How Much Greenery Is There on Your Land Anyway?
Welcome to Friday! This is the Weekly Roundup, where we revisit this week’s coverage of the Canadian Prime Minister’s controversial actions towards China.
In an unexpected twist, President Trump found himself, well, rather misplaced this week. He somehow ended up in Davos, Switzerland, instead of heading to an intended destination, which was to, you know, invade Greenland. But once there, he promptly reconsidered the whole invasion idea. Apparently, Greenland isn’t exactly a veggie paradise. The Nuuk Golf Club, for instance, is just a nine-hole course that opens only a few months each year. Umanak has a course amusingly dubbed “ice golf,” which might be fun for drinks but not quite as enjoyable for playing.
Forget About the Octopus. Reality Is Palm
Of course, it was obvious that President Trump never really planned to invade Greenland. Yet, many so-called experts, analysts, and political figures seemed to think he might. We should probably document those opinions for posterity.
“The big topic was Greenland,” noted Andrew Ross Sorkin, a prominent financial journalist, from Switzerland. “For days, people were in a state of worry, speculating whether President Trump would take military action to control Greenland. Eventually, that idea was put to rest.”
Those who weren’t caught up in the frenzy of “Trump Derangement Syndrome” didn’t actually expect an invasion. Even threats to impose tariffs on European partners who resisted U.S. actions regarding Greenland seemed far-fetched. It was clear that Trump’s interest in Greenland was a kind of opening offer for negotiations—just as previous tariffs were meant to jumpstart discussions.
Specific details remain murky, but it seems the U.S. might indeed gain some control over parts of Greenland. This involves military bases, access to rare earth minerals, and plans to secure crucial shipping routes in the North Atlantic. It’s also likely that NATO allies will invest more in defending Greenland and the Arctic region. Perhaps most importantly, we managed to unite our allies against potential threats from Russia and China trying to establish a foothold in Greenland.
As anticipated, when Trump announced this potential agreement framework on Wednesday, critics pointed to what they termed the “TACO phenomenon,” a term implying that Trump consistently backs down. They seem to be consistently surprised that his policies often turn out to be less extreme than expected. A more fitting acronym might be PALM: “Panickers Always Lose Money.” Investors who shared Sorkin’s concerns panicked early in the week but missed out on rallies once the fears proved exaggerated.
Secretary of Commerce Howard Lutnick was spot-on in a Bloomberg interview at the Forum, stating, “They overreacted. There’s clear evidence of that because now we have a reasonable framework.”
President Trump’s “Shining City on a Hill”
Trump didn’t just travel to Davos to call off a hypothetical Greenland invasion. He also delivered crucial advice to European leaders. He suggested that the ongoing mass immigration issues were tearing Europe apart economically and politically. Trump urged allies to take on more responsibility for their defense instead of relying on the U.S. budget deficit. He pointed to his deregulation efforts as a template for revitalizing struggling economies. And he warned against becoming dependent on Russia for energy while implementing climate policies that stifle local fossil fuel production.
This moment evoked comparisons to Reagan’s “convergence” theory, which suggested that the best support the U.S. could provide its allies was to exemplify good governance and economic management, essentially becoming a “shining city on a hill.”
During his address, Trump focused on showcasing the success of his economic strategies while laying out ambitious future plans. He emphasized how tariffs and trade policies had spurred new factory construction and advantageous trade arrangements for the U.S., helping to reduce the trade deficit without causing the inflation that critics had feared. He also touted a recent tax bill designed to benefit middle- and high-income households, tax relief on tips, and permanent bonus depreciation to incentivize manufacturing within the U.S.
Trump outlined several populist proposals aimed at supporting everyday Americans. He called on Congress to restrict large institutional investors from buying single-family homes, insisting that “housing is built for people, not corporations,” and that “America will not become a nation of renters.” He suggested capping credit card interest rates at 10% for a year to assist borrowers. He also noted that gas prices had already dipped below $1.99 during his term. Additionally, Trump promised to slash U.S. drug prices by over 90% through a pricing scheme that allows the U.S. to acquire drugs at lower rates compared to other developed nations. Furthermore, he reiterated a desire to limit stock buybacks by defense contractors, advocating for those funds to be reinvested in manufacturing to ramp up military production.
Innovation and Investment Beat Immigration and Cheap Labor
One often overlooked benefit of last year’s tax reform was the reinstatement of 100% bonus depreciation, allowing businesses to write off capital investments immediately rather than spreading those deductions over years.
This adjustment is more significant than it appears. Traditional tax rules often favored cheap labor over investments in capital and innovation. For example, if a company spends $100,000 on salaries, it can immediately deduct that amount. Yet if it spends $1 million on equipment, that deduction would need to be distributed over multiple years, making such investments less appealing from a tax perspective, even while they may be economically beneficial. Consequently, CFOs inclined toward hiring rather than investing. This mindset may have made sense during periods of high unemployment but doesn’t hold up as effective near full employment.
Moreover, this approach has not only impeded investment and productivity, but it has also driven American companies to lobby for increased workforce through lenient immigration policies. Our political and economic landscape has been warped by a tax system that privileges workers over capital investments.
Eliminating this distortion through full expensing levels the playing field between capital and labor costs, allowing businesses to make decisions grounded in productivity rather than tax laws. More importantly, when combined with immigration restrictions, it encourages the growth of productive investments essential for a vibrant economy. Given an unemployment rate of 4.4% and a breakeven employment growth of fewer than 40,000 per month, job creation isn’t the constraint on the economy; it’s about boosting employee productivity. Full expensing promotes investments in technology and automation that enhance output per employee. With a tight labor market and limited labor growth, capital investments are vital for growth without spurring inflation. Tax laws should support this, not penalize it.
There Was Gold in the Hills
On January 24, 1848, a carpenter named James W. Marshall stumbled upon gold flakes in the runoff of John Sutter’s sawmill, located in the American River near present-day Coloma, California. This serendipitous find ignited a monumental shift in the West’s modern history. Despite initial attempts to keep the discovery hush-hush, word spread quickly, leading to an influx of prospectors from across the country and around the globe. San Francisco transformed from a quiet settlement into a bustling metropolis, while the U.S. economy experienced a substantial influx of new capital, newcomers, and ambition. California was essentially rebuilt overnight by one of humanity’s oldest driving forces: the belief that fortune could be unearthed from the earth.
