Americans dislike what life is showing them, but Trump gives Fed no open doors

(Originally published March 21 in “What in the World“) Trump made good on threats to abolish the Education Dept., signing an executive order for the woman he appointed to run it to start tearing it apart.

Whatever his latest, technically unconstitutional, move will do to the quality of American education and the long-term quality and productivity of the nation’s future workforce, it will ostensibly eliminate the 3,200 jobs at the department that weren’t already killed earlier this month. Potential layoffs at the National Oceanic and Atmospheric Administration, meanwhile, threaten to deprive Americans of reliable forecasts of increasingly severe weather brought about by climate change. Drill, baby, drill.

So far, Trump’s administration has fired tens of thousands of federal workers, or roughly 4% of the nation’s largest employer’s workforce. As of March 7, roughly 75,000 of the government’s 2.3 million workers had taken Trump’s Congressionally unapproved buyout offer, while another 25,000 had been fired. Some have been reinstated; others are challening their dismissal in court. The latest weekly data from the U.S. Dept. of Labor showed that 8,648 former federal workers had begun receiving unemployment benefits, up 40% from the week before and 28% from the same week a year ago.

With his policies aiming to boost the rolls of jobless citizens and his tariffs driving up prices they pay for goods, it’s little wonder Americans are increasingly unhappy. In the latest World Happiness Report, the United States dropped to its lowest ranking since the annual report began in 2011, falling to 24th behind the United Kingdom. Its highest score was in GDP/capita, a measure skewed by wealth inequality. Its lowest score came in the category concerning citizen’s sense of “freedom,” where it ranked 115th—behind Palestine. That’s the result of the question when Americans are asked: “Are you satisfied or dissatisfied with your freedom to choose what you do with your life?”

Trump has driven the U.S. Federal Reserve to add its voice to the chorus of voices warning that he is raising the risk of stagflation. The Fed on Wednesday disappointed Trump and others hoping for lower interest rates by saying it would keep its benchmark rate unchanged. In doing so, it essentially admitted Trump has put it in a pickle.

On the one hand, Trump’s policies are rapidly weakening the U.S. economic outlook, which argues for lower interest rates to ward off a recession. The Fed said it now expected the economy to grow 1.7% this year, down from its previous forecast of 2.1%.

On the other hand, Trump’s tariffs are likely to drive up prices, which argues for higher rates to ward off inflation. The Fed said it now predicts inflation this year of 2.7%, up from its previous forecast of 2.5%.

Faced with these two countervailing forces, the Fed is forced to sit on its hands. But in the perverse logic that often drives the market, investors took cheer because the Fed said it still anticipates being able to cut rates at least twice this year as slowing growth outlasts the inflationary impact of tariffs. So, the S&P500 responded by rising 1%. Investors were, in a nutshell, less sad than they were the day before.

But Trump isn’t finished yet. His plan to impose levies on China-made ships bringing imports to U.S. ports (and even on ships owned by companies with China-made ships in their fleets), is already reportedly curbing U.S. exports. What Trump apparently forgot in this scheme was that ships arriving with imports are the same ones that then load up and sail away with American exports. So now fleet owners won’t take orders to ship U.S. coal overseas because of the fees they risk having to pay to arrive in ports to load up.

Xcoal Energy & Resources CEO Ernie Thrasher warned in a letter to U.S. Department of Commerce Secretary Howard Lutnick that the situation could effectively halt $130 billion worth of U.S. coal exports in 60 days. And the same situation could hit U.S. exports of oil, liquefied natural gas, and other petrochemicals, as well as agricultural exports.