Kicking an Addiction

Welcome to This Week’s Leyendecker View

To give anything less than your best is to sacrifice the gift.
– Steve Prefontaine

FAVORITE READS OF THE WEEK

Has DEI destroyed our institutional competence?

Is Catholicism the new cool?

FAVORITE POD OF THE WEEK

Shane Parrish interviews Bill Belichick

THINKING OUT LOUD

Kicking an Addiction
Escaping the Keynesian Trap

The federal budget under consideration does not cut the deficit.
Wall Street is starting to worry more seriously about the country’s debt.
Even Obama’s budget director is worried about our debt.
The national debt is driving up rates for some local governments.
Manufacturing can’t return overnight.
Big, beautiful bill needs a debt strategy.
Jamie Dimon sees cracks in the bond market.
Ray Dalio presents the 3% solution. 

Many people are criticizing the current reconciliation bill (the “big, beautiful bill”) because it does not cut spending enough and it does not increase revenue enough, so it’s not going to solve our government’s out-of-control spending and exploding debt problems.

The crappy economic policy we have had for many years, maybe a few decades, cannot be fixed overnight.

Consider the trillions of dollars the government has been throwing into the economy, especially since the 2008 crash.

The government is never the most efficient allocator of capital. That said, those trillions of dollars have subsidized government agencies, schools, the health care industry and many other industries and companies, all of which employ workers. Many of those workers are paying mortgages, raising kids and living a regular life. They may be working in unproductive organizations, but they still need a job.

You can imagine the economic and jobs chaos that would ensue if we turned off the stimulus pump overnight without first enabling the private sector to take up the slack. Or if we cut costs much faster than we were able to increase revenue to compensate for the lack of federal stimulus.

Largely since 2008, the American economy has devolved into outright stimulus addiction. Trillion-dollar budget deficits are now the norm, and our federal debt has exploded.

No one has yet been able to figure out how to get us off the fiscal and monetary stimulus “drug.” It’s our financial heroin, and the addiction has gone on for way too long and has gotten way too serious.

It’s true that we have to kick this addiction. But like a heroin addict, it can be deadly if we go cold turkey.

But if we don’t titrate off the drug, the addiction to ever more fiscal and monetary stimulus will likely win. Relapse will happen. For the heroin addict, the only safe way to dry out is through methadone—it eases the addict off heroin safely to prevent debilitating, possibly lethal withdrawal and to reduce the odds of relapse. 

For the American economy, our methadone is a multi-front plan: persist with government spending while we try to generate revenue elsewhere and fix the fundamentals of the economy.

For team Trump, this involves spending reduction through DOGE, seeking international investment in major industries (e.g., a large goal of Trump’s recent trip to the Middle East), efforts to move more manufacturing back home, and leveraging tariffs to offset trade imbalances, incentivize investment in the US and encourage more Americans to buy American. Meanwhile, Congress must find the courage and wherewithal to reduce overall spending—over time and safely, but it has to happen.

So let’s not fool ourselves. We will have to continue deficit spending for some period of time. But let’s also not fool ourselves: This is serious. And Washington—and the media—must take it seriously and get out of the way of efforts to inspire more organic private sector economic activity and to reduce spending.

THE RANDOMS

Is the only way we get fiscal discipline as a country is being forced to do so by an enormous crisis?

Is a trade deal with China even doable?

Meta just signed a deal for a large utility to supply them with nuclear power. Does this mean households are now going to subsidize big tech’s AI ambitions?

Why does Europe have a seat at the table of global policy? They can’t even solve the Ukraine situation in their own backyard.

What average American cares if Europe’s luxury goods are subject to a tariff that means rich people have to pay more for things they want but don’t need?

Do we really think human beings are going to subject their lives to a horde of robot workers and helpers? Really? Is that humanity’s future?

Which of the big tech companies are going to become the next dinosaurs because of AI? Which new AI companies, besides Nvidia, are going to be the next big tech leaders?

How long before the cyber criminals take down a major company or industry? Or country, for that matter? Is it really safe for everything in the world to be on the internet?

What exactly is so abhorrent about physical labor? If our backs, our arms, and our legs are less valuable than our brains, then what will the future human body actually look like?

For how long has the pursuit of food, shelter and clothing dominated human effort?

ECONOMIC NEWS

Economy

Companies are gaming inflation
CEO exits are at a record level
Inflation was benign in April
Manufacturing activity is contracting
Consumers are financing groceries

Labor

May jobs beat expectations, but pace slows
ADP job report is dismal
McKinsey replacing entry-level jobs with AI
Walmart CEO started as warehouse worker
Find the most talented people on earth

BUSINESS

Finance

Oregon wants PE out of health care
Private equity can’t get a break
The Asian-US investment tsunami
Another private credit red flag
Has private equity become a money trap?

Real Estate

Vacation home market looks shaky
As does South Florida real estate
New apartment construction permits plummet

Tech

Smart phones can be made in the US
Cyberattacks hit retailers
Welcome to the age of cyber insecurity
AI will supercharge hackers
The case for breaking up Google

AI

Tariff chaos nothing compared to AI future
Claude threatens to blackmail engineers
DeepSeek’s AI is getting better
AI is creating a worsening energy problem

Energy Transition

Another EV transport ship catches fire
Mackinac Center’s energy scorecard rankings
What the hell are rare earth minerals?
EVs died a century ago

THE NATION

The Washing-Tone

Trump-Elon feud is great for news media
Trump bans some countries’ citizens
Team Trump scrutinizes tech contracts
SCOTUS ends 500K migrants’ temporary legal status

Tariffs

Trade deficit drops 50%
China says US is a trade cheat
Steel tariffs to double
US goods imports tumble 20%
India to import more US oil

Social Trends

The American dream died by suicide
Is our wealth gap obscene?
Sports betting boom about to backfire
Wisdom still comes with age, not youth

GEOPOLITICS

Global

Global growth expected to fall
Mexico’s Supreme Court won’t be independent
The future of foreign aid, from McKinsey

Europe

ECB cuts rates
The Muslim Brotherhood is capturing Europe
Europe is losing the global tech race
Poland elects a pro-Trump nationalist
Doing business in Germany is a grind

Ukraine

Russia is using Chinese weapons
Ukraine executes a brilliant Russian bomber attack
Putin retaliates with Kyiv attack
Ukraine hits Crimea bridge again
Cease-fire is a long shot

Middle East

Israel arming Palestinians to fight Hamas
Israel bombs Hezbollah drone makers
Trump says no Iranian nuclear enrichment
Iran not in a negotiating mood
Iran speeds ahead on uranium stockpile

China

Harvard is Communist Chinese party school
The US is not hobbling China’s tech
China seeks to dominate the robot biz

War Creep

Israeli arms exports set record
China supports Russian weapons industry
China supports Iran with weapons material
Britain may build 12 attack submarines
The potential drone killer

MAKING A BETTER YOU

Mind

Get more quiet time.

Sing to your babies, please
Quit being so hard on yourself
The secret to building a trusting relationship

Body
Get more outside time.

A diet that can cut Alzheimer’s risk
Coffee is good for you
How healthy is citrus fruit?

FUN STUFF

Let your hair down, baby! Even if you’re all alone.

The Extraordinary

Our solar system may have a new planet
The one bird species that can fly backwards
Milky Way photographer of the year

It’s Vacation time

The perfect road trip
America’s feel-good summer cities
US vacation spots may be less crowded
Don’t go to Northern Michigan before I do

Music That Found Us

Eminem’s “Lose Yourself,” from 331 movies.
Best albums of the year so far

Worth a Watch

Apple and Owen Wilson’s golf show, Stick.
The lovely comedy, The Ballad of Wallis Island.
U2 documentary, Bono: Stories of Surrender.
A fun camping film, Good One.

The Yum Yums

Time for some sweets?
Classic rhubarb pie
Transcendent rice crispy treats
Bread pudding
Pistachio chocolate chunk cookies
Lemon-almond butter cake
Chocolate pie for breakfast?

PARTING THOUGHTS

We are not defined by the technologies we create, but by the process in which we create them.
–Clarence “Kelly” Johnson, former Chief Engineer for Lockheed’s Skunk Works

IN CASE YOU MISSED IT

The First Interview: The Candidate Perspective
June 3, 2025

Threading the Needle
May 30, 2025

Just Say No?
May 23, 205