Hey all, Peter Zeihan here. Coming to you from Colorado. Today is the 11th of June, and the news is that the US House of Representatives has given final approval to the new Department of Homeland Security budget. What can I say about this? It will go to the president’s desk. Now. He’s expected to sign it. It includes within it a rough quadrupling of funding for immigration, Customs Enforcement and border control. 

That’s on top of the $75 billion that was part of the big, beautiful bill from last year. And this is for an agency that normally has a total budget of about $10 billion. So over the four year term, this is about a quadrupling of the budget. Now, lots of people are going to say lots of things about immigration and human rights and thuggery in general. 

I’m going to leave those topics to them. Not that they’re pointless, but they’re just not mine. I want to hit this from the point of view where everyone is going to feel it. The United States now is seeing more of its population dying than being born, and the largest generation in American history. The baby boomers are mostly retired, and by the end of this decade, they will all be retired. 

Which means that if you want a growing labor market and the growing economy that goes with it, you need to get the people from somewhere other than natural birth. And the only option until we have cloning, like really good cloning, is immigration. And with this sort of system, at least for the rest of this decade, that’s functionally impossible. 

So that means that every pressure you’re feeling in the economy on the affordability question is about to get significantly worse, because there just isn’t going to be enough people to make everything function. Industries that’ll be hurt hardest. Our agriculture services and health care and construction. Those are the places where people who are not born in the United States tend to carry a disproportionate load. 

So for those of you who are older, look forward to spending lots of long hours and hospitals in a bedpan that hasn’t been changed. For those of you who like to move into new homes, get used to those being significantly more expensive because we won’t have the labor to build them. And for those of you who are used to going to things like restaurants, expect those tables to not turn around because there’s nobody cleaning the dishes. 

And in agriculture, we’ll still be able to do row crop pretty well. But as you get into, say, meats where people are, the animals have to be herded. That’s usually done by immigrant later. And when you’re dealing with fruits and vegetables, where that has to be handpicked immigrant labor as well. So everything gets more expensive on a secular basis now. 

And even if the day Donald Trump leaves office or this term ends and Ice is more reformed, if that’s the right term, and all of a sudden immigration picks back up to something that’s closer to the half century average, it will take another ten years for that to feed into the system. So we are guaranteed now to have significantly higher inflation than we needed to. 

That’s piece one. Piece two is that this is not an annual budget. This is a budget that is designed to fund these agencies through the remainder of Trump’s term, outside of the normal budgeting process. Now, under normal circumstances, Congress would never agree to this because that takes all of the power away from Congress. Congress has the power of the purse, the House specifically, and transfers it to the executive for the remainder of the term by the time Trump signs this, it’ll be codified into law. A couple things from that. Number one, the executive now has full authority to use this however he wants. Congressional check is gone. We’ve been talking on and off for the last few years about how the United States is going through a political transition, with both the Republican and the Democratic Party basically breaking down. 

This basically completes that process for the Republican Party. Trump has ejected a number of high ranking senators and House members via primaries. They’ll be gone in November, and the number that remain are going to be so isolated that they really can’t do anything. They’ve had this last stand, this last two weeks, where they’ve stood up to Trump on a number of issues, and now that is effectively over because they’ve lost their leverage. 

That means that the Republican Party is gone. It’s no longer the party of business or national security or rule of law, certainly not a fiscal conservatism. And this will accelerate what’s next, because we’re not going to have several years of the political right in the United States being completely nonfunctional outside of the person of Donald Trump personally, from a Democratic point of view, from an organizational point of view, this is generally pretty bad. 

It also means that whatever his whim is, is now state policy. And there are really no checks in the congressional branch of government. And so we’ve been seeing these cavalcade and compounding mistakes by Trump, whether it’s in negotiations with Iran or with Russia or domestic regulation or with the tariff policies. All of that is going to accelerate now, because the last of the folks who might have provided some ballast are gone now. 

And this law means that he doesn’t even have to consult anybody. Which means it really doesn’t matter to me what happens in the midterms. Because Trump has barely gone to Congress at all in his first year and a half in office. And now that he’s gutted what’s left of the Republican Party, and even if the Democrats managed to retake both houses of Congress, why would he go to Congress again when the priorities he has have already been funded for the rest of this term? The only way you could change that is if Congress decided to rescind this funding. But that would have to overcome a presidential veto, which requires a two thirds majority. 

So that’s just not going to happen. So all hail the King. He’s got what he needs to do, whatever he wants on the issues that he cares about as long as he’s alive or in office. And yes, there is some gray area between those two.

Hey everybody, Peter Zeihan here, coming to you from Vegas. Had to find a quiet corner for this one was a little hard with all the people running around anyhow. Today we’re talking about the new acting Director of National Intelligence. Guy by the name of Bill Pulte. If you’re familiar with homebuilding, Pulte homes that Bill Pulte. He already has a position in the government. 

He’s a Trump loyalist. And he’s appointed to the civic of this right FH for the Federal Housing and Financing Agency, which is responsible for, among other things, back stopping about 70% of American mortgages. So big job. And most of the insurance agencies under FHFA, most notably Fannie Mae and Freddie Mac, are in conservatorship and have been since the financial crisis. 

So it’s a big, important full time job. The fact that he comes from housing and is now managing the mortgaging system suggests a conflict of interest. When he was going through confirmation hearing year, several senators piped up about that, most notably Elizabeth Warren. But you know, she hates everybody, so it’s hard to take that too seriously. 

Anyway, he has now been deputized as the acting head of national intelligence, and his job there is to coordinate the dozen plus federal agencies that have intelligence arms, everybody from the NSA and the CIA to law enforcement. Anyway, that is a full time job as well. And what it really tells us is President Trump, doesn’t really care about the national security agencies at all, and he certainly doesn’t want them talking to him about what’s going on in the world. 

Trump feels the need to be the smartest person in the room. And if somebody from the intelligence agency is there talking about Moldova or Kyrgyzstan or Bolivia, they will obviously know them more than the president about that topic. And so they’re just not allowed into the room. Now, the outgoing director of national intelligence was Tulsi Gabbard, who had some foreign leanings and so seen her gone as great, but now replacing her with somebody who is completely unskilled and there’s no background in intelligence or military affairs or project management is really not great either. 

About the only good news I can say is at least this guy is not beholden to foreign interests like Tulsi Gabbard was. He’s a loyalist, so he’s unlikely to tell Trump anything that he doesn’t want to hear. Which probably means that all of the intelligence’s basically now have a ceiling above them, between them and the president. So Trump is continuing to go down this path of being the least informed leader that we have had in modern history. 

The only other one that is even remotely in the same bucket would be Barack Obama, who was famous for not wanting anyone in the room at all. This is just the other side of that coin. So good news. Not really. But considering that Donald Trump doesn’t have anyone in his circle with real foreign policy experience except for Marco Rubio, who has similarly been banished and now heads two agencies State Department, for the similar purposes of keeping him in arm’s length from the president, keeping those institutions away from the president. It’s kind of par for the course.

Hey all, Peter Zeihan here. Coming to you from Vasto, Italy. Today is the 18th of May. You’ll see this later in the week. Short version is. We’ve probably had the single biggest step backward in rule of law in the United States of the second Trump term, which is, you know, saying it’s saying something in of itself. And the fact that I’m telling you this from Italy is a little concerning. 

The short version is today, the Trump administration settled a lawsuit that had brought against the US government while Trump was president. So basically Trump suing Trump and then settling with Trump to establish a slush fund of about 1.8 billion USD. Technically, it’s $1,000,000,776 million to compensate conservatives who have been prosecuted by the Justice Department in the past. Everyone who has been shortlisted to get a payout, as somebody who is one of Trump’s close political allies and in essence, this is a slush fund. 

This is the sort of operation that people in Italy have been telling you, like even the most crooked of our politicians would have never dreamed of doing something so obvious and brazen. This has a lot more in common with how Nigerian governments in recent decades have handled slush funds, basically suing yourself, controlling both sides of the negotiation, and then handing out the money to whoever you wanted to in the first place. 

Although even Nigeria has moved away from that model in the last 20 years, the most recent governments to do things like this were Nicolas Maduro of Venezuela and Hugo Chavez. This is hardly the first time the Trump administration in round two has done this. I really doubt it’ll be the last. The judge that oversaw the settlement basically said in legal terms, what the actual fuck? 

But here we are. This is what happens when you have an executive who sees the rule of law as part of the problem, rather than part of the solution. We should expect significantly more things like this. And this kind of dovetails with what has functionally happened with the tariff situation. Whereas the tariffs policies have changed so often that the only way that you can stay ahead of them is to have a really good relationship with the regulator, which is another way to say bribery. 

What was the other comparison I wanted to make? Give me a minute. It’ll come to me. Oh yeah. On the regulatory question, the Trump administration has gutted several of the regulatory bodies so that enforcement of the regulations that are on the books, even some of them from Trump, one can’t really be done in a timely manner, but they’re not bothering to staff these agencies with people who could strip out regulations from, say, the Obama or the Biden years. 

They’re just telling companies to not abide by them and put themselves in deep legal jeopardy that that a future administration might come after the before. But the Trump administration is saying, you know, all you have to do is not follow the law in its current form, and we’re not going to prosecute you. So it’s breaking down the rule of law that allows us business to be the most dynamic in the world. 

And basically following a model that the Russians had during the 1990s and the 2000, where you deliberately have conflicting guidance from the Kremlin and from law and from regulation, and the only way to stay on the positive side of that is to bribe everyone in sight. So mazel tov from Italy, a country that used to be run this way but found a different way.