Joe Biden is finally, irrevocably gone, consigned to the ash bin of history. Not before time though, and the preemptive pardoning of his skeevy siblings for crimes “they didn’t commit.” Has there ever been a more corrupt and mendacious president?
Finally, we can get down to the business of making America strong again, domestically and internationally.
This time around excuses from denizens of the ‘swamp’ won’t cut it. Trump’s appointments are disrupters not establishmentarians. This shake up should begin with the Fed: it’s lies, obfuscations and buck passing.
Where inflation is concerned, it wasn’t the Covid-19 pandemic, it’s not the war in Ukraine, it’s not supply chain disruptions, and it’s not going to be President Trump’s tariffs.
The former excuses are tired and outdated. The latter is simply hyperbole. Economists said exactly the same thing in 2016. What we got was the strongest economy and lowest unemployment since Ronald Reagan. Clearly, they aren’t any smarter now.
What we do have is a government that spends too much and a central bank that prints too much. Since 2020 when Biden took over, M2 the broadest measure of money supply, has increased 63% (WSJ 1/16/2025).
This is exacerbated by a trillion dollar plus spending blow out which, among other things, has annual federal spending on Medicaid increasing by 60% to $963 billion since covid. This is more than the U.S. now spends on national defense (WSJ 1/26/2025).
Via accounting slight of hand Biden officials allowed blue states like California to cover nearly 40% of residents, extending it to undocumented immigrants as well. Medicaid funds are also now used to pay for homeless housing, food and mini refrigerators (WSJ 1/26/2025).
As President Trump is already doing at the border, it is our belief he will force the Fed to take ownership of their part in the ‘inflation crisis.’ To blame others is “an unbecoming declaration of impotence.” (WSJ 1/16/2025). If he demands they stop printing money and set monetary policy wisely, stable prices should result.
That Trump’s tariffs will be inflationary is another shibboleth of economists. “Trade accounts for only about 25% of the U.S.’s gross domestic product. A 10% universal tariff proposed by President Trump would have a minor, one-time effect on overall price level.” (WSJ 1/26/2025). This should not be statistically significant.
Further, as in 2016, any inflationary effect of tariff policies may be overshadowed by the disinflationary influence of deregulation and spending cuts. Therefore, we look forward to the potential of an improving environment for both CRE and DSTs.
However, even with all this positive change afoot at the national level, Democrats who run nearly every great city in the nation are doubling down on their sanctuary city nonsense. Unless you have more confidence than we do in their ability to make one work – clean it up, control crime, smash corruption, educate the kids, it’s probably time to consider following the money South into the burbs and exurbs. We have a possible solution.
