We’re All Farmers Now

Welcome to This Week’s Leyendecker View

The larger and more complex any system gets, the more systemic risk grows.
– Yours Truly

FAVORITE READS OF THE WEEK

Trump’s Three Steps to Economic Growth
From Treasury Secretary Bessent

The Vanishing of Youth
How population decline robs us

FAVORITE WATCH OF THE WEEK

Secretary of Interior Doug Burgum sits down with All-In’s David Friedberg
to talk energy and more

THINKING OUT LOUD

We’re All Farmers Now

Let’s think of the US economy as a farm.

Lots of people don’t think our farm is very productive anymore. They think the farmers have gotten old, tired and lazy. They took their eye off the ball. They concerned themselves with self-interest. They got distracted by renewable energy. They stopped caring about the farm’s well-being and health. As a result, our fields are overgrown with weeds choking the soil. If it weren’t for government subsidies, our farm wouldn’t make money.

Our farm has been limping along at 2% or so growth (GDP). For many years now, if we get anything better than 2% growth, we pat ourselves on the back for what good farmers we are.

Instead of shifting our focus back to creating a vital, healthy and productive farm, for many years we’ve been subsidizing it with $1T to $2T annually in fiscal and monetary stimulus to keep it afloat. Not thriving, but afloat, and that’s good enough.

But now, everyone with a brain is telling us we can’t subsidize the flailing farm anymore. It will lead to financial and economic ruin.

Having been operated on subsidy for so long, our farming tools are now old, broken and out of date. The fields have gone fallow.

Now we have to import more stuff because we can’t grow enough stuff on our farm.

A new “farmer” recently showed up. He wants to make the farm more productive. But he can’t run the farm the same way as before. The old way has significantly reduced the farm’s potential.

This new farmer can’t plow the fallow fields with broken-down machinery, plant seed and then quickly reap a bountiful harvest. It takes time to go from seed planting to a bountiful harvest. It takes fertile ground. It takes meticulous and constant oversight.

This is to say nothing of weather, one of the most significant influences on farming, and one over which we have no control.

Many real farmers pray every day. They pray for more rain. They pray for less rain. They pray for cooler weather. They pray for warmer weather. They pray that some disease or insect won’t destroy their crops.

Our old, outdated farming tools are our globalization-era industrial and trade policy. Even President Biden saw this had outlived its utility. Our broken farming tools are the massive regulations that stifle our private sector economy. Too bad Biden didn’t understand that.

Fixing our tools and liberating farmers from regulation will take time. Lots of “smart people” don’t seem to want us to do this. They are pushing back.

The soil on our farm may need multiple plowings before it becomes fertile again. This will take time.

In this metaphor, the global geopolitical environment is our farm’s unpredictable weather. We might be able to influence it somewhat, but we cannot control it. We don’t yet know how tariffs and the new trade negotiations will work out. Who knows what Russia will do, what China will do, what Iran will do, what North Korea will do. Who knows if a new storm will surface that we didn’t forecast.

We certainly want a bountiful harvest, but first we have to improve industrial and trade policy, make regulation less economically destructive and work toward creating a more productive geopolitical environment.

Farmers do not plow a field, plant seeds and reap a bountiful harvest simultaneously. They especially can’t do this in fields that have been left fallow. And we can no longer stay addicted to government subsidies to create the illusion that we have a healthy farm.

Creating a productive farm takes time. It takes change. It can’t and won’t happen overnight.

Be patient, friends. Think like a farmer. Act like a farmer. It may even help if we pray for our country a bit more.

THE RANDOMS

The cardinal electors of the conclave elected the first American pope, Pope Leo XIV. He’s the first Pope from the United States.

The first pope from the United States is pretty interesting, especially since we have a controversial president. Do the cardinals know something the rest of us don’t?

I’m wondering if we are wasting our time and money on solar, wind and batteries. These are not higher-density energy sources than hydrocarbons. And an economy will not grow if energy is more expensive and/or less dense. Certainly there is some other innovation we should be focused on.

Google is following Meta and unleashing an AI chatbot for young children. Is it healthy for young children to have dialogue and a relationship with technology? Where’s the parent backlash, or does big tech control Washington?

Trump seems to have convinced OPEC to knock down oil prices to counteract his tariffs. Not a bad strategy there.

Whoever thought that the government can productively engage in private-sector lending? Student loan defaults are surging. And Fannie Mae and Freddie Mac could soon be in a crisis.

Here’s a novel Team Trump idea: Let the loan delinquency rate determine if a university has the ability to set up student loans.

Had this thought a couple of newsletters ago, but it’s too good not to repeat…

Here’s a catch-22 for you: Our obesity epidemic tells us that we buy and eat too much food. And the explosion of personal storage units and record credit card debt tells us that we buy too much stuff for our homes and ourselves. If tariffs and/or a recession means we buy less stuff, then we should be healthier and less encumbered by stuff and debt. But, unfortunately, that would be terrible for our economy. Now what does that tell us?

With energy demand exploding because of AI, is it conceivable that a big tech company will buy Exxon? Or has China’s recent backing-off AI data center growth telling us we’re in an AI infrastructure bubble?

Marco Rubio is looking pretty presidential these days.

ECONOMIC NEWS

Economy

The Fed sticks with its inflation focus
The data doesn’t point to a recession
Services industry index beats expectations

Labor

Stoicism is going mainstream
Get your kids in shop class
Corporate America has paused hiring
AI is now competing with college grads

BUSINESS

Finance

Private equity shoves around some lenders
Short sellers target private credit
Private credit results point to market stress
Apollo raises big secondary equity fund

The Buffett Buffet

Warren Buffett’s alpha
Buffett is still a stock seller
The next Berkshire CEO

Real Estate

Distressed RE fund hauls in billions
Houston #1 place in the US to move
Where home prices are rising and falling

Tech

Is Google about to get split up?
Is AI about to kill Google search?
Is Mark Zuckerberg crazy?
The case against social media

AI

AI is causing big water problems
Nimby-ism hits AI infrastructure development
Is AI set to replace traditional search?
China is experiencing an AI data center bust
OpenAI abandons converting to for-profit

Energy Transition

Democrats kill a major climate policy
EV sales grind to a halt
The climate change sitting-duck cities
Bezos-backed nuclear company lacks funding???

THE NATION

The Washing-Tone

Trump to repeal global chips curbs
Time to restart student loan collections
The movie industry needs US subsidies
Trump has OPEC on his side
Trump to cut fat and increase defense spending

Tariffs

Trump announces a UK trade deal
China tries to cheat the tariff system
Is fentanyl Beijing’s negotiating tool?
Are Japan’s Treasury holdings a negotiating tool?
India has 110% tariffs on imported cars

The Tariff Effect

Tariffs have exports collapsing
Tariffs boosting some US manufacturers
A US company building electric motors
We don’t need Chinese bikes

Social Trends

We have the first American pope
White men are now a minority in boardrooms
Mississippi schools are national role model
College grads dominate stable marriages

GEOPOLITICS

Global

An India-Pakistan war is here
Pakistan hails Chinese-made jets
Global manufacturing contracts
Argentina embraces nuclear energy

Europe

UK thwarts an Iranian terrorist plot
Major UK wind project canceled
Is Poland Europe’s future leader?
Europe plans to end Russian energy addiction

Ukraine

Is Putin creating a Russian war culture?
Xi keeps close to Putin
This war is intensifying
Ukraine drones shoot down Russian jets

Middle East

Syria wants a US, not a China, deal
Trump has a truce with the Houthis?
Israel takes the lead dealing with Houthis
Israel gives Hamas a hostage deadline

China

China tries financial stimulus to boost economy
Made-in-China airliner needs US parts
China economic data is opaque
TikTok sent European data to China

War Creep

Turkey wants to build nuclear-powered subs
Investors jump into Europe’s defense biz
Palantir benefits from growing “warrior culture”
US advancing with hypersonic missiles

MAKING A BETTER YOU

Mind
Get more quiet time.

Let artwork make you feel
Why gardening is good for you
An ancient key to happiness

Body
Get more outside time.

Your body on sugar
Need some ideas? Run
10 questions to ask your doctor

FUN STUFF

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

The Extraordinary

Antarctica’s ice sheets are growing again
Ready for some dark sky stargazing?
Ancient Egyptians were astute astronomers

Music That Found Us

88 year-old Buddy Guy’s new tune “Travelin’”
Keith Jarrett’s The Köln Concert album
“Puff the Magic Dragon” wasn’t about pot
Blondshell’s “23’s a Baby”

Worth a Watch

Jurassic World Rebirth looks bonkers.
The Uninvited, a dramedy.
Parthenope, the best of youth.
Trump’s University of Alabama commencement address

The Yum Yums

Who’s ready for Mexican-Indian food?
Ginger garlic shrimp with coconut milk
I love cioppino.
Hot honey-baked sweet potatoes, YUM!

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

Fighting for Survival
May 2, 2025

Don’t Panic, Yet
April 25, 2005