Weak Dollar

Plus: Columbia's Hamas apologists, Musk's lawsuit against OpenAI, and more...

Trade wars are neither good nor easy to win: President Donald Trump's famous first-term mantra, "trade wars are good, and easy to win," was already proven false several years ago, but he appears to have learned no lessons, and may even be doubling down. At least back in the halcyon days of Trump round one, he could be relied on to care about market indicators of his success. Now, he genuinely appears to be pursuing a weaker dollar, slapping tariffs on America's biggest trading partners, and seems more immune to worries about whether markets will greet his policies favorably.

"Wall Street's done great," Treasury Secretary Scott Bessent said Tuesday, "but we have a focus on small business and the consumers. So we are going to rebalance the economy." (Sounds like central planner talk.)

"Investors entered 2025 optimistic that an already strong U.S. economy could get an extra boost from an administration pushing market-friendly tax cuts and regulatory rollbacks," reports The Wall Street Journal. "Instead, trade tensions and signs of slowing growth have driven major indexes lower in recent weeks. The declines accelerated this week as Trump imposed 25% tariffs on the U.S.'s major trading partners—forcing investors to rethink how serious he is about pursuing a broadly protectionist agenda." (Even his imposition of tariffs has been unpredictable, full of baits and switches. Last month, he announced tariffs on Canada, Mexico, and China, only to delay the Canada and Mexico ones—and the full China tariff amount—for a month before finally imposing them this week. Then, when U.S. automakers expressed concern over higher prices, he announced that he would exempt them from the Canada/Mexico tariffs—but only for one month.)

A weak dollar, to be clear, would make it cheaper for people abroad to purchase American products, which Trump believes could boost manufacturing. But he also seems to appreciate having a strong dollar because he wants it to maintain its status as the preferred reserve currency. Part of his pursuit of a weakened dollar appears based on his belief that trade deficits are necessarily bad and in need of fixing. "We have deficits with almost every country—not every country, but almost—and we're going to change it," he said last month. It's not totally clear where this belief comes from, but weakening the dollar (and "fixing" the trade deficit) would probably serve his push to reinvigorate American industrial capacity. (Still, it will take a lot of time for such capacity to be built up, and there's no guarantee that that means long-term lower prices; Americans would probably be better off if the administration simply allowed them to buy products from overseas as they please.)

All of this is to say: Trump's economic policy so far is rather schizophrenic, to which markets have not responded favorably. In the past, this would have led to a course correction. Right now, he appears almost ideological, fascinated by a weaker dollar, but not totally willing to commit to a clear approach or timeline.

The great rehiring begins: Over at the Centers for Disease Control and Prevention, about 180 employees of the roughly 700-750 fired in the last few weeks were told to actually report to work this week. "Those who received reinstatement emails included outbreak responders in two fellowship programs—a two-year training that prepares recent graduates to enter the public health workforce through field experience and a laboratory program that brings in doctorate-holding professionals," reports the Associated Press.

The National Science Foundation, meanwhile, rehired roughly half the employees it fired about two weeks ago. The Department of Agriculture is working to rehire 5,000 axed employees.

"The Trump administration informed federal departments Tuesday that any firings of their probationary workers are up to the agencies themselves in an update to its policy after a federal judge last week paused recent mass terminations," reports USA Today. "The revised guidance from the U.S. Office of Personnel Management states that 'OPM is not directing agencies to take any specific performance-based actions regarding probationary employees,' adding that 'agencies have ultimate decisionmaking authority over, and responsibility for, such personnel actions.'"

Meanwhile, the Department of Government Efficiency's (DOGE) X account keeps touting…canceled software licenses, surely a drop in the bucket. (Hey, even drops in buckets count, though.) It will be interesting to see whether many of the DOGE-related headline numbers—which libertarians like myself greeted as useful culling of overgrown federal agencies!—end up rubbing up against the realities of firing union-protected federal employees (and the fact that, in many of these cases, congressional authorization is needed to fully shutter and defund these departments, like the U.S. Agency for International Development). Perhaps we need even more substantive structural reforms…ending public-sector unions, anyone?

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Scenes from New York: Columbia update.

This is taking place in the library building:pic.twitter.com/D7QrIm4d2G

— Steve McGuire (@sfmcguire79) March 5, 2025

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• It's absolutely insane that a lefty journalist can tweet "Hahahahahahahahaha" in response to a female athlete suffering a traumatic brain injury after a volleyball was lobbed her way by a transgender opponent. (The woman, Payton McNabb, had her story told by the president at the address on Tuesday.)

Hahahahahahahahaha https://t.co/D1tZ3IOw8Z

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