The tariff sledgehammer has a role, but it's a limited one. There's an inherent tension in State-Corporate Capitalism. Proponents of the free market hold that any state Industrial Policy will fail because the State cannot pick the winners and losers as effectively as The Market. Yet Corporate Capitalism continually lobbies the State to lower interest rates and taxes, weaken the currency to make corporate products cheaper in overseas markets, erect tariff / trade barriers against mercantilist global competitors, etc. In other words, the State should butt out of the free market except when it serves our purposes. The other source of inherent tension is the State's responsibility for more than boosting private-sector profits. Enterprises have the luxury of focusing on one thing: boosting profits and "shareholder value." Governments have responsibilities far broader than boosting profits--for example, national security, which has been gutted by de-industrialization and the wholesale transfer of supply chains overseas. Steep tariffs are now being deployed to correct the corporate offshoring that boosted profits so wondrously. The problem is tariffs are not enough to reverse offshoring to reshoring. Tariffs act as a useful sledgehammer but a sledgehammer has a limited scope of utility. There are more moving parts in the decision to reshore than tariffs. What few realize is every State has a de facto Industrial Policy set by the entirety of State policies and regulations. This Industrial Policy is implicit rather than an explicit set of goals and policies, and so various pieces of this implicit Industrial Policy may actually be contradictory. Just as the State doesn't have the luxury of focusing solely on profit, corporations don't have the luxury of gambling the company's future based on one State policy that's likely to change. Enterprises must consider a great many factors before committing billions of dollars to moving supply chains and production facilities. These include: 1. Tax structures 2. Regulatory burdens 3. Environmental requirements 4. Workforce availability and cost 5. Cost of capital 6. Availability of credit 7. Cost of healthcare for the workforce 8. Automation / AI 9. Domestic and global market conditions and competition 10. Public sentiment The State's policies set many parameters that affect decisions about reshoring: the complexity of tax codes, the cost of healthcare, the cost of capital, environmental regulations, the relative ease or difficulty of doing business, the availability and skills of the workforce, and so on. The de facto Industrial Policy of the U.S. has incentivized hyper-globalization and hyper-financialization, to the detriment of the national interests and security. Wall Street, the political class and Corporate America benefited from these de facto policies while the bottom 90% lost ground. The New Cost of American Inequality: $80 Trillion Measuring the Income Gap from 1975 to 2023 (RAND) $1 Trillion of Wealth Was Created for the 19 Richest U.S. Households Last Year The richest of the rich in America control record slice of nation's wealth. (WSJ.com) These are not the result of "market forces," they're the result of State policies. The point is all of these State policies have to be changed if we as a nation are serious about reshoring critical supply chains. Tariffs are not enough. I have long advocated here for a radically simplified corporate tax structure that's a flat tax of 5% paid on whatever profits are reported pro forma quarterly. Corporate taxes could be reduced for companies that source all components and assembly of their products in North America. There many ways to incentivize reshoring that are more reliable and actionable than tariffs alone. I've advocated shifting the tax burden from workers and employers (Social Security and Medicare taxes paid by all workers and employers) to capital via transaction fees on all capital transactions and the elimination of tax giveaways / breaks for capital. Since the top 10% own / control 80% to 90% of all income-producing capital, a policy shift from labor / employers to capital would transfer the tax burden to the wealthiest Americans, those who have benefited so richly from the de facto policies of hyper-globalization and hyper-financialization. I've also noted here many times that the current healthcare system will bankrupt the nation all by itself. Radical reforms are required to improve the overall health of Americans and reduce skyrocketing costs, many of which qualify as profiteering, fraud or needless paper-shuffling. The tariff sledgehammer has a role, but it's a limited one. If we're serious about reshoring strategic supply chains, we have to tackle all the hard stuff that the wealthiest class wants to leave as-is because they've benefited so mightily from existing policies. None of these reforms will be easy. There are many competing interests and complex trade-offs that must be negotiated so whatever pain is required will be distributed primarily to those who can best afford it. These are the folks with the wealth and incentives to lobby the hardest for their exclusion from any pain, and therein lies the political challenge: do we leave the status quo intact because it favors the most powerful few, or do we put national security above private-sector spoils? New podcasts: Dismantling the Economic Divide (1 hour) (hosts Emerson and Amy) Retirement Lifestyle Advocates w/ Charles Hugh Smith (host Dennis Tubergen) My recent books: Disclosure: As an Amazon Associate I earn from qualifying purchases originated via links to Amazon products on this site. The Mythology of Progress, Anti-Progress and a Mythology for the 21st Century print $18, (Kindle $8.95, Hardcover $24 (215 pages, 2024) Read the Introduction and first chapter for free (PDF) Self-Reliance in the 21st Century print $18, (Kindle $8.95, audiobook $13.08 (96 pages, 2022) Read the first chapter for free (PDF) The Asian Heroine Who Seduced Me (Novel) print $10.95, Kindle $6.95 Read an excerpt for free (PDF) When You Can't Go On: Burnout, Reckoning and Renewal $18 print, $8.95 Kindle ebook; audiobook Read the first section for free (PDF) Global Crisis, National Renewal: A (Revolutionary) Grand Strategy for the United States (Kindle $9.95, print $24, audiobook) Read Chapter One for free (PDF). A Hacker's Teleology: Sharing the Wealth of Our Shrinking Planet (Kindle $8.95, print $20, audiobook $17.46) Read the first section for free (PDF). Will You Be Richer or Poorer?: Profit, Power, and AI in a Traumatized World (Kindle $5, print $10, audiobook) Read the first section for free (PDF). The Adventures of the Consulting Philosopher: The Disappearance of Drake (Novel) $4.95 Kindle, $10.95 print); read the first chapters for free (PDF) Money and Work Unchained $6.95 Kindle, $15 print) Read the first section for free Become a $3/month patron of my work via patreon.com. Subscribe to my Substack for free NOTE: Contributions/subscriptions are acknowledged in the order received. Your name and email remain confidential and will not be given to any other individual, company or agency. Thank you, Mark S.C. ($70), for your wondrously generous subscription to this site -- I am greatly honored by your steadfast support and readership.   Thank you, Jeff T. ($70), for your marvelously generous subscription to this site -- I am greatly honored by your support and readership. Thank you, Tempos L. ($70), for your magnificently generous subscription to this site -- I am greatly honored by your support and readership.   Thank you, Ohio Chris ($7/month), for your superbly generous contribution to this site -- I am greatly honored by your support and readership. Go to my main site at www.oftwominds.com/blog.html for the full posts and archives.

What this means: On a weekly basis, Realtor.com reports the year-over-year change in active inventory and new listings. On a monthly basis, they report total inventory. For May, Realtor.com reported inventory was up 30.6% YoY, but still down 16.3% compared to the 2017 to 2019 same month levels.   Now - on a weekly basis - inventory is up 31.1% YoY. Realtor.com has monthly and weekly data on the existing home market. Here is their weekly report: Weekly Housing Trends View—Data for Week Ending May 3, 2025 • Active inventory climbed 31.1% year-over-year There were more than 1 million homes for sale last week, crossing this threshold for the first time since December 2019. • New listings—a measure of sellers putting homes up for sale—rebounded, rising 9.3% year-over-year • The median list price was up 0.9% year-over-year Here is a graph of the year-over-year change in inventory according to realtor.com.  Inventory was up year-over-year for the 78th consecutive week.   New listings were the highest since 2022. Median list prices are up slightly year-over-year.

Plus! The Path of Deployment; The Long Tail; Non-News; Data; Models

From STR: U.S. hotel results for week ending 3 May The U.S. hotel industry reported positive year-over-year comparisons, according to CoStar’s latest data through 3 May. ... 27 April through 3 May 2025 (percentage change from comparable week in 2024): Occupancy: 65.8% (+1.8%) emphasis added The following graph shows the seasonal pattern for the hotel occupancy rate using the four-week average. Click on graph for larger image. The 4-week average of the occupancy rate is tracking below both last year and is close to the median rate for the period 2000 through 2024 (Blue). Note: Y-axis doesn't start at zero to better show the seasonal change. The 4-week average will mostly move sideways until the summer travel season.  We will likely see a hit to occupancy during the summer months due to less international tourism.

Trump's crypto-for-access dinner triggers broad ethics alarms, and 73% non-US attendance raises fresh concerns over foreign influence