The transparency of the Deepseek analysis shows how many assumptions have to go into these forecasts and highlight the bogus claims of many economists (MMTers excluded) who proclaim that mathematical models are inviolable truths and that normative inputs have no real value.
Thank you Deepseek and the moral of the story is that indeed tariffs are not good economic policy. Not to mention there's a pretty good chance that firms will use tariffs to further raise prices simply because they can.
Absolutely astonishing. Deepseek did this analysis in the time it takes a decent athlete to run the 100 yard dash! But Stephanie didn't ask Deepseek to analyze the effects on the U.S. economy. And then there's the amount of economic pain each side is willing to endure. A Deepseek analysis of the HUMAN emotional response to this scenario would be interesting to read.
What is the purpose of hurting our Canadian allies (or any ally) with high tariffs on all their exports to us that we clearly want, need and use to our benefit? We shoot ourselves in the foot by paying the higher costs for them or forgoing these products altogether. Does this incentivize manufacturing the Canadian export products in the US? And what about their retaliatory response to us? So now some of our industries get hurt and negate any benefits (if any) originally accrued to us. This all seems so stupid and ruinous to our friendly relations we have developed over the years. I can see maybe a tariff on one or two commodities that would benefit the US in keeping manufacturing here and opening up job opportunities as long as we have the resources.
I think tRump is sociopathic in his bullying behaviors toward the whole world with his narcissitic attitude to bring attention to himself and he does not care about the damage he causes as long as he gets the power he craves over everyone. He worships money, his path to grandiosity and admiration. He is very dangerous to democracy and I hope our courts will be able to restrain his worst tendencies. IMHO.
The tarriff threat has nothing to do with industry and economics. It's to step up Canada's immigration and law enforcement efforts to stem fentanyl traffic and illegal immigration via the border. It sure would seem in Canada's interest to tighten up security given their vulnerability to our largesse.
Nope. That was the initial nonsensical excuse that even Trump no longer bothers with. Fentanyl from Canada to the US is a drop in the bucket (<0001%), and is a tiny fraction of the illegal drugs and guns entering Canada from the USA. Migration is similarly minuscule, and goes in both directions. Regardless, Canada was willing to undertake any and al reasonable actions to improve border security, but Trump had no interest.
Now its all about the "Trade Deficit", which he exaggerates by triple, excludes trade in Services (heavily weighted to the USA) and excludes Direct Investment. The USA has always had, and continues to have, a trade SURPLUS with Canada in manufactured goods. The actual "deficit" is recent, and is composed entirely of raw materials processed for a profit by USA corporations - most principally the heavy crude oil required by Gulf refineries, which then exports the gasoline and other distillation products to Europe for a PROFIT! Since the collapse of Venezuelan oil production, the oil sands are the only real alternative heavy crude supply to keep those refineries going.
The fact is this is not a zero-sum issue. Tariffs will be extremely harmful to Canada, but will also be damaging to the USA. At this point, Trump is bent on destruction. Canada is the little brother that always had the USA's back, but which Trump, is now determined to beat to a pulp on the playground, just because he can.
Conky. Could not agree more with your summarization. Experts on both fentanyl and immigration claim neither are a significant threat based on studies with credible, provable evidence. US Customs seized approx 20Kg of fentanyl at the Canadian border vs 9,000 plus Kg at the Mexican border. Also approx 23,700 arrests at Canadian border vs 1.5mil plus arrests at Mexican border (fewer than previous year at approx 2 mil.)
Canada has already ordered more drones, helicopters and other resources along the border. They are concerned with organized crime and money laundering. The flow of fentanyl is not a major problem.
As usual, tRump has mistakenly lumped the borders of Mex and Canada together to make his sweeping threats of tariffs if these countries do not comply to his unclear, nonspecific demands. He uses tariffs as a scare tactic. He threatened Russia with tariffs if they don't stop their war with Ukraine! What buying and trading do we do with Russia? That shows you how little he knows about tariffs.
If he wants to minimize or solve the flow of drugs or illegal immigration from over the borders of allied countries, destroying their economies and possibly ours is not a very smart way to do it, no matter how much of a "genius" he claims he is.
See my comment just below, but further, King Donnie is too willfully ignorant to comprehend the impacts on currency.
If the Canadian dollar collapses from (pre-Trump) $0.74 US to $0.60, American products will then be 25% more expensive in Canada than now, even before countervailing tariffs are applied by Canada. Meanwhile, that depreciation will push the cost of Canadian products down by 20% in the USA, negating most of the tariff impact.
The "Trade Deficit" will become even more exaggerated. A vehicle made in the USA for sale in Canada will be 25% more expensive than now due to currency depreciation, and an additional 25% more expensive once countervailing tariffs are applied by Canada. If our Automobile industry is to be destroyed, why would we not try to make the best of it by opening the door to Chinese manufacturers, hopefully with some kind of final assembly provision? Why would a Canadian buy ANYTHING from the USA? Why would a Canadian spend any money on travel to the USA?
Trump's failures represent financial losses and the absence of ethical business practices, market research, and strategic planning.
How can anyone look to Trump for leadership, honesty or integrity when the trail he leaves behind him is littered with slime, broken promises, poor decisions, stiffed vendors, devastating reputation and history of repeated failure? A short list includes:
1. Trump University or the Trump Entrepreneur Initiative (2004-2010) — Trump staged wealth-building seminars costing up to $34,995 for mentorships that would offer students access to Trump's secrets of success. Instructors turned out to be motivational speakers sometimes with criminal records. Lawsuits and criminal investigations abound. The for-profit education company ended in a $25 million settlement over fraud lawsuits without admitting wrongdoing.
2. Trump Institute - A separate failed business from Trump University, offering real estate seminars under a licensing agreement until 2009. Trump endorsed the program through infomercials despite not being involved in its operations.
3. Trump Vodka (2006-2011) A luxury vodka brand that failed to meet sales thresholds and was discontinued.
4. Trump Airlines (1989-1992) Trump borrowed $365 million to purchase Eastern Air Shuttle, which he rebranded "Trump Airlines". He added gold bathroom fixtures. Two years later Trump could not cover the interest payment on his loan and defaulted on a $1.1 million loan repayment and eventually ceased operations
5. Trump Steaks (2007) An attempt to break into the meat industry that ended shortly after its launch. Trump Steaks was pulled from shelves within two months due to low sales while owing Buckhead Beef $715,000.
6. GoTrump.com (2006-2007) A luxury travel search engine shut down after a year due to critique and lack of traction.
7. Trump Mortgages (2006-2007) Trump told CNBC in 2006 that "I think it's a great time to start a mortgage company … The real-estate market is going to be very strong for a long time to come." Then the real estate market collapsed. Trump had hired E.J. Ridings as CEO of Trump Mortgage and boasted that Ridings had been a "top executive of one of Wall Street's most prestigious investment banks." Turned out Ridings had only six months of experience as a stockbroker. Trump Mortgage closed and never paid a $298,274 judgment it owed a former employee, nor the $3,555 it owed in unpaid taxes.
8. Trump Ice (2004-2010) marketed under the "Trump Ice" brand, promised one of the purest bottled waters but was known for its low mineral content and plastic bottling, critiqued as more of a vehicle for Trump's image than a testament to water quality.
9. Trump Magazine (2007-2009) - Trump Style and Trump World were renamed Trump Magazine to reap advertising dollars from his name recognition. However, Trump Magazine quickly went out of business, shut down with suggesting significant unrecouped investment in publication and distribution.
10. Trump Tower Tampa (2006-2007) - shelved due to financing and market challenges, indicating significant investment losses and lost deposits.
11. Trump SoHo Hotel (2008-2017) - struggled with occupancy rates, investment and operational losses, and compounded by legal fees.
12. Trump Taj Mahal (1990-2016) - Opened with grandeur but faced immediate financial distress, multiple bankruptcies, operational losses underscoring significant financial failure.
13. Trump Marina - Opened in 1985 in Atlantic City as Trump's Castle, this casino resort was renamed Trump Marina in 1997. Despite the rebranding efforts and strategic location, the property struggled with financial stability and was sold after multiple challenges, including a near foreclosure in the late 1990s.
14. Trump’s World Fair at Trump Plaza - another casino venture in Atlantic City, was opened in 1996 failed to draw the expected crowds and revenue, leading to its closure in 1999.
15. Trump Baku Hotel (Never opened) - A luxury hotel project in Azerbaijan that faced legal and financial issues that halted this project, suggesting sunk costs in development and planning without the realization of potential revenues or returns.
16. Trump Plaza Hotel and Casino (1984-2014) - Once a landmark in Atlantic City, it went through multiple bankruptcies before closing, indicating substantial financial losses over its operational life due to declining revenues.
17. Trump International Hotel and Tower Dubai (Never realized) - shelved in 2008,
the failed venture reflects lost investments in planning and pre-development stages.
18. Trump International Hotel and Tower New Orleans (Never realized)
19. Trump Tower Palm Beach (Never realized) - Faced local opposition and environmental concerns, quickly scrapped.
20. Trump Tower Charlotte (Never realized) another example of Trump experiencing financial losses related to planning and initial development efforts without achieving fruition.
21. Trump: The Game (1989, 2005). Milton Bradley tried to sell it. As did Hasbro. After investment, the game died and went out of circulation.
22. Trump Foundation (Fraudulent Charity) (1988-2018) - A private foundation started by Donald Trump, dissolved by court order in 2018 following a series of legal violations. The foundation was scrutinized for unethical and illegal activities,, culminated in Trump being ordered to pay $2 million in damages for misusing charitable funds for political gains.
23. Trump Winery in Charlottesville, Virginia, managed by Eric. Despite claims of being the largest winery on the East Coast, Trump Winery is not the largest either by volume of wine produced or acreage under vine in Virginia, let alone the East Coast.
24. Trump Fragrances (2004-2015) - Donald Trump's ventures into the fragrance market, branded "Donald Trump, The Fragrance", a "Success by Trump", "Empire by Trump" all failed due to lack of sales.
25. Truth Social, the social media platform launched by Donald Trump's Trump Media & Technology Group (TMTG), reported substantial financial losses, amounting to $31.6 million from its launch until mid-2023. In 2023 alone, regulatory filings and company reportshighlighted losses of $58 million.
26. Trump Matresses — Serta stopped offering a Trump-branded mattress, again due to low sales.
27. Trumpnet — A telephone communication company that abandoned its trademark.
Trump isn’t good at being president. He’s a weak leader, a terrible negotiator, and among the worst judges of character when it comes to both our allies and our adversaries. He failed in the Covid crisis and through unfunded tax breaks for the rich, fumbled the prosperity he’d been handed.
We are yet to see the financial outcomes on his grifts in tRump bibles, trading cards, guitars and crypto memes which have no promise or guarantee and requires an agreement not to sue when it is dumped and prices crash for the investors. They have been duped.
And yet 30% of the voter population got him elected! I guess they love being kissed with lies and corruption.
Thanks for this! You might also add that his poor character judgement continued into the WH. How many of the folks he appointed to top positions in his government did he eventually fire because he said they were incompetent idiots?
very interesting. a little long (abd hard) for me to try to think through in a short time. but i was surprised to see that Deepseek actually "thought" about some things i was sure it was not going to take account of [and other commenters have mentioned some things i did not think of. all in all i would agree with those commenters: "some things not included in the analysis, but enough to suggest that tariffs are likely to be a bad idea"...which we already knew.
one thing that impressed me is that the start of the analysis had a very human sound to it and i really cannot undersand how AI does that.
another thing: i am not sure that a 4% or even 10% reduction in GDP is all that important. we got along just fine when GDP was 10% less than it is today,, and most of the world gets along with personal "GDP" much less than 10% of what the average american "enjoys." remember that GDP is a measure of money not of quality of life.
To Stephanie - could we run this in our local weekly newspaper in Ontario, Canada? The Wellington Times has a weekly circulation of 5000. It is of great interest - both the power of AI and the effect of tariffs. Would it be a massive legal undertaking to obtain permission?
Isn’t one of the core tenets of MMT the recognition that it is possible for societies to act consciously to achieve common goals and that we are not slaves to market price signals. I thought we all saw that with Covid in 2020? Why are we abandoning those. Insights? All demands are not created equal.
Indeed, there are potentially alarming reinforcing factors. Among them is commercial banks' (alleged) reluctance to grant credits. Recently, some economists called U.S. commercial banks risk-averse. Dealers and brokers are said to be nervous, hedging their slackening earning potential instead of profiting from facilitating the money markets' business activities. My interpretation differs. It is not banks' reluctance but the lack of demand for credit because of decreasing investment due to industrial production, which is way under capacity potential. That reminds me of the pre-financial crisis of 2008-2009 when, according to Stigum's <Money Market>, demand for credit had decreased tremendously in 2005/2006, <ruining> dealers' and brokers' business models and inspiring commercial banks, particularly investment banks, to boost their ingenuity to new frontiers, utmost creative derivatives. Andrew Lo (MIT) knew there would be winners. Did he mean Goldman Sachs? This time, the mutually reinforcing U.S. domestic effects of external tariffs (including retaliatory foreign tariffs) and, hereby, induced decreasing U.S. domestic investments have the potential of <bombing> the world economy into a devastating slump.
"Tariffs are paid by the importing country". True, but paid to whom? If the US imposes the tariffs on its imports (which are Canadian exports), the payments are denominated in USD and paid by the US consumer to the US government. If Canada imposes tariffs on its exports (which are US imports) the payments are denominated in CAD and paid by the US consumer to the Canadian government.
So best if Canada beats the US to the punch because the payments being denominated in CAD keeps the US demand for CAD up.
OMG. What grade would you give this if your student submitted it?
"Exchange rates are determined by many factors, including capital flows, interest rates, etc. But including this in the model complicates things."
"But modeling exchange rate changes requires a more complex model."
Deepseek needs to speak to Warren ;-)
Fascinating! Also God Bless America and Canada!
The transparency of the Deepseek analysis shows how many assumptions have to go into these forecasts and highlight the bogus claims of many economists (MMTers excluded) who proclaim that mathematical models are inviolable truths and that normative inputs have no real value.
Thanks for sharing; impressive. I'm in dire need of a smart math buddy.
BL: tariffs remain a horrible/asinine policy.
Thank you Deepseek and the moral of the story is that indeed tariffs are not good economic policy. Not to mention there's a pretty good chance that firms will use tariffs to further raise prices simply because they can.
Absolutely astonishing. Deepseek did this analysis in the time it takes a decent athlete to run the 100 yard dash! But Stephanie didn't ask Deepseek to analyze the effects on the U.S. economy. And then there's the amount of economic pain each side is willing to endure. A Deepseek analysis of the HUMAN emotional response to this scenario would be interesting to read.
Wally
yes.
Wally. Great point. In addition to the U.S. economy we should use this new power to analyze the effects on all connected economies.
What is the purpose of hurting our Canadian allies (or any ally) with high tariffs on all their exports to us that we clearly want, need and use to our benefit? We shoot ourselves in the foot by paying the higher costs for them or forgoing these products altogether. Does this incentivize manufacturing the Canadian export products in the US? And what about their retaliatory response to us? So now some of our industries get hurt and negate any benefits (if any) originally accrued to us. This all seems so stupid and ruinous to our friendly relations we have developed over the years. I can see maybe a tariff on one or two commodities that would benefit the US in keeping manufacturing here and opening up job opportunities as long as we have the resources.
I think tRump is sociopathic in his bullying behaviors toward the whole world with his narcissitic attitude to bring attention to himself and he does not care about the damage he causes as long as he gets the power he craves over everyone. He worships money, his path to grandiosity and admiration. He is very dangerous to democracy and I hope our courts will be able to restrain his worst tendencies. IMHO.
Sandra
yes. [i don't think my "yes" is important, but I do feel a need to add my voice to your important points.]
The tarriff threat has nothing to do with industry and economics. It's to step up Canada's immigration and law enforcement efforts to stem fentanyl traffic and illegal immigration via the border. It sure would seem in Canada's interest to tighten up security given their vulnerability to our largesse.
Nope. That was the initial nonsensical excuse that even Trump no longer bothers with. Fentanyl from Canada to the US is a drop in the bucket (<0001%), and is a tiny fraction of the illegal drugs and guns entering Canada from the USA. Migration is similarly minuscule, and goes in both directions. Regardless, Canada was willing to undertake any and al reasonable actions to improve border security, but Trump had no interest.
Now its all about the "Trade Deficit", which he exaggerates by triple, excludes trade in Services (heavily weighted to the USA) and excludes Direct Investment. The USA has always had, and continues to have, a trade SURPLUS with Canada in manufactured goods. The actual "deficit" is recent, and is composed entirely of raw materials processed for a profit by USA corporations - most principally the heavy crude oil required by Gulf refineries, which then exports the gasoline and other distillation products to Europe for a PROFIT! Since the collapse of Venezuelan oil production, the oil sands are the only real alternative heavy crude supply to keep those refineries going.
The fact is this is not a zero-sum issue. Tariffs will be extremely harmful to Canada, but will also be damaging to the USA. At this point, Trump is bent on destruction. Canada is the little brother that always had the USA's back, but which Trump, is now determined to beat to a pulp on the playground, just because he can.
Conky. Could not agree more with your summarization. Experts on both fentanyl and immigration claim neither are a significant threat based on studies with credible, provable evidence. US Customs seized approx 20Kg of fentanyl at the Canadian border vs 9,000 plus Kg at the Mexican border. Also approx 23,700 arrests at Canadian border vs 1.5mil plus arrests at Mexican border (fewer than previous year at approx 2 mil.)
Canada has already ordered more drones, helicopters and other resources along the border. They are concerned with organized crime and money laundering. The flow of fentanyl is not a major problem.
As usual, tRump has mistakenly lumped the borders of Mex and Canada together to make his sweeping threats of tariffs if these countries do not comply to his unclear, nonspecific demands. He uses tariffs as a scare tactic. He threatened Russia with tariffs if they don't stop their war with Ukraine! What buying and trading do we do with Russia? That shows you how little he knows about tariffs.
If he wants to minimize or solve the flow of drugs or illegal immigration from over the borders of allied countries, destroying their economies and possibly ours is not a very smart way to do it, no matter how much of a "genius" he claims he is.
See my comment just below, but further, King Donnie is too willfully ignorant to comprehend the impacts on currency.
If the Canadian dollar collapses from (pre-Trump) $0.74 US to $0.60, American products will then be 25% more expensive in Canada than now, even before countervailing tariffs are applied by Canada. Meanwhile, that depreciation will push the cost of Canadian products down by 20% in the USA, negating most of the tariff impact.
The "Trade Deficit" will become even more exaggerated. A vehicle made in the USA for sale in Canada will be 25% more expensive than now due to currency depreciation, and an additional 25% more expensive once countervailing tariffs are applied by Canada. If our Automobile industry is to be destroyed, why would we not try to make the best of it by opening the door to Chinese manufacturers, hopefully with some kind of final assembly provision? Why would a Canadian buy ANYTHING from the USA? Why would a Canadian spend any money on travel to the USA?
Trump's failures represent financial losses and the absence of ethical business practices, market research, and strategic planning.
How can anyone look to Trump for leadership, honesty or integrity when the trail he leaves behind him is littered with slime, broken promises, poor decisions, stiffed vendors, devastating reputation and history of repeated failure? A short list includes:
1. Trump University or the Trump Entrepreneur Initiative (2004-2010) — Trump staged wealth-building seminars costing up to $34,995 for mentorships that would offer students access to Trump's secrets of success. Instructors turned out to be motivational speakers sometimes with criminal records. Lawsuits and criminal investigations abound. The for-profit education company ended in a $25 million settlement over fraud lawsuits without admitting wrongdoing.
2. Trump Institute - A separate failed business from Trump University, offering real estate seminars under a licensing agreement until 2009. Trump endorsed the program through infomercials despite not being involved in its operations.
3. Trump Vodka (2006-2011) A luxury vodka brand that failed to meet sales thresholds and was discontinued.
4. Trump Airlines (1989-1992) Trump borrowed $365 million to purchase Eastern Air Shuttle, which he rebranded "Trump Airlines". He added gold bathroom fixtures. Two years later Trump could not cover the interest payment on his loan and defaulted on a $1.1 million loan repayment and eventually ceased operations
5. Trump Steaks (2007) An attempt to break into the meat industry that ended shortly after its launch. Trump Steaks was pulled from shelves within two months due to low sales while owing Buckhead Beef $715,000.
6. GoTrump.com (2006-2007) A luxury travel search engine shut down after a year due to critique and lack of traction.
7. Trump Mortgages (2006-2007) Trump told CNBC in 2006 that "I think it's a great time to start a mortgage company … The real-estate market is going to be very strong for a long time to come." Then the real estate market collapsed. Trump had hired E.J. Ridings as CEO of Trump Mortgage and boasted that Ridings had been a "top executive of one of Wall Street's most prestigious investment banks." Turned out Ridings had only six months of experience as a stockbroker. Trump Mortgage closed and never paid a $298,274 judgment it owed a former employee, nor the $3,555 it owed in unpaid taxes.
8. Trump Ice (2004-2010) marketed under the "Trump Ice" brand, promised one of the purest bottled waters but was known for its low mineral content and plastic bottling, critiqued as more of a vehicle for Trump's image than a testament to water quality.
9. Trump Magazine (2007-2009) - Trump Style and Trump World were renamed Trump Magazine to reap advertising dollars from his name recognition. However, Trump Magazine quickly went out of business, shut down with suggesting significant unrecouped investment in publication and distribution.
10. Trump Tower Tampa (2006-2007) - shelved due to financing and market challenges, indicating significant investment losses and lost deposits.
11. Trump SoHo Hotel (2008-2017) - struggled with occupancy rates, investment and operational losses, and compounded by legal fees.
12. Trump Taj Mahal (1990-2016) - Opened with grandeur but faced immediate financial distress, multiple bankruptcies, operational losses underscoring significant financial failure.
13. Trump Marina - Opened in 1985 in Atlantic City as Trump's Castle, this casino resort was renamed Trump Marina in 1997. Despite the rebranding efforts and strategic location, the property struggled with financial stability and was sold after multiple challenges, including a near foreclosure in the late 1990s.
14. Trump’s World Fair at Trump Plaza - another casino venture in Atlantic City, was opened in 1996 failed to draw the expected crowds and revenue, leading to its closure in 1999.
15. Trump Baku Hotel (Never opened) - A luxury hotel project in Azerbaijan that faced legal and financial issues that halted this project, suggesting sunk costs in development and planning without the realization of potential revenues or returns.
16. Trump Plaza Hotel and Casino (1984-2014) - Once a landmark in Atlantic City, it went through multiple bankruptcies before closing, indicating substantial financial losses over its operational life due to declining revenues.
17. Trump International Hotel and Tower Dubai (Never realized) - shelved in 2008,
the failed venture reflects lost investments in planning and pre-development stages.
18. Trump International Hotel and Tower New Orleans (Never realized)
19. Trump Tower Palm Beach (Never realized) - Faced local opposition and environmental concerns, quickly scrapped.
20. Trump Tower Charlotte (Never realized) another example of Trump experiencing financial losses related to planning and initial development efforts without achieving fruition.
21. Trump: The Game (1989, 2005). Milton Bradley tried to sell it. As did Hasbro. After investment, the game died and went out of circulation.
22. Trump Foundation (Fraudulent Charity) (1988-2018) - A private foundation started by Donald Trump, dissolved by court order in 2018 following a series of legal violations. The foundation was scrutinized for unethical and illegal activities,, culminated in Trump being ordered to pay $2 million in damages for misusing charitable funds for political gains.
23. Trump Winery in Charlottesville, Virginia, managed by Eric. Despite claims of being the largest winery on the East Coast, Trump Winery is not the largest either by volume of wine produced or acreage under vine in Virginia, let alone the East Coast.
24. Trump Fragrances (2004-2015) - Donald Trump's ventures into the fragrance market, branded "Donald Trump, The Fragrance", a "Success by Trump", "Empire by Trump" all failed due to lack of sales.
25. Truth Social, the social media platform launched by Donald Trump's Trump Media & Technology Group (TMTG), reported substantial financial losses, amounting to $31.6 million from its launch until mid-2023. In 2023 alone, regulatory filings and company reportshighlighted losses of $58 million.
26. Trump Matresses — Serta stopped offering a Trump-branded mattress, again due to low sales.
27. Trumpnet — A telephone communication company that abandoned its trademark.
Trump isn’t good at being president. He’s a weak leader, a terrible negotiator, and among the worst judges of character when it comes to both our allies and our adversaries. He failed in the Covid crisis and through unfunded tax breaks for the rich, fumbled the prosperity he’d been handed.
We are yet to see the financial outcomes on his grifts in tRump bibles, trading cards, guitars and crypto memes which have no promise or guarantee and requires an agreement not to sue when it is dumped and prices crash for the investors. They have been duped.
And yet 30% of the voter population got him elected! I guess they love being kissed with lies and corruption.
I fear for the next four years.
Thanks for this! You might also add that his poor character judgement continued into the WH. How many of the folks he appointed to top positions in his government did he eventually fire because he said they were incompetent idiots?
"Wait, but tariffs are paid by the importing country..."
AI is already smarter than Trump voters.
💪 A true teacher always makes their student show their work.
very interesting. a little long (abd hard) for me to try to think through in a short time. but i was surprised to see that Deepseek actually "thought" about some things i was sure it was not going to take account of [and other commenters have mentioned some things i did not think of. all in all i would agree with those commenters: "some things not included in the analysis, but enough to suggest that tariffs are likely to be a bad idea"...which we already knew.
one thing that impressed me is that the start of the analysis had a very human sound to it and i really cannot undersand how AI does that.
another thing: i am not sure that a 4% or even 10% reduction in GDP is all that important. we got along just fine when GDP was 10% less than it is today,, and most of the world gets along with personal "GDP" much less than 10% of what the average american "enjoys." remember that GDP is a measure of money not of quality of life.
oops: not less than ten percent of what we enjoy, but ten percent less than what we enjoy,
To Stephanie - could we run this in our local weekly newspaper in Ontario, Canada? The Wellington Times has a weekly circulation of 5000. It is of great interest - both the power of AI and the effect of tariffs. Would it be a massive legal undertaking to obtain permission?
Isn’t one of the core tenets of MMT the recognition that it is possible for societies to act consciously to achieve common goals and that we are not slaves to market price signals. I thought we all saw that with Covid in 2020? Why are we abandoning those. Insights? All demands are not created equal.
Indeed, there are potentially alarming reinforcing factors. Among them is commercial banks' (alleged) reluctance to grant credits. Recently, some economists called U.S. commercial banks risk-averse. Dealers and brokers are said to be nervous, hedging their slackening earning potential instead of profiting from facilitating the money markets' business activities. My interpretation differs. It is not banks' reluctance but the lack of demand for credit because of decreasing investment due to industrial production, which is way under capacity potential. That reminds me of the pre-financial crisis of 2008-2009 when, according to Stigum's <Money Market>, demand for credit had decreased tremendously in 2005/2006, <ruining> dealers' and brokers' business models and inspiring commercial banks, particularly investment banks, to boost their ingenuity to new frontiers, utmost creative derivatives. Andrew Lo (MIT) knew there would be winners. Did he mean Goldman Sachs? This time, the mutually reinforcing U.S. domestic effects of external tariffs (including retaliatory foreign tariffs) and, hereby, induced decreasing U.S. domestic investments have the potential of <bombing> the world economy into a devastating slump.
"Tariffs are paid by the importing country". True, but paid to whom? If the US imposes the tariffs on its imports (which are Canadian exports), the payments are denominated in USD and paid by the US consumer to the US government. If Canada imposes tariffs on its exports (which are US imports) the payments are denominated in CAD and paid by the US consumer to the Canadian government.
So best if Canada beats the US to the punch because the payments being denominated in CAD keeps the US demand for CAD up.