Consumer confidence is at record lows, while the stock market is close to record highs. Can this be happening in the same economy?

It can and it is. The University of Michigan’s consumer sentiment index is now at the lowest level ever, in data that begins in 1962. By that score, Americans are gloomier now than they were during the 2020 Covid pandemic, the 2008 financial crash, the 2001 terrorist attacks, the double-dip recessions that began in the late 1970s, and the oil shocks of 1979 and 1973, when gasoline rationing caused long lines at filling stations.

Stocks haven’t noticed, or if they have, they don’t care. The S&P 500 index has risen for eight weeks in a row, the best string of weekly gains since 2023. It’s half a percentage point from a new record high. It has done this with oil prices firmly above $100 per barrel for nearly three months and with President Trump’s Iran war reigniting inflation.

Can this last? Or does something need to give? It can probably last, for better or worse. Wall Street and Main Street are becoming two different worlds, and the widening gap we see now is the continuation of a long-term trend, rather than something new.

[The Weekly WTF: Bailouts for criminals]

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Trump criminal fund. These are historic times! A new scheme by President Trump to give taxpayer money to convicted criminals and absolve himself of tax liability is “one of the single most corrupt acts in American history,” according to a government watchdog group. It’s not every day you get to experience such unprecedented events!

The Trump plan is a new fund of $1.8 billion to compensate Trump supporters who marauded through the US Capitol on January 6, 2021, along with others Trump wants to reward for their loyalty (to him, not the country). Another part of the deal is immunity for Trump, his family, and his “affiliates” for any tax evasion they may have committed. Ever.

The whole plot is so galling that it may finally have set the limit for how much corruption Trump’s fellow Republicans are willing to tolerate. Some prominent GOP senators are pressuring Trump to cancel the slush fund by delaying action on immigration legislation Trump wants, and possibly on other priorities. Congress could also pass a law prohibiting Trump from doling out the money, but he could veto it. Plus, Republicans want to avoid a vote that puts their most vulnerable members on record opposing Trump.

[Trump says to hell with affordability]

Two things matter: One is whether Congressional Republicans will actually grow a spine and start to buck Trump in material ways. Be skeptical. The other is whether Trump has lost all interest in governing and is now willing to burn every bridge if it serves his own personal interests. It increasingly looks that way.

If you want to know the details of the Trump criminal fund and why it may actually be legal, Lawfare offers this thorough breakdown.

How to lose by winning. Trump has vanquished some foes within his own party by endorsing challengers who are defeating sitting members of Congress in Republican primary elections. So Trump gets revenge on people who voted to convict him of impeachment or opposed him in other ways, such as Sen. Bill Cassidy of Louisiana and Rep. Thomas Massie of Kentucky. Both recently lost primaries to Trump-backed opponents, ending their Congressional tenures. Trump has also endorsed the far-right Ken Paxton over the more moderate John Cornyn in the Texas Senate primary, endangering Cornyn’s reelection odds.

So Trump remains the don within his party. But the MAGA candidates he’s helping elect will be weaker candidates against Democrats in the November general elections, and that could ultimately tip the Senate to Democratic control. If Paxton ends up as the Republican nominee, in Texas, for instance, a Democrat could actually win a Texas Senate seat for the first time in nearly 40 years.vThat’s another reason Senate Republicans are growing furious with Trump. So yeah, maybe Trump is giving up on governing because personal revenge is sweeter. Punchbowl News has this nice summary of the situation.

[5 things to know about the midterm elections]

The Democrats still suck. Trump has spotted the Democrats an 8-0 lead in the seventh inning, and they’re cruising to an easy win, right? Um, no, not at all. Dysfunction remains the Democrats’ most prominent feature, underscored by the publication of an overhyped “autopsy” of what went wrong when Kamala Harris lost the 2024 presidential election to Trump.

You or I could have written a better report. Harris lost because Joe Biden never should have run for reelection and he bailed out too late. Harris was a mushy candidate who might not have even been the nominee if there were a normal primary election process. And the Biden-Harris record of high inflation and out-of-control illegal immigration was a loser to start with.

Anyway, don’t waste any time reading the Dems’ own analysis of what went wrong, which even Democrats are mocking as vapid. The main takeaway is that the Democratic Party remains leaderless and rudderless. It can make gains in this year’s midterm elections simply because of Trump’s plummeting popularity. But we still have a huge political problem: Neither of the two political parties represents the practical sensibilities of a huge part of the electorate, maybe even the majority.

[Voters hate both parties more than ever]

Send a wedding postcard! Donald Trump, Jr. is getting married this weekend in the Bahamas. His father might be too busy to attend. “This is not good timing for me,” Trump explained on May 21. “I have a thing called Iran, and other things.”

Trump also has an Air Force 747 that can take him wherever he wants and cut every air-traffic control line. It will be Don, Jr.’s second wedding. Trump Sr. has been married three times. Maybe weddings are no big deal in the Trump family. Trump will catch the next one.

Just quit now? Matthew Prince, the CEO of tech company Cloudflare, wrote a remarkably candid essay in the Wall Street Journal on May 20 explaining which employees he’s replacing with artificial intelligence. The safest workers, Prince said, are “builders” who create products and “sellers” who bring in the revenue. The most vulnerable, he said, are “measurers” who analyze processes, including auditors, marketers, operations analysts and a lot of middle managers. Cloudflare recently cut 20% of its workforce, and “the vast majority of those we laid off were measurers,” Prince said. Consider yourselves warned, measurers.

To err is human! Written typos and other mistakes now count as signs of authenticity—as in, proof that AI didn’t write this. That’s the conclusion of an Atlantic essay claiming that people are deliberately making catchable mistakes on resumes, dating profiles and social-media posts to demonstrate that a human actually composed the material. How kwaint.

[I asked AI for investing advice. It’s pretty good]

Energy crisis, whatever. Trump’s latest stance on the Iran war he can’t end is he’s in “no hurry” to make a deal with Iran and get oil flowing through the Strait of Hormuz again. It’s only oil, after all, and we’ve got plenty of that right here in the US of A. But Trump is still too busy to make Junior’s wedding.

But those bankruptcies loom larger now that Trump has bumbled into a Middle East war he can’t figure out how to end. Trump’s decision to attack Iran on February 28 triggered a global energy crisis that has sent the price of oil and other commodities 50% higher and led to dire shortages in some parts of the world.

American bombs have damaged Iran’s military, but Iran has clapped back by shutting down the Strait of Hormuz and throttling Persian Gulf energy supplies. The world now waits to see whether Trump can force the reopening of the strait or Iran will indefinitely enjoy newfound leverage over global energy markets.

Trump’s bankruptcies foretold all of this. Other rash Trump actions, such as his trade wars, revealed poor judgment and a weak grasp of economic fundamentals. But the Iran war scaled those shortcomings up to the level of catastrophic blunder. Here are three prominent similarities between the Iran war and Trump’s six bankruptcies.

Lousy instincts. Trump says he trusts his gut on major decisions, including whether to attack Iran. One can reasonably ask why, given that Trump’s gut instincts have often been terribly wrong.

[See how the economy damage from the Iran war is spreading]

Trump trusted his gut—and ignored expert advice—on many of the decisions that led to the bankruptcies of three Atlantic City casinos in the early 1990s, and New York City’s Plaza Hotel in 1992. One of Trump’s biggest mistakes was overpaying for assets such as the Eastern Airlines shuttle (which he bought in 1988), some of his casino properties, and the Plaza. Trump often eschewed detailed valuation analysis and just bid what he thought was right.

Experts didn’t just point out Trump’s mistakes after the fact, when his businesses failed. They called them out in real time. Trump’s fellow real-estate developers thought he vastly overpaid for the Plaza, which he bought for $407 million in 1988. “Donald’s purchase of the Plaza was greeted with howls of ridicule in the Manhattan real-estate industry,” journalist Harry Hurt III wrote in a 1993 book. Basic revenue projections showed Trump would need to fill every room at the hotel, every day, at rates 250% higher than the prevailing prices, just to make interest payments on the debt he took on to buy the hotel.

Before the Taj Mahal casino even opened in 1990, one prominent analyst correctly predicted that it would fail, because it would require unprecedented amounts of revenue to stay solvent. The Taj was bankrupt a year later.

[See 5 things to know about this year’s midterm elections]

Trump’s gut failed him on Iran because he completely disregarded anything Iran might do in response to a US attack. What makes this oversight especially galling is that there’s extensive analysis at the Pentagon and other government agencies predicting that if attacked, Iran would block the Strait of Hormuz and attack energy infrastructure elsewhere in the Gulf, which is exactly what it did. Trump’s top military advisers told him this, according to media reports. Trump trusted his gut over the experts and the whole world is now paying a steep price.

Glutton for failure. Trump kept trying to make a go of Atlantic City casinos, even as other states began to allow gambling and the Atlantic City casino market was well past its peak. A public company he ran, Trump Hotels & Casino Resorts, went bankrupt in 2004 after nearly a decade of unprofitability. It reorganized and went bankrupt again in 2009. Trump won anyway, because by then, he had learned to charge his own companies fees to use his name and provide other services some analysts considered dubious.

The Iran equivalent is Trump’s repeat insistence that the Iran war will end any minute and everything will soon get back to normal. In early March, during the first week of the war, Trump said, “we expect a very swift conclusion.” He has been spouting similar rosy updates almost daily ever since, as oil and gasoline prices go higher and higher. Reality is not unfolding the way Trump wants it to.

Trump first, the little guy last. Trump is notorious for stiffing contractors while protecting his personal wealth. His Atlantic City bankruptcies left hundreds of local businesses unpaid and thousands of workers furious. One lesson Trump drew from his first four bankruptcies was never to put his personal money at stake, and always rely on creditors and other investors, as he explained to biographer Timothy O’Brien. That would protect his personal fortune if the business went bust.

The little people hurt by Trump’s Iran misadventure are millions of Americans now paying more for gas, food and many other products. Interest rates are up, raising borrowing costs for everybody. Conditions are even worse in Asia and Europe. Trump now says he’s not real worried about anybody’s financial concerns. That fits the profile.

[Trump says to hell with affordability]

Does this tell us anything about how or when the Iran war will end? One of the main takeaways from Trump’s business failures is that he always managed to land on his feet, regardless of how badly others got hurt. Trump’s approval rating is now at the lowest point of either presidential term, with some Trump voters now voicing buyer’s remorse. Many other former Trump supporters know the feeling.

Enjoy a cartoon.

You can order this cartoon ^☝️ or others like it, plus merch featuring cartoons, at CartoonStock.com.

~ ~ ~ ~ ~ ~ ~ ~ ~ ~

The war with Iran that President Trump launched on February 28 has settled into a tense and costly standoff. Bombs are no longer flying, but Iran has de facto control over the Strait of Hormuz and a chokehold on world energy markets. Hardly any cargo is clearing the strait, with no end in sight. Investors and business owners want to look past the war, but sporadic surges in energy prices and other collateral damage from the war are still rattling markets.

Everybody knows the war has raised gasoline prices. It’s now affecting the economy in other serious ways. Here’s where we stand:

Oil prices jumped from about $68 before the war to as high as $110 in early April. Prices then dipped after Trump announced a ceasefire on April 7, and traders hoped that oil shipments through the strait would resume. They haven’t, and prices have drifted back up to the $110 range. Physical inventories are now running low, causing painful shortages of refined products such as jet fuel.

Gas prices have risen by about 50% since the war started, to a national average of around $4.50 per gallon. A $1.50 jump in gas prices costs a typical driver about $60 a month in higher costs.

Diesel prices have jumped too, and that’s making it more expensive to produce and transport food and many other products. That’s pushing overall inflation higher.

[Nobody’s fixing anything 😡]

Inflation is now growing faster than incomes, for the first time since 2023. This is a gloomy milestone that indicates the typical worker is falling behind.

Most economists think inflation will go even higher this year, since it takes a while for higher production and transportation costs to move through the supply chain, all the way to consumers. The Cleveland Federal Reserve’s “nowcasting” tool suggests inflation today is around 4.2%, up from 3.8% in the latest official report, which was based on surveys from mid-April.

There’s a nearly even chance inflation could hit at least 5% this year. Here’s how the odds of higher inflation have risen on the prediction site Kalshi:

Interest rates usually rise when inflation goes up, since bond buyers demand a higher return to compensate for the eroding value of money. The rate on the benchmark 10-year Treasury note has jumped from about 4% before the war to 4.6%, with rates on consumer and business loans rising in similar measure.

[The Weekly WTF: To hell with affordability]

Mortgage rates were slowly declining before the war, but have since gone back up, by about four-tenths of a percentage point. That raises the monthly payment on a typical mortgage by about $80.

Rates could go higher. Here’s how the outlook for mortgage rates has changed on Kalshi:

[5 things to know about this year’s midterm elections]

Stocks sank early in the war, then rallied after Trump announced the ceasefire. The AI boom is boosting earnings and growth, with many buyers reluctant to sit on the sidelines, even amid an energy shock. But the war is probably still depressing stock values. University of Michigan economist Justin Wolfers estimates that stocks are about 5% lower than where they’d be without the war. Stockholders are making good money, but they’d be making more if oil prices had never spiked.

GDP growth will probably end up lower because of the war. In late February, right before the war began, the Atlanta Federal Reserve’s GDP Now model estimated that first-quarter GDP growth would be 3.1%. The estimate declined as fighting raged for six weeks. First-quarter GDP growth ended up at 2% in the actual data.

The effects of the war could suppress growth for as long as the Strait of Hormuz is closed. Most economists don’t expect a recession. But consumer confidence is at recessionary levels and Trump’s approval rating is at its lowest point ever. The military outcome of the war remains uncertain, but economically, it’s a loser.

Enjoy a cartoon.

You can order this cartoon ^☝️ or others like it, plus merch featuring cartoons, at CartoonStock.com.

Inflation is getting more serious. Stocks retreated on May 15 as inflation pushed interest rates to 15-month highs, which has implications for stocks and many other asset classes.

The inflation news is broadly problematic. The overall inflation rate jumped from 3.3% in March to 3.8% in April. That’s largely because of the Iran war, Iran’s closure of the Strait of Hormuz and soaring energy prices.

Inflation is probably going higher still. Wholesale inflation jumped from 4.3% in March to 6% in April. It costs more to produce and transport stuff because diesel fuel and most other forms of energy are suddenly a lot more expensive. Wholesale inflation usually becomes consumer inflation as producers pass it along. The Cleveland Federal Reserve’s Inflation Now tool estimates that inflation today is 4.2%. That would be the highest since 2023, when consumers were gasping from the soaring prices that tarnished Joe Biden’s presidency.

The latest price hikes represent an ominous inflection point for consumers: Inflation is now outpacing wage growth, for the first time since 2023. That means the typical workers is falling behind. And it’s not an anomalous blip. We’ve been warning about declining real-income growth for several months because it shows up prominently in our Better-Off Index.

Read more

No price is too high. When running for president in 2024, Donald Trump promised, “I will immediately bring prices down, starting on day one.”

Maybe he meant, starting on day one and ending a few days later? Like a temporary sale, rather than everyday low prices?

That’s basically what has happened. Inflation bottomed out more than a year ago and is now roaring again, thanks to Trump’s war with Iran and his taxes on imports. And high prices no longer bother Trump, now that he’s president.

“I don’t think about Americans’ financial situation,” Trump said in front of the news cameras on May 12, when a reporter asked if soaring prices affected his peace negotiations with Iran. “I don’t think about anybody,” he stressed. “Not even a little bit.”

Trump was trying to make the point that his only priority in dealing with Iran is to stop its nuclear weapons program. You might be wondering, didn’t President Obama have a plan to stop Iran from getting the bomb?

[Inflation would be tamed, if not for Trump]

Yes, he did! Under the 2015 Obama deal, Iran agreed to dismantle its nuclear weapons program and let international inspectors monitor the progress. Trump canceled the program in 2018. Only since then has Iran been stockpiling bomb-grade uranium, as the New York Times recently explained.

If Trump hadn’t canceled the Obama deal, Iran wouldn’t be building atomic weapons, which means there would be no 2026 Iran war and no 2026 Trump energy crisis. Trump still wouldn’t care about voters, but it would be less infuriating if gas prices were still $3 per gallon and there was no new inflation outbreak.

Instead, we have gas at $4.50, and maybe heading to $5. Higher costs for transportation and production will soon send the price of groceries and many other things higher. Nothing to worry about here.

Fertile imagination. Here’s a challenge for Hallmark: Design a greeting card for Fertility Father’s Day. Of course, it would have to feature Trump’s likeness.

At a May 11 White House event focused on maternal health care, Trump called himself “the father of fertility.” If you didn’t know the context, what would you think? Even in context, what do you think? Is Trump bragging about his sperm count? Does he compare his sperm count with Joe Biden’s?

Maybe, but Trump says he is the father of fertility because he signed an executive order giving health insurers the option to cover the cost of IVF, the expensive fertilization procedure for couples with difficulty conceiving. Trump has been thinking about his fertilization legacy for a while. In 2024, he called himself “the father of IVF” because he planned to sign legislation making it a covered insurance benefit. Earlier this year, he dubbed himself the “fertilization president.”

But the order won’t do much. There’s no federal money to help pay for IVF, and insurers aren’t required to cover it, just encouraged to do so. Maybe Trump should don his Jesus smock and perform some immaculate conceptions.

Petty Ka$h. The wonderful Kentucky bourbon Woodford Reserve has an unfortunate problem with the FBI. Director Kash Patel, who seems to be a problem drinker, apparently gives out personalized 750-millimeter bottles engraved with his name and title, according to the Atlantic. Sometimes Patel signs the bottles, using the charming spelling he prefers: Ka$h. It’s a pretty weird branding mashup, given that the FBI doesn’t make bourbon or have a stake in any liquor company.

[Nobody’s fixing anything 😡]

People on social media are calling for a boycott of Woodford. That seems unfair. Brands don’t need to be punished just because jerks like them. Should Trump foes boycott Diet Coke and Heinz ketchup because they’re Trump staples? Nah. Leave Woodford alone, unless it turns out they’re giving Patel free bourbon or dishing secret dirt on Jack Daniel’s.

Patel is a problem child. The Atlantic previously reported that Patel is a heavy drinker who sometimes misses meetings without explanation and has other hallmarks of an alcoholic. Leaks like this usually happen because a dogged reporter finds a source who really wants to dump on the target. The Atlantic seems to have found many. Patel has upended the FBI and fired a lot of agents far more qualified than he is, no doubt earning the ire of many expert leakers. Some are shivving him now.

Patel is such a snowflake that he sued the Atlantic for $250 million. That’s a show lawsuit that won’t go anywhere, and if it did, would involve a discovery phase likely to turn up more Patel embarrassments. Patel has also reportedly ordered an investigation to find out who’s leaking to the Atlantic. Trump might fire him before any of this gets anywhere. Trump doesn’t care that his aides are incompetent, but he does care if they embarrass him. Patel may be too shabby even for Trump.

There’s one more farcical tidbit. During Senate testimony on May 12, Democratic Sen. Chris Van Hollen of Maryland asked Patel to take an alcohol disorder test. Patel basically said, I will if you will. So Van Hollen took the test and posted the results on social media on May 13. He’s pretty dull, reporting just 3 drinks per week. So now Patel gets to report on his own drinking habits. If he can’t remember, maybe some FBI agents could help him reconstruct the details.

Senate slaps its own wrist. The Senate passed a measure on May 14 that will halt its pay if the government shuts down, starting once the midterm elections are over in November. Good start, but it should go further.

[5 things to know about this year’s midterm elections]

The rule restores full back pay once the shutdown is over. Nope. Members of Congress should forfeit pay for every day they shut down the government, like professional athletes who lose their pay when they get suspended for an infraction. And the House should adopt a similar rule, so that the people responsible for shutting down the government pay for it.

James Tacorico. Texas is abuzz over James Talarico’s lunch order at the Taco Joint in Austin on May 12. Talarico is the Democrat with a fighting chance of flipping a Texas Senate seat in this year’s election. Barack Obama paid him a visit, and while campaigning, the two stopped in for a bite, with a news throng in tow.

Obama ordered one steak and one chicken taco. Normal.

Talarico ordered two potato, egg and cheese tacos. Questions arose.

Greg Abbott, the Republican governor, said it was evidence that Talarico was a closet vegetarian, as if that would be a mortal sin against cattle ranchers. A taco podcast debated eggs for lunch. (Easy answer: Yes) The taco editor at Texas Monthly told the New York Times that both the establishment and the order were good choices for a candidate trying to appeal to moderates and centrists.

Hot sauce is still okay, right?

Here’s the clip:

Wealth inequality has been worsening since digital technology became widespread, China became a manufacturing powerhouse, and much of the American working and middle class started falling behind. It’s a complex trend with no single cause. But the chief hallmark is living standards that are declining for a majority of Americans, prompting widespread gloom and in some cases fury.

Economists puzzle over consumer confidence readings that are dismal, even as the economy looks healthy on paper. But worsening wealth inequality goes a long way toward explaining why so many Americans are pissed off.

The following two charts show what may be the most important and dangerous trend in the US economy. The portion of national wealth—mostly real estate and financial assets—controlled by the working and middle class has been declining since the mid-1990s, according to Federal Reserve data. The sharpest drop-off has occurred during the last 20 years.

The richest 10% of Americans now own 68.3% nation’s assets, up 8 percentage points from the levels of 1990. The other 90% own just 31.7%, down from 40% in 1990.

The second chart shows the distribution of wealth by income level rather than wealth tranche, with slightly different thresholds. But the trend is the same. The portion of wealth owned by the top 20% of earners has jumped from 59.5% to 71.9%. The portion owned by the bottom 80% of earners has dropped from 40.5% in 1990 to just 28.1% now.

There’s nothing wrong with rich people in a capitalist society. The problem is that too few people are benefiting from a dynamic economy that is generating huge amounts of wealth. It’s popular to bash billionaires, as if they’re deliberately plundering the rest of us. But the real problem is a system that rewards breakneck innovation while doing little to help workers who get caught in the gears of change.

[Stock owners are pulling away from most other Americans]

Rising student debt loads and a lack of entry-level opportunities hold some younger workers back right out of the gate. Elevated real estate prices and a shortage of starter homes in many areas keeps lower-income Americans from building wealth through home ownership. More than half of Americans own stocks, mostly in retirement accounts. But the richest 10% of Americans own 87% of all stocks, which means a roaring stock market doesn’t do much to help the majority of Americans. The compounding wealth of the top 10%, meanwhile, fuels much of the spending that keeps the US economy growing.

Trump encapsulated the problem better than most politicians when he minted his trademark phrase “Make America Great Again” during his first presidential run. That harkens back to some unspecified time in the past when things were better. In 2016, Trump promised that “the forgotten men and women of our country will be forgotten no longer,” a direct appeal to blue-collar Americans who have watched their communities crumble as globalization sent millions of jobs overseas.

But Trump has done nothing to aid the working and middle class during more than five years on the job. The bottom 90% share of wealth hit the lowest level on record during Trump’s first term. It rebounded a bit after Joe Biden became president in 2021. But that was mostly driven by stimulus checks and other types of aid Congress passed amid the Covid pandemic. That largesse wasn’t sustainable, and once it ran out, the downward wealth trend for most Americans resumed. It is now headed for a new record low during Trump’s second term.

Trump’s focus on manufacturing jobs has been a total bust. There are nearly 5 million fewer manufacturing jobs now than there were in 2000, and those were once the good-paying jobs younger workers counted on to put money in the bank and save for the down payment on a home. Trump has raised tariffs and herded migrants out of the country, on the premise that better-paying jobs for Americans will somehow materialize. But they haven’t.

What Trump has really done is pursue pet causes while facetiously claiming they’ll help blue-collar workers. He loves tariffs because they let him micromanage the economy, and he doesn’t seem to care that they raise prices for Americans and reduce growth. He hounds migrants because it pleases the nationalists among his base, while peddling the fiction that Americans are going to step in to clean hotel toilets and pick fruit once the foreign workers are gone.

[The middling Trump economy, in 9 charts]

Did Biden do better, in between Trump’s two terms? You might think so, because he signed bills meant to stimulate factory construction, green energy production and other types of infrastructure. But it didn’t move the needle. Once the Covid aid was gone, the wealth gap continued to widen in 2023 and 2024.

The barriers to getting ahead are now generating self-defeating populism defined by tribal warfare among interest groups that does nothing to make anybody better off. Trump and other feral opportunists wage culture wars because their group needs to blame some other group for being stuck in a rut. But culture wars don’t boost paychecks or living standards, and trolling isn’t a skill most people can build a successful career around.

What is artificial intelligence going to do to wealth inequality? Probably make it even worse. The technology revolution contributes to the gigantic wealth gap because it creates a chasm in the economy. Technologists have all the latest tools and a constant edge. They will own the AI economy and capture the wealth it generates, which could be unimaginably huge. The analog sector will look in from the outside, as it has for most of the digital era, and wonder what went wrong.

[5 things to know about this year’s midterm elections]

What to do? One step would be a presidential administration with one priority above all others: Bringing more wealth to the massive majority and shrinking the wealth gap while protecting growth. Social and cultural causes, which tend to get canceled out when control of the White House changes parties, should be on the back burner.

There are many ideas for how to shrink the wealth gap. For starters, we should learn the lessons of the China Shock instead of repeating it with an AI Shock. It’s now well understood that the rapid outsourcing of manufacturing to China in the early 2000s ravaged many American communities and contributed to the growing wealth gap. The government could have managed that in a way that slowed the transition and provided better protections for displaced workers and their families.

There are a lot of people thinking about how to prevent AI from doing something similar. It will require a bigger safety net, including better tools to help more people find a place in the AI economy. History now proves this would be a lot better than simply letting workers flounder.

There should probably be higher taxes on the richest Americans, but they don’t need to be punitive. Top tax rates have been much higher in the past, when the wealth gap was more reasonable, and they didn’t stop America from being the world’s most innovative nation. New tax proceeds would be best spent on training and teaching, so that more workers have the skills for the economy of the future and don’t get stuck in the past.

We need more affordable housing. There’s a bill in Congress now that might help, but as is often the case, there’s a hostile minority faction standing in the way.

It might also help to stop fetishizing manufacturing as a cure-all for workers who don’t have a college degree. There’s no rule that says old industries must remain lucrative forever, and America’s industrial production remains steady even as payrolls have dropped. That’s efficiency, which we shouldn’t try to reverse. Better to funnel workers into the fastest-growing industries, at all levels.

Democrats got one thing right when they passed the Affordable Care Act in 2010. That law went from being unpopular to very popular because it lowered health care costs for millions of Americans. It also brought the nation closer to universal coverage, which ought to be an economic prerequisite allowing people to work where they can be most productive, not where they can get health insurance.

Republicans recently let some ACA subsidies expire, which is a step backward. It would benefit the entire economy if health care were something everybody could count on instead of a perk of working for a big organization. In addition to universal coverage, the other health care priority should be lowering costs throughout the system.

There’s a rich assortment of other ideas for how to better share the wealth at universities, think tanks, and even Wall Street investing firms. America has never lacked brainpower. But we sorely need fixers able to do what’s necessary instead of what is convenient.

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Trump should be bragging about the demise of inflation and campaign promises kept. While campaigning in 2024, he told voters he’d get prices down. Prices should be down, or at least flat. Virtually all of the price pressures that pushed inflation to 40-year highs during the Biden administration are gone.

But now there are new price pressures, courtesy of Trump himself. The inflation rate jumped from 3.3% in March to 3.8% in April, driven by the surge in energy prices resulting from Iran’s closure of the Strait of Hormuz. A year earlier, inflation was just 2.3%.

Trumpflation began with the tariffs Trump started imposing last year. Courts have struck down many of them, but the average import tax has still jumped from 2.4% when Trump took office to about 10% now.

The Trump tariffs have kept the cost of clothing, appliances, furniture, electronics and many other things higher than they’d otherwise be. They’ve helped push coffee and beef inflation into double digits. Trump insists tariffs aren’t inflationary, yet he’s planning to reduce beef tariffs to address high prices—a tacit admission that his own policies are costing people money.

The Iran war that Trump launched on February 28 is shaping up as the dumbest move by a president in decades, maybe since Herbert Hoover’s tariffs intensified the Great Depression in the early 1930s. Iran’s de facto closure of the Strait of Hormuz has sent oil and gasoline prices to the highest levels since 2022, the year inflation hit a 40-year high of 9% and gasoline prices hit $5 per gallon for the first time ever.

Everybody knows high energy prices are straining American budgets anew. What gets less attention is where inflation has subsided. Here, for example, are some of the major spending categories where inflation has dropped, paired with energy-related spikes.

The year-over-year change in rents has fallen from 8.8% in 2023 to just 2.8% now. Food inflation is less than half what it was three years ago. Car insurance premiums soared for a couple of years, but are now flat. Consumers would rather see falling prices, instead of smaller price increases. But low inflation still allows people to get ahead, as long as incomes rise by more than prices.

If Trump had imposed no new tariffs and left Iran alone, many Americans would have regained the ground they lost to inflation during the Biden years. The psychological scars of price shocks would be fading or gone.

Instead, prices are rising by more than incomes for the first time since 2022. When real income turns negative, as it probably is now, the typical American is falling behind, by definition. And there is probably worse inflation to come, as rising transportation and production costs work their way through supply chains, all the way to consumers.

Inflation comes with other costs not quite as visible as the gas prices plastered on billboards at every filling station in America. Inflation pushes interest rates higher, because bond buyers demand a higher return to compensate for the eroding value of money. So home and car buyers pay more. As usual, lower-income Americans get hit the hardest, with the higher cost of gas and household energy leaving less money for everything else.

Trump is obviously concerned. He wants to suspend the federal gasoline tax, which is 18.4 cents per gallon. But he probably can’t do that without Congressional legislation, and it might not pass. The gas tax funds the Highway Trust Fund, and some members of Congress will likely object to raiding a primary source of infrastructure funding. Congress did not suspend the gas tax in 2022, when prices peaked at $5 per gallon.

Iran, meanwhile, remains defiant. It seems to be weathering a US blockade of its ports and testing how much political pain it can inflict on an American president. Millions of consumers, unfortunately, are the conduit for that pain.

Enjoy a cartoon.

You can order this cartoon ^☝️ or others like it, plus merch featuring cartoons, at CartoonStock.com.

Jobs, meh. Economists liked the April jobs report, because it “beat expectations.” But workers worried about stagnant pay and eroding job security don’t give a hoot about those types of numerical technicalities. And consumer surveys show most Americans find the job situation pretty disappointing.

The average forecast was for about 60,000 new jobs in April, and employers ended up creating 115,000 new jobs. So at the headline level, it seems like a win. Hiring expanded from a few narrow sectors earlier in the year—mostly health care and social services—to construction, retail, trade and transportation, and leisure and hospitality. The unemployment rate stayed steady at 4.3%.

But the trends are still lousy. Longer-term data shows the job market weakening, as you can see in the charts below. While job growth was pretty good in both March and April, the economy has shed jobs in five of the 15 months since President Trump took office in 2025. Employment growth has averaged just 31,000 new jobs per month since Trump became president. In 2024, it averaged 122,000 new jobs per month, nearly four times as much.

The unemployment rate has remained steady for the last several months, but it’s nearly a point higher than at the low in 2023, when it bottomed at 3.4%.

Trump’s tariffs are supposed to revive manufacturing, but there are fewer blue-collar jobs than when Trump took office.

Most of the hiring is still concentrated in health care and social services. There’s nothing wrong with those jobs, but they don’t boost the productive capacity of the economy like growth in other sectors might. There’s been a notable decline in business-service employment, a large sector with many good-paying white-collar jobs. Four other major sectors have lost jobs during the last year.

[Get all the facts on the middling Trump economy]

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Iran war running hot and cold. Does anybody know if the Iran war is on or off? The Trump administration says it’s both.

US and Iranian forces are still shooting at each other. Gen. Dan Caine, Chairman of the Joint Chiefs of Staff, says Iran has attacked US forces more than 10 times since President Trump declared a ceasefire on April 7. Iran sporadically fires at tankers in the Gulf. US forces recently sank six Iranian vessels in the region, and they continue to disable Iranian cargo ships trying to run the US blockade. The Strait of Hormuz is still blocked to most oil shipments.

But everything is fine, seriously. Secretary of State Marco Rubio said on May 5 that the war is over and the mission has been accomplished. What mission? Well, not deposing Iran’s authoritarian regime. It remains in place. The Iranian people have had no chance to take back their country, either, even though Trump promised they would when he launched the war on February 28. All of Iran’s nuclear weapons material is still in the country. Rubio says reopening the strait to oil shipments is now a humanitarian mission, as if it would be a nice gesture to the rest of the world, but not really that big a deal.

Here’s what is really going on. Trump is in a bind that’s the political equivalent of each of his six business bankruptcies. He completely failed to foresee the consequences of attacking Iran, like a hustler who takes on too much debt and then can’t pay it back. He’s desperate for a face-saving solution that doesn’t look like defeat. So he keeps telling his creditors that he’ll come up with the money, hoping for some kind of miraculous intervention, such as a bailout from his dad. But dad isn’t around to help on this one. So, a mess.

The Internet thinks this captures Trump’s Iran predicament:

Cartoon Pete. Defense Secretary Pete Hegseth posted a two-and-a-half minute cartoon video featuring himself trying to explain why taxpayers should gladly raise the defense budget by half a trillion dollars, to $1.5 trillion. “We’re putting the American taxpayer first,” Hegseth lies in the video. There’s a cameo appearance by Deputy Defense Secretary Stephen Feinberg, in cartoon format, smoking a cigar at a big desk, like an old-timey tycoon who doesn’t care if smoking is banned. Then he orders “Deal Team Six” into action. They’re going to go out and whip the military-industrial complex into shape, you see.

Hegseth doesn’t mention the bill for the unnecessary Iran war, which is at least $25 billion so far, and could easily end up double or triple that. His idea of putting American taxpayers first is giving sweetheart defense contracts to Trump family members, who had zero experience in defense technology before their Dad became president. Defense contracts to the president’s family would be prohibited in any other administration. Where’s Hunter’s laptop?

Hegseth promises us there will be more videos like this, so you might want to wait for the whole series to drop before gathering the family in the home theater. Meanwhile, here are a few highlights from the pilot.

The people’s ballroom. The Justice Dept. will probably be prosecuting Trump for cost overruns at the new White House ballroom any day now. When Trump announced the ballroom project last year, he said donors and friends would pay the $200 million cost, and taxpayers would cover nothing. Then the cost doubled, to $400 million. And now, some Republican senators are trying to appropriate as much as $1 billion for the project, which means taxpayers would be footing the bill, after all.

Trump said on social media that the cost went up because the size of the project doubled and the quality improved, following “deep rooted studies.” Somehow, it is still “under budget,” Trump says. Now that’s some next-level developer talk.

The White House hasn’t explained why taxpayers should cover the bill, though.

Trump’s Justice Dept. launched a prosecution of the Federal Reserve and its chair, Jerome Powell, because a Fed renovation project is running about 30% over budget, due to unforeseen asbestos contamination at two 100-year-old buildings, and construction costs that spiked after the Covid pandemic. If taxpayers get stuck with the ballroom bill, then the entire project is a cost overrun, because the actual cost to taxpayers should be 0. If Congress funds the $1 billion ballroom, they should throw in several million more to make sure the prosecution is well-financed.

Put up your dukes, Trump. Polling firm YouGov ran a survey asking people if they thought they could beat Trump in a fistfight. I checked the date to make sure it wasn’t April 1. It wasn’t. I looked at the web site address to make sure it wasn’t a spoof. No, it was the actual YouGov.

They ran the poll because Trump held a May 5 White House event highlighting physical fitness, and asked one boy in attendance, “you think you could take me in a fight?” YouGov jumped on the bandwagon by asking more than 2,600 Americans three questions: Could an eight-year-old boy beat Trump in a fight? Could a typical American beat Trump in a fight? And could you personally beat Trump in a fight?

The survey results are below. The YouGov pollsters didn’t reach me on the question, but if they had, I would have said that Trump would run like a banshee from any fight where he didn’t have a bodyguard. The fight I’d most like to see is Trump against a transgender woman, because in addition to getting beat up, he’d probably pass out from cooties.

Anyway, here’s what Americans think about this timely topic:

Art diss. I’ve never been invited to the Met Gala and never will be, but I do enjoy checking out the world’s most elaborate Halloween costumes and wondering how you go to the bathroom inside one of those contraptions. This year’s event was controversial because billionaire Jeff Bezos and his arm-cleavage wife Lauren Sanchez-Bezos co-chaired it, and they represent everything that’s bad about conspicuous consumption, I guess. Of course, it’s a FUND-RAISER for the Met’s Costume Institute, so maybe you’d want RICH PEOPLE helping you raise all those funds?

Anyway, the whole thing is meant as spectacle and the Bezos involvement didn’t bother me, and if did, who would care?

But this was fun: The theme of the event was fashion as art, and what do celebrities know about art? Not much, is what real art mavens think. So the Whitney Museum, a few miles south of the Met, posted on its Instagram account after the gala, “I hereby order all celebrities to take an art history class.”

That’s what I’m talking about! A museum-on-museum diss track!

The Whitney followed up by pointing out they have free tours every day at 1 and 2 pm. Well worth a visit! I love the Whitney. And the Met, too.

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The midterms are obviously important. For most Americans, however, the stakes aren’t as high as much of the coverage will make it sound. We’ll report on the midterms here at The Pinpoint Press, but only on the real news likely to make a difference. Let’s start with five things worth paying attention to, now that Election Day is less than six months away:

Democrats will probably gain power, but their odds are slipping. President Trump’s approval rating has dropped below 40%, the best possible development for Democrats. The Iran war could still last for months, with gasoline prices well above $4 per gallon as voters prepare to go to the polls in the fall. You couldn’t script a better scenario for the opposing party to eject the incumbents.

The one thing working against Democrats, for now, is the redistricting arms race that seems like it might net Republicans a few seats in the House of Representative that they wouldn’t otherwise win. A lot could still happen, and that redistricting edge may not be decisive. But Democratic odds have declined after a couple recent court decisions went against them.

Prediction site Kalshi puts the odds of Democrats winning the House at around 74%, down from a high of 86% in early April. The Senate is closer, with Republicans slightly favored to maintain control, according to Kalshi.

There will be tons of chatter in coming months about whether Democrats will mount a “blue wave” that sweeps them into power in both houses with higher than usual margins for a midterm. It’s a fun parlor game for political geeks, especially those hoping Trump and his fellow Republicans take a beating. But the margins won’t matter all that much for most ordinary Americans.

If Democrats win the House, that’s all they’ll need to block Republican legislation through 2028, such as additional tax cuts or more funding for migrant roundups. Republicans already anticipate that happening.

If Dems win the Senate, it will be with a very small majority, possibly just a one-vote margin. They’d gain control over Trump Cabinet appointments, which would basically mean no more jackass picks such as Defense Secretary Pete Hegseth or FBI Director Kash Patel. Trump has already fired a couple of Cabinet officials, and he might axe a few more this year, so he can be sure of getting replacements through a friendly Senate in 2026.

With control of either House, Democrats are likely to launch right into oversight hearings on just about every Trump controversy. Jeffrey Epstein will never really die. Dems will probe Trump’s ballooning fortune as a president on the take. They’ll rake over agencies with the shiftiest Cabinet secretaries, take testimony on thuggish behavior by Trump’s immigration goons, and highlight abuses of prosecutorial power at the Justice Dept. A third impeachment proceeding against Trump is possible, though conviction in the Senate probably isn’t. Also watch for impeachment proceedings against the shadiest Cabinet appointees.

What Democrats won’t be able to do is pass partisan legislation of their own, since Trump would veto it. So while Democrats might get some satisfaction from running up the score in a blue wave and keeping Trump’s corruption in the headlines, they won’t have much luck enacting their own priorities until 2029, at the earliest.

If you do care about the horse-race aspects of the midterms, two good sources for following the action are the Cook Political Report and the Center for Politics at the University of Virginia. There are many others.

There’s no “affordability” action on the horizon. Not in Washington, DC, anyway. The only legislation Republicans might pass before the midterms are some funding bills and possibly a modest tax cut, which most people won’t notice. There’s nothing serious in the works to address the high cost of housing, health care, energy or food. Trump could actually make affordability worse. He’s still planning to roll out new tariffs in coming months, which would raise the cost of imports, all the way to you and me.

If Democrats win control of both houses, they might try to pass health care subsidies or other affordability measures next year, as a messaging exercise meant to tell voters what they stand for. Don’t get too excited. Dems won’t have the votes to override a Trump veto and they might not get organized enough to figure out what their message is, anyway.

The stock market outlook is pretty good, politically. The average gain in the S&P 500 index is 9% in the second year of a presidential term. The S&P is already up 7.4% for the year. If stocks cooled off for the next few months, that would be consistent with midterm election year trends.

Morgan Stanley points out that political uncertainty tends to subdue risk-on trading in the months before a midterm election. But by the beginning of October, investors start to price in the likely outcome and look past the election, with stocks rising. Once the election is over, stocks rip, with an average gain of 22% in the 12 months following a midterm election.

This year could be different. The artificial intelligence boom has been generating outsized stock gains since the end of 2023. A big part of that has been torrid earnings growth, which is now double the historical average. AI fervor could overpower election effects, which tend to be temporary, anyway. It could also go the other way if there’s some big meltdown that suggests the AI trade has gotten ahead of itself.

If Democrats do win one or both Congressional houses, divided government will generate few big changes in government policy, which is generally good for stocks. While the energy crisis caused by Trump’s war with Iran has been a disaster, markets like Trump’s deregulatory bent, along with the lower tax rates he signed into law last year. Those policies will continue to goose stocks.

Trump will continue to threaten election interference. Trump thinks it’s funny to troll democracy. He “jokes” about being a king, says he may or may not leave when his term expires in 2029, and demands voting restrictions he thinks will help Republicans in November. The gerrymandering arms race that’s underway this year got started because Trump told allies in Texas to rig congressional districts in a way that would help Republicans gain five House seats. It’s safe to assume that Trump would steal the election, if he could.

The good news is, that will be hard. Nathaniel Rakich of Votebeat handicapped the risks of Trump rigging the midterms in a recent interview with the Silver Bulletin newsletter. Many safeguards are built into the system. States administer elections and the president can’t cancel them or tell states how to run them, though Trump may try. It’s also not clear that all the gerrymandering will help Republicans. Trump’s efforts to limit and discourage mail-in voting might also not help his cause.

More worrisome is the possibility Trump will try to send immigration agents or other federales to areas near certain polling places, to intimidate voters or election workers. Friendly red-state governors such as Greg Abbott of Texas could call out National Guard troops for the same purpose. Creating chaos in or near areas where there are tight elections might be a pretext for snatching or invalidating ballots. If there is a blue wave, a small number of irregularities may not matter. But if Democrats underperform—always possible!—and there's a tight race for control of the House, Trump meddling in a few close races could become momentous.

Trump is heading toward his lame-duck phase. Trump litigates everything, and orders his minions to litigate everything. So there will be lawsuits over the midterm election results. The most likely outcome is that courts hold the line, as they did in 2020, the first time Trump tried to overturn an election. You’ll know there’s a problem if I start to post an exploding head emoji at the top of every dispatch I send. 🤯

Normal presidents curtail their domestic policy ambitions and focus more on foreign affairs once they hit lame-duck status. Trump seems less likely to go quietly. He still seems determined to enact more tariffs, and might feel unrestrained once he doesn’t have to worry about angry voters and all their kvetching about affordability. He’s ordered military action in seven nations so far during his second term, and it’s not clear his misadventures in the Hormuz Strait have taught him restraint. Plus, Trump thrives on conflict, whether he has laws to sign or not.

Divided government might generate gridlock, but it won’t provide any respite from the madness.

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The rest are living in a different world.

The Pinpoint Press Better-Off Index shows a modest improvement in US living standards compared with one year ago. But it’s largely because of stock-market gains. Without stocks, the year-over-year improvement is much weaker. And on the measures that matter most to working-class Americans, the economy is stagnant and probably getting worse.

The Better-Off Index answers the question, are we better off than we were one year ago? The index compiles four basic economic metrics—job growth, income growth, home affordability and stock-market performance—into one number, with values over 100 indicating improvement and values below 100 indicating decline.

The Better-Off Index through April is 108.91, which is an 8.9% improvement over conditions one year earlier. That’s up from 105.63 in March.

But without stocks, the Better-Off Index is just 102.1 for April. And most of that was due to improving home affordability. Growth in employment and real income, adjusted for inflation, was extremely weak, revealing substantial stressors for working Americans who aren’t building wealth through home ownership or stock-market investments.

This disparity illustrates the “K-shaped economy,” with Americans who hold financial wealth representing the upper leg of the K, and doing quite well. They’re benefiting from a huge rally in stocks that’s been going on since late 2023, with the S&P 500 index up 76% since then. Upper-K Americans also tend to be homeowners, and the luckiest of those bought before 2021, allowing them to refinance at the record-low mortgage rates that followed the 2020 Covid pandemic.

~ ~ ~ ~ ~ ~ ~ ~ ~

Check out everything The Pinpoint Press offers:

• Weekly market intelligence

• Exclusive datasets and charts on how the Trump economy is doing

• The economic costs of the Iran war

• The Weekly WTF: Crazy shit that actually happened

• Elite cartoons

• And way more

~ ~ ~ ~ ~ ~ ~ ~ ~

Lower-K Americans are typically workers who rely on a paycheck alone, with little financial wealth to pad their living standards. While slightly more than half of all Americans own stocks, many of those holdings are in retirement accounts that are generally untouchable for working-age people. And even those holdings tend to be small. The wealthiest 10% of Americans own 87% of all stocks, according to Federal Reserve data. The next 40% own about 12%, while the bottom 50% own just 1% of all stocks.

Affordability and inflation are once again top concerns for many Americans. The Better-Off Index accounts for inflation in two ways. The first is real income, which is income adjusted for inflation. As the chart above shows, real incomes were negative for much of Joe Biden’s presidency. That’s because of runaway inflation that peaked at 9% in 2022, which was far higher than nominal income growth.

Real income turned positive late in Biden’s term, and went a bit higher when President Trump took office, largely because inflation fell to a low of 2.3%. But inflation is on the march again, due to Trump’s war with Iran and surging energy prices. Inflation is now 3.3% and almost certainly going higher. Real incomes, as a result, are barely higher than one year ago and will probably turn negative soon.

Home affordability also captures inflation, specifically housing inflation. Home affordability is improving on a year-over-year basis, because mortgage rates are lower than they were in 2025 and the growth in home prices has slowed.

But housing affordability remains poor. It takes 41% of median income to pay for a typical house, according to the Atlanta Federal Reserve, which is far higher than the affordability threshold of 30%. Housing costs have been above the 30% threshold since 2021, when low rates led to a surge of buying, pushing home prices up and up.

Housing affordability is also likely to worsen. The latest data is from February—before Trump launched the war against Iran—when the average mortgage rate was 6%. The Iran war has pushed interest rates higher, with the average mortgage rate now around 6.3%. So home affordability will likely worsen in future data.

Many Americans don’t need charts and indexes to know that their paychecks are stretched. Consumer confidence, by some measures, is close to the lowest levels on record. Trump’s approval rating is sinking, especially on economic issues. His net approval rating on the economy has dropped from +12 to -24, according to YouGov. On inflation, his net approval has crashed from +6 to -44.

If you own stocks, the 28% gain during the last year is a welcome cushion against rising costs and other economic stressors. But many Americans lack economic shock absorbers, which explains the very sour public mood.

You can order this cartoon ^☝️ or others like it, plus merch featuring cartoons, at CartoonStock.com.

Stocks defy gravity. It’s hard to think of a time when the stock market levitated so far above the real economy. The Trump energy crisis is stoking inflation and causing lots of pain for businesses and consumers. Yet stocks are hitting record highs and basically blowing off concerns about the energy crisis. There are two questions: Is it real? And can it last?

On the first one, the stock rally is definitely more real than the dot-com boom of the late 1990s, which led to the dot-com bust of the early 2000s. Stocks are going up because earnings are strong and analysts keep raising their expectations for future earnings. These are not phantom companies that might be profitable someday, like many of the dot-com darlings were. These are profit juggernauts such as Alphabet, Apple and Microsoft, which faced rigorous earnings expectations this week—and exceeded them. These companies are both investing heavily in the artificial-intelligence buildout, and benefiting from it.

Here’s what Microsoft CEO Satya Nadella said this week: “We are at the beginning of one of the most consequential platform shifts that will change the entire tech stack.” If Nadella is right about the AI revolution being at the beginning, it makes sense that stocks would be roaring.

[These 8 charts explain why stocks are rallying in the midst of a war.]

Can it last? The AI transformation will definitely be lasting. Nobody knows if stocks are in a short-term bubble. But the fundamentals look pretty good. Patrick O’Hare of Briefing.com points out that the estimated growth rate of first quarter-earnings has soared from 12.5% a few weeks ago to 27.2% now. And it’s not just tech. “The salient point is that the earnings growth in other sectors has been much better than expected,” O’Hare wrote on May 1.

Skeptics ask how stocks can be soaring in the midst of an energy crisis. There’s another way to look at it: Without the Iran war and lofty oil prices, stocks would probably be doing even better.

For the week, stocks gained around one percent, with the S&P 500 and NASDAQ both hitting new record highs on May 1. From now on, our Saturday market summary will include charts showing stock returns by sector, based on data from S&P Global. It’s fun to look at how different industries rise and fall over time.

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86 Comey. President Trump’s henchmen at the Justice Dept. indicted former FBI director James Comey for a second time over some seashells he photographed on a beach last year. The case will undoubtedly fail a second time. This is an absurd abuse of power that would be laughable if—well, it is laughable. But it’s also grotesque.

Last year, Comey posted a picture on social media of shells on a beach arranged to form the numbers “86 47.” 86 is slang for get rid of. The dictionary definition is “to eject, dismiss or remove.” 47 refers to Trump, the 47^th president. So Comey was saying, get rid of Trump. Criminal, right? No, not remotely. Anybody has the right to say get rid of Trump, or get rid of anybody.

[See all of Trump’s losing causes]

The snowflake Trump claims “86” means “kill” because he’s seen that in gangster movies. In Trump’s addled mind, Comey was calling for his assassination. Trump’s corrupt Justice Dept. charged Comey with the same thing last year, but a judge threw it out for procedural reasons. If the latest indictment leads to an actual prosecution, there’s no way the government will win, because Comey and everybody else are protected by the First Amendment.

But Trump isn’t trying to win the case. He hates Comey because the former FBI director insisted Russia interfered in the 2016 presidential election, which Trump won. That triggered Trump’s deep insecurity, provoking his feral need for revenge. Trump is just trying to hassle Comey with pointless prosecutions and force him to spend bajillions on lawyers. By the way, your tax dollars and mine are financing these frivolous prosecutions.

[AI gave me some investing advice. It’s pretty good]

Gallows humor. It’s been a busy week for federal malpractice. The Federal Communications Commission says it’s going after ABC because its late-night host Jimmy Kimmel keeps roasting Trump. Oh wait, the FCC didn’t quite admit that’s why it ordered an early review of ABC’s broadcast licenses.

But that’s obviously what is going on. Trump called (once again) for ABC to fire Kimmel on April 27, and the next day the FCC issued what is plainly a threat against the network.

Kimmel’s latest offense is an April 23 segment spoofing the annual White House Correspondents’ Dinner. It’s funny and worth watching, if you haven’t seen it. In the skit, Kimmel jokes that First Lady Melania Trump has the look of an “expectant widow.” I laughed at that when I watched, which was before the actual correspondents’ dinner on April 25. Trump is 79 and Melania is 56. She will very likely outlive him, maybe by a lot. That’s the joke.

Well, at the actual dinner two days later, some crazy guy planning to shoot Trump wrecked the whole party, with Secret Service agents whisking Trump to safety. So the fragile Trump claimed that Kimmel’s expectant widow joke was an incitement of violence. Brendan Carr, the humorless FCC don, took the hint and now seems to be threatening ABC with regulatory extortion. Kimmel responded with another funny segment that’s also worth watching.

Trump in your pocket. To stroke Trump’s ego, the State Dept. will issue 250,000 commemorative passports featuring Trump’s image and signature. There was a momentary nationwide panic when some people thought all US passports would come with Trump’s face, for the rest of Trump’s term, forcing American travelers to endure 10 years of mockery every time they enter another country. But only weirdos who actually want the Trump passports will have to endure the mockery.

Junior Apprentice. The Wall Street Journal reported that Amazon is mulling a reboot of “The Apprentice” that would feature Donald Trump, Jr. as the obnoxious tycoon who fires people for fun. The idea is in the early stages, and it’s a good guess somebody leaked the plan to the Journal to embarrass Amazon and maybe kill the idea before it gets any further. Amazon is already taking heat for the awful “Melania” film that looks like a badly disguised ransom payment to the Trump family. Regular episodes of a Trump Jr. vehicle would probably lead to boycotts and a lot more trouble than Amazon would ever want.

But Don Jr. certainly has star power. Somebody should cast him as the lead in a reality show about a boorish trust funder struggling with anger issues.

War over. The Iran war is over, according to an official notice Trump sent to Congress. That’s very convenient, because the War Powers Act requires the president to end a war once it has been underway for 60 days, unless Congress explicitly authorizes the war. The 60-day mark for the Iran war was April 29. Trump declared a ceasefire April 7. So … we’re good?

Yeah, sure—as long as the bombs don’t start flying again. If they do, there will be a big argument over whether a resumption of hostilities represents a new war that restarts the 60-day clock, or a continuation of the old war, which would then be beyond the 60-day mark.

[See the economic toll of Trump’s Iran war]

Markets aren’t subject to the War Powers Act, and they consider the war to be ongoing, at full tilt. Brent crude oil is trading at around $110 per barrel, which is 60% higher than the pre-war level and close to the wartime high. The average gasoline price is about to hit $4.50 per gallon, an abrupt 50% hike from pre-war levels. Whatever is going on in Iran, the affordability war many Americans are engaged in is as hot as ever.

National debt > GDP. The amount of federal debt held in public markets now exceeds the size of the whole US economy for the first time since the World War II era. And it will probably exceed the record of 106% of GDP, set in 1946, by 2028 or so. Congress plans to address the problem … never.

It could always be worse. The next time you’re feeling sorry for yourself, take solace that you’re not a North Korean soldier. Bloomberg reported that North Korean dictator Kim Jong Un has publicly acknowledged that North Koreans fighting in Ukraine have orders to kill themselves instead of being captured. Kim calls it “self blasting” and describes it as a form of heroism. He should demonstrate the technique.

North Korea started sending troops to fight alongside Russian forces in Ukraine in 2024, in exchange for cash and goodies. Ukrainian intelligence noticed the North Korean suicides, which dear leader now seems to have confirmed. An estimated 2,000 North Koreans have died fighting for Russia in Ukraine, while Ukraine has captured only two North Korean soldiers alive. Since they disobeyed orders, those two probably can’t go home once the war is over. What a predicament.

During April, however, stocks staged a surprise rally that erased those wartime losses and turned stocks positive for the year. The S&P 500 index is now up about 4.5% in 2026, with a few sectors up by a lot more.

Some analysts don’t understand how stocks can blow off a global energy shock that’s raising costs for most companies, damaging consumer purchasing power and depressing growth. It could be that markets are too sanguine and stocks will drop anew.

But it’s also true that investors think huge gains lie ahead for the beneficiaries of artificial intelligence, with or without a war. Views change about who those beneficiaries are likely to be. But for now, investors have decided that the risk of missing out on huge AI-related gains outweighs the economic damage caused by the war. The war effects will (probably) be temporary. The transformative effects of AI will be lasting.

A few intriguing charts show how the AI boom temporarily became a sidestory during the first few weeks of the war—then roared back to propel stocks to new highs.

First, here’s the S&P 500 index for 2026. It was up by a fraction—basically flat—when the war started on February 27. From the start of the war through March 30, the S&P 500 fell 7.8%. Since then, however, the S&P has jumped by nearly 13%.

Stocks in most industries have followed the S&P. This chart shows eight of the 11 industries represented in the index: communications, consumer discretionary, consumer staples, financials, health care, industrials, real estate, and utilities. Nothing stands out, but that’s the point.

Now here’s the index with all eleven sectors. The additions include technology, materials, and energy. We’ve also added two subsectors, semiconductors and software, using the S&P Global subsector indexes. Ignore the muddle in the middle and focus on the standouts at the top and bottom.

[See the economic toll of the Iran war.]

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TL;DW: It’s good for markets. Powell is better than whatever stooge Trump would try to install. Trump will not gain control of the Fed, thank goodness. Meanwhile, the Fed may not cut interest rates at all this year, largely because of Trump himself. His foolish tariffs and his war with Iran have triggered another bout of inflation, raising the odds that the Fed will RAISE interest rates instead of cutting them.

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