Our Resilient Economy

September 5, 2025

Doug Leyendecker

Welcome to This Week’s Leyendecker View

Without hard work, nothing grows but weeds.
–Gordon B. Hinckley

FAVORITE READS OF THE WEEK

The glorious future of the book
Nothing is really better.

The path to industrial renewal
We really can get there.

The $140B failure swept under the rug
Bureaucratic ineptitude, at a minimum.

THINKING OUT LOUD

Our Resilient Economy
Doomsayers, step aside

Despite widespread concern over the potential negative impact of Trump’s tariffs, the Commerce Department recently revised second-quarter GDP upward, surprising many. With the stock market rallying for much of the year, investors seem to be seeing past the media’s constant drumbeat of worry.

Why does the media focus almost exclusively on negative headlines? And why does the stock market continue to “climb the wall of worry”? What do investors understand that the media doesn’t? Let’s take a closer look.

So far, tariffs haven’t significantly raised inflation or curtailed consumer spending. Corporate profits are strong, investors are making money and tech companies are in the middle of a massive AI-driven investment surge.

As I said in the essay, “A Chat With Claude,” the AI boom is fueling a new wave of infrastructure development. To meet rapidly rising AI demand, we’ll need more chips, computers, workstations, data centers and, crucially, electricity to power it all.

This infrastructure spending is key to the economy’s current resilience. When a country invests heavily in infrastructure, especially new infrastructure, it drives economic growth. Infrastructure expansion typically leads to a two-phase boost, first through capital investment, then through increased productivity.

Today, we are experiencing an infrastructure boom comparable to the railroad expansion of the 1800s, the post-WWII interstate highway system and the internet boom of the 1990s. Our current boom should lead to stronger economic growth than we’ve seen in decades.

Also adding to our economic resiliency are Trump’s tariffs, which are proving a way for our government to extract funds from trade as it seeks to level the trade playing field.

As I’ve recently written, since World War II the United States has basically been subsidizing the economies of many nations around the world. The consequences of this generosity have gotten our country into a deep economic hole. Our debt to GDP presents a threat as existential as the threat the world faced in WWII. Except today, we are the country that needs saving.

Tariffs are another tool in Trump’s war chest to improve the US economy. Just recently, the Congressional Budget Office said tariffs are on track to decrease the federal deficit by $4T.

Contrary to popular belief, tariffs are playing an economically supportive role. They serve not just as a source of government revenue but also as a tool to incentivize investment within the US economy. Billions of dollars have been pledged for domestic production since their implementation—a development that should bolster job creation and economic momentum in the coming years.

Another under appreciated factor is energy. Trump’s “drill, baby, drill” policy aims to lower energy costs, benefiting both consumers and businesses. Since energy costs are foundational to the production of goods and services, cheaper energy acts like a tax cut across the board.

Increasing revenues while reducing costs is the basic formula for any turnaround. That’s the strategy behind the push to create a more self-sustaining U.S. economy—one less reliant on endless stimulus, government debt and bureaucratic sprawl.

Yes, this is a significant shift. As I wrote in “The Fall of Bureaucratic Bumbling,” entrenched interests—career bureaucrats, politicians and elements of the court system—are actively working to block these efforts.

A recent appeals court ruling that certain tariffs may be illegal introduces new risks. It threatens the revenue currently benefiting the economy and could chill domestic and international investment.

Of course, political opposition is to be expected in a two-party system. But it’s worth asking: Do Democrat leaders truly understand the current economic challenges we face? Ironically, many on Team Trump are former Democrats who became disillusioned with a party they felt no longer prioritized the country’s well-being.

It’s also worth questioning the media’s relentless attacks on the MAGA economic strategy. Would some people in this country really rather see America fail than see Donald Trump succeed?

THE RANDOMS

It doesn’t look like the wars in Gaza or in Ukraine are going to end anytime soon. Neither Russia nor Iran is interested in coming out a loser.

What professions today are considered honorable? Does honor even factor into our lives anymore?

Humans have backs, arms, hands, fingers, legs, feet, toes, eyes and ears, but will our bodies matter in the future? Robots are replacing us in the factories, farms and maybe soon construction sites. The transition from physical labor to cognitive labor drove us to the gym to get in our “physical labor.” If AI eliminates cognitive jobs, where will we go to get our “brain workouts”? If jobs become little more than writing AI prompts, will we be at risk of the old adage, An idle mind is the devil’s workshop?

Trump calls for voter identification in all US elections. So up until now, voters didn’t have to prove citizenship to vote? If so, how, when and why did that happen?

If a bunch of people believe in global warming, shouldn’t there be a real estate boom going on in the Great Lakes region like Chicago, Detroit and Buffalo? Anyone investing their money in these economically challenged cities should soon be the beneficiary of a warmer world, right? Time to get out of coastal California and go to the coastal Great Lakes.

Do cartels control all politicians and governments in Mexico?

ECONOMIC NEWS

Economy

The job market is anemic
US services industries are doing well
US manufacturing keeps contracting
Construction spending, too
Recession risk at 93%, says UBS
How Americans perceive our economic health
The middle class feels squeezed

Labor

Job openings drop unexpectedly
Workers overwhelmed with AI training
How to become super productive
Are robots making workers more valuable?

BUSINESS

Finance

Citi outsources $80B to BlackRock
Carlyle goes big buying PE stakes
Stock prices have surpassed the dot.com era
The wealthy go big into private credit
PE returns lag S&P 500

Real Estate

Republicans ponder national housing emergency
Mortgage refinancing starts to thaw
What a city revival looks like
How eviction laws can tank real estate

Tech