Bhuvan—The marketplace of narratives
The word “unprecedented” is often thrown around with reckless abandon in financial markets—so much so that it verges on the meaningless. But if ever there were a moment that truly deserves the label, the current one is a strong candidate. We are, without doubt, in uncharted waters. It reminds me of this quote by Hector Barbossa from Pirates of the Caribbean: At World's End:
Barbossa: For sure, you have to be lost to find a place that can't be found, elseways everyone would know where it was.
Trump is doing something similar. He’s launched a trade war to accomplish an unknown objective. It’s madness. If there’s one thing trade economists across the political spectrum agree on, it’s that tariffs are a terrible idea. They cause assured damage with little to no benefit.
Despite loud proclamations from Republican talking heads, it's unclear whether Trump is causing short-term pain for long-term gain. It’s starting to look more like short-term pain for even more long-term pain. That brings me to something I’ve been thinking about all week: trying to make sense of reality as it unfolds is hard even in the calmest of times—but in moments as chaotic as these, it becomes nearly impossible.
A dumb model I use to understand the policy world is to think of it as a marketplace of ideas and narratives. Everyone with a stake—from industrialists to policymakers—lists their ideas in this marketplace. Then, those ideas are traded in secondary markets. The liquidity providers for these ideas are think tanks, policy wonks, media outlets, pundits, and influential commentators on social media. If an idea gets enough volume from a wide variety of traders, it leaks into the broader consciousness of the junta.
The most successful ideas are often the ones that attract the most liquidity in this marketplace. Once enough people “buy” into an idea, it can achieve escape velocity and grab the attention of politicians. Until there’s broad-based liquidity behind it, an idea is unlikely to gain traction in the real world.
This is a dumb model—but a useful one, in my view—for making sense of the Trump moment. There are a lot of competing narratives about him. What you think of Trump often depends on which narrative you buy into. I use the word narrative deliberately because we don’t yet know the eventual outcome of his actions. You can only judge him based on what he’s doing in the present. The full impact may take years, if not decades, to play out.
Here are some of the competing narratives about Trump:
Trump is a strategic genius playing 8D chess vs. he’s a bumbling baboon.
Scott Bessent—who worked with Stanley Druckenmiller and George Soros to break the British pound—is now at the Treasury. So, Trump must know what they’re doing vs. Bessent is overrated, clueless, and likely a sacrificial lamb.
Trump is inflicting short-term pain for long-term gain vs. he’s inflicting short-term pain for more long-term pain.
Trump is using tariffs as leverage to force others to the negotiating table vs. he has no idea what he wants.
Trump is redesigning the global financial system vs. just wrecking it because he’s an egomaniac.
To make sense of this moment, you at least have to grapple with these basic narratives.
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