Trump’s 2017 tax cuts expire soon − study shows they made income inequality worse and especially hurt Black Americans

             The Tax Cuts and Jobs Act, signed by Donald Trump in 2017, is set to expire on December 31, 2024. While it was the most extensive tax overhaul since Reagan's administration, it primarily favored corporations, wealthy individuals, and tax partnerships, with over 80% of the cuts directed to these groups. Despite promises of middle-class relief, the advantages were modest, and the law added $1.9 trillion to the national deficit. Its helpful impact on Black, middle-income, and low-income taxpayers was particularly limited, exacerbating existing economic inequalities. As Republicans negotiate new tax policies in 2025, lessons from the 2017 reforms remain critical. Trump's tax cuts deepened racial income and wealth disparities, as the corporate tax savings primarily benefited wealthy shareholders rather than the broader population. In the U.S., most shareholders are corporations, pension funds, and wealthy individuals, which are predominantly composed of white Americans. Trump's tax cuts required the IRS to calculate inflation adjustments using the Chained CPI. Many consumers had to switch to cheaper alternatives as prices rose. For instance, it assumed shoppers would buy pork instead of beef as they tried to minimize the perceived impact of inflation. In addition, this approach resulted in smaller inflation adjustments, disproportionately affecting low-income communities with limited access to budget-friendly alternatives. Since Black Americans are more likely than low-income white Americans to live in underserved neighborhoods, they have been more severely impacted by rising prices. Finally, with the Trump tax cuts set to expire, Congress can reassess their impact and address the inequalities they worsened. By crafting policies that promote fairness, lawmakers should work toward a tax system that supports all Americans more effectively. 

Link To Article:

https://theconversation.com/trumps-2017-tax-cuts-expire-soon-study-shows-they-made-income-inequality-worse-and-especially-hurt-black-americans-233758

Norway plans to virtually erase gasoline and diesel cars from its streets

By the end of 2025, Norwegian officials believe that 95 to 100% of cars on their roads will be electric vehicles. Data published by the Norwegian Public Roads Administration found that EVs accounted for more than 96% of new cars sold in the first few weeks of this year, an astonishing number. Norway has long been recognized as an advocate of sustainable transportation and a leader in clean energy with almost all of its electricity coming from renewable resources and its new car sales solidify its citizens involvement in helping the country uphold these goals. Norway's success with transitioning to EVs comes even without a federal mandate that its citizens must switch to them, but rather long term and consistent policies that have supported the uptake in EVs. Some policies applied to their EV owners include discounts on road parking taxes. Norway is a definitive leader is clean energy and is an excellent model for many other countries to follow. 

These astounding numbers from Norway also come in light of newly elected President Trumps recent withdrawal from the Paris Agreement. Trumps decision to withdraw has been heavily criticized by many advocates of clean and renewable energy. Will Norway's push to use clean and renewable energy be enough to help our planet or will it at least promote the use of clean energy in other countries? Although Norway has posted very impressive numbers, I believe it will take more than a few countries to promote clean energy usage to actually have a significant impact on the planet as a whole in the long run.

Link: https://www.cnbc.com/2025/01/28/norway-set-to-be-the-first-to-fully-transition-to-electric-vehicles.html

Study reveals flaws in Ohio's retail electricity marketplace

 A very timely report by a group of OSU researchers on the state of the retail electricity market in Ohio. This ties very closely to our discussion of perfect markets and what the necessary conditions are for markets to be efficient. This is a clear case where deregulation of the market was supposed to create fierce competition and a more efficient allocation of electricity. It turns out that consumers lack the necessary information to make decisions and what we end up with is called a market failure....we will cover this later in the week. 

You can listen to the report instead of reading the article...just under 5 minutes.

Arabica Coffee Prices Hit New High on U.S., Colombia Tariff Spat

 Link: https://www.wsj.com/economy/trade/arabica-coffee-prices-hit-new-high-on-u-s-colombia-tariff-spat-582446fe?mod=economy_lead_story

President Trump’s imposition of tariffs, or the threat of tariffs, has already proven to be a powerful bargaining tool when it comes to trade. President Trump had threatened to impose tariffs on Colombia up to 25% in retaliation for the Colombian government refusing two planes with migrants to land. The article doesn’t elaborate on the plane fiasco, but does say that the two countries came to a resolution as the tariffs would be “held in reserve” unless Colombia breaks their end of the deal. The consequence of the tariffs led to a 40% increase in price for the coffee (the US imports about 30% of its coffee from Colombia). 

The tariffs help shed some light on potential issues that could be looming over commodity markets in Canada, Mexico and China. Potential tariffs on imports from these countries is likely to lead to increased volatility around trade in the coming weeks. With Mexico and Canada being the US’s biggest trading partners this could lead to major disruptions in markets that are already experiencing heightened prices.

The main reason why this article caught my attention is because I am still very curious about how tariffs will affect the US and the rest of the world in the coming years. It has already proven to have great effects but there are differing opinions on whether or not the effects are positive or negative and just how far will it be used simply as a threat?

Connecting the World's Grids for Cheaper and Greener Energy

Less than 3% of all power crosses a border, leading to high prices and inefficiencies worldwide. Energy prices in Norway have been spiking as of late as the normally windy North Sea has turned calm, resulting in their reliance on wind power to come back to haunt them. Politicians are proposing the idea of connecting international cables to curb problems like this.

The idea is that when there is a windy day in Norway and they have an excess amount of power, they can send it to another country where whatever renewable source they use is not in excess. In simplified terms, power can flow from where it is cheap to where it is costlier. This would allow for cheaper energy on both sides of the cable and help in cutting greenhouse gas emissions. 

Norway does have state-owned power plants unlike the United States whose energy giants would never allow an efficient service like this. An additional worry is the potential for sabotaging the lines due to political differences like the Taiwanese subsea communication link that may have been this month.  

https://www.economist.com/leaders/2025/01/23/to-make-electricity-cheaper-and-greener-connect-the-worlds-grids

New Orleans Super Bowl Implications

 The Super Bowl is one of the most watched sporting events in the world, and this year, it's being held in the Big Easy. New Orleans, already a bustling tourist destination, will host the biggest sporting event in the United States. Last year, the Super Bowl generated $480M in economic impact. The estimations for this year are nearing $600M. The Super Bowl falls right in the middle of "Mardi Gras season", New Orleans's busiest time of year. Restaurants, bars, gift shops, and everything in between will see a massive revenue boost with the increased number of people. More shifts will be worked, more foot traffic and many more drunkards will be recklessly spending their money - all boosting the economy! New Orleans also recently hosted the Sugar Bowl - with Notre Dame and Georgia facing off in a battle on January 2nd.

I had the chance to speak with some business owners in New Orleans, and they mentioned this time of year is huge for them usually from Mardi Gras, but with the Super Bowl added on top, they are expecting to do very well over the coming weeks.

The Super Bowl will be a fantastic mood lifter for New Orleans after the tragic terrorist attack on New Year's Day in the French Quarter. 

Source: How New Orleans is transforming Super Bowl 2025

After the wildfires: What a long rebuilding process will look like for Los Angeles homeowners

 The rebuilding process in Los Angeles following the wildfires will likely focus on integrating fire-resistant building techniques, implementing stricter zoning laws to limit construction in high-risk areas, and providing financial aid to homeowners through state relief packages. With around 12,000 buildings destroyed and damaged, which is estimated to be around 40 billion dollars' worth of damage. "“Rebuilding the homes themselves actually is the easy part,” said Tom Grable, division president, Orange County-Los Angeles, for Nevada-based Tri Pointe Homes. “The much harder part is what it’s going to take to bring those lots back to buildable form,”. In order to get to accelerate the cleanup and rebuilding processes, Mayor Karen Bass has issued executive orders like, California Environmental Quality Act and the California Coastal Act. Homeowner are using the California FAIR Plan "“the FAIR Plan had just $377 million available to pay claims and has $5.75 billion in reinsurance available,”. Overall, the process of getting new houses up will take a long time but eventually they will get the land back with houses and buildings back up as soon at the land is cured. 

Article - How Los Angeles will rebuild homes after the wildfires

How Disagreements Between The US and Columbia Over Immigration Policy Can Impact US Consumers

 President Trump has said that the US will impose retaliatory measures against Columbia in response to their blocking of two migrant deportation flights being carried out by the US military. The measures include a 25% tariff on all Columbian goods entering the US, which would increase to 50% after one week, a travel ban and visa revocations against Columbian officials, as well as emergency treasury, banking and financial sanctions.

These actions would be taken against the US’ third largest trading partner in Latin America. The US and Columbia share a 2006 trade agreement, in 2023, there was $33.8 billion worth of two-way trade between the two countries, including a $1.6 billion US trade surplus. The biggest imports from Columbia to the US include crude oil, gold, coffee, and cut roses.

Columbia’s resistance to US migrant deportations are an example of growing discontent amongst the rest of Latin America to US immigration policy. Along with condemnation and resistance from Columbia’s President, Brazil’s foreign ministry spoke out against the policy, calling it “degrading treatment”. Additionally, Mexico refused a request allowing a US military aircraft carrying migrants to land, though President Trump has not taken action against them, the US’ largest trading partner.

It will be interesting to watch how the US will respond to Latin American resistance to its immigration policies, especially against countries that conduct significant trade with the US. Tariffs on products such as coffee and crude oil could have inflationary effects, resulting in US consumers seeing higher prices at both the grocery store and gas pump.

Source: https://www.cnbc.com/2025/01/26/colombia-turns-away-military-deportation-flights-from-us-officials-say.html

 

Zanzibar to generate 200 megawatts of wind power

 In a major move toward renewable energy, Zanzibar has announced plans to generate 200 megawatts of wind power, marking a significant milestone in its efforts to adopt sustainable energy solutions. According to The Citizen, the project will involve the construction of wind farms in key locations, providing clean and reliable energy for both residential and industrial use.

This initiative is critical in reducing Zanzibar’s reliance on fossil fuels, which currently dominate the energy sector. The shift to wind power will help combat climate change and improve energy security and stability across the region. With global energy prices fluctuating, tapping into renewable resources offers a more cost-effective and environmentally friendly alternative.

Once operational, the wind farms are expected to have far-reaching benefits. For households, this means more affordable electricity and fewer power outages. For businesses, reliable energy can increase productivity and reduce operational costs. The project is also anticipated to create hundreds of jobs during the construction and maintenance phases, offering opportunities for local communities to benefit economically.

Experts believe this project could position Zanzibar as a renewable energy leader in East Africa. By prioritizing clean energy, the region has the potential to attract foreign investment, boost its economy, and inspire neighboring countries to follow suit. However, successful implementation will require careful planning, efficient execution, and long-term maintenance to ensure the project achieves its goals.

Zanzibar’s ambitious wind power initiative is a beacon of hope for sustainable development in the region. As the world continues to embrace renewable energy, projects like this highlight the importance of transitioning to cleaner, greener alternatives. With the right policies and partnerships in place, Zanzibar is poised to set a powerful example for other nations in the fight against climate change.

https://www.thecitizen.co.tz/tanzania/zanzibar/zanzibar-to-generate-200-megawatts-of-wind-power-4900352

Trump issuing ‘emergency 25% tariffs’ against Colombia after country turned back deportation flights

After the president of Columbia blocked a US military plane from landing, Trump threatened retaliatory tariffs on them. He said they would start at 25% and then be raised to 50% in the country. He also noted that there may be a travel ban to the country. I wonder if he would actually do this to a specific country and what the implications would be for the economies of both countries.

Trump's Second Term Tarrifs

     A large part of President Trump's campaign platform was his emphasis on reshoring American manufacturing, including the promise of a 10 to 20% charge on imported goods. However, as he entered office, aggressive as many of his first actions were, he took a surprisingly slow approach to tariffs. Instead of the broad and universal tariffs of the caimpaigns, he has been using them as "negotiation tools" or threats, aiming to get other countries in line with his own foreign policy and trade goals. He has threatened Russia in order to secure a ceasefire with Ukraine, and planned tarrifs for Canada and Mexico, whihc can be used as leverage to ensure Trump's border goals.  There are signs, such as feaseability assessments, which point to the Trump administration exercising previosuly unseen caution in pursing their economic agenda (at least in this area). This caution may be due to internal skepticism of the viability and harm of tarrifs by senior officials, as well as corporate executives in Trump's circle. 

According to Trump's nominee for Secreatry of the Treasury, Scott Bessent, one of the other goals of tarrifs- besides acting as an effective threat- is still to bring manufacturing back to America. The simple and repeated economic arguement is that making foreign goods more expensive would encourage state side production, and bring back American jobs. Trump in the past had critized other efforts to bring American manufacturing to the forefront again, such as the CHIPS act of the Biden administration, believing that tarriffs were cheaper and more effective. However it seems that in office, Trump will likely keep funding rolling for the act, which has broad bipartisan support. 

    There is hope that these actions point to Trump pursuing a less aggressive tarriff policy and perhaps continuing to use tarrifs mostly as threats. The article in the Times predicts that if enacted tarrifs start to encurr the negative effects economics predict, such as higher prices and inflation, this means he will likely pull back. If this is the case however, the administration will have to find other ways to fund its massive tax cuts, and may mean proposing cuts to massively popular programs like Medicaid. 

NYT "Why Tarrifs Are Different"  

TSMC is confident its CHIPS Act funding will continue under Trump, says CFO Wendell Huang

Trump Discusses the Future of FEMA

    FEMA, otherwise known as the Federal Emergency Management Agency, has been responsible for supporting state and local officials in instances of disaster relief, however, under the Trump administration that may change. Recently reelected President Donald Trump suggested that the services provided by FEMA should be shuttered and the states should be responsible for their disaster relief policies and programs. Trump believes that the states would outperform FEMA, FEMA should be terminated and direct funding for disaster relief should directly be provided for the states.

    Luckily congressional action would have to be taken for FEMA to be dismantled. Historically FEMA has been a very reliable backstop for disaster relief since 1979 and is supported by Democrats and Republicans alike so the future of FEMA may still be up for debate. However, many FEMA managers have been advocating for FEMA reforms since the agency's resources have been so extended. Many arguing the issue of FEMA strain is a result of the state's lack of disaster relief programs and policies, while others debate that FEMA is applying its already strained resources on projects that should be covered by other agencies, projects such as managing the federal government’s response to the pandemic under the Trump administration or helping shelter unaccompanied minors at the southern border. As a result of growing tensions regarding FEMA and its overloaded workers, we are likely to see reforms to this agency or its destruction. 

 

Trump routinely calls economic data ‘fake.’ Here’s why that’s dangerous

Federal economic data is at greater risk as federal statistical agencies face mounting challenges under a potentially more austere environment, driven in part by President Trump’s criticism of government data and the newly formed Department of Government Efficiency’s efforts to streamline operations. Experts like former BLS commissioners Erica Groshen and William Beach warn that reduced funding, declining response rates to surveys, and heightened political scrutiny threaten the accuracy and consistency of federal statistics. This data—often called a form of national infrastructure—guides policymaking, business decisions, and public advocacy; without it, both government and private entities risk making uninformed choices. Meanwhile, broader cuts to discretionary spending could further endanger essential data-collection programs, with potential fallout including the erasure of information on already marginalized groups, such as LGBTQ+ communities. Advocates emphasize that robust, reliable federal data is crucial for identifying economic inequities and crafting solutions; to this end, some organizations are archiving government websites and pushing for legislation to preserve statistical agencies. Suggestions include consolidating these agencies under an independent office led by a chief statistician, modernizing survey methodologies, and exploring partnerships with universities to keep critical data flowing.

Link: 

https://tinyurl.com/v3cp9wbz

AI in 2025

     One of the most successful investment banks, Goldman Sachs, is thinking ahead to the future at where they want to be at with Artificial Intelligence. Their Chief Information Officer has declared that in 2025 he is will implement Large Language Models(LLMs). This type of Intelligence is a model that uses deep learning to process natural language and used to generate, translate, and answer questions. This gives AI the abilities of a human worker. So what does that mean for actual human workers? 

    There is talk of hybrid workforce. AI will be treated more like employees and will work in a team with human workers. This brings a whole different side to a business. You will need people educated in AI in order to manage human and AI collaborations. Another aspect is Human Resources. Will there be HR for AI? If a Intelligence system is underperforming they might get removed or replaced with better AI and you need someone educated in AI to test this. 

77% of companies are either using AI or exploring AI. How will this look on the economy?  In the book the Work of the Future, the authors main point they argue is the AI will reduce middle skilled jobs. This is going to leave a lot of workers left behind. But they specify that we need to be ready for that and have better job direction for these kind of workers. 

    There is no question AI will take some jobs in the Labor Force. It will shift the demand for jobs and may potentially increase inequality. But it will give arise to a whole new swarm of AI related jobs and take over routine repetitive jobs. It will make industries more efficient and hopefully create new industries that may spur economic growth.

https://mitpress.mit.edu/9780262547307/the-work-of-the-future/

https://www.goldmansachs.com/insights/articles/what-to-expect-from-ai-in-2025-hybrid-workers-robotics-expert-models

U.S. Home Sales Hit Their Lowest Level in Nearly 30 Years

   In 2024, U.S. home sales fell to their lowest level since 1995, with only 4.06 million existing homes, including single-family houses, condos, and townhouses sold, according to the National Association of Realtors (NAR). Experts attribute this slowdown to persistently high mortgage rates and a limited housing inventory, both of which have contributed to record-high home prices. The median home price reached $407,500 in 2024, further straining affordability, especially for millennials who are entering their prime home-buying years.

    Despite the Federal Reserve cutting interest rates three times last year and planning two additional cuts in 2025, mortgage rates have remained stubbornly high, averaging around 7% for a 30-year loan. Many homeowners who secured much lower rates of 2-3% before 2022 are reluctant to sell, further limiting the supply of available homes. Experts suggest this lack of movement in the market has created a situation where supply is unable to meet demand, describing it as a "market failure."

    By the end of 2024, total housing inventory rose to 1.15 million units, a 16% increase from the previous year. However, the market still falls short by approximately 3 million units needed to achieve a balanced, healthy market. Analysts warn that sluggish home sales will likely persist in the coming year with interest rates expected to stay elevated and builders hesitant to invest in new developments due to affordability concerns. Builders remain cautious, as high costs and low affordability deter potential buyers from entering the market despite strong demand.

    Experts anticipate that the housing market will continue facing challenges unless there is significant intervention, such as more aggressive interest rate cuts or policy changes to incentivize new construction and improve affordability.

Source: https://www.washingtonpost.com/business/2025/01/24/housing-market-2024/

 The Rise of AI: How Companies Are Adapting to the New Wave of Technology

Artificial Intelligence (AI) is no longer a futuristic concept—it's here, and it’s transforming how businesses operate. From automating tasks to improving decision-making, AI is shaping the modern workplace. But for many companies, integrating AI into their operations comes with tough decisions and challenges.

The Big Question: Upskill or Outsource?

With AI capabilities expanding rapidly, companies are asking themselves: should they train their current employees or hire external experts? According to Hakan Kardes from Alignment Health, hiring external consultants can accelerate AI projects by bringing in specialized expertise. However, relying too much on outside help could create long-term dependency.

Why AI Is Exciting (and Challenging)

The integration of AI doesn’t just bring technical results—it energizes teams. Engineers at Bitsight found themselves inspired by the chance to work on cutting-edge projects. But as exciting as AI can be, companies must approach it cautiously. Governance and risk management are critical, ensuring data is secure and AI tools don’t produce misleading or incorrect information.

The Hybrid Approach: A Practical Solution

For businesses that lack internal expertise, a hybrid model can be the answer. This means combining external consultants' expertise with internal staff's efforts to build a strong foundation for AI initiatives.

My Take on the Rise of AI in the Workplace

Artificial Intelligence is undoubtedly reshaping the way businesses operate, but it’s not without its complexities. I believe the real challenge lies in finding a balance between innovation and practicality. Companies must carefully decide whether to invest in their current workforce or bring in external experts, and the answer might not be the same for everyone.

While hiring external consultants can accelerate the adoption of AI, I think upskilling internal teams is a more sustainable option in the long run. It not only builds a strong foundation of in-house expertise but also fosters creativity and motivation among employees. 

That said, I also understand that not every company has the luxury of time or resources to develop internal expertise from scratch. For them, a hybrid approach—combining the speed of external consultants with the stability of an internal team—might be the best solution.

Source: https://www.cnbc.com/2024/09/12/ai-forcing-companies-to-make-difficult-costly-hiring-decisions.html

Store Closures Hit New High , Who’s Affected?

 

The number of stores closing in 2025 shows that the retail market is evolving. According to Coresight Research, about 15,000 stores are expected to close this year. That is more than double the number of closures in 2024 at 7,325. Surprisingly, that’s the highest number since the covid pandemic when nearly 10,000 stores ceased operations. The top five retailers that have announced the most closures this year are Party City, Big Lots, Walgreens Boots Alliance,7-Eleven, and Macy’s respectively. What’s remarkable is these lapses aren’t happening because people are spending less money. In fact, consumer spending went up last year by 4% with holiday sales hitting almost $1 trillion. The issue is retail giants like Walmart, Amazon, and Costco are drastically growing their market share by offering unbeatable convenience and lower prices. This has left smaller chains and specialty stores unable to compete. As John Mercer from Coresight pointed out, it’s clear that competitive dynamics, rather than demand, are driving this trend.

 It’s interesting to see how connected everything is and how the actions of one entity can impact the other. For example, when a large retailer like Macy’s shuts down at a mall, the smaller stores around it can’t survive because there’s a loss of foot traffic. This means smaller retailers will face a decline in sales which translates to them struggling to cover their cost of operations and then eventually being forced to close permanently. Macy’s plans to close 150 stores by 2027, with about 50 projected to shut down yearly since 2024. The abandoned spaces get renovated into gyms, clinics, or even apartments instead of new stores. On the brighter side, it’s encouraging to see that 5800 new stores are projected to open this year. Chains like Aldi, JD Sports, Pandora, and Barnes & Noble are expanding which shows that retailers who adapt to shifting consumer preferences can thrive. This indicates that while the retail industry is shrinking, new models and measures can still be established to ensure survival and growth.

source :  

https://www.cnbc.com/2025/01/23/store-closures-rise-led-by-party-city-big-lots-walgreens.html  

Healthcare Jobs are high in demand

Healthcare jobs are expected to be in high demand and a great option for people who are interested in healthcare for 2025. Healthcare jobs make up for six out of the top twenty five jobs for 2025. This was found through a ranking from indeed. The healthcare field has been expanding a lot, adding 902,000 healthcare and social assistance jobs in 2024 alone. Over the next decade healthcare jobs are actually projected to grow much faster than average. The salaries for these jobs are also pretty high compared to other fields. Radiologists for example earn a median annual salary of $385,000, while physicians make around $225,000 which is higher than the average salaries for most other jobs. Even for registered nurses, they are also high in demand and making a lot of money right now. However, entering the healthcare field typically requires a significant amount of education and training which is something everyone can't and is not willing to do. Politcial changes in the country are also thought tohave a potential effect on the healthcare field. Trump and his fellow republicans are potentially going to cut federal spending on medicaid or allow affordable care act subsidies to expire and this could lower the demand for healthcare. 

Source:https://www.nbcnews.com/business/economy/health-care-jobs-are-demand-2025-one-top-roles-can-pay-385000-rcna187613

Trump's Threat to Putin to Resolve the Russo-Ukrainian War

    President Donald Trump took to the social media outlet Truth Social, a media site ran by Trump Media & Technology Group, to threaten Russia and President Vladimir Putin regarding ending the war between Russia and Ukraine. President Trump stated he would enforce "high levels of Taxes, Tariffs, and Sanctions on anything being sold by Russia to the United States" if a deal is not made to end the fighting and to come to a peaceful resolution soon. Nonetheless, no specific details were discussed in this threat from one president to another, just the general warning. On the campaign trail ahead of the 2024 election, Trump promised to end the Russo-Ukrainian War within 24 hours of taking office if elected—already falling short of his own timeline.

    Trump, who was critical of the support towards Ukraine from the Biden Administration during his time out of office, is now appearing to look to have a change of opinion and looks to end the war soon but from a different approach than the previous administration. During Biden's presidency, numerous different sanctions were placed against Russian companies, imports, and differing institutions. Although the sanctions placed caused Russia's economy to take a significant hit, it did little to slow their war efforts after receiving aid from their allies. Due to the unknown logistics of this threat, it makes much less practical sense to impose more sanctions and tariffs than it would have in previous years. Since the war started trade with Russia has already significantly decreased, so it would be interesting to see what these potential tariffs and sanctions would do to both economies. 

    The Russo-Ukrainian War formally began in February 2014 over Russia's economic interests, but heavily ramped up in February 2022 when Russia invaded Ukraine and have been fighting there since. Hundreds of thousands of civilians and soldiers have passed away since the war began. While a peaceful resolution remains the ultimate goal, the war has already caused irreversible damage to both nations, making the road to recovery complex and questionable.

Link: https://www.cnbc.com/2025/01/22/trump-threatens-russia-with-sanctions-tariffs-if-putin-doesnt-end-ukraine-war.html

The Federal Reserve Leaves the NGFS

The Federal Reserve recently announced its decision to exit the Network of Central Banks and Supervisors for Greening the Financial System (NGFS). This global organization comprises banks and financial institutions focused on integrating climate concerns into their policies. The United States joined the NGFS in 2020; however, with the transition to a new presidential administration, the Fed has chosen to sever its ties with this organization. 

This decision has brought forth a range of reactions. Rep. Andy Barr, a strong supporter of the move, argues that it prioritizes American interests over global climate issues. Some analysts believe that the Fed's focus on climate risks has distracted from its traditional responsibilities, pointing to the Silicon Valley Bank failure in 2023 as an example of insufficient oversight. This withdrawal highlights a broader shift towards prioritizing domestic financial stability over international climate commitments. Jerome Powell, the chair of the Fed, stated that central banks should not become climate policymakers. Conversely, individuals like Ben Cushing express concerns that this move could further isolate the U.S. on the global stage. Many believe the timing aligns with President Trump's agenda to reduce U.S. involvement in international matters and global commitments. Trump has also already announced plans to withdraw from the Paris Climate Accord, which he previously labeled as detrimental to the economy. Officials argue that this isolating approach may weaken the United States’ influence globally. 

While I believe it is essential for our central banks to concentrate on their traditional roles—especially with events like the Silicon Valley Bank failure—I also think we must not completely ignore the global issue of climate change. The Federal Reserve should consider ecological decisions, but they should not dominate our policies. This balanced approach can prevent our economy from suffering due to a narrow focus on domestic issues. As a nation, we sometimes tend to concentrate solely on our internal challenges. However, we may be able to solve many of our problems by adopting effective global frameworks or policies. We may not be the best in every area, but we are not confined to our own knowledge and resources. This is the advantage of being part of global organizations which we are currently jeopardizing.

Article: https://www.theepochtimes.com/business/federal-reserve-withdraws-from-global-climate-group-as-trump-set-to-assume-power-5794554

Who is this new U.S. Treasury pick?

Trump's Immigration Plan on the US

I really do not think Trump's plan will affect the job market as much as we think.  We have 47.8 million immigrants with about 12 million of them in the category that Trump's party wants to deport.  He wants to deport the immigrants who have temporary visas that expire during his term (about 40% of the 12 million)  and "illegal" immigrants. Some in this “illegal” category came into the states lawfully under a plan Biden made but Trump's party says it is unlawful. 

Let’s also mention how slow the deportation process is. There is one deportation officer for every 7,000 cases.  If we take a look during Trump's first term, there were about 1.2 million immigrants deported.  Interestingly, during Obama's first term he deported 2.9 million and his second term he deported 1.9 million.  This leads to the question and makes me wonder how many immigrants is it possible for Trump's party to deport in this next term.  

Finally, I found this paper called “The Cost of Illegal Immigration to Taxpayers.”  I could get more in depth about the paper with things like 59% of illegal immigrant households use welfare programs compared to 39% of US born households.  This could be good for the economy because we can have more money to help US born citizens.  I am no expert and I am sure I am missing something so let me know if I overlooked something.  

https://cis.org/Testimony/Cost-Illegal-Immigration-Taxpayers?gad_source=1&gclid=Cj0KCQiAqL28BhCrARIsACYJvkfaYOXcjjBbYHfBuYiBaphn5zZY4AZ-gZIu4tFyB02waDVH7ZcGT8AaAuhFEALw_wcB  

Sources

https://www.nytimes.com/interactive/2025/01/17/us/immigrants-trump-deportations.html 

https://www.nbcnews.com/news/us-news/quickly-trump-will-able-carry-mass-deportation-plan-depends-factors-rcna188064 

Trump's 25% Tariff Plan: Economic Implications

President Donald Trump announced on Monday that he will impose 25% tariffs on imports from Mexico and Canada starting February 1, 2025. This move, part of his "America First trade policy," represents an escalation from his earlier 10% proposal during the campaign. 

Economists project these tariffs will increase consumer prices. Goldman Sachs estimates a 0.1% price rise for every 1% tariff increase, while the Peterson Institute for International Economics forecasts an annual $1,700 cost for middle-class households. Moody's predicts potential job losses of 675,000 and a 0.4% unemployment rate increase. 

The tariffs will affect various imports, including Canadian crude oil and Mexican cars, car parts, and electronics. While Trump has announced plans for Canada and Mexico, he hasn't confirmed universal tariffs on all imported goods.

These tariffs could impact the United States-Mexico-Canada Agreement (USMCA), potentially disrupting established North American supply chains. As the February implementation date approaches, businesses, policymakers, and consumers are closely watching the potential economic effects of this policy shift.

The Biden administration had largely maintained Trump-era tariffs, highlighting the complex political nature of trade policies.

Article: https://www.forbes.com/sites/alisondurkee/2025/01/21/will-trumps-tariffs-raise-prices-what-to-know-as-he-threatens-goods-from-canada-and-mexico-starting-feb-1/

Home Insurance Difficulties During Natural Disasters

As Southern California has recently dealt with extreme hardships due to the recent wildfires, homeowners insurance has become much more costly and unattainable to residents. For those who live in areas with the largest expected loss, premiums increased nearly 82% more than those in low risk areas. This creates an even larger challenge for the 180,000 residents who have been displaced due to the fires. 

While this topic has been brought to attention due to the raging California wildfires, this has been occurring for quite some time now. Other recent disasters, such as hurricanes in the Southeast and severe storms in the Midwest, have also created significant challenges for Americans. One may wonder, how does this affect the long term wellbeing of those affected? According to CNBC, non-renewal rates in these high risk areas are 80% higher than the national average. Insurers in these areas also typically paid claims up to $5,000 more than low risk regions. 

The Treasury Department released this information to the public on January 17th, with just three days before the change in administration. Officials are hopeful that the administration under President Trump can use this information to spring a plan into action that makes insurance affordable for those affected by natural disasters. 

Link : https://www.cnbc.com/2025/01/16/home-insurance-costs-soar-as-climate-events-surge-treasury-dept-says.html 

Australian's are Struggling to Make Ends Meet Under Their Current Economy

 Australia’s economy was the envy of the world. Now it’s falling behind. 

Australia has recorded an impressive 28 straight years of steady economic growth since 1992 until the 2020 pandemic. Since then citizens of the country are finding it harder to support themselves with the rising inflation. I thought it was interesting to note that Australia has an interesting background in recessions. After the Great Depression, Australia was one of the only major developing economies that experienced a relatively short recession before getting back on their feet in little time, and they did pretty well during the 2008 housing crisis because of their strong banking regulations. Now, they seem to be in a hard position because their economy is growing at its slowest pace since the 90s. 

The first three quarters of 2024 the United States experienced an expansion of 3.1 percent, but Australia’s GDP only grew by 0.8 percent. I also thought it was interesting to note that if it wasn't for the immigration-driven population they would actually be in a recession since their per capita growth has been negative for seven straight quarters. Meaning if you factor out the population growth driven by immigration then Australia’s economy is shrinking on a per individual basis. Australia experienced a 7.8 percent peak in inflation and stagnant wages during the pandemic and they are still seeing lingering effects from this today. For many residents, they are finding it hard to build up savings because of this slow growth causing many to find any sort of housing too expensive. 

One of the main causes of the slowdown have to do with the high interest rate. During the pandemic the RBA (Reserve Bank of Australia) lowered the benchmark rate to almost zero, and then raised them later to 4.35 percent to try and tame inflation, but many claim it was actually the cause of it. With a federal election next year, both major parties are looking at reducing the migration as a way to ease the cost of living. While it was stated earlier that if it wasn’t for their immigration Australia would be in a recession, that doesn’t necessarily mean that the migration was beneficial for the economy. This influx of individuals put pressure on housing and strained infrastructure which is why many native Australians do not expect to be homeowners under the current economic conditions unless something is done. 

Trump says He Will Declare National Energy Emergency

In his inaugural address, Trump said he will declare a national energy emergency with the goal of fighting inflation. With this action, he is aiming to increase fossil fuel production and ultimately withdraw the United States from international commitments to combat climate change. In combination, Trump also promised to revoke what he described as the "electric vehicle mandate." Trump is also citing the AI race with China and the need to stay at the forefront of global technology as a reason for the declaration of a national emergency.

With this promise of a declaration of a national energy emergency, many questions remain unanswered. The Trump Administration has promised to cut energy costs in half within the first year of his administration, which sounds like a large task to undertake. It will be interesting to see if Trump has these capabilities along with what possible repercussions there could be for the global climate in the short run and in the very long run.

Link: https://www.cnbc.com/2025/01/20/trump-to-declare-national-energy-emergency-expanding-his-legal-options-to-address-high-costs.html

Trump's Mass Deportations Effect the Job Market

As President-Elect Donald Trump is set to be inaugurated this January, his promises of mass deportation loom large. President Trump said that this is priority one and that immigrants in America could see themselves deported as early as day one in office. While Trump voters may have supported this on the surface, they may not have seen the underlying economic ramifications that certain economists have brought to life.

Experts are saying that mass deportations would not only put a large hole in the job market, but would also carry large job losses for American citizens. A 2023 study shows that 44,000 US born workers could lose their job for every 500,000 immigrants. Additionally, stories from all over America are popping up about companies, big and small, who are reliant on the immigrant workforce to support their companies.

https://www.cnbc.com/2025/01/11/trumps-mass-deportation-plan-could-have-a-big-effect-on-inflation.html

Here’s why inflation may look like it’s easing but is still a huge problem

The Federal Reserve may be nearing its inflation goal, but challenges remain as high prices continue to strain the U.S. economy. Key highlights include recent reports suggesting inflation over the past year is approaching the Fed's 2% target and predictions of upcoming data from the Bureau of Economic Analysis that might show an inflation rate close enough to round down to 2%. The broader cost of living challenges persist, even as inflation trends align more closely with the central bank's objectives. These dynamics underscore the complex balance the Federal Reserve must strike between achieving inflation goals and addressing the lingering impacts of high prices on the economy. In the article, Federal Reserve Bank of San Francisco, President Mary Daly’s anecdote illustrates the nuanced challenges the Fed faces in balancing inflation and interest rates. The Fed’s half-point rate reduction aimed to align interest rates with moderating inflation, which is well below its mid-2022 peak. This highlights the Fed’s challenge of navigating a delicate economic environment, ensuring inflation remains contained while supporting overall economic stability. 

Link to article: https://www.cnbc.com/2024/10/19/why-inflation-may-look-like-its-easing-but-is-still-a-huge-problem.html

SpaceX Starship Breaks During Test Flight

 

Link:https://www.nbcnews.com/science/space/spacex-lost-starship-rocket-debris-videos-rcna188078

This past Thursday, SpaceX tested the Starship which is “the most powerful rocket ever developed” and measures at “400 feet tall.” During the flight mission the ship broke up and bits of it have disintegrated over the Gulf of Mexico and the Caribbean Sea. 

Despite its failure, the system is expected to play a crucial part in NASA’s plan to return to the moon which is scheduled to happen in 2027 on the Artemis III mission. More than that however, the Starship could possibly even take astronauts to Mars. 

For me, reading this article made me realize how close “science fiction” really is. I can’t help but wonder what space exploration will bring in terms of policy which is inextricably connected to economics. Will space exploration mean planetary expansion? Will it be something we get to see in our lifetime? Space colonies?