This current administration risks putting this cycle in reverse by undermining the Federal Reserve, imposing tariffs and passing a tax and policy bill that is more budget busting than big and beautiful.

That set off a virtuous economic cycle of growth, deficit reduction, lower interest rates and thus more investment and growth. Fiscal responsibility helped contain inflation b/ it was accompanied by respect for the independence of the Fed and recognition of the importance of a strong dollar.

In that earlier era, we followed a strategy of hoping for the best, while planning conservatively. We paired policies that reduced the deficit with others that stimulated investment.

There are important parallels between the two moments. Mr. Clinton then and Mr. Trump now face serious fiscal problems and an economy that is being rapidly changed by new technology; then it was the internet, now it’s artificial intelligence.

We were members of Bill Clinton’s economic team when the federal budget was balanced, the only time that has happened in more than half a century. In nearly every respect, the Trump administration’s approach is the opposite of what worked in the 1990s — and it poses huge risks to our economy.

Takeaways:
Losing the Privilege – The U.S. has long benefitted from the dollar’s dominance. That status was never guaranteed.

Policy Risk Is the New Market Risk – When investors worry more about Washington than war or pandemics, something’s broken.

Takeaways from my conversation w/ Jay Sapsford:

Triple Market Warning – Stocks, bonds, and the dollar are falling together. That should be a source of 'apprehension.'

Tariffs Send Mixed Signals – Economic nationalism may play well at home, but globally it raises doubts about U.S. reliability.

Trump’s attack is not surprising given his authoritarian tendency and past rhetoric. Columbia's capitulation was unconstructive at best, and I pray Harvard will avoid following their example.

Second, President Trump is no moral beacon on antisemitism. He has praised and dined with Neo-Nazis and holocaust deniers and welcomed the support of ugly white nationalists.

First, that it would be illegal and likely unconstitutional, as well as threatening prosperity and national security, to suddenly withdrawal federal resources from American universities.

....if it is to regain public confidence and be in a maximally strong position to confront dictatorial oppression of the kind currently being applied to Columbia, other universities, several prominent law firms and holders of valid work visas.

To be sure, Harvard has much more to do on discipline, limiting DEI, constraining soft censorship of conservative ideas, and promoting ideological diversity .....

I hope and trust these actions reflect the belated development of conviction and courage by leadership, rather than an effort to appease the threatening, dangerous, oppressive Trump administration.

The university at last did the right thing by suspending its partnership with terrorist supporting Birzeit University and by moving to replacing the leaders of its Center for Middle Eastern Studies.