Trump's Fundamental Shift of the U.S. Economy (guest Mark DiPlacido)
Breaking News: Politician Actually Does What He Promises.
Thousands of people who are paid to be smart and insightful have been joined by every national Democrat in emoting a singular sentiment: “Waaaaaaahhhhhh!”
The party that used to believe that America should be prosperous but that everyone should share in that prosperity before it was taken over by woke, neurotic Karens, is now uniformly opposed to President Donald Trump’s efforts to restore manufacturing and resolve trade deficits that have dated to the 1970s—a problem Trump has been spotlighting since the 1980s. Even moderate Pennsylvania Democrat John Fetterman joined every other Democrat in a futile attempt to restrict Trump’s legal ability to defend American businesses through tariffs that were used effectively through most of U.S. history until the 1970s. Democrat Senate leader Chuck Schumer called the tariffs a “betrayal.”
Meanwhile financial experts and Wall Street pooh-bahs like Jamie Dimon have taken to the media in the biggest outpouring of emotion in Manhattan since Judy Garland died. The ongoing stock market correction and turbulence, which the tariffs precipitated, are blamed on Trump’s policy instead of the reality that the market was a bubble—trading at about 30 times earnings instead of a modern norm of around 20—and goosed by the Biden era’s $8 trillion of deficit spending and make-believe about how quickly artificial intelligence technology can be commercialized.
Doesn’t anyone see the bigger picture? Trump’s fundamental economic reform has come at long last. He has been promising it since he cleared the Republican primary field of 17 opponents in 2016. With the mandates he won repeatedly against all odds, he has finally set in motion a shift in the economy similar in scope to the reforms Ronald Reagan enacted in his first term. That period was marked by turbulence in measures like GDP and stock market valuation. So too was a more modest shift in the early 1990s when personal computers became ubiquitous at work and businesses realized radical efficiencies in managing inventories and personnel. If they weren’t flailing hysterically, these “top men” might try to explain the new world that is unfolding and help investors and consumers understand who the winners and losers will be in this once-in-a-lifetime shift.
Luckily, we do have someone who sees the bigger picture. We had him on our Domino Theory podcast, which I co-host with Mark Simon. Mark DiPlacido is a policy advisor to American Compass, one of precious few think tanks that actually gets and embodies the New Right. He also served in the first Trump administration under U.S. Trade Representative Bob Lighthizer. For starters, Mark grasps that Trump’s “Liberation Day” tariffs are not just about extracting quick concessions or making a speedy deal with other governments—but fundamentally fixing an American economy that otherwise faces ruin. Mark explains:
Mark DiPlacido: When we think about a trade deficit what that essentially means is that we're consuming about a trillion dollars more every year than we produce. And in order to pay for those goods, it has to come from somewhere. What we end up usually doing is putting the goods on credit through, like government bonds or other corporate bonds.
Or we sell off our assets. We sell our stock, we sell our corporate equity, we sell our real estate, our intellectual property, and, essentially, those are selling away pieces of the pie. Because when Americans own those things, they also own all the appreciation and all the interest on those assets instead, all that wealth.
The name of the event on Wednesday was Making America Wealthy Again. We are ceding our wealth, especially in the long term, to pay for short term consumption. And at the same time, it's hollowing out our industries, as we're offshoring, as we're chasing, maybe higher shareholder returns. We're selling the house overseas, we're selling our manufacturing capabilities. And innovation comes from being able to manufacture in the long run as well. Most innovation, most [research and development], most of the baseline for the future of the economy is also tied to our ability to make things here.
It just in the long run it's become completely unsustainable. And, another stat to put out there along the lines of your comment is the net foreign asset position, which is basically how much of how much Americans own of foreign assets versus what foreigners own of American assets.
And that number parallel to the national debt has risen as these trade deficits have risen to now be around $24 trillion. So, foreigners own $24 trillion more of American assets than Americans own of foreign assets. And that's making us an asset-poor country. That's making us an unwealthy country.
Mark DiPlacido further elaborated that what is recorded as investment in an over-financialized economy actually isn’t what most people think of investment. This is another key reason to use tariffs to shift part of the economy back to manufacturing and away from services:
Mark DiPlacido: …how I arrived at my understanding of this problem and came to focus on it in my career is that when you look at GDP, we can [currently only grow] at 3% because productivity has not risen. And it doesn't rise because we don't have actual investment going on in our country.
And what's usually categorized as investment does not look like the investment that the average American would think. I think when most people think of investment, they think of increasing our industrial capacity, increasing innovation, making things more, making more with fewer resources. What's qualified as investment in a lot of financial conversations or conversations with, libertarian think tanks is just swapping investments around is these asset purchases that are just transferring hands and that doesn't build, that doesn't build the pie, that doesn't build the house, that doesn't make the economy stronger and more resilient.
Mark Simon jumped in with a case study of the problem of running a permanent trade deficit with other countries.
Mark Simon: I have to say the net foreign assets, I'm glad somebody looks at that. A couple of years ago, maybe it was you guys with Lighthizer looking at that, and that really caught my eye because basically it just comes down to if we're all a global village. The fact of the matter is they own more of the village than we own anymore. And they now own some of our key assets… So for example, Nike shoes. We design Nikes in Austin or whatever it is, but every other part of that supply chain, including the logistics systems that controls it, are out in Asia. They're taking a greater part of that dollar. And it's the one thing that I do think that people often miss.
Unlike almost every moaning analyst on the establishment financial networks and adherents to Keynesianism (repeatedly discredited but forever loved from the Fed to Wall Street to Congress), Mark also offered some practical insight:
Mark Simon: The one thing this thing is going to do when you get rid of Temu [and other Chinese exporters who exploit the “de minimus” loophole] and when you start bringing jobs back is the domestic freight industry is going to really pick up because you're going to have people who actually have to handle cargo, who have to move things.
(Trump on Oprah in 1988 discussing elements of the trade policy that he is finally getting to implement after being proved right.)
Shifting gears, Mark DiPlacido addressed the fact that job numbers (and therefore GDP) were phonied up by the Biden administration through out-of-control government spending that included a bloated annual budget of $7 trillion, of which $2 trillion went on the government’s credit card each year (for reference, the federal budget was “only” $4 trillion when the big-spending Obama administration left town):
Mark DiPlacido: There, there's been a lot of talk of job growth in the Biden administration, and you look at the kinds of jobs those were, first of all, they were, 75% of them were government or government-adjacent jobs in in healthcare and education. Those are propped up by trillions in dollars of deficit spending that the Biden administration did to pay off all of its allies.
And it's also been in these temporary part-time jobs where people have to work multiple jobs, hustling on the side, not getting stable benefits, not getting stable hours, and it's very hard to raise a family or to, get in a stable enough position to start thinking about having kids when that's the kind of economy on offer for people without a college degree…
The way our economy is structured, the incentive is to have as few assets as possible and as, as much, intellectual property as possible to collect rents. And that means that the wealth and the benefits of those companies and those industries overall are not flowing down to that section of our population who maybe have fewer degrees or have a different skillset.
Of course the public knew this instinctively even as establishment financial reporters and economists assured them prosperity was at hand and they were just too stupid to see it.
Turning to the politics of trade and tariffs, Mark touched on a fundamental difference between the New Right and the failed old Republican Party on which Trump pulled the plug, as well as why so few Democrat leaders support Trump even though their former voters seem to do just that:
Mark DiPlacido: The Republican base has been digesting as much of the free market orthodoxy as anybody over the last 30 or 40 years since the Reagan administration. And I think [Trump’s] nomination in 2016 showed that there is a deeper concern with the national interest than with some sort of free market orthodoxy that people in DC and on the coast that consider themselves Republican or right wing have calcified over the last 30 years.
I think we saw even with Reagan. He took action to save the auto industry in 1981, right after the oil shock in the seventies started favoring these Japanese cars. The big three were under a lot of pressure, and they were in a lot of trouble. And Reagan stepped in and said Japan has to put in a tariff free quota…
…I do think certainly intellectually and certainly politically, there are Democrats that still, at least in theory, support the middle or working class, the way they used to, coming out of the FDR wave, you know. But I think that Democrat party overall, and if you look at the party apparatus, you look at the Biden administration, the way it was run, and you look at the Harris campaign, that's not the core of their party anymore.
And they might still have the leadership of some of these unions, but the membership is definitely swung to the president. And I think we're going to continue to see things move in that direction.
Here’s the full transcript of the podcast episode. Subscribe for free at YouTube, Apple, Spotify or other podcast catalogs.
Parting Shot
We are told that the Democrats are having a debate about the future of their party. Even Tampon Tim Walz, the deviant vice presidential candidate who put tampons in school boys’ rooms for 4th graders, took a break from presumably driving a windowless van around playgrounds to weigh in on what he thinks went wrong. Other Dems are experimenting with a different tone to reach the common man, including swearing in public—a sure sign one has a strong, appealing argument.
The problem for the Democrats is they have no new ideas and can’t reform any more than low-ratings CNN can go centrist: what’s left of its dwindling audience would split, leaving it with nothing. The public has the Dems’ mark, and it shows with polls indicating approval for the party at just 21 percent.
One Dem opinion writer argued for a Democrat version of Republicans’ 1994 Contract With America, which helped Newt Gingrich and other Republican candidates win both houses of Congress for the first time since 1952. Great idea! Here’s a quick five-point contract to get the Dems started:
Democrat Contract With America
Tampons in boys’ rooms (“menstrual equity”!) and biological men in women’s sports.
Return to globalism and exporting manufacturing jobs.
Return to open borders, especially for the most violent illegals and those toting fentanyl.
Stop negotiations with Russia, start World War III.
Censorship and racism under whatever new label they come up with for DEI.
Let’s hope Kamala Harris and Tampon Tim are back in 2028 to sell the contract!
Other Media: Sky News Australia.
© 2025 Rockies Aria LLC. All rights reserved. Transcripts edited manually and with Descript.
People love hating on Trump ..trust the tariffs they work
"Biological men in women’s sports," aka, back before the language was distorted, as men in women's sports. Great post. Love the tariffs and believe Trump is on the right track.