An Empire Falls :: Uncertainty

The First in a Sometime Series

The Heisenberg Uncertainty Principle. Unlike Trump’s tariffs, actual math.

As I’ve written before, the world as we knew it is over. Last week, Trump’s tariff tussle threw the world financial system, global trade, and 80 years of a world that ‘made sense’ into history’s rubbish bin. Even after his broad public retreat, much of the world refused to buy in.

We’ll now experience a critical part of an empire’s end: Uncertainty.

The United States almost single-handedly designed the world that many of us grew up in. Many of our children and grandchildren will experience the full brunt of what it means to live in a time when America has voluntarily pulled back from leadership, brute force, and soft power.

Only a hegemon can provide its people, and the world, the illusion of certainty, of clarity, and of inevitability. It’s a fiction, and only one that the raw force of world-ending power and financial dominance can perpetrate on billions of humans.

Now, things are different. The chaos will manifest in a multifold manner, but the financial aspects seem most germane today.

Retirement :: We’re Not 401(o)K, We’re Socially Insecure

More than half of all Americans have some sort of retirement account: A 401K or an IRA. The Republican tariffs set off a cascading sell-off in both American and foreign financial markets, leaving investors watch years of work tumble in value because of one man’s caprice and his administration’s inability to do math.

The pull back on duties drove buyers back in, chasing bargains. The damage may be done, though. As of last year, foreign investment made up some 18% of money in the markets, equaling $16.5 trillion according to Axios. What if just 10% of those funds find a home elsewhere in the world?

It’s already happening. Per Euronews, “The euro surged to a more than three-year high against the US dollar during Friday’s Asian session, as investors continued to offload US assets amid US President Donald Trump’s chaotic tariffs.”

Given the turmoil, Americans counting on Social Security for part of, or all, their retirement income also face an uncertain future. Social Security accounts for 21% of America’s federal budget. Medicare, in which all Americans are enrolled at 65, represents another 15%.

The country’s political leadership has for years been unwilling and unable to make hard decisions about ‘getting our fiscal house in order.’ Both parties have avoided hard choices due to the US dollar’s status as the world’s reserve currency, the US Treasury’s status as the safest financial haven available, and perhaps most importantly, investor’s willingness to loan us so much money we can simply dilly-dally along, making minimum payments on the family credit card.

All that is gone. All of it is over. The patient is terminal, if not yet in hospice.

“The markets don’t like instability and they don’t like uncertainty.” - Peter Mandelsohn

Quarter-by-Quarter, Minute-by-Minute

Large, public-traded companies are so consumed with the idea of certainty that they’ve allowed themselves to become prisoner to a system that expects them to report their growth and earnings every 90 days. An unexpected bad quarter creates the double-whammy of a stock price tumble and the cost of borrowing go up.

How do the companies that make and comprise the financial markets plan for anything in this time? How do corporate bean-counters account for instability? They slow. They contract. They cut costs. They fire people.

Small and mid-sized companies, too, rely on some level of certainty, whether that’s sales, accounts receivable, or when materials will arrive, to ensure their businesses can operate and grow. Their employees need an expectation that their employer will have enough cash set aside to cover payroll every two weeks.

What are these businesses to do in the face of ever-changing tariffs on products and components they have to order months ahead of time? While the markets ‘relaxed’ when Trump said he’d simply levy a 10% tariff on everyone not named China, that’s not good news for small businesses, those scrappy folks we’ve referred to as ‘the backbone of the American ecomony’ for so many decades.

These owners and bosses will refocus on maintaining the business they have and ensuring existing customers are taken care of. They’ll put off buying a new piece of capital equipment or hiring that extra couple of staff to help with expected growth.

On the Rocks

Thanks to Republicans and their chaos, we’re all strapped to a river raft, heading into class five rapids while Donald Trump throws boulders at us from the hilltops. None of what we’re seeing is ‘for the greater good’ or to ‘return America to prosperity.’ No, now the river is cresting, the rockings are looming, and the waterfall is approaching.

The Beginning of the Beginning of the End

“This not the end,” Winston Churchill told the British people during a dark hour. “This is not even the beginning of the end. This is the end of the beginning.”

We’re not even that far along. We are at the beginning of something, yes. And what we knew is over. We are indeed on that raging river without a paddle and no sense of where to go? We can panic, and tumble over the side, hoping that fate will save us. Or we can hold on to one another, take care of one another, pull one another back from the edge and attept to navigate to calmer waters.

Whatever we do, uncertainty is now our constant companion. Of that we can be certain.

News and Notes:

Please check out my terrific conversation with

Steve Schale

on the Democrats’ super PAC mess, why Florida went so red so fast, and why the 2030 census is existential to the future of the Republic. I hope you’ll listen and leave a five star rating.

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