So check this out: Back in 2022, some MIT researchers decided to figure out why inflation went absolutely nuts the year before, hitting 9.1% in June. Their answer? Pretty clear-cut. The main culprit was all that federal spending—specifically those stimulus checks we got during COVID. Not corporate greed. Not supply chain issues. Just... government money flooding the system.
As one of the professors put it, what shocked them wasn’t just that federal spending was *a* factor—it was that federal spending was *the* factor, by a mile.
Why am I bringing this up now? Because Trump is floating this idea of sending out $2,000 "tariff rebate" checks to pretty much everyone except "high-income people" (whatever that means). And if history’s any guide, this would probably spark inflation the same way those pandemic checks did. Only this time, it’s not like we’re in a crisis where people are stuck at home with no income. This would just be... free money, basically.
Now, I can already hear some of you: "But Evensen, this is different! The checks would be paid for by all that tariff money Trump is bringing in!"
Yeah, about that.
The Committee for a Responsible Federal Budget crunched the numbers and figures tariffs might bring in around $300 billion this year. But those $2,000 checks? If they work like the stimulus checks did, they’d cost about $600 billion. So that’s double what we’d be taking in. To break even, we’d have to send these checks out once every *two years* instead of as a one-time thing.
And that’s just one estimate. Trump hasn’t exactly been forthcoming with details. A University of Chicago professor who used to work in the White House ran his own math—he says it’d cost $200 billion to send checks to 100 million people, or $400 billion if you include 200 million. Either way, that’s a huge chunk of cash that *won’t* be going toward paying down the national debt, which Trump said he wanted to do with tariff revenue.
Also—and this is important—*we* pay the tariffs. Not China, not Mexico. American businesses pay them when goods come into the country, and then they pass those costs along to us. So tariffs are basically inflation waiting to happen. If the goal is to help families, it’d make way more sense to *lower* tariffs so prices drop by about $2,000 per household. You know, actually, let people keep more of their money instead of taking it with one hand and giving it back with the other.
The Tax Foundation put it pretty bluntly last summer: "Tariffs are not an efficient way to raise revenue." They explained that when tariffs get too high, imports drop, so you actually collect less money. Plus, they hurt economic growth by squeezing businesses and consumers. And here’s the kicker: Even though Americans are the ones paying these tariffs, rebating the money back to us would be "fiscally irresponsible and also risk increasing inflation."
And look, I get it—times are tough for a lot of people. But broadly speaking, the economy isn’t exactly hurting right now. We grew at 3.8% in the second quarter, unemployment is around 4%, and inflation is already stubbornly sitting at 3%. As one analyst from Bankrate told CNBC, "Money is money, and when more money comes into the economy to chase the same amount of goods and services, it’s going to be inflationary."
The smarter move? Reduce tariffs. That would bring *more* goods into the country *and* give everyone more purchasing power.
Oh, and there’s one more thing looming over all of this: The Supreme Court might soon decide whether the president can even impose tariffs by himself in the first place.
Democrats found out the hard way last year that voters have zero patience for rising prices. So while people might love getting a $2,000 check in the mail, they’re gonna be furious when they realize how little it actually buys them.
Japan's economy shrank almost 2% in the three months through September, as a drop in exports in the face of U.S. tariffs resulted in the first contraction in six quarters, government data showed on Monday.
Shipments from automakers in particular plummeted, following a period of hiking exports before tariffs came into effect.
Still, as the overall contraction was not as acute as expected, it likely represents a temporary setback rather than the start of a recession, economists said.
"The contraction is largely due to one-time factors such as housing investment," affected by regulatory change, said economist Kazutaka Maeda at Meiji Yasuda Research Institute.
"Exports also reacted," he said. "Overall, the economy lacks strong underlying momentum, but the trend still points to a gradual recovery over the next year or two."
Economists generally viewed this quarter's GDP figures as having a marginal impact on the Bank of Japan's thinking when next deciding interest rates versus factors such as inflation. However, an economist close to Prime Minister Sanae Takaichi gave the data more weight.
Given the contraction, it "would be misguided for the BOJ to decide to raise interest rates" in December, Credit Agricole chief Japan economist Takuji Aida, who is on Takaichi's flagship panel tasked with laying out the country's growth strategy, said in a report to clients.
Gross domestic product contracted 1.8% in July-September. That compared with the revised growth of 2.3% in the previous three-month period, as well as the 2.5% contraction that economists on average estimated in a Reuters poll.
The reading also translated into a quarterly contraction of 0.4% versus the median estimate of 0.6%.
Exports constituted the main drag as the impact of higher U.S. tariffs intensified. Automakers saw shipment volume plunge, reversing earlier front-loaded exports ahead of tariff hikes, though they mostly absorbed tariffs by cutting prices.
Net external demand, or exports minus imports, knocked 0.2 of a percentage point off growth, versus a 0.2-point positive contribution in April-June.
The U.S. and Japan formalised an agreement in September that implemented a baseline 15% tariff on nearly all Japanese imports, versus an initial 27.5% on autos and 25% for most other goods.
Housing investment also weighed on growth as tighter energy-efficiency regulations introduced in April slowed commitments.
Private consumption, which accounts for over half of economic output, grew 0.1%, matching a market estimate. That was cooler than the 0.4% of the second quarter, indicating that high food costs increased reluctance to spend.
Capital spending, another key driver of private demand-led growth, rose 1.0% in the third quarter, far exceeding a market estimate of 0.3%.
"Private consumption rose for the sixth straight quarter, and capital expenditure increased for the fourth consecutive quarter," Minoru Kiuchi, the economic revitalisation minister, said in a statement.
"This reinforces our view that the economy remains on a moderate recovery path," he said.
Private-sector estimates reflect expectations for growth to rebound in October-December. A poll of 37 economists by the Japan Center for Economic Research projected a 0.6% expansion.
The weak GDP data comes as Takaichi's government compiles a stimulus package to help households manage rising living costs.
Advisers to Takaichi have cited a likely sharp GDP contraction as a reason for aggressive stimulus measures.
Finance Minister Satsuki Katayama told reporters on Sunday that the proposed economic stimulus would exceed 17 trillion yen ($109.94 billion), media reported.
"From late this winter through around spring, there will be measures that improve households' income conditions in real terms," said Nomura Securities economist Uichiro Nozaki. "Therefore, in terms of underpinning consumption in the first half of next year, this is a positive factor."
Scrappy small businesses are increasingly putting generative artificial intelligence to work and using AI strategies to tackle scheduling, finances, and marketing demands,The Wall Street Journalreports. From automated customer responses to financial bookkeeping, smaller firms are becoming more strategic in how they implement AI to cut costs. A recentU.S. Chamber of Commerce reportfound that roughly 60% of small businesses now use AI tools, a 40% jump from 2024. While promising for entrepreneurs, the trend also signals the continued elimination of entry-level roles.
The Federal Aviation Administration said Sunday it is lifting all restrictions on commercial flights that were imposed at 40 major airports during the country’s longest government shutdown.
Airlines can resume their regular flight schedules beginning Monday at 6 a.m. EST, the agency said.
The announcement was made in a joint statement by Transportation Secretary Sean P. Duffy and FAA Administrator Bryan Bedford.
Citing safety concerns as staffing shortages grew at air traffic control facilities during the shutdown, the FAA issued an unprecedented order to limit traffic in the skies. It had been in place since Nov. 7, affecting thousands of flights across the country.
Impacted airports included large hubs in New York, Chicago, Los Angeles, and Atlanta.
The flight cuts started at 4% and later grew to 6% before the FAA on Friday rolled the restrictions back to 3%, citing continued improvements in air traffic controller staffing since the record 43-day shutdown ended on Nov. 12.
The number of flights canceled this weekend was at its lowest point since the order took effect and was well below the 3% cuts the FAA was requiring for Saturday and Sunday. Data from aviation analytics firm Cirium showed that less than 1% of all flights were canceled this weekend. The flight tracking website FlightAware said 149 flights were cut on Sunday and 315 were canceled on Saturday.
The FAA statement said an agency safety team recommended the order be rescinded after “detailed reviews of safety trends and the steady decline of staffing-trigger events in air traffic control facilities.”
The statement said the FAA “is aware of reports of non-compliance by carriers over the course of the emergency order. The agency is reviewing and assessing enforcement options.” It did not elaborate.
Cancellations hit their highest point on Nov. 9, when airlines cut more than 2,900 flights because of the FAA order, ongoing controller shortages, and severe weather in parts of the country. Conditions began to improve throughout last week as more controllers returned to work amid news that Congress was close to a deal to end the shutdown. That progress also prompted the FAA to pause plans for further rate increases.
The agency had initially aimed for a 10% reduction in flights. Duffy had said worrisome safety data showed the move was necessary to ease pressure on the aviation system and help manage worsening staffing shortages at air traffic control facilities as the shutdown entered its second month and flight disruptions began to pile up.
Air traffic controllers were among the federal employees who had to continue working without pay throughout the shutdown. They missed two paychecks during the impasse.
Duffy hasn’t shared the specific safety data that prompted the cuts, but he cited reports during the shutdown of planes getting too close in the air, more runway incursions, and pilot concerns about controllers’ responses.
Airline leaders have expressed optimism that operations would rebound in time for the Thanksgiving travel period after the FAA lifted its order.
Ford Motor Co.’snew headquarters, the carmaker’s first central office switch since Dwight Eisenhower was president, is double the size of its old one with room for twice as many employees.
The new HQ has seven restaurants as part of a 160,000-square-foot (14,864 square-meter) food hall, office space, design studios, and fabrication shops.
And, of course, cars.
The “crown jewel” of Ford’s headquarters, according to Ford Land’s global design and brand director, is a showroom she likened to a “James Bond villain’s lair.”
“But it is impressive. When you’re in it, you feel like you are in the center of automotive design,” Jennifer Kolstad said this past week, after leading a media tour of the new 2.1 million square-foot (195,096 square-meter) HQ.
“Its principal function is decision-making,” she said. “It’s where we showcase our new product, and our executives make decisions about what we will take to market.”
Ford is moving its headquarters for the first time in seven decades, relocating to the newly constructed building 3 miles (4.8 kilometers) away in its longtime home of Dearborn, Michigan.
The new structure is being called “Ford World Headquarters.” It is part of a larger campus that will take the name of the current HQ: Henry Ford II World Center. Henry Ford II was the grandson of company founder Henry Ford and the uncle of Bill Ford, the automaker’s executive chairman.
Ford’s current headquarters, known as “The Glass House,” opened in 1956 and will be demolished. The 122-year-old company expects to complete its move in 2027. It does not disclose the cost of the project.
“Ford wants a new headquarters building that reflects who they think they are and who they want to be going forward. They don’t want to be viewed as the car company from yesterday. They want to be viewed as a car company for tomorrow,” said Erik Gordon, a professor at the University of Michigan’s Ross School of Business. “And they need to attract new kinds of employees. They’re competing for software engineers, AI experts. Every company on the planet wants the same people. Those people are used to working in new, very cool offices.”
Ford not only focuses on modern amenities in its new home, but it is also prioritizing proximity.
When the new HQ is fully online in two years, it will have more than 14,000 employees within a seven-minute walk and another 9,000 within a nine-minute drive, said Jim Dobleske, Ford Land CEO.
And, unlike The Glass House, where executives are separated from their employees, the new headquarters building is designed to allow for better and more collaboration between teams.
“(Ford CEO) Jim Farley has said in the past: ‘When you walk into our existing headquarters building, you’re not quite sure if you’re walking into Ford or if you’re walking into a shampoo company,’” Dobleske said. “This building, you know, you are walking into Ford Motor Company.”
Some workers have already set up shop inside the new headquarters, which is to be the site of a grand-opening celebration on Sunday.
General Motors is also in the midst of a headquarters move, departing its Renaissance Center home in Detroit for a new downtown office building.
Gordon, the Michigan business professor, said “both companies want a new look.”
They “want to be seen as forward-looking companies of the future -- companies that are good at software and AI and things that they haven’t been known for in the past,” he said.
Bitcoin, the world's largest cryptocurrency by market value, was down by 1.59% at $93,684 at 4:21 p.m. ET (2121 GMT) on Sunday.
