To The Moon

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Hey everyone, Today I'm going to talk about Trump's Recession Day tariffs and some of the broader policies we're seeing from the administration—and more importantly, what all of this could mean for investors right now.

Normally, I focuses on individual stock analysis—probably 80–90% of the time—but I’ve had a lot of requests to share my macro views, so this is my attempt at that. I'm aiming to do something like this maybe once a week, depending on how it goes.

Since we’ve got this big “Recession Day” event coming up on, April 2, 2025, I thought now would be a good time to frame how I’m looking at all of this from an investor perspective—especially in historical context, which I think is often overlooked.

Okay, let’s get into it.

Big Picture

We’re shifting back to a pre-FDR economic framework—pre-1932. This isn't just speculation; the policy direction and appointments we’re seeing make that pretty clear. Now, the day-to-day noise is messy, but the long-term trend is visible.

Historically, there's always been a segment of the U.S. political landscape that’s been against the FDR-era economic changes and the post-WWII consensus. What we’re seeing now is a concerted effort to rewind the clock—to go back 100 years, even further in some ways.

We had a kind of revolutionary period post-1776 up to about 1830. Then Andrew Jackson came in, and we had around 100 years of policies that are now making a comeback—limited central banking, high tariffs, patronage-based government roles, etc.

I’ll run through six major policy shifts I’m tracking that I think are relevant to investors.

1. Reducing Central Bank Power

The administration seems set on weakening the Fed’s independence. While I doubt the Fed will be abolished entirely, we’ll likely see it become more politicized.

Evidence?

• Pro-crypto stance (including pardoning shady actors), which undermines the Fed.

• Less financial regulation.

• Powell’s probably on the chopping block—likely replaced next year by a political ally.

Investor takeaway: Expect more economic volatility. The central bank has helped smooth things out over the past 80 years—no real depressions since the 1930s. If we remove or politicize that mechanism, we could see a return to deeper and more frequent depressions instead of mild recessions.

2. Tariffs Are Back

Trump’s Liberation Day tariffs are part of a broader trend toward protectionism. While they’re being pitched as “reciprocal,” in practice it’s inconsistent and not super principle-based.

Historically, tariffs were the way the government funded itself before income taxes. Congress spent a ton of time deciding tariff structures. We’re basically shifting the tax burden from income and corporate taxes to consumption-based taxes like tariffs.

Investor takeaway:

• Could lead to crony capitalism (as companies lobby for protective tariffs).

• Harder for global companies to scale.

• May benefit domestic-focused, medium-sized businesses.

• Tariffs could stick around longer-term, so it’s worth factoring into company fundamentals.

3. Patronage Over Civil Service

We're seeing more unqualified political appointments—people who supported the president getting rewarded with government jobs, regardless of experience.

This goes hand-in-hand with cutting back the civil service and weakening the professional bureaucracy—something that started under Teddy Roosevelt and expanded under FDR.

Investor takeaway:

• Government services will likely become less competent and more politically influenced.

• You may not be able to count on fair or consistent regulatory enforcement.

• Businesses will need to be more politically savvy and nimble.

4. Reduced Spending on Public Goods

We’re seeing cuts in areas like education, libraries, and public programs that help working-class individuals improve their standing.

Historically, countries and regions that invest in education outperform over time. Cutting back on that could reduce long-term economic productivity and mobility.

Investor takeaway:

• Long-term, this may affect the quality of the labor force and consumer base.

• It’s a drag on future innovation and growth.

Macro Outlook and Investment Strategy: Rephrased Thoughts

Let’s talk through some key macro shifts I’m seeing right now, what they could mean for businesses, society, and us as investors.

1. Reduced Public Services and Education Investment

We’re seeing a broad pullback in funding for basic services—including education—not just at a state level, but increasingly nationwide. I'm not debating whether this is right or wrong; I’m just focused on the consequences.

In the short term, this might reduce taxes, which could benefit businesses. Employers may even gain more leverage over their workforce due to fewer educational and social safety nets. But long-term? It could become harder to attract the educated talent businesses need. So, it's a trade-off. We'll have to wait and see how it all plays out.

2. Retreat from Global Trade Leadership

Another big shift is reduced U.S. involvement in supporting global trade norms and structures. This includes foreign aid, which is a form of soft power—spending money to influence other countries without resorting to military force.

Most Americans don’t fully understand the value of soft power. It might look like wasted money, especially with jobs having gone overseas, but it’s actually about stability and influence without war.

As the U.S. pulls back from this role, expect more global instability—piracy, rogue states, and less secure trade routes. Over time, that could lead to rising costs, disease outbreaks, and a more fragmented global economy. So as investors, we can’t count on the cheap, open global markets of the past. New trade alliances could eventually emerge, but that’ll take time.

3. Reduced Regulation

This shift is generally pro-business, at least in the short run. Less regulation means lower compliance costs, potentially higher profits—especially for industrial companies.

But there's a downside. History tells us that without guardrails, some businesses will cut corners—whether through pollution, unsafe practices, or financial risk-taking. This will likely impact society more than investors directly, but the long-term consequences could catch up to everyone.

We’ve offshored pollution for decades. As industry comes back onshore, we may be surprised by declining environmental and public health standards. That’s the price of deregulation, and it’s part of the new reality.

4. Return to Gilded Age Economics

It feels like we’re going back to a kind of Gilded Age: massive inequality, weaker middle class, and the rise of ultra-wealthy winners. If you succeed, the rewards will be huge. But if you don’t, your position will likely slide down toward the working class.

Take banking, for instance. Deregulation could let banks make riskier loans again. That could lead to another financial crisis like 2008–09—but for the survivors, it’s an opportunity to acquire assets at rock-bottom prices. Individuals, though, may end up worse off, working for lower wages and losing wealth.

5. Rise of Subprime Lending Again

Look at how aggressively "buy now, pay later" models have spread. These systems are effectively trying to get people back into debt—because that’s how the lenders profit.

The risk? If borrowers can’t repay, it could spiral into another credit crunch. Sure, lenders might still come out okay if the underlying assets hold value, but it's risky. Personally, I’m staying away from these financial plays right now. The macro environment is too volatile, and the risk of steep downturns is higher than it’s been in decades.

6. Navigating as an Investor

Despite all of this, I’m still buying—when the price is right. I hold about 90% cash and have a watchlist with clear valuations. When a stock hits my price, I buy it—even if I think the market’s going lower. In fact, some of my best investments have come when I felt the most negative about the economy.

Right now, I think a recession is almost a certainty—maybe a 90% chance. It could even turn into a depression if policies remain unchanged. Student loan payments alone could push us over the edge by knocking down credit scores and reducing consumer spending.

Conclusion

If you’re dollar-cost averaging, now’s actually a great time to start. You’ll be buying into the market slowly and potentially getting better prices as things dip. Focus on high-quality, growth-oriented companies. Tighten your standards, stay disciplined, and don’t panic.

None of this is new historically. We’ve seen these dynamics before, particularly in the 1800s. But for most people alive today, this feels radical and unfamiliar. The context helps make sense of what’s happening.

As investors, we have to think not just about what’s happening day to day, but what kind of long-term framework we’re investing into. This isn’t just about interest rates or GDP growth—it’s about the entire structure of how the economy is going to operate.

Let me know your thoughts in the comments—agree, disagree, think I’m totally off? I’d love to hear it.

Disclaimer: I want to make it clear that I am not a financial advisor, and nothing I say is intended to be a recommendation to buy or sell any financial instrument. Additionally, it's important to remember that there are no guarantees or certainties in trading or investing, and you should never invest money that you can't afford to lose.

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