opportunity to make a valued contribution to the preservation of democracy. Your generosity helps fuel that contribution, so thank you again. - Martin