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The Big Beautiful Ballroom

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As Trump hits countries with another round of tariffs, mostly out of spite, he announces a new ballroom that would further transform the White House into his imperial palace.  The $200 million gilded ballroom is grossly out of scale but no matter.  Trump doesn't feel like he can properly entertain all his affluent guests, whom he claims will be footing the bill.  With very little pushback, he can get away with pretty much anything these days.  I'm not sure how his MAGA base is going to take it, especially after all the Medicaid cuts in the latest spending bill, but he made sure to note the Fed is spending much more money on its home improvements.

Hard to believe that Trump "came one appellate court ruling away from losing control of his empire." He has doubled his fortune over the past year and now acts like King Midas, forcing foreign leaders and tech barons to call him "daddy" and bend the knee.  The latest to offer praise to the Commander-in-Chief is Nvidia boss Jensen Huang.  Anything to get a tax break in this topsy-turvy world Trump has created.  While the economy hasn't crumbled like many economists predicted it would in the face of a trade war, it hasn't roared like a lion either.  

The Dow Jones took another tumble after flirting with 45,000 this past week. It wasn't so much due to tariffs as it was the mediocre job numbers.  An infuriated Trump fired the Bureau of Labor Statistics commissioner claiming she "faked the job numbers" back in 2024 to make Kamala Harris look good and that this was all Joe Biden's fault.  You live by the Dow, you die by the Dow.

Trump has had six months to initiate his sweeping changes, including a "big beautiful bill" he managed to ramrod through Congress before the summer break, yet still doesn't want to claim the economy as his own. At least not until it shows signs of improvement.  It's kind of limped along under his tumultuous administration, held in check by what has been a largely favorably tech bro reception to his administration.  The biggest companies in the world are all tech companies led by Nvidia, which passed a whopping $4 trillion in market cap this past July.  No wonder Huang is exulting Trump. Microsoft and Apple round out the Top Three, not far behind.  

They are all investing heavily in AI as if it will be the next game changer.  Sounds like a bubble project to me but who am I to say? So, I consulted those who would know more. Gary Marcus, professor emeritus at NYU says it is largely show and very little substance.  If you take a close look at all the AI-generated videos they display very little common sense.  They're just grabbing from the vast pool of visual imagery available on the internet and spinning out imitations.  Maybe AI is just learning to crawl and will soon reach exulted peaks of imagination, but more likely it will just stumble along duplicating what it collects through countless servers, passing it off as original content.  The tech bros are fine with that as long as it sells.

Having worked in architecture for the past 40 years I can tell you there have been few appreciable gains in the computer software I use.  Granted, I don't do fancy visualizations.  I still build my own models. What I do see fails to impress me for the most part, and now architecture firms are turning to AI to cut out graphic designers which will only makes things worse.  You don't really get a sense of how a building functions unless you work out its infrastructure and most of what I see is just surface glam.  I'm glad to see I'm not the only one who thinks so.  Yet, if the visualization is eye-catching that's all you need in today's market.

So, I brace myself for another recession that will probably come sooner than later.  We somehow dodged a bullet with COVID thanks to all the money governments poured into the economy to keep people working through the pandemic.  For a moment there in 2020 it looked like the floor would fall out from under us again, but the Federal Reserve and European Central Bank learned from 2008 and threw trillions of dollars into the market rather than opt for austerity measures, which greatly prolonged the earlier recession. It took my wife and I five years to recover from that one.  I'm afraid there is not enough money left in reserve to stave off another major recession.  I think this is the way many people feel right now given all the early warning signs.

What better way to disguise disappointing job numbers and other downtrending market indicators than to build a fancy new ballroom! If the floor does fall out, he will blame Jerome Powell or Joe Biden or whatever name comes to the tip of his tongue, much like he blamed COVID on "Jina."  Unfortunately, we all have to bear the brunt of it while he rides out his four years in luxury, spending time between the White House and his numerous golf resorts.  Why he couldn't build his ballroom in Mar-a-Lago or Bedminster is anyone's guess.  Maybe he plans to stay in Washington longer?  

If you haven't already started making preparations for the coming recession, I suggest you do so. This one could be even worse than 2008 given the greatly over-valued tech companies.  This is a bubble about to burst!

Comments

  1. John L.August 4, 2025 at 8:22 PM

    Great article Jim! My last tour of the White House was in 2016 (during the Obama administration) - I remember thinking that, while the size of the larger public rooms certainly presented a number of limitations, bigger would not necessarily be better. I've toured several massive royal palaces in Europe (most recently in Amsterdam) and I've never come away from any of the tours thinking "we should have this back home". The current iteration of the White House is not gaudy or ostentatious - nor should it ever be. The Orange Clown should keep his tiny little hands off The People's House.

    ReplyDelete
    Replies
    1. AnonymousAugust 4, 2025 at 8:46 PM

      Thanks John. When things start to look glum, nothing like a little glitter.

      Delete

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