Tariffs Not As Terrible As We Were Told?

When President Trump announced on April 2 that he was going to implement a broad range of tariffs on imported goods his plans were met with a storm of criticism.

Source: https://www.whitehouse.gov/videos/my-fellow-americans-this-is-liberation-day-april-2-2025-president-donald-j-trump-%F0%9F%87%BA%F0%9F%87%B8%F0%9F%A6%85/

This is how Trump framed his announcement of the tariffs on that day.

“My fellow Americans, this is Liberation Day. April 2, 2025, will forever be remembered as the day American industry was reborn, the day America’s destiny was reclaimed, and the day that we began to Make America Wealthy Again.” –President Donald J. Trump

Economists, political pundits and Democrats were quick to criticize Trump.

Tariffs would hurt the U.S. economy.

Our trading partners would not accept tariffs.

Trump was going to start a trade war.

Tariffs would cause inflation.

The revenues that tariffs would raise would be minimal.

All of this would lead to a U,S. stock market meltdown as investors lost confidence in the United States.

It is true that uncertainty about the tariff strategy initially caused a downturn in the stock market.

The S&P 500 lost 12 % of its value in the week after Liberation Day.

However, it now stands over 12% higher than it was on April 1, 2025.

It is almost 28% higher than where it stood at the market lows on April 8.

The betting market odds of a recession in 2025 are currently at 17%. In April, right after the tariff plan was announced, the odds were as high as 70%.

This is one of the lowest betting odds numbers on a recession since Polymarket started taking wagers.

Revenue from tariffs has already resulted in over $150 billion to the federal budget this year.

Source: https://www.foxbusiness.com/politics/july-tariff-revenues-break-monthly-record-150-billion-collected-so-far-2025

Treasury Secretary Bessent is estimating that tariff revenues will exceed $300 billion for the year.

In 2024, there was about $80 billion in revenue from tariffs most of which were on China that Trump instituted during his first term.

Thus far, tariffs do not appear to have contributed to additional inflation.

Source: https://www.cbsnews.com/news/inflation-trump-tariffs/

That may change over time but to this point it appears that the tariffs are not being passed through to any significant degree.

This is also what occurred when Trump put the tariffs on China in his first term. The conventional wisdom was that we would see increased prices on Chinese goods but it never materialized.

One reason that you are not likely to see consumer prices rising to reflect the tariff cost on imported goods is because the tariff is levied on the import price.

This the cost before a distributor, wholesaler and a retailer marks up the price and takes their share of the profit.

For example, imported clothing might sell at retail for 3x-5x of what the cost that the tariff is calculated on.

A $50 shirt might have been imported at $10 from China or Vietnam. A 15% tariff would only shave $1.50 off of the shirt's margin. It might be just as easy to eat most of this cost than attempt to pass it through.

When you are dealing with products such as motor vehicles, the importer has to compete with American vehicle manufacturers that are not subject to the tariff.

The import has to be cost competitive with the domestic vehicle or overall sales will suffer.

That is why when you see the analysis of the U.S. tariffs on European automaker they are all cutting their profit forecasts. The tariff is not easily passed on to U.S. consumers. The Europeans are going to have to absorb it to stay competitive in the U.S. market.

Not much that was predicted by the naysayers about Trump's tariff plans has come true.

That is also true regarding the deals he has been able to negotiate thus far.

Let's take a look at the startling success that Trump has had in negotiating new tariff and trade agreements with some of our major trading partners.

United Kingdom (source)

General tariff on UK imports into the United States set at 10%. It was previously 3.4%.

Tariff on U.S. goods into the UK reduced from 5.1% to 1.8%.

UK opens market for U.S. ethanol, beef, animal feed, machinery, etc. that has been restricted in the past.

UK agrees to purchase $10 billion in airplane and parts from the U.S. (Boeing).

Vietnam (source)

20% general tariff on Vietnam imports into the Unite States. It was previously 0%.

40% tariff on goods made in China and transshipped through Vietnam.

0% tariff on U.S. goods into Vietnam. It was previously 5.1%.

The U.S. imported $125 billion in goods from Vietnam in 2024. It exported $12 billion to Vietnam.

Japan (source) 

15% reciprocal tariffs.

Japan opens market to U.S. vehicles, rice and more.

Japan to invest $550 billion in the United States

Indonesia (source) 

 0% tariffs on 99% of U.S. exports.

 Ends all non-tariff barriers.

19% tariffs on Indonesian imports (was 3.2%).

Major sales of U.S. energy, agriculture, and Boeing jets.

Indonesia must adopt U.S. labor & IP protections.

Of course, this week saw the announcement of the largest trade agreement ever signed in world history between the United States and the European Union.

The EU trade deal contains these key provisions.

European Union (source)

Establishes a general 15% tariff on imports from the EU compared to an average of 4.8% previously.

The EU will generally reduce tariffs on U.S. goods. For example, U.S. cars imported to Europe will be reduced from 10% to 2.5%.

In addition, the EU has agreed to purchase $750 billion in U.S. energy between now and 2028 and invest an additional $600 billion in the United States over that period.

The EU has also agreed to purchase hundreds of billions of dollars of U.S. manufactured military equipment.

How was Trump able to negotiate such a favorable trade deal for the United States?

He had LEVERAGE.

Bill Mitchell puts it in very simple terms that almost anybody can understand.

I wrote about the tariff issue in early April right after Trump announced his plan and the significant leverage that the United States had in all of this.

Looking at the numbers it is clear that if the United States is going to get to a place with free and fair global trade it needs to look at the tariff situation globally.

It should also be evident in looking at the numbers that the United States has a lot more leverage in a trade war scenario than our trading partners who are benefiting by almost $1 trillion per year.

Trump understands the big picture. He also understands the long game. Trump also understands that to win you have to fight and take calculated risks. Of course, it is easier to do that if you have less to lose than the other guy.

On this issue the United States has a lot less to lose than anyone else.

The Financial Times is no fan of Donald Trump.

However, in the aftermath of the EU trade deal, they published this.

 

It is also not unusual to see takes like this on social media.

Link: https://x.com/LinaSeiche/status/1949662636292899221

It should be noted that the trade situation is not as one-sided as it appears to be.

EU countries have long used value-added taxes that act as tariffs to protect their markets and raise revenues.

Those taxes are still in place and they are substantial.

The average VAT rate in Europe is 21% and ranges from a low of 17% in Luxembourg to 27% in Hungary.

The United States has no comparable border tax so there is still an imbalance in the trade tariff/tax situation between the U.S. and EU. It just is not as large as it was before.

Where does this go from here?

The US/EU tariff deal still needs to be approved by the EU Parliament.

This is not assured. There are plenty in Europe who are not happy about this deal, most particularly France.

In the end, my guess that they will not have much choice to accede due to the leverage Trump has.

At the same time, the agreement that Trump has reached with the EU puts even more pressure for China and Canada to come to terms with Trump.

Talks are ongoing with China right now and an extension is possible beyond the current deadline of August 12 that Trump previously established.

However, the clock is ticking on Canada where it does not appear any talks are progressing. Canada could be facing a financial crisis if the U.S. market is effectively cut off to them due to the fact that 22% of the country's GDP is tied to exports to the United States.

At this point, it appears that Trump has been a lot smarter than his critics thought he was.

It also might prove true that tariffs are not anywhere near as terrible as we were told.

Time will tell the true story as it always does.

Medicaid In Context

Medicaid spending was mentioned in the media a lot during the debate leading up to the passage of the Big Beautiful Bill earlier this month.

To hear the Democrats and media speak about it you would think that the new law drastically cut Medicaid.

Let's put the Medicaid issue in context with some hard facts and truths.

The reality is that the only major change to the Medicaid rules was to limit federal funding for able-bodied adults aged 19-64 in those states that previously expanded Medicaid to those with higher incomes than existed in original Medicaid. 

In the Obamacare legislation of 2010, states were given the option to expand Medicaid to those with higher incomes above the base poverty level (up to 138% of the federal poverty level)  with the federal government paying 90% of the cost.

41 states have chosen to expand Medicaid as of the beginning of 2025.

Alabama, Florida, Georgia, Kansas, Mississippi, South Carolina, Tennessee, Texas, and Wyoming have not adopted expansion citing costs and philosophical objections.

The new federal requirement is that an individual to be Medicaid eligible in those 41 states must engage in at least 80 hours per month (20 hours per week) of "community engagement" activities to maintain eligibility. Qualifying activities include working, participating in a work program, community service, or education. Exemptions apply to pregnant women, parents of children under 14, people with disabilities, and certain caregivers.

The intent of the provision is to make sure that Medicaid continues to be available to those it was originally intended to help.

Medicaid was originally enacted to provide access to healthcare for the disabled, the blind, those below the poverty line or the elderly who had no assets and required long term care.

It was not intended to provide health care for able-bodied people who could work.

There is not anything in the legislation that prevents a state from allowing able-bodied people to remain eligible for Medicaid. Those states will just be prevented from receiving the federal funding.

California, New York or another Democrat-run state that wants to provide expanded Medicaid benefits to able-bodied people is free to do so. The taxpayers of that state will just have to pay for it.

For historical context, Medicaid did not even exist until 1965. Neither did Medicare.

Is it just a coincidence that health care costs as a percent of GDP just happened to explode as a share of GDP right after these two programs were enacted?

From 1900 to the mid-1960's health care costs in the United States generally were less than 1% of GDP.

Those costs started to consume a greater and greater share of the nations's economy since Medicare and Medicaid were enacted until today where it is close to 10% of GDP.

Isn't it incredible  to see what happens to costs when someone else is paying the bill?

Source: https://www.usgovernmentspending.com/healthcare_spending

Medicaid spending is now approaching $1 trillion per year with the federal government paying about 70% of the total costs and states paying 30% on average.

Total Medicaid Expenditures 1966-2023
Source: https://www.statista.com/statistics/245348/total-medicaid-expenditure-since-1966/

There are over 83 million enrolled in Medicaid coverage in the United States representing over 20% of the total population.

39% of all children in the nation are covered by Medicaid.

Medicaid Enrollment (1966-2023)
Source: https://www.statista.com/statistics/245347/total-medicaid-enrollment-since-1966/

In seven states and the District of Columbia more than 25% of the population is on Medicaid.

For example, in California 38% (15 million of the 39 million residents) in the state are on Medicaid.

43% of the children in the state are on Medicaid. 

California is spending $124 billion per year on Medicaid of which $82 billion comes from the federal government and $42 billion is paid by the state.

Who knows how many illegal immigrants are on Medicaid in California?

In New York, 35% are on Medicaid. It is 40% in Louisiana.

Nationally, more than 40% of all births are paid by Medicaid each year.

However, in Louisiana almost 2/3rd's of births are paid by Medicaid.

Here are a list of the states that are above the national average in regards to Medicaid births.

Source: https://www.marchofdimes.org/peristats/data?reg=99&top=11&stop=154&slev=1&obj=18

Utah has the lowest percentage of Medicaid births---18% followed by New Hampshire at 21%.

Is the Medicaid program actually providing an incentive for the poor to have more babies since the rest of us our paying for it? My son and daughter-in-law had a baby a couple of years ago. He had good private healthcare coverage but it was a high deductible health plan like most in the private sector have today.

It cost my son and his wife more than $5,000 in out of pocket costs to have the child. Compare that to a Medicaid mother where the taxpayer is picking up the cost. Who is more likely to have the next child?

Are the Medicaid eligibility requirements too broad even after the recent reforms? Bear in mind that the new Medicaid rules would do nothing about changing the eligibility for pregnant mothers or children.

Are poor people having that many more babies than those with more money due to the financial incentives?

Most people do not realize the extent to which Medicaid spending has crowded out the spending that states have traditionally focused on in their budgets---primary and secondary education, higher education, roads and highways and law enforcement.

For example, in my home state of Ohio, 12% of the state's $3 billion general fund budget went to Medicaid and 54% went to education in 1975.

In 2025, 47% of the state's $44 billion general fund budget went to Medicaid and only 33% went to education.

Education was the highest budget priority in the state budget in 1975.

Today it is Medicaid by a large margin. 

Medicaid is literally crowding out all other state spending in Ohio and most other states.

Educators continually argue in Ohio that the state (the taxpayers) is not funding education like it should. Their argument has merit but the focus should be on Medicaid spending rather claiming that taxes should be increased.

These are the facts but Democrats and the mainstream media portray the Medicaid reforms as if the world is going to end.

The reality is that if health care costs are not reined in we will soon have a federal budget which only consists of two major items---health care and interest expense.

Medicare, Medicaid and other government health care programs already cost almost $300 billion more per year than Social Security.

The United States government spends twice as much on health care as it does on national defense.

Interest on the national debt is more than $1 trillion per year.

If we can't reform Medicaid to require that able-bodied adults do something more than collect government benefits what hope do we have to insure that the people that really need health care can continue to receive it in the future?

How are these reforms unreasonable, irresponsible or inhumane?

Will We Ever See Truth and Justice?

The disclosures that were made over the last week by Director of National Intelligence Tulsi Gabbard that President Barack Obama, the Director of National Intelligence James Clapper, the Director of the CIA John Brennan and others conspired to create a false intelligence narrative that tied Donald Trump's election in 2016 to Russian collusion was in the headlines.

This was clearly done with the intent of undermining the Trump presidency before he even was sworn into office.

Source: https://www.foxnews.com/politics/new-russiagate-evidence-directly-point-to-obama-doj-decide-criminal-implications-gabbard

The biggest claim by Gabbard is that Obama himself directed his key intelligence officials to manipulate the intelligence with the objective, in Gabbard's words, to "unsurp" a duly elected incoming President.

This was after the intelligence agencies had presented a report right after the election that concluded that there had been no evidence that the Russians favored Trump or had colluded with him in his election.

It did not take long for a group of hand-picked intelligence analysts to produce a new assessment that reached a different conclusion and was disseminated to the media a month after Trump was elected.

Gabbard is saying that all of this was done at the direction of Barack Obama.

The efforts by Obama and his team laid the groundwork for what would become a Trump-Russia collusion investigation that consumed most of Trump's first term and substantially hampered his Presidency. 

It remains to be seen whether the DOJ will actually find any grounds to indict Obama or any of the others with a crime for what they did to Trump.

We have already seen the U.S. Supreme Court rule last year in Trump v. United States that former presidents are generally considered immune from criminal prosecutions related to acts during their term of office.

The ruling establishes a three-tier framework:

Absolute immunity for core constitutional duties for actions involving presidential duties established in the constitution such as issuing pardons, appointing officials and conducting foreign affairs.

Presumptive immunity for other official acts within the president’s authority. For example, this includes overseeing the intelligence operations of the United States. This would be a high bar for prosecutors to overcome in this case as Obama can just claim he sent the intelligence people back to make sure that Trump was not colluding with Russia. His argument will be that he did not specifically direct them to create the false intelligence narrative. 

No immunity for private or unofficial acts.

In that it would undoubtedly be almost impossible to prosecute Obama for any actions he took against Trump while he was President, I believe Trump's best move would be to preemptively pardon Obama. This allows Trump to take the high road but it still sends a message to the public that Obama was complicit in the conspiracy.

Let the DOJ focus their efforts on Clapper, Brennan, Comey and the others who might have been involved in a conspiracy to undermine and delegitimize Trump's lawful election in 2016.

The question that remains is what criminal charges could be brought here?

Many mention that those involved here were engaged in "treason" but there is a very specific and limited definition in federal law for that crime.

18 U.S.C. § 2381 says, “Whoever, owing allegiance to the United States, levies war against them or adheres to their enemies, giving them aid and comfort within the United States or elsewhere, is guilty of treason and shall suffer death, or imprisoned and fined, and incapable of holding any U.S. office.”

I don't see how a charge of treason could bring a conviction based on the legal definition in the federal statute.

If proven, the actions involved here are certainly egregious and did great harm to confidence in our democracy and government institutions but does not seem to rise to being at war with the United States or giving aid and comfort to our enemies.

A more likely crime that might be charged in this case is attempting to overthrow and put down the duly elected President through promoting the dissemination of false intelligence reporting. This could be considered as seditious conspiracy.

18 U.S.C. § 2384 defines the crime of seditious conspiracy as  "If two or or more persons in any State or Territory, or in any place subject to the jurisdiction of the United States, conspire to overthrow, put down, or to destroy by force the Government of the United States, or to levy war against them, or to oppose by force the authority thereof, or by force to prevent, hinder, or delay the execution of any law of the United States, or by force to seize, take, or possess any property of the United States contrary to the authority thereof, they shall each be fined under this title or imprisoned not more than twenty years, or both.

If Obama's associates were charged with this crime it would be the ultimate irony as this is the same statute that a number of the high profile actors in the January 6th, 2021 protests at the U.S. Capitol were charged and convicted of.

It is important to keep one other fact in mind as you follow the reporting of this story.

Democrats and the media are trying to dismiss the charges that Tulsi Gabbard has levied here by saying that it has been previously known and accepted that the Russians had tried to influence the 2016 election.

This generally consisted of attempting to disrupt and sow discord about the democratic process rather than favoring one candidate or another.

Gabbard affirmed this but her evidence indicates that there was nothing more to Russian involvement in the election than causing overall mischief. Obama and the others ignored this finding and used fabricated intelligence (including the discredited Steele dossier paid for by the Clinton campaign)  suggesting that Trump was a tool of the Russians and had colluded with them to get elected. 

In fact, the intelligence that Gabbard released this week makes clear that there was no evidence that Russia preferred Trump or did anything to directly assist him let alone collude with him in the election.

In fact, I wrote a blog post in April, 2017 ("The Real Russian Scandal") when the Russia, Russia, Russia scandal was at its height and argued that nothing in the argument that Putin wanted Trump to beat Hillary made any logical sense. That was true for the simple reason that Russia's economy was so dependent on high oil prices.

And isn't money the largest motivator in the world?

For example, in 2016, 50% of Russia's federal budget revenues came from oil and gas sales and 68% of the country's exports are related to oil and gas.

This is what I wrote over eight years ago in that blog post.

Of the two candidates running for President, which of the two candidates was more likely to initiate policies that would lead to increased oil and gas prices?

Was it the candidate who wanted to build the Keystone pipeline, lift the Obama moratoriums on drilling on federal lands, lift the restrictions on new drilling technologies, rescind Obama-era EPA rules on drilling and coal and end the excessive regulations of fossil fuels?

All of these positions of Donald Trump would serve to lower oil and gas prices by increasing U.S. and global supply.

Hillary Clinton's policies would have done the exact opposite. In fact, she was on record during the 2016 campaign as saying that "we need to move away from coal and all the other fossil fuels as energy sources".  That was about the same time she was saying she would put all of the coal workers in the United States out of work. She might have thought those statements were in her own self-interest in order to play to her liberal left base of voters. However, it could not have been further from our nation's economic self-interest.

At the same time, if you were sitting in Vladimir Putin's chair, wouldn't those positions be music to your ears? What could be better for Putin than a U.S President who wanted to exorbitantly raise the prices of fossil fuels in order to make green energy projects more viable?

As we watch what may come of the Tulsi Gabbard intelligence disclosures there is one more question that I think everyone should keep in mind.

What was the real reason that the President of the United States and his people were so intent on undermining or discrediting the next President?

Why would they do what they did?

Why would they risk their careers on all of this?

What was their real motivation?

What were they really hiding?

What were they so afraid of with having Donald Trump sit in the Oval Office that they would go to these extraordinary lengths to subvert and undermine our democratic process?

I wrote a blog post on that subject in 2018 titled "Mendacity and Misdirection' where I suggested that everything about the Russian Collusion story made no sense.

It looked to me to be misdirection to hide their own misdeeds that they feared that Trump would unearth.

Everything involved here looks to me like an attempt at misdirection to take the focus off of Obama, Clinton, the Democrats and the FBI. Their objective is to point their finger at Trump and the Russians so that no one is pointing the finger at them.

I was in law school at the time of Watergate.

If Watergate showed us anything it is that the cover-up always seems be worse than the original crime in Washington.

Watergate began with a bungled robbery of the Democratic National Committee offices by former CIA operatives in an attempt to gain access to DNC files and wiretap the offices. There was never any proof that I saw that Richard Nixon knew about the plans for the original break-in. However, he did get involved in attempting to cover-up his campaign's involvement after the fact. It finally led to his resignation

Does any of that sound familiar?

However, Watergate is nothing compared to what possibly occurred in this case. This is a million times worse.

We may have had the FBI and Department of Justice being weaponized to attempt to force a duly elected President from office. The scary thing is that it could very well have been done to simply cover-up their own mendacity and misdeeds.

There is undoubtedly much more that we have yet to learn.

It took a long time for the truth to come out about Watergate and that was with a determined press who desperately wanted to find Nixon guilty of a crime.

It is ironic that the media today is doing everything in its power to aid in the misdirection. There is little interest in finding the truth.

It should give all Americans great concern.

We can only hope that truth will prevail and that Lady Justice really has the blindfold on when it does. 

It does often take a long time for the truth to come out.

Perhaps we are getting closer to finding out in this case.

However, finding out the TRUTH and seeing justice prevail are two different things. 

Sadly, it is unlikely that we will ever see the justice we should see.

We may have to just be satisfied in finding out the truth as to why all of this was done.

This and That---July 23, 2025 Edition

A few random observations, charts and factoids to provide some context on what is going on in the world.

Space Launches

If you don't think that Elon Musk has single-handedly saved the United States space program consider this graphic.

The United States would be far behind China today if not for Elon.

The accomplishments of SpaceX are even more impressive when you consider the payload mass that has been placed in orbit so far in 2025.

Over 90% of all payloads among all countries that have been reported as placed into orbit this year have been done by SpaceX.

Source: https://x.com/dpoddolphinpro/status/1940088062588969387

Diversity of Opinion

People of the political left like to refer to conservatives as authoritarians who are close-minded and not willing to consider diverse views and opinions.

However, research into diversity of thought between liberals and conservatives actually indicates it is those on the left who coalesce around a very fixed set of opinionswhereas the right diverges widely.

This graphic speaks volumes.

Source: https://bpspsychub.onlinelibrary.wiley.com/doi/10.1111/bjso.12665
Credit: https://x.com/kevinnbass/status/1946871154683027965

This may be why high profile Democrat Rahm Emanuel (former Chief of Staff to President Barack Obama) who was on Megyn Kelly's show recently stated (jokingly?) that he needed to go into a witness protection program after he stated that a man could not become a woman.

Link: https://x.com/MegynKellyShow/status/1947618455785521653

Education as a Participation Sport

The Democrats are trying to make the Trump administration's cuts and reorganization of the Department of Education a big deal.

Look at this graphic and try to make the case that the education system of the United States has been improving since the Department of Education was established in 1980.

Credit: https://x.com/BrentAWilliams2/status/1944748764117242263

Yes, the graduation rate has improved. However, SAT scores have gone down at the same time.

It appears that many students are just being given a piece of paper for showing up in some form for 12 years of education.

Education has become like youth sports. Everyone gets a trophy no matter what the performance has been.

The Hollowing Out of the American Economy

There is no better graphic to show how the American economy has changed over the last 35 years than this comparison of the top employer in each state in 1990 vs. 2025.

Credit: https://x.com/dailydirtnap/status/1944788330769424452

Many high-paying working class jobs were lost as we allowed our manufacturing base to be outsourced to China and other countries.

The reality is that no value is created in an economy until something is manufactured, created or built. Most everything beyond that value creationis merely transferring that wealth among the rest of society that are providing services or one type or the other.

How long can you sustain a society where health care is the largest employer? Where does the money come to pay for the doctors, nurses and technology?

The same can be said for hospitality, retail or professional services.

This is the key principle behind Trump's tariff strategy.

You simply cannot outsource the foundation of an economy.

We have done it for the last 35 years but it is not sustainable over the longer term.

Fair Weather Fan?

Are you a fair weather fan?

What is your perfect combination of temperatures, humidity and cloud cover?

The website myPerfectWeather.com allows you to put in your inputs and provides a map of the most desirable places for that weather in the United States.

For example, if you are looking for daily high temperatures of between 60 and 85 degrees, a dew point of less than 60 degrees and less than 50% cloud coverage it is hard to beat the California coast.

This map indicates the places I have lived most of my life have some of the most uncomfortable weather that exists. It is either too hot, too cold. there is too much humidity or too many cloudy days.

It must have something to do with where I was born. The area around Akron, Ohio appears to have the most uncomfortable weather you can find.

Credit: https://x.com/US_Stormwatch/status/1944880629814059096

If you are willing to live with temperatures in the 50 degree to 80 degree range with everything else remaining the same a big swath of the country opens up for you weather-wise including much of North Carolina.

Credit: https://x.com/US_Stormwatch/status/1944896030153302424

Take advantage of perfect weather when you can! 

Are The Ads Mostly A Lie?

Over the last decade we have become accustomed to seeing advertisements depicting mixed-race married couples with children to sell their product.

Source: https://www.newson6.com/story/5e363cc12f69d76f620597b9/adorable-star-of-cheerios-commercial-hails-from-oklahoma

Source: https://www.newson6.com/story/5e363cc12f69d76f620597b9/adorable-star-of-cheerios-commercial-hails-from-oklahoma

This ad for Cheerios that aired during the 2013 Super Bowl was one of the first that made a point of highlighting a multi-race married couple and a biracial child named "Gracie".

Link: https://www.youtube.com/watch?v=9J_M2qa4xh0

This is the real life family of "Gracie" who was played by Grace Colbert in the ad.

(child on the right in the photo).

 

Source: https://www.newson6.com/story/5e363cc12f69d76f620597b9/adorable-star-of-cheerios-commercial-hails-from-oklahoma

It seems the advertisers want to cover all the bases in one ad.

Has there been a better acting gig the last few years than to be a cute biracial child?

In fact, it seem it has become rare to ever see a white married man and woman with 2.2  children in a any tv ad.

The fact is that there are some successful mixed race marriages involving a Black man and white woman and three happy children in the family.

However, it is extremely rare if you look at the data.

First of all, mixed race marriages have increased in the United States but they are still rare.

This is portrayed as common place in advertising.

What are the actual numbers?

Only 7% of the 63 million married couples in the United States are mixed race.

63% of married couples in the United States are both white.

6% of married couples are both Black.

12% of married couples are both Hispanic.

Biracial children living in family unit with a married man and woman is even rarer.

Most are aware of the extraordinary number of out of wedlock births among African Americans.

 

70% of all births of Black children are born out of wedlock according to the most recent CDC data.

The comparable number for Whites is 27%.

For Asians it is 12%.

In 1940, the out of wedlock birth rate for Blacks was 15%.

However, what I recently found interesting is that the out of wedlock birth percentage when a Black father and White mother are involved is an astounding 97%!

The out of wedlock percent for a Black father and Hispanic mother is 95%. 

With a Black father and Asian mother it is 85%.

The overall out of wedlock percentage of a biracial child with a Black father is 92%.

This data is contained in a study that was published in 2015 involving birth trends, family structure, economic stability, paternal relationships and emotional stability of biracial children with African American fathers.

Those numbers make the 70% percent out of wedlock percent for Black children look good.

Source: https://www.scribd.com/document/393060433/92-Absent-Black-Fathers-with-Biracial-Children

This is an excerpt from an article that summarized the findings of the study.

Source: https://x.com/Rothmus/status/1946606747856015487

The study did find that in 20% of the situations involving the out of wedlock births of a Black father and White mother, a marriage eventually did occur.

That is a much better number than occurred with the out of wedlock births to Asian and Hispanic mothers with a Black father.

In fact, in only 1% of the cases involving an out of wedlock birth of a child to a Black father and Hispanic mother does the couple end up getting married!

Source: https://www.scribd.com/document/393060433/92-Absent-Black-Fathers-with-Biracial-Children

Consider all of the above when you see the next advertisement that showcases a happy and prosperous biracial family enjoying the product that the advertiser has spent millions of dollars in producing and placing the commercial.

Those families do exist somewhere.

However, the data would suggest that the happily married couple with biracial kids might be akin to finding a black swan.

The advertising might want us to believe that these children are living an idyllic life with a loving mother and father. However, the data in the study suggests most are living with a single mother on welfare and a father who is not present and not supporting the mother and child financially

.

H.G. Wells went so far as to refer to advertising this way which could possibly be said about these families with biracial children in tv commercials.

I would not go that far in that I was in charge of corporate marketing and advertising for a Fortune 500 company at one time in my career. 

However, it should be kept in mind advertising is about creating an aspirational view of what the world should look like rather than the reality of what it really is.

The flood of biracial commercials we have seen over the last decade when compared to the actual data does make it clear that there is more theater than reality and more art than science behind these ads.

Transformative Trump

How did Trump win in 2024?

That is a question that a lot of Democrats ask.

Pew Research recently released the most complete analysis I have seen of the voting shifts in major demographic groups between 2020 and 2024 to propel Trump to a second term as President.

Quite simply, Trump defeated Kamala Harris in 2024 by gaining votes among groups who have traditionally supported the Democrat party.

Trump did the same when he beat Hillary Clinton in 2016 primarily by scoring huge advantages with working class white voters who had historically been the base of the Democrat party.

Trump won in 2024 by building on that base and gaining further support with minority and young voters who have also been reliable Democrat voters in the past.

Trump gained the most with minority voters in 2024.

Hispanic voters shifted to Trump by over 17 points between 2020 and 2024.

Asian voters shifted by 16.5 points.

Black voters moved to Trump by 14 points compared to 2020. 

The shift was generally greater with Men than Women but the trend was true for both genders.

Black men had the largest shift to Trump of any key group of voters---almost 22 points.

However, Black women also moved to Trump with a shift of almost 9 points.

Hispanic men shifted to Trump by 19 points. Hispanic women were not far behind at 17.3 points.

(Click on image to enlarge)
Source: https://www.liberalpatriot.com/p/a-final-comprehensive-look-at-how

A lot is made of Trump's base being heavily comprised of white, non-college voters.

This has been a major source of support for Trump since he entered politics.

That group remained firmly in Trump's corner between 2020 and 2024 but he did not grow much more support in this group than he had already.

Trump picked up less than 2 points with this group in 2024 compared to 2020.

On the other hand, Trump made major inroads with younger voters.

18-29 age voters shifted nearly 14 points to Trump.

Age 30-44 voters moved 12 points to Trump.

College graduates also moved 6 points towards Trump in 2024.

The only major key groups that shifted away from Trump between 2020 and 2024 were White Women (0.7 shift to Harris) and Women Age 65+ who moved to the Democrat by 6 points.

Men Age 65+ largely cancelled out the senior women by moving to Trump by 5 points.

Another interesting finding in the Pew Research is that Trump would have even won the 2024 election if the turnout was even larger than it was.

This contradicts the argument that we often hear is the Republicans need to suppress the vote to win.

Source: https://www.politico.com/news/2025/06/26/2024-election-turnout-trum-00426544

Donald Trump is working to achieve a lot of transformational policies in his second term.

However, the transformation that Trump has caused between the political parties in the United States is remarkable in itself.

One of the most interesting trends in American politics over the last 30 years has been the shift we have seen in party identification between college and non-college educated voters.

College educated voters tended to be Republicans a generation ago.

Non-college educated voters were likely to vote Democrat.

These previous norms have completely flipped in the Trump era.

In fact, the more education someone has the more likely they are to vote Democrat.

Since Trump arrived on the scene, the working class have largely abandoned the Democrat party concluding a trend that started with Ronald Reagan.

In 2024, Trump and the Republicans have made further inroads with minority and younger voters leaving the Democrats in a vulnerable position looking forward.

There were a lot of Republican officeholders who did not believe in Trump in his first term. He struggled to get majorities in Congress to support his agenda.

That is no longer the case. It is amazing to see how Trump's legislative agenda has moved through Congress with the small majorities the Republicans have.

Trump has become the Republican party.

Donald Trump has been a truly transformative political figure largely through his force of personality.

It remains to be seen whether the shift in voter support he has been able to attain will be sustainable for the Republican party at large after he has left the political scene.

One also has to be aware of the vagaries of the political environment and the ease in which the attitudes of voters can change in a short period of time.

Trump is seeing this right now in his polling numbers as the Jeffrey Epstein files have taken over the headlines and stores about ICE rounding up illegal immigrants are sensationalized by the media.

We saw it earlier with the hysteria when Trump first announced his tariff strategy.

This is graph from Rasmussen where you can see voter reactions to these stories in Trump's  approval numbers.

If you look deeper at the polling data, Trump's approval with Republicans is as strong as it has ever been.

These voters are pleased to see Trump carrying out his agenda on immigration, the passage of the Big Beautiful Bill and all the rest.

In fact, CNN just released a poll yesterday that confirms a Quinnipiac poll from earlier this week that shows that Trump's approval with Republicans has actually increased despite the Epstein File saga.

LInk: https://x.com/ThePatriotOasis/status/1945840125277065303

However, the same is not true with Independents who are more susceptible to current media narratives.

Rasmussen and Quantus Insights are both showing Trump's is underwater by a net -17 points with Independents right now.

Six weeks ago Trump was -11 points.

Source: https://x.com/QuantusInsights/status/1945953186730098953

Keep in mind that Trump's overall approval is largely going to be driven by the views of Independent voters at this time.

He cannot do much better with GOP voters than he is doing right now.

He cannot do much worse with Democrat voters.

This snapshot from a YouGov poll this week graphically shows that.

It is still to be determined whether Trump will permanently transform the political parties in the United States for the longer term.

However, there is no denying how transformative Trump has been since he first came down that escalator at Trump Tower 10 years ago.

There has not been anything like it in my lifetime.

Georgia On My Mind

Major League Baseball's All-Star game was held in Atlanta last night.

Atlanta had originally been awarded the 2021 game but MLB moved the game out of Georgia in a decision made in April, 2021 due to Georgia passing a voting integrity law. 

The new law put tighter restrictions on voter id, mail-in voting, absentee voting and prohibited the distribution of food and water to those standing in line to vote. At the same time the new law liberalized the rules for in-person early voting that is less susceptible to voter fraud.

Critics argued that this new law would suppress voter turnout.

Joe Biden called the Georgia law an "atrocity" and "Jim Crow in the 21st Century".

Source: https://www.usatoday.com/story/sports/mlb/2021/04/02/mlb-all-star-game-atlanta-moved-georgia-voting-law/7066061002/

 

MLB Commissioner Rob Manfred explained the decision this way in 2021.

“I have decided that the best way to demonstrate our values as a sport is by relocating this year’s All-Star Game and MLB Draft,” commissioner Rob Manfred said then. “Major League Baseball fundamentally supports voting rights for all Americans and opposes restrictions to the ballot box.”

Four years later the All-Star game was played in Atlanta last night.

The voting integrity law in Georgia that MLB was protesting in 2021 is still in effect.

What about those "values" that MLB was demonstrating in 2021 by moving the All-Star game?

What about the voting restrictions that were supposed to result in fewer people voting?

Georgia saw record voter turnout in 2024 when we were told that the new law would suppress turnout.

A big reason is that the new law significantly expanded early voting opportunities across the state.

Source: https://www.ajc.com/politics/georgia-voters-set-a-new-turnout-record-at-almost-53-million-in-2024-election/ZRE5Y6ZLBNCUBL54MZOMWGDIF4/

In 2020, before the new law, 4,999,960 votes were cast in the Presidential election.

In 2024, after the so-called voting restrictions were in place, 5,250,905 votes were cast for President.

After the "restrictive" voting integrity law was in place, voting turnout increased statewide by over 5% between 2020 and 2024.

Voting turnout also increased in the state's largest county, Fulton County, in which 62% of the population is comprised of minorities (42% Black, 8% Hispanic, 8% Asian, 4% other minority groups).

Where was the voter suppression?

The same is true looking at voter turnout in Georgia in the 2018 gubernatorial race (pre-voting integrity law) and 2022 race (post-law).

Voter turnout was also higher in 2022 than 2018.

Voter turnout in 2018 was 3,939,409. Voter turnout in 2022 was 3,964,926.

Major League Baseball never gave a good reason why their values would not allow them to play the All-Star game in Atlanta in 2021 but there was no problem in doing so in 2024 even with the same law in place.

However, when you play the cancel culture game and argue that a voting integrity law is going to suppress voter turnout, you look pretty ridiculous when it does not prove to be true.

Here's hoping that this should be another lesson for those in the sports world that they should quit trying to play politics and just play the game we are paying to see on the field.

A Budget Surplus?

BUDGET. SURPLUS.

Two words that you almost never see together when it comes to the federal government.

It has been 24 years since the federal government had an annual budget surplus.

Over the last 10 years the federal government has averaged a budget deficit of $120 billion per month.

Source: https://fred.stlouisfed.org/series/MTSDS133FMS

Most of the time the only monthly surplus we have seen will be in April when final payments for the previous tax year and first quarter estimated taxes for the current year are due.

The other common months where we might see a surplus are June, September and January which are the other months that estimated taxes are due.

However, we have not seen a monthly surplus for the month of June in 10 years.

Until June, 2025.

 

Source: https://www.cnbc.com/video/2025/07/11/u-s-government-reports-budget-surplus-of-27-billion-vs-20-point-5-billion-deficit-estimated.html

The budget surplus came as a huge surprise to economists and government observers.

To put the number in context, consider the federal government deficits for the previous four years.

June, 2025.    $26 billion surplus

June, 2024.    $71 billion deficit

June, 2023.    $228 billion deficit

June, 2022.    $89 billion deficit

June, 2021.    $174 billion deficit

There was almost a $100 billion improvement in the federal government's fiscal situation between last June and this June.

How did that happen?

The media has highlighted a surge in revenue from tariffs in most stories involving the monthly surplus.

Source: https://www.cnbc.com/2025/07/11/treasury-posts-unexpected-surplus-in-june-as-tariff-receipts-surge.html

The revenue coming in from tariffs is confounding the predictions of many economists.

The tariffs thus far have also not caused the inflation that the same economists predicted would occur.

The actual Truflation inflation index is about half of what it was at the beginning of the year.

However, tariffs are only part of the reason for the monthly surplus.

If we compare the financial data that is in the U.S. Treasury Department's Monthly Treasury Statement we see that receipts for the month improved by $60 billion compared to June, 2024 and outlays declined by $37 billion.

Only $21 billion of the $60 billion of increased receipts is due to customs duties. The remainder is largely due to increased individual income tax receipts.

The reduction in total outlays was also significant. We don't often see year over year decreases in federal spending under any circumstances.

$32 billion of the $37 billion in reduced outlays compared to the previous year appears to be due to timing shifts since June 1 fell on a weekend. The remaining difference appears to be primarily due to lower outlays in the Department of Education regarding student loan debt. The Biden administration apparently had recorded a cost of $74 billion in June, 2024 for estimated student loan costs (presumably for student loan forgiveness) that was not done in 2025 by the Trump administration.

You can compare June, 2024 to June, 2025 based on data in the U.S. Treasury Department's Monthly Treasury Statement.

Note that this graphic was taken from the June, 2024 Monthly Treasury Statement which reflects a $66 billion deficit. The June, 2024 deficit was later revised to $71 billion deficit as shown in the June, 2025 statement.

A federal government surplus for a single month is hardly anything to get overly excited about.

Even considering last month's surplus the federal deficit was $1.9 trillion over the last 12 months.

Source: https://www.crfb.org/blogs/12-month-rolling-deficit-19-trillion-june-2025

However, if you look at this chart closely, you can see that the deficit has been trending down since Trump took office.

It is a start.

Tariffs are helping but much more has to be done on the spending side if the federal deficit is to be brought under control.

What will help the most in reducing the deficit is if we can get economic growth such that tax receipts growth is consistently outpacing the growth in outlays.

This would then allow the annual federal deficit as a % of GDP to get to a more manageable 3% of GDP compared to the 6% range it has been at recently.

Source: https://fred.stlouisfed.org/series/FYFSGDA188S

However, to do this it will require that tax receipts out pace outlays by about three percentage points per year for the next five years.

It is unlikely that economic growth alone can accomplish this goal so there has to be some sort of serious spending restraints to avoid fiscal disaster.

Of course, that is easier said than done when we look at what is going on in Washington, D.C.

A good example is the shock and angst we saw reported in the media late last week over layoffs that took place after 1,300 State Department employees were dismissed in a reorganization of the department.

Source: https://www.nbcnews.com/politics/trump-administration/veteran-us-diplomats-baffled-mass-layoffs-state-department-rcna218433

Source: https://thehill.com/homenews/administration/5396900-trump-rubio-state-department-layoffs/

Link: https://x.com/ralakbar/status/1943787864501653651

Such reorganizations and layoffs often happen in the private sector due to a changing competitive and technological environment.

Just last week Microsoft announced that it was laying off 15,000 employee due to AI with only a fraction of the media coverage the government layoffs received.

There were no tv cameras at Microsoft headquarters filming the "moving scene" as those employees left work for the last time.

Source: https://www.timesnownews.com/business-economy/industry/microsoft-cuts-15000-jobs-amid-ai-pivot-tells-employees-invest-in-your-own-ai-skilling-excerpt-article-152265387

 

Layoffs and terminations almost never happen in government. However, when was it decided that a government job was a lifetime paycheck?

For example, the State Department had 57,000 employees in 2007 and it reported 80,214 on its payroll recently.

Has that much changed in the world the last 20 years that requires 23,000 more State Department employees to do the business of diplomacy?

The 1,300 dismissals is but 1.6% of the total number of employees at the State Department.

If this number can't be cut what can?

For one month we can sit back and soak in the beauty of these two words---Budget Surplus.

However, enjoy it while you can.

You can rest assured that there are many, many more months (and years) ahead where Budget Deficits will rule the day until there is a fundamental shift in the way Washington, D.C. operates.