And of course, the collapse of the rule of law. All of these things should be terrible for the U.S. economy, especially in the long term. And yet to date, the stock market has seemingly shrugged it all off. In fact, markets look somewhat ebullient. In 2025, the S&P 500 grew a solid 16 percent—far better than the average year, and better than many forecasts, particularly in the wake of Trump’s Liberation Day tariffs.So what’s going on? Why aren’t investors pricing in all these risks?

Some of it may be that they believe there’s a huge, sustainable Trump boom just around the corner. It didn’t come by the end of 2025, but perhaps it’ll arrive this quarter . . . or next quarter . . . or the end of 2026, per the latest goalpost-moving forecasts from Commerce Secretary Howard Lutnick. But there are other ways to interpret what’s going on. None of them are particularly assuring:

1. U.S. markets actually aren’t doing that great, when compared to our global competitors.

2. The lion’s share of growth here in the United States—in both financial markets and hard economic data—is driven by a single sector: A.I . . .

3. . . . which looks an awful lot like a bubble right now.

I find these explanations to be more persuasive than the hope that a new economic golden age is about to dawn. And to understand why, it’s worth recapping why you should worry about the long-term damage from Trump’s policies in the first place. LET’S START WITH something that should go without saying: Democracy and the rule of law are good for their own sake. But they also matter quite a bit to the U.S. economy. A country that protects property rights; that has free capital markets; that has a stable and predictable regulatory regime; where all citizens are equal before the law; where individuals don’t fear being expropriated by the state without cause; and where private contracts can be enforced regardless of political connections is generally a better place to do business. All these features are among the reasons the United States has long been the richest country on earth. It’s also why we have attracted so much foreign capital. When property rights aren’t protected and the justice system operates to reward friends and punish enemies, doing business is harder. People don’t have the certainty they need to invest here, or study here, or start businesses here. “If businesses can’t predict what the law will be next year or even next month they will pause,” Nick Bloom, an economics professor at Stanford, told me. “No firm wants to invest to suddenly discover the government is now taxing you twice as much or has banned your product.” 

In fact, there was a Nobel Memorial Economics Prize awarded in 2024 on “how institutions are formed and affect prosperity.” Here’s how the Nobel committee, in press materials released with the award, summarized the laureates’ findings: “Institutions that were created to exploit the masses are bad for long-run growth, while ones that establish fundamental economic freedoms and the rule of law are good for it.” Much of that prize-winning research looks at developing countries. But lately we have plenty of cautionary tales here in the United States.Today, companies must fritter away precious resources finding ways to bribe appease a mercurial president, via gilded trophies, fake accolades and unpopular movie sequels. Or they waste their energy scheduling and canceling and then uncanceling shipments of imported goods, depending on Trump’s latest tariff tweets. Or maybe they’re holding off on investment entirely, because there’s too much uncertainty. This affects even the sectors Trump is ostensibly trying to help, such as energy. 

“With all the changing regulations a bunch of wind-farm investments are massively lossmaking and all investment has stopped,” Bloom said. “This will not only damage wind farms, but other energy investments as related industries fear being next. If you are thinking of building a big coal station, sure the Trump administration is in your corner today. But maybe next month Trump decides he prefers oil or gas, or the next administration thinks you should be taxed twice as much. So not surprisingly even coal plants are not rushing to invest.” THE HARD ECONOMIC DATA are somewhat dated and backward-looking, especially right now due to the recent government shutdown. What data we do have are not super encouraging, given that three of the past six months saw job losses. But we do have real-time data from stock markets, which are supposed to be forward-looking. The White House has been quite eager to tout that data because U.S. markets appear to be up—a fair bit. Aides often crow about new market highs. And Trump often claims that the United States is “the hottest country anywhere in the world,” and that all foreign leaders admit it. 

But the numbers appear less impressive when you look a little closer. In reality, U.S. markets have been relatively laggard since Trump took office, when compared to the rest of the world. As you can see, non-U.S. markets grew by nearly twice as much as U.S. markets did last year, according to data from the financial services company MSCI. By other metrics, too, the United States has been losing its premium against other countries. The dollar is slumping against other currencies, and in 2025 had its biggest decline since 2017 (the first year of Trump’s prior term). As Bloomberg’s Robert Burgess pointed out, every major currency appreciated against the U.S. dollar in 2025.

The American economy may have entered 2025 as the “envy of the world,” according to The Economist, but it exited somewhat worse for wear. Then there’s the question of what drove growth here in the United States. The answer is, overwhelmingly, artificial intelligence.......read on, there's still more  https://www.thebulwark.com/p/trump-says-we-have-the-hottest-economy-markets-tell-different-story?utm_source=post-email-title&publication_id=87281&post_id=183294287&utm_campaign=email-post-title&isFreemail=true&r=mwxsy&triedRedirect=true&utm_medium=email

$170,000 a minute: why Saudi Arabia is the biggest blocker of climate action Desert kingdom depends on oil dollars but its people already face a climate ‘at the verge of livability’. What’s going on? GuardianDamian Carrington  Can you imagine getting another $170,000 one minute later? And the handouts then continuing every minute for years? If so, you have a feel for the colossal cash machine that is Saudi Arabia’s state oil company Aramco, the world’s biggest producer of oil and gas last year...... Saudi Arabia vital statistics GDP per capita per annum: $35,230 (global average $14,210) Total annual tonnes CO2: 736m (seventh highest country) CO2 per capita: 22.13 metric tonnes (global average 4.7) Most recent NDC (carbon plan): 2021 Climate plans: critically insufficientPopulation: 36 million Can you imagine someone giving you $170,000 (£129,000)? What would you buy? Can you imagine getting another $170,000 one minute later? And the handouts then continuing every minute for years? If so, you have a feel for the colossal cash machine that is Saudi Arabia’s state oil company Aramco, the world’s biggest producer of oil and gas last year. How can these contradictions be understood, and can countries desperate to fight a climate crisis that is already killing a person a minute outflank Saudi obstruction? “The Saudis are not crazy.” says Karim Elgendy, an expert on climate and energy in the Middle East. “But they don’t want to be a failed state.”

The point of the spear......Saudi Arabia almost killed the global UN climate treaty at birth three decades ago. Negotiations veteran Alden Meyer was in the room at the UN headquarters in New York as the gavel was about to come down on a treaty. “French diplomat Jean Ripert had to ignore the Saudis, and the Kuwaitis, vigorously waving their nameplates in the back of the room, trying to object to adoption of the treaty. He just ignored them and brought down the gavel.” “But that’s something you can only do if it’s a handful of countries,” he says. Since then, Saudi Arabia has taken care to mobilise the Arab group or other major players, and to great effect. “They’ve been the point of the spear in terms of organising the resistance,” says Meyer, at the climate thinktank E3G. An early and pivotal victory for Saudi Arabia and its oil-rich Opec allies was blocking the use of voting to take decisions in UN climate negotiations – voting is common in other UN bodies. Instead, consensus is needed for approval. “This impasse has never been overcome. It gives outsized influence to laggards, which suits Saudi Arabia very well,” a report by the Climate Social Science Network found, with the impasse since “crippling” the talks.

Armed with an effective veto, Saudi Arabia has held back climate negotiations ever since by becoming master of the arcane and complicated procedural rules that govern the process, “seeking to ensure it achieves as little as possible, as slowly as possible”, the report said. More than a dozen obstruction tactics have been deployed, from disputing the agendas to claiming that strands of the talks have no mandate to discuss issues it dislikes – such as phasing out fossil fuels – to insisting action to help vulnerable countries adapt to global heating is linked to compensating oil-rich nations for lost sales. Delay is a key aim and, for example, Saudi Arabia strongly opposed any virtual negotiations when Covid shut down the world in 2020. “They are really good at it, absolutely masterful,” says Dr Joanna Depledge at the University of Cambridge. Saudi Arabia also deploys broader arguments: that the big historical emitters, such as the US, Russia and UK, bear the main responsibility for tackling climate change under the terms of the treaty, and that while it sells the oil, helping to fund its development, other nations actually burn it. The Saudi government did not respond to a request for comment from the Guardian.

‘Water down, weaken, remove’.......In recent years, Saudi climate obstruction has expanded from the climate talks to many international environmental meetings. A plan to cap the production of plastic, supported by more than 100 nations, collapsed in August after opposition by Saudi Arabia and allies, which had also blocked voting in those negotiations A landmark deal for a carbon tax on shipping was stymied in October after Saudi Arabia – backing voting on this occasion – called a successful vote for a postponement, amid bullying by the US. Even at a UN desertification summit hosted by Saudi Arabia itself in 2024, nations failed to agree on a response to drought because the hosts refused to allow any mention of climate in the agreement.This full-spectrum assault on climate action was memorably described by Meyer as a “wrecking ball” last year. “They definitely are still in that mode,” he says. Saudi Arabia has also consistently worked to weaken the influential reports of the Intergovernmental Panel on Climate Change, which are signed off by governments, Meyer says, “systematically trying to water down, weaken and remove” mentions of, for example, “net zero”, despite Riyadh having a 2060 net zero target. One startling fact illustrates the success of Saudi obstructionism. It took 28 years of annual UN Cop negotiations for the first mention of fossil fuels in the decision, at the Cop28 summit in Dubai in 2023, sparking an immediate fightback by the Saudis that left that strand of the talks a “debacle”, according to Depledge. The Saudis claimed the agreed “transition away from fossil fuels” was just one option on an “à la carte menu”.

Monopolising fossil fuels..... It’s hard to grasp the scale of what Saudi Arabia is seeking to protect. Aramco was the world’s biggest oil and gas producer in 2024 and the kingdom has the second biggest proven oil reserves in the world (after Venezuela). Its oil is simple to extract, and its ability to quickly ramp up or cut production gives it the greatest influence over the global oil market, which it uses as part of the Opec+ cartel of oil exporters to manipulate the price of oil. It costs just $2 to get a barrelful of oil out of the ground, Aramco’s chief executive, Amin Nasser, said in October, but that barrel has been selling for between $60 and $80 over the last year. The extraordinary profit margin meant that Aramco banked $250m of profit every day from 2016 to 2023, making it the world’s most profitable company over that period. “Saudi Arabia wants to prevent a strong global response to climate change because they see that as really threatening their economy, for reasons that are pretty damn obvious,” says Depledge. “Saudi Arabia depends on fossil exports for national survival [and] the regime regards the prospect of a green energy transition as an existential threat,” says historian Nils Gilman, writing recently in Foreign Policy. “The House of Saud uses its oil rents to finance both its domestic social order and its international influence.” For example, Saudi Arabia spent more on fossil fuel subsidies, keeping energy cheap for its subjects, than it did on its national health budget in 2023.“Its ambition is not to phase out fossil fuels, but to monopolise them as global supply tightens,” Gilman says, leaving Aramco as the last man standing. In 2024, Aramco had the largest near-term expansion plans for oil and gas production of any company in the world, 60% of which could not be burned in a 1.5C climate scenario. Aramco declined to comment.......read on   https://www.theguardian.com/world/2025/nov/15/170000-a-minute-why-saudi-arabia-is-the-biggest-blocker-of-climate-action                                                                                       

Climate crisis on track to destroy capitalism, warns top insurer. Action urgently needed to save the conditions under which markets – and civilisation itself – can operate, says senior Allianz figure. Guardian Damian Carrington Thu 3 Apr 2025 The climate crisis is on track to destroy capitalism, a top insurer has warned, with the vast cost of extreme weather impacts leaving the financial sector unable to operate. The world is fast approaching temperature levels where insurers will no longer be able to offer cover for many climate risks, said Günther Thallinger, on the board of Allianz SE, one of the world’s biggest insurance companies. He said that without insurance, which is already being pulled in some places, many other financial services become unviable, from mortgages to investments. Global carbon emissions are still rising and current policies will result in a rise in global temperature between 2.2C and 3.4C above pre-industrial levels. The damage at 3C will be so great that governments will be unable to provide financial bailouts and it will be impossible to adapt to many climate impacts, said Thallinger, who is also the chair of the German company’s investment board and was previously CEO of Allianz Investment Management. The core business of the insurance industry is risk management and it has long taken the dangers of global heating very seriously. In recent reports, Aviva said extreme weather damages for the decade to 2023 hit $2tn, while GallagherRE said the figure was $400bn in 2024. Zurich said it was “essential” to hit net zero by 2050.
Thallinger said: “The good news is we already have the technologies to switch from fossil combustion to zero-emission energy. The only thing missing is speed and scale. This is about saving the conditions under which markets, finance, and civilisation itself can continue to operate.” Nick Robins, the chair of the Just Transition Finance Lab at the London School of Economics, said: “This devastating analysis from a global insurance leader sets out not just the financial but also the civilisational threat posed by climate change. It needs to be the basis for renewed action, particularly in the countries of the global south.” “The insurance sector is a canary in the coalmine when it comes to climate impacts,” said Janos Pasztor, former UN assistant secretary-general for climate change. The argument set out by Thallinger in a LinkedIn post begins with the increasingly severe damage being caused by the climate crisis: “Heat and water destroy capital. Flooded homes lose value. Overheated cities become uninhabitable. Entire asset classes are degrading in real time.” “We are fast approaching temperature levels – 1.5C, 2C, 3C – where insurers will no longer be able to offer coverage for many of these risks,” he said. “The math breaks down: the premiums required exceed what people or companies can pay. This is already happening. Entire regions are becoming uninsurable.” He cited companies ending home insurance in California due to wildfires.

Thallinger said it was a systemic risk “threatening the very foundation of the financial sector”, because a lack of insurance means other financial services become unavailable: “This is a climate-induced credit crunch.”.....read on      https://www.theguardian.com/ environment/2025/apr/03/ climate-crisis-on-track-to- destroy-capitalism-warns- allianz-insurer