The U.S. economy is believed to be growing at a 3.8% rate. That would not be bad but is widely uneven between states and sectors. Some calculate that 80% of that growth is related to AI investments by the largest companies while the general economy is actually deteriorating without that.

Got AI? Real gross domestic product decreased in 39 states in the first quarter of 2025. Moody’s tracks the economy on a state-by-state basis and says that by their analysis that 22 states are in recession, Iowa being one of them, with another 13 states treading water. The economic hardship of soybean farmers is getting all of the good press, so that wheel should get greased first from USDA.

Iowa’s real GDP contracted by 6.1% in the first quarter of 2025 compared to the previous quarter, placing it 49th among all states. Iowa’s unemployment rate is at 3.80%, compared to 3.70% last month and 3.20% last year. Much better than the 4.2% U.S. unemployment rate, Iowans are working harder but for less. President Trump just blew away wind turbines and has not deregulated E15 nationwide or deregulated low-carbon ethanol, which are Iowa’s only available contributions to energy economic growth development.

Moody’s says that two blue states, California and New York, are wobbling and should they tip over then the downturn would go national. Neither are Trump favorites so will get little to no help from him as he cuts billions in federal spending for those states that, while appropriated by Congress, does not meet the ideological aims of the administration. Those two blue states are in the top three for AI investment, which keeps the lights on. Iowa is so far down the list of states with AI investment it doesn’t get mentioned.

I have been told that ag goes into recessions first and comes out last. There appear to be no golden nuggets for ag exports in the trade framework agreements being made. The framework agreed to with Taiwan committed them to less spending on U.S. commodities than what Taiwan had been buying before. No gain. China knows that their soybean card has worked well for them when Trump is posting about it. I think that some of the U.S. market share of exports being lost is unrecoverable. If so, that will be a hard truth when realized.

Farmers will need Trump tariff-transfer ACHs …every year. That will not work as building carryovers would eventually crush us. He has pissed off the entire world and we are seeing our allies recoil, seeking new relationships and avoiding us. Universal trust in the U.S. has been lost. He makes trade deals, but then follows up with additional random tariffs on movies, lumber and furniture so deals are never final. Frameworks are not trade deals and Japan just replaced their prime minister, who had inked a framework with Trump for a woman, which is a first for their country, who says they may opt out of the framework. South Korea now says it can’t pay the $350 billion agreed to in its framework.

Cold feet or buyers’ remorse? That will cost them. Maybe, Trump will not care as long as he can charge them higher tariffs.

The country is careening toward autocracy almost unimpeded; every deal is transactional; government is getting into business with business, what Rand Paul calls socialism, taking equity positions in private companies in order to control them. When the federal government takes stakes in companies, then other private or public companies in those industries compete against the government. We are seeing just the beginning of how the government treats those that they are not in bed with, using regulatory power punitively. Our president is taking efforts to consolidate his power in tumultuous conditions, many of which he is creating. He is tightening his direct control of the U.S. military for both his domestic and foreign executive branch discretionary use. Crypto magnates reportedly convinced Trump to swap in their guy as the nominee to head the CFTC. Note the major league CEOs standing in the background in White House pictures. They have rushed to get into the tent with him to pee out.

I watched a farmer praise all the tariff revenue pouring into the Treasury … who should be asked who he thinks the money is coming from? I do not think that he actually knows or would not have been so thrilled about it. Are farmers not now being made financially dependent on USDA ACHs? Trump deregulation will lower farm operating costs 1%. Fertilizer went up a lot more than that. The Smoot/Hawley tariff act got a global economic downturn rolling in 1930 and what is so different this time? Aren’t we headed in the same direction?

The world is massively rearming, which may produce many undesirable consequences, while AI is blowing a bubble. When nations build militaries, tell me when they have ever gone too long without using them? President Trump rails about “Democrat wars” but the ones he starts will be “righteous.” The stock market has soared to new highs on exaggerated exuberance.

Interest rates?

In just a few months’ time, when Powell’s term as chairman ends, the White House will tell the Fed where to set the rates. Then the White House will find out that it is the market that sets them. He intends to gain control of the Fed so he can use it to manipulate U.S. and global monetary policy as he sees necessary. This puts him in control of both fiscal and monetary policy. I think that global central banks are positioning in gold and that when everything hits the fan the public will be late to the gold party. I expect farmland could become a hard asset like gold. Crazy idea, right?

We lament the U.S. being $36 trillion in debt, but the world is $300 trillion in debt and like 1930 Smoot-Hawley tariffs, the Trump trade war is upsetting the global supply chain system that was servicing it. Money that our trade partners had been making from thriving trade used to service their debt is now being diverted into our tariff coffers to service ours. Yet if trade flows collapse so does tariff revenue.

I started this year recommending that we “turtle up” while we watch events unfold. The fact that turtles survived mass extinctions as a species marks them as survivors, but it will not be a fun ride.