I’m a big fan of the Nobel Prize-winning economist, who recently resigned as a columnist at the New York Times to start his own Substack. It’s refreshingly blunt.

Today he calls out the intentional cruelty in Congressional budget negotiations, which will fund small gains in after-tax income for the top 0.1% of earners with taxes/service cuts that will pare 10%+ from the after-tax incomes of the poorest 20% of the population.

It’s hard for me not to connect this behavior with the similar cruelty in ICE’s seizure and deportation to foreign prisons of non-citizen residents like Kilmar Abrego Garcia. In Mr. Garcia’s case, the administration is also refusing to obey court instructions to return him to the US.

What does institutionalized sadism have to do with the stock market? It’s certainly not a plus for the vast majority of foreign tourists–and by extension for the hotels, airlines and areas that cater to tourism.

There are two more important issues, though:

–reputational damage to the idea of the US as the land of the free and the shining city upon a hill. This likely already playing out in PE multiple contraction and currency weakness.

–economic growth comes from having more workers and from giving workers better skills. Given that the domestic population is barely growing, arresting and deporting immigrants is shooting yourself in the GDP foot. So too is attacking universities and dismantling federal education assistance.