The destruction of economic values as they are embedded in quotations on national and international stock exchanges has reached levels after the US tariffs announcements of unprecedented levels. Only the banking crisis had reached similar levels and bursting speculation bubbles. Whereas professional investors might have seen this coming, the normal small investors who had hoped for a positive effect of Trump’s economic policies on shareholder values, which occurred right after the election has been wiped off already. For those people who rely on stock market investments for their pensions have to digest heavy losses now. The second round effects of reduced consumption of pensioners who have lost 10% of their retirement savings will further aggravate the situation for this group of people. Paired with higher expected inflation the economy will be forced into a recession caused by Trump’s tariff announcements and enactments. As this will lower prices of oil and gas as well as other raw materials, his electoral base of tycoons following a « drill baby drill » device experience also losses. A lot of damage all around him leaves millions of people in the US with losses to digest. Probably even more across the world, particularly in the poorest countries of the world. Such a real world macroeconomic experiment is like playing poker on a global scale. However, many countries may build new alliances that may wither the storm better than Trump anticipated. Hence, the game of poker will reenter economic textbooks again in addition to game theory and maybe chess strategies. (Image winter sunset). 
Rich richer
The US economy under Biden had continued to make Americans richer. In an article by Talmon Joseph Smith in the New York Times from 2025-4-3 p. 7 the puzzle that Americans have grown richer, but don’t feel it, has been well explained. The large share of households owning their homes albeit with mortgages from low interest periods have witnessed their increased wealth. However, inflation is eating into their cash available for daily purchases. With another round of tariffs and additional inflationary pressure caused by those, the average person or household doesn’t fell much better off than some years ago. Economic anxiety and our preference for loss aversion or loss avoidance make us react with consumption restrictions to prepare for increased risks as well increased uncertainty about the directions of the whole economy and our very private wealth and consumption patterns. How and when the US economy will get back on track remains to be seen. Higher uncertainty usually reduces investments and with increasing interest rates again the economic recovery might be protracted. The NYT p.7 cites business owners with statements like “we’re not putting our foot on the brake, but we’re taking our foot off the gas.” Betrayel of working class people due to rising unemployment after 3 years of very low unemployment is likely to widen wealth gaps in the US population even further. The rich will get richer, but at high costs to the population as a whole. (Image: ceiling painting in Petit Palais, Paris). 
Tariffs trumped
Economists are used to differentiate between micro-and macro-level effects of tariffs. For each buyer of a car, import tariffs raise expectations about prices for a product. Many consumers will then decide to buy lower quality at the same price or postpone buying a new or replacement product for some time. For cars it might mean that many people will then decide to buy rather later than sooner. If thousands of people do so, the market will fall into recession overall and it will take months or years to come back to the same or a higher level. A political economy perspective has taught us that eager politicians are in favor of a short recession immediately after an election which increases the chances of re-election once the economy gets back to normal or catches up on lost growth.
The US under Trump apparently gambles with such an economic rationale. Short term inflation is already rising, interest rates stay high before the upheaval caused by tariffs starts to settle.
There is, however, another alternative mechanism at work as well. Thorstein Veblen long ago hinted towards what is not called in economics the Veblen effect. Some fancy cars for example can raise prices well above others because of their cleaving image. Just because they get even more expensive the buyers of such products gain additional attention as part of a social class which does not have to care much about their additional spending. The consequences of tariffs will most likely widen the gap between those saving dearly and those able to splash out cash despite increased tariffs. The most felt consequences, therefore, will be on social inequality within the US (compare WSJ 2025-4-24 A2 by Juliet Chung, “Richest of Rich Gain §1 Trillion”). 
Design skills
The is a huge B2C or C2B market in connection with home design and adaptations. Nowadays people are inspired by instagram, pinterest, YouTube and TikTok. Additionally, many play around with Apps to create their own images of how they would like to arrange or rearrange their home. Some have taken first steps to include measurements of their home in the design. The compatibility with professional software of the construction sector, however, is a drawback that delays or leads people to go to enterprises that take into account the prior efforts of young lay designers. It is a little bit like an own contribution in home building quite popular among new home builders to alleviate the upfront cash needed for first home acquisition. The younger generation could offer some of their “digital native” skills to bridge the gap in construction and home design. Of course, reworking and precise measurements on the location will still be required as construction has a lot of legal liability issues involved. Cooperation is a form of burden sharing to advance faster and/or with lower costs. 
Unwinding USA
Stock markets move largely due to expectations. Therefore, the mixing of economics and politics can create lots of signals, which are likely to raise price expectations. Inflationary pressures will call for central banks to increase interest rates which will reduce economic activities that are largely financed through the credit market.
The unwinding of the economy reduces turnover and most likely also profits of companies. The fate of Tesla cars in the last 2 months (Link) and the stock market value of Tesla shares (Link) have plummeted. The unwinding of shareholder value and inflation on the rise as well are a the effects of the MAGA narrative and Musk‘s appointment in politics as chief of GOPE.
The „home made recession“ in the US and the choice to prioritize own products might work in the long run, but the costs of the short-term induced inflation will affect vulnerable consumers more than the people who buy many products that show few price increases. The unwinding of the economy of the USA is likely to cause shock waves rippling through the global economy.
Image: Prices to charge e-cars with solar energy in Germany according to sunshine.
Corruption Caught
In fraud or corruption it is primordial that the probability to be caught is very high to deter potential fraudulent activity. The new Trump administration has enacted as one of the first executive orders that the FCPA stops to take on new cases of suspected corruption as well as reconsider some of the running procedures. In the same vein, the Corporate Transparency Act (CTA) has been silenced so that American companies to not have to disclose ownership information that fall under the CTA until 2025-3-21 until a major reform will be published.
These policy shifts concern more than just US citizens. The competition between countries will be effected because as companies trading with the US which used US bank accounts were also liable under this legislation and subject to prosecution. The FCPA has been an important example for other countries to follow at least within the Member countries of the OECD. The shift in priorities of the Trump administration might open doors again to corruption which we believed were shut with lasting effect.
In conjunction with the rapid increase in military spending when the capacity for the production of military equipment is slow to increase might increase the risks of corruption talking hold again. Market economies build on fair competition, but less prosecution of corruption introduces a bias into negotiations which works against innovation and competitiveness. We have a hard time to understand any kind of logic in such economic and legal strategies.
Image: Bridge collapsed due ro material defects. Archive Berlin Tempelhof Schöneberg.
Betrayal Politics
Most economists would hold that in free market economics there is no room for moral statements. Betrayal, therefore, is left out of most standard text book economics courses. However, more advanced courses that include strategies based on so-called “game theory”, where actors may breach prior commitments, betrayal has entered economic science. A “tit-for-tat” strategy is frequently the best “game-theoretic” solution to such strategic behavior to deter also repetition of defecting on agreed rules or bargaining outcomes. For real world applications beyond the simple strategic advice, the maths involved are quite challenging. We’ll check soon, how AI is changing that game.
Another popular economic theory is one of “gift exchange”. You gift a sum of money (or weapons for self-defense to a country) with no explicit consent that the money should be repaid (through rare earths) in peace time. A betrayal occurs, if a country suddenly asks things in return for the previous gifts. For politicians that understand themselves as “market marker” and “deal maker”, there will be a tendency to claim back a gift in order to come to some kind of gift exchange rather than an altruistic donation.
William A. Galston wrote in the WSJ (2025-2-26) naming the US political action of the 2nd Trump administration a “betrayal of Ukraine and American values”.
If free markets mean making ruthless use of “tit for no possible tat” and “gifts are always a gift exchange”, we move back to mercantile and medieval practices, where settles could claim land at gun point.
What way out of this? Adam Smith, champion of classical economics, wrote before his famous book on “The Wealth of Nations” a lesser known, precursor book on “The Theory of Moral Sentiments”. Actually, he was convinced that the one would not work without the other.
Maybe, going back to classical economics is much better than a Trump administration version of neo-classical economics in a new era of political economy 3.0. 
More BRICS
The move towards a multipolar world order is in full swing. With the USA retreating from a primordial international role discarding UN institutions and the defense of major elements in the fight for individual freedom, the diplomatic order of the last 80 years has changed. The liberation of the concentration camps in Germany and the 80 years of the end of the 2nd World War on 1945-5-9 had forged an alliance in which the common enemy was defeated and the the next major confrontation in Europe or on the globe had to be warded against.
The evolution of peace in Europe has been marked by the Cold War and a bipolar world order which confronted the USA and Russia at various places. The rollback of Russia has seen its high time with the Northern and Eastern extension of the EU and NATO. This goal of US strategic interests has been largely accomplished.
In the shadow of this bipolar relationship the BRICS have moved towards greater economic power and therefore influence in the international arena. Economic data on the biggest economies in the world over the last years show the rise of the BRICS, bit mainly China and India. Their population sizes create enormous and largely shut off internal markets. All these developments create new challenges to the previously relatively stable world order. Technological advances have been narrowing more rapidly than before since the access to the best available knowledge spreads fast and more equally across the globe through the internet.
The ugly face pf imperialism is returning front stage and attempts to change the previous versions of imperialism into a new hegemonic world oder. Updated views of economic power and influence zones let us look with a rational perspective on the new power play. Due to the containment of Russian influence, the USA has China as the major power to confront, a major shift as of the 2020s. The China-driven Silk road project with strategic landing points across the globe has „trumped“ American efforts to align BRICS to human rights values over the last decades. European diplomacy will have to recognize that we entered another phase of „Realpolitik“ due to major economic shifts over several decades. (Image: extract from Max Klinger, The walkers, ambush, 1878 in Berlin SPK). 
Sustainable Food
Climate change has a severe impact on sustainable food production. The OECD reports annually on the evolution of volumes of production and monitors the resources and subsidies allocated to the agricultural sector of the economy. The sector and the whole nutrition chain are frequently perceived as a major driver of shrinkflation, greedflation and cheatflation.
Changes need to be introduced with a medium and long-term perspective in order to allow for smooth adaptations of the sectors involved and to avoid so-called hog cycles.
Most economic debate is focused on the quantity of production. The loss of production due to climate change and Russia’s war in Ukraine has been and continues to be substantial causing starvation and premature deaths. Another issue is the lower quality of food due to droughts. Repeated events call for adaptations. Certainly the adaptation of more resistant crops is part of the answer. However, the other side of the same coin consists in the consumer’s readiness to buy products that suffered during a drought. Just as the reduction of fertilizers and less water in the production of droughts reduces the size of fruit, for example, we, the consumers will be systematically challenged in our purchasing habits of fresh food.
Price-sensitive consumers will have to choose the products that have reduced prices due to drought quality loss. Other consumers may choose the drought affected product if a “resilience message” is attached to such products. Solidarity with climate affected farmers, just like bio-farmers’ products in ecological production, opens up another perspective to more sustainable consumption and farming. 
Existence as Eggsistence
Artists have their own ways of hallucinating. They don’t need an AI to generate ideas beyond the normal, even allowing for 2 standard deviations off the usual. As a result of the thorny question about your existence, Ram Katzir came up with the impressive statement about his „eggsistence“ being subjected to a squeezed experience. Ever increasing shares of the labor force would subscribe to this statement about the modern workplace. Each turn of the screw risks to crack up the egg‘s shell. Rather focus on the egg, try to get a grip on the screw. There are thousands if not millions who crack up under the excessive pressure of economic and political circumstances. The new platforms of food, grocery and parcel delivery at home have become the latest example of AI-assisted and algorithmicly managed screws. What is driving your eggsistence. It is about time to ask fundamental questions again. (Image: Eggsistence, by Ram Katzir 2021 in Brussels, Galilas Collection Belgium) 