How ironic would it be if “US exceptionalism” in all its various manifestations peaked in 2024 and began to wane during the first year of Donald Trump’s promised American renaissance?
That’s a rhetorical question. It’d be very ironic indeed if last year in fact marked the zenith of American dominance and if history remembers 2025 as the first year of a long sunset.
Sunsets can be “golden,” but I doubt that’s what Trump meant when he spoke of a “golden age” during his second inaugural.
Do note: You don’t have to be any kind of partisan to make the case. You just have to look at the numbers, acknowledge a few uncomfortable realities (e.g., that whatever else they accomplish, mass deportations could very well be net drag on the economy) and accept that generally speaking, trees don’t grow to the sky.
“US nominal GDP’s up an exceptional 50% over the past five years driven by excess government spending,” BofA’s Michael Hartnett wrote, in his latest, adding that immigration “accounted for 84% of a 3.3 million rise in the US population last year.”
Fiscal excess may be ending, and border encounters (illustrated on the right, above) have collapsed. They’re likely to fall further one way or another if Stephen Miller has anything to say about it, and he does.
The simultaneous loss of fiscal and demographic tailwinds will constitute a macro shock, and it’s unlikely that supply-side initiatives (e.g., tax cuts for the rich and exhortations for white people to have more babies) will be sufficient to offset that shock.
Across markets, “US exceptionalism’s now exceptionally expensive and exceptionally well-owned,” Hartnett said, suggesting US outperformance may “peak in 2025 as excess government spending ends, immigration’s reduced and DeepSeek means a peak in AI capex return expectations.”
Of course, it’s all relative. Or at least it is until pathologically avaricious Americans stop spending. “So long as US consumer spending’s resilient, peak US exceptionalism’s a relative not an absolute theme,” Hartnett went on. Going forward, he wrote, the “Magnificent 7” may become the “Lagnificent 7,” supporting “a broadening of US and global equity and credit markets.”
Very nice graphic result! Are you still using midjourney or newer from the Mag7 offerings?
White non-Spanish speakers have not reproduced themselves for years. Clearly the Trumpers are on the downslope.
The roaring 20’s have definitely made a reappearance in this century. As we enter the back half of this decade that has seen, financial excess, a pandemic, and the election of a no-nothing rich man (twice) who’s lack of understanding of the Federal government is only dwarfed by his inability to hear any form of criticism; one has to ask if history will continue repeating itself.
Tariffs, lack of regulation in questionable investments, corruption, rampant substance abuse and use, and a disillusioned nation hellbent on nationalism and protectionism do not bode well.
Does that mean the end of American exceptionalism? Who knows, it could be that, or it could be that watching this whole thing fall apart is the event that drives a resurgence of American ingenuity and patriotism.
I wonder if anyone has analyzed or intends to track the effect of foreign cash flows due to tarriff’s? I think there are competing factors at work.