Hola Libertinus!

Well, well, well—look who’s back.

Donald J. Trump bulldozed his way back into the Oval Office, hauling the GOP along to grab the House, the Senate, and—let’s be honest—the entire political cookie jar.

Historic? Maybe. Earth-shattering? Doubtful. As your faithful contrarians, we’re here to ask the real question: what, if anything, does this actually mean?

First up, West takes a hard look at Trump’s economic promises—from big talk on the budget to tariffs to Elon’s “DOGE.” Then, Zach peels back the layers of America’s $36 trillion bureaucratic beast to ask if this just the latest act in a very familiar play.

More cynical than you hoped? Well, it’s good for what ails you, if you can keep it down.

Grab your drink of choice, settle in, and let’s unpack whether anyone in D.C. can really move the needle… or if it’s all just sound and fury.

🤿 U.S. ELECTION DEEP DIVE

The Big Red Wave

As you all have seen Donald Trump won the US Presidential election in sweeping fashion, making gains in nearly every demographic group.

Not only that, but the Republicans flipped the Senate, and won the House as well.

Additionally, the Republicans already have a 6-3 majority in the Supreme Court.

This is an unprecedented shift in American politics, and paves the way for the Trump regime to have fairly unmitigated political power.

But does any of this actually matter for the economy?

Well, the biggest economic problem the US has is high spending, which seems unlikely to be resolved by the new Trump admin (after all, he was just as big of a spender last go around as any of them).

Throwing a bone to fiscal conservatives, one of the least influential factions of the modern conservative coalition, Trump has promised to create a Department of Government Efficiency (DOGE).

What's more, this DOGE will be headed by Elon Musk and Vivek Ramaswamy.

I cannot think of a better dream team for this type of position.

The problem though is that the three largest expenses are Social Security, Medicare/Medicaid, and servicing the national debt.

No one is capable of touching these three expenses - it's simply not politically viable.

Trump loses the support of his aging base if he even hints at cuts to Social Security or Medicare/Medicaid, and if interests payments on US debt don't go through the world's economy could possibly collapse.

For these reason, the best we can hope for is the firing of non-producing government bureaucrats and maybe some pay reductions.

But Trump also poses some major risks on the economic policy front, specifically two of them.

Tariffs, which are always a bad idea, seem to be the basis of Trump's economic plan.

Trump does a good job of selling the idea of tariffs, even floating the possibility that profits from tariffs could one day replace revenue generated from the income tax.

The problem is that other countries don't actually pay for tariffs, American consumers do.

Think about it, if you ran a business on already thin margins and a sweeping tax of 20-60% was imposed, are you going to bankrupt yourself by keeping prices the same?

No, you'll do what every viable business does and increase the prices your consumers pay.

One of the perceived benefits of tariffs is that it means that American businesses don't need to compete as heavily in the market in order to be successful.

This may be true in the short term, but it reveals a long term problem as well.

Competition is the mother of innovation.

If US businesses don't need to compete to get market share, then why would they innovate?

Similarly, why would they bother with keeping quality control high?

Decreasing competition for US businesses may be a short term boon for them, but a loss for consumers and for humanity more broadly as competition and innovation stagnate.

The second major risk Trump poses to the economy is the rolling back of central bank independence.

He's stated on multiple occasions that he would lower interest rates, or at the very least have a "seat at the table" when interest rate decisions are made by the Fed.

But there is a reason central bank independence exists.

We already know what national leaders do when they control interest rates - they drop them to boost popularity.

The trade off here is that systemically low interest rates are a big contributor to inflation.

This, in tandem with tariffs, could lead to the long term kind of inflation seen in various countries in the third world.

That's not good.

For these reasons, I suspect the Trump second admin will be typified by growth (thanks to deregulation and less government interference in domestic businesses) coupled with above average inflation due to tariffs and low interest rates.

That said, I'm less unhappy about Trump winning than I would be about Kamala winning.

This is because I view the risks that Trump presents as a bit of a flash in the pan.

Tariffs and decreasing Fed independence could do very bad things for the economy, but Trumpism could also die with the end of Trump's administration, paving the way for fiscal conservatism to become an element within the Republican party again

Kamala didn't present any "flash in the pan" risks in the way Trump does, but instead represents a long term national decay via the prioritization of "HR ladies" over producers.

A much bigger threat than either tariffs or lack of Fed independence is the US gov becoming entirely consumed with wealth redistribution rather than wealth production.

Even though Trump does pose economic risks with some of his policies, he represents a shift towards valuing production over redistribution, which is the most important thing in any country's economy

So where do the Democrats go from here?

Probably nowhere good, but what little shreds of political optimism that still exist in me yearn for a reformed Democratic party based on internationalism and free trade in opposition to Trump's national protectionism.

I know, I know, seeing the Dems flip the script and start advocating for free market policies is a long shot, but a boy can dream.

And maybe, just maybe, if they did this they'd be in a better position to pick up voters who are primarily concerned with the economy on the next go around.

In any case, buckle up because a second Trump administration will be better positioned to institute sweeping systemic change than the first.

Not all of those changes may be good for your pocket book though, so stay abreast of developments here.

Oh, and a final lesson from the elections is that the betting markets called it right.

After repeated claims of market manipulation, it turns out that the betting markets more or less accurately priced in a Trump victory.

I was skeptical about how this was possible given the fact that presumably betting markets have the same data as everyone else.

So how did they do it?

Well, they didn't just have the same data as everyone else, they had more.

Turns out that some of the high rollers in Europe were commissioning polling companies to conduct independent research on their behalf.

This idea of "betting due diligence" is fascinating to me and am looking forward to seeing how it develops moving forward.

That's all from me - Zack, take it away. ~West

Not with a Bang, But a Misread Memo

Berlin, 1989.

The Cold War is at its frostiest.

The Berlin Wall, a symbol of Soviet control and division, looms oppressively—a brutalist middle finger dividing East and West.

Then along comes East German Politburo member Günter Schabowski, your classic bureaucrat who, through sheer dumb luck, finds himself playing a pivotal role in history.

He’s on live TV, fielding questions about new rules on border crossings. Trouble is, he’s more confused than anyone else, shuffling through orders delivered from on high, looking for concrete answers.

Everyone is surprised to hear restrictions are being relaxed. Very relaxed. A journalist asks: “So, when do these new travel permissions go into effect?”

Schabowski scratches his head, mistakenly mutters these sweeping changes are in effect “immediately,” and the rest is history. You can even watch it right here.

People watching at home are equally confused, thinking, “Wait, we can just waltz across the border now?” That's what the man on TV said, after all. And so they do exactly that.

Thousands of East Berliners flock to the wall, practically demanding it come down. The guards, equally clueless and unprepared for, say, a revolution, open the gates, and the floodgates of sweet, sweet freedom open with them.

In that moment, history wasn’t made by fearless leaders or a grand conspiracy. Nope, it was a clueless bureaucrat misreading the fine print on live television. And nothing was ever the same.

Within days, the Berlin Wall was reduced to rubble, and this revolutionary momentum caused the Soviet Union to soon collapse under its own weight.

Yep, the iron grip of communism didn’t end with a heroic standoff of the human spirit overcoming all odds... nope, it was undone by a pure distillation of beautiful incompetence.

Turns out, nothing takes down a bureaucracy like bureaucrats themselves.

But here's what I want you to consider—no one at the time realized they were seeing the beginning of the end.

The dissolution of the USSR, the shift in global power, the coming tsunami of capitalism crashing over Eastern Europe—it wasn’t on anyone’s radar that night.

The people of East Germany were just happy to be finally getting across that wall to visit family or get smashed on West German beer (as you might imagine, centrally-planned, communist beer was notoriously watered down and terrible).

Point being that, looking back, it’s easy to play historian and connect the dots, but at the time? Just people living in a very strange moment without a clue about what it would eventually mean.

Fast-forward to today...

Donald Trump is once again the President-elect.

And he didn’t just win... he steamrolled his opponent, in a defeat so complete pundits are still picking their jaws off the floor.

Republicans took the hat trick trifecta of the Presidency, Senate, and the House.

Dems are scratching their heads, desperately searching for an explanation. Was it the wokeness? The relentless virtue signaling? The wide open border? Transitioning kids? Indecisiveness about Israel? Maybe it was Kamala's cackle?

Who knows. But the 24/7 news-cycle is fumbling to make sense of it all. And maybe they’ll get there.

But that's the thing about post-rationalizing—you're trying to make sense of a moment, a zeitgeist, whose cause and ultimate effects (if any) are yet unknown.

As for Trump...

He's promising that we’re on the brink of “American Golden Age.” Sounds good, right? Who doesn’t want a slice of that pie?

And look, I'd be lying if I didn't say that the prospect of Elon and RFK Jr. tackling the bureaucratic beast of government bloat and big pharma wasn't best case scenario.

But who knows how long the bromance will last and how effective it could actually be?

Certainly not myself. After all, the last thing the deep state—yes, the real one, the one made of run-of-the-mill, banal bureaucracy, churning out inefficiency like clockwork; not shadowy cabals—wants is to be trimmed down.

Let’s talk about the debt. At this point, it’s north of $36 trillion.

But, like West pointed out above, Trump’s not touching military spending, Medicare, Social Security, or anything else that would actually make a dent. These things are as sacrosanct to the right as DEI is to the left.

Trump isn't exactly known for austerity, either.

During his first term he cut corporate tax rates, increased military spending, funded infrastructure and veterans' programs, and, here's the biggest one: he authorized over $4 trillion in emergency spending during the pandemic.

Annual deficits increased each year of Trumps tenure. In the end, the national debt had risen by nearly $7.8 trillion, from $19.9 trillion to $27.7 trillion.

Now we've got to service that debt. Plus Biden's $5 trillion deficit. And today's interest rates (and persistent inflation) aren’t exactly helping the situation.

So here's my cynical take...

Every administration promises to “fix” it, and every administration fails. Washington isn’t broken—it’s just really good at being Washington. The government, just like markets, grow until the bubble pops. It's always been this way.

And Trump’s big plan to “pay for it” by cutting taxes and hiking tariffs? Please.

Tariffs have been tried before, and guess how well they worked? Google the Smoot-Hawley Tariff Act of 1930 if you're curious.

Spoiler alert: tariffs and trade wars played a played a huge role in the economic spiral that resulted in the Great Depression, making it nearly impossible for the global economy to recover.

History loves to rhyme, especially when it comes to top-down mismanagement. We see it play out time and again: when the government tries to manipulate a complex system, it backfires spectacularly.

So, to bring this on home...

Regardless of who’s in power, true patriotism means wishing for the best for the country—despite well-warranted skepticism.

I will say this might be our best shot at meaningful change, but that's not saying much. Trump is set to govern over the exact same bureaucratic behemoth that’s been rolling towards its destiny unfazed by whoever’s at the wheel.

Unfortunately, rooting for big, sweeping change is like rooting for the post office to become a model of customer service and efficiency. And have you even been to a post office lately? My local, dilapidated branch literally looks like something out of the USSR. No, really. There are missing ceiling tiles, holes in the walls, and always one disgruntled employee moving at a glacial pace while the line is typically into the lobby.

In closing...

The swamp, the debt, the alphabet agencies—they don’t just roll over because a new sheriff rides into town. The problem is the bureaucratic hydra itself. It thrives on inefficiency and is only interested in self-preservation.

If we can learn anything from the fall of the Berlin Wall, it’s that while we're all standing here, waiting for someone to accidentally make the right move, change often comes not from a hero or a savior, but from the weight of a broken system collapsing under the oppressive weight of its own bloated bureaucracy.

So here’s to four more years of modest hopes, low odds, and a motley cast of characters that would make Shakespeare smile.

Enjoy the show, America! It’s probably the same act we’ve seen before—but the costumes sure are interesting. ~Zach

That’s it for this week’s trek through D.C.’s latest drama.

Will this time be different? Only time will tell.

But if history’s any guide, government doesn’t collapse in a blaze of reform—it buckles quietly under its own inertia. It happened in Rome, and it happened 1,515 years later in the USSR.

So let’s sit back, watch the players act out their parts, and remember:

No matter who’s in office, stay skeptical, stay curious, and keep an eye on the only place you can truly make a difference: your own house.

Until next time…

Sic semper debitoribus,
~ West & Zack

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