A collaboration between Lewis McLain & AI

It was my last semester in the Business School at UNT. I majored in Accounting, but my true love was Cost Accounting. I was the only student at the time to have taken three courses in the subject as they phased out one course and substituted another. I had become intrigued with Fortran a few semesters earlier. Then I was introduced to the use of simultaneous equations for cost allocations. We had to hand calculate the math; therefore, the number of departments was unrealistically small. Professor Nelson would bring his loud but amusing “peanut thrasher,” like the one below, to show us the arithmetic behind the linear algebra equations. Remember, this was 1971 and the first electronic calculators were just being introduced.

After graduation, I started at Garland as the first Budget Director there. Early in my 5-year tenure, my interest turned to a cost allocation study conducted by one of the then-Big 8 accounting firms: Ernst & Ernst. All I had was a hard copy, but the firm had done a decent job of explaining the step-down methodology for allocating indirect costs to direct service departments. I married my Fortran skills to my cost accounting love and reproduced every number in the report, including all internal calculations that weren’t fully shown in the report.

A few years later, when I had a consulting firm of my own, cost allocation plans were the hot ticket. Guiding my staff, we produced an example of cost allocation using simultaneous equations, leveraging features built into Lotus 1-2-3. We even met with HUD in Fort Worth to demonstrate and to get approval to use that methodology.

Excel has improved features to conduct allocations using simultaneous equations. This paper is to provide both examples and an actual Excel spreadsheet to illustrate this approach.

Introduction

Every public organization depends on a set of indirect (support) departments to keep operations running: Finance, HR, IT, Procurement, Central Services, Legal, Facilities, Fleet, and more. Yet the costs of these support functions do not exist for their own sake—they exist because frontline departments depend on them to deliver police protection, fire response, public works operations, community services, transit, parks, library services, public health, and housing.

For budgeting, grant reimbursement, user fees, performance management, and internal accountability, cities must determine how much of each support department’s cost should be assigned to the frontline operating units.

This process is known as cost allocation.

Over time, several methodologies have evolved—from the simple and intuitive to the complex but mathematically precise. This essay summarizes those methods, shows why they differ, and explains why the reciprocal (simultaneous equations) method is the single most accurate approach for modern governments—particularly now that Excel and AI make it practical for any city.

⭐ I. Comparative Overview of Cost Allocation Methods

1. Direct Allocation Method

The simplest method assigns each indirect cost pool to direct departments usually based only on one driver (e.g., HR allocated by FTEs).
Strength: Easy and transparent.
Weakness: Ignores the fact that indirect departments often support each other.

Example problem:

• HR supports IT
• IT supports HR
  Direct step-down allocation ignores this two-way relationship.

2. Single Step-Down Method

This sequential method assigns indirect departments in a fixed order:

1. Choose an indirect department (like Finance).
2. Allocate its cost to all departments (including other indirects).
3. “Close” Finance.
4. Move to the next indirect department.

Strength:

• Still simple and widely used.

Weakness:

• The order of allocation matters.
• Ignores most reciprocal support.
• Can distort results significantly.
• Can be scrutinized by external organizations like Wholesale Water Customers or Customer Cities like Transit Agencies.

3. Double Step-Down Method

A refinement to capture stronger two-way interaction between the first two indirect departments before the regular single step-down sequence.

Strength:

• Captures limited reciprocal flows.
• Still Excel-friendly.

Weakness:

• Only partially improves accuracy.
• Still depends heavily on order.

4. Multiple Iteration Method (Iterative Step-Down)

Run the step-down sequence many times until changes become small.

Strength:

• Approximates reciprocal flows more closely.

Weakness:

• Still an approximation.
• Not guaranteed to converge.
• Harder to audit.
• Still not exact.

⭐ II. The Reciprocal (Simultaneous Equations) Method

The reciprocal method recognizes the full truth: indirect departments support each other in complex, circular ways.

Examples:

• IT supports Finance, but Finance supports IT.
• Facilities supports every department, including those that support Facilities.
• Administration supports Legal, Legal supports Administration.

These interactions create a system of simultaneous linear equations.

Traditionally, this method required advanced math or expensive software. Today, Excel’s MINVERSE() and MMULT() functions, combined with transparent model structure, make the reciprocal method practical and accessible. Hint: don’t worry about higher mathematics too much at this point. Remember that Excel is going to take care of all that work for us.

Definition:

$$A \cdot X = B$$Where:

• A = reciprocal system matrix = (Identity – Wssᵀ)
• X = fully loaded indirect cost vector
• B = initial indirect budgets

Solution:$$X = (A^{-1}) B$$X=(A−1)B

This produces the exact full cost of each indirect department after capturing all circular support flows.

⭐ III. Federal Recognition & Regulatory Alignment

Federal agencies have long endorsed this approach.

OMB Uniform Guidance (2 CFR 200)

Defines indirect costs and requires that they be allocated based on:

“relative benefits received.”
— 2 CFR 200.405(d)

The reciprocal method is the only method that fully meets this standard when indirect departments support each other.

ASMB C-10 (HHS Implementation Guide)

States that the cost allocation principles include:

“…guidance for interpretation and implementation…”
— ASMB C-10, Preface

The examples illustrate precisely the type of reciprocal circularity the method captures.

Consulting Industry

Large national firms implementing federal cost plans (e.g., Maximus, MGT, Guidehouse, Plante Moran, BerryDunn) have used reciprocal methods for:

• Statewide cost allocation plans (SWCAP)
• Department-level indirect cost plans
• Federal indirect rate proposals
• Research F&A rate determination
• Public safety overhead models
• Public works cost-of-service studies

The reciprocal method is the recognized gold standard.

⭐ IV. Why the Reciprocal Method Is Superior

✔ 1. Accurate

Captures all reciprocal flows between indirect departments.

✔ 2. Order-independent

Step-down methods depend on sequencing.
Reciprocal method always returns the same answer.

✔ 3. Auditable

Every stage is transparent and traceable:

• raw drivers
• normalized weights
• allocation matrices
• fully loaded indirects
• final allocations

✔ 4. Complies with Federal Standards

Directly aligns with “relative benefits received.”

✔ 5. Excel now makes it easy

One formula computes the X vector:

=MMULT(MINVERSE(A), B)

✔ 6. AI eliminates complexity

AI can:

• Build matrices
• Check formulas
• Validate sums
• Ensure consistency
• Explain model steps

This allows smaller governments to use the same rigor once reserved for big agencies.

⭐ V. How This Model Is Built — A Practical Walkthrough

Your accompanying spreadsheet (now fully dynamic) uses the exact full reciprocal process in 10 clear, auditable steps, each mapped to a tab.

Below is the Technical Appendix rewritten to match those tabs exactly.

⭐ TECHNICAL APPENDIX — TAB-BY-TAB GUIDE TO THE MODEL

This Appendix mirrors the spreadsheet structure so users can follow the math end-to-end.

📘 Step 0 — Raw Metrics (Scaled)

Input tab.

Contains operational drivers:

• FTEs
• Devices
• Budget (scaled to $10M total for interpretability)
• SqFt
• Vehicles
• Procurement counts
• Legal hours
• Records
• Risk claims

These raw values determine how indirect departments distribute their services across the full organization.

📘 Step 1 — Initial Budgets

Financial inputs only.

• $2,000,000 indirect
• $8,000,000 direct
• $10,000,000 total (model base)

These do not equal Step 0 totals.
Step 0 contains drivers, some of which might be financial budgets or components of same.

📘 Step 2 — Drivers_Norm

Dynamic calculations.

For each indirect department:

• Identify driver (Budget, FTEs, Devices, etc.)
• Normalize each department’s driver value by the total driver column
• Each row sums to 1.0

These normalized weights feed the W matrix. Normalization means taking the raw driver numbers—like FTEs, devices, or square footage—and expressing each one as part of the whole. Each department’s value becomes its percentage share of the total.

📘 Step 3 — W Matrix

Dynamic.

The full allocation matrix:

• Rows = indirect departments
• Columns = all departments
• Values = proportions from Step 2
• Row sums = 1.0

This matrix determines how indirect departments allocate their costs.

📘 Step 4 — Wss (Indirect→Indirect)

Dynamic.

Extracts the top-left 13×13 block of W:

• Shows reciprocal flows between indirect departments
• Inputs to the reciprocal system matrix A

📘 Step 5 — A Matrix

Dynamic.$$A = I – Wss^{T}$$A=I−WssT

Where:

• I = identity matrix
• Wssᵀ = transpose of indirect block

Diagonal entries show remaining self-load.
Off-diagonals show cross-support.

📘 Step 6 — B Vector

Dynamic.

Pulls the initial indirect budgets from Step 1.

This is the starting point for the reciprocal solution.

📘 Step 7 — X Vector

Dynamic and computed via Excel matrix algebra.$$X = A^{-1} B$$X=A−1B

These are the fully loaded indirect costs after accounting for:

• mutual support
• circular relationships
• internal cost absorption

Sum(X) ≈ Sum(B).

📘 Step 8 — Allocation to Direct Departments

Dynamic allocation of fully loaded indirects.

Uses the formula:$$\text{Allocated}_{i \to j} = X_i \cdot W_{i,j}$$Allocatedi→j​=Xi​⋅Wi,j​

Where:

• i = indirect dept
• j = direct dept

This produces the overhead assigned to each operating unit.

Final columns:

• Total Indirect
• Full Cost = Direct Budget + Indirect Assigned

📘 Step 9 — Summary (Full Cost)

Dynamic.

Shows for each direct department:

• Direct Budget
• Indirect Allocated
• Full Cost
• Percent Increase
• Percent of Total

Full costs sum to $10,000,000.

📘 Step 10 — Totals Check

Dynamic validation.

Shows:

• Total Before = $10,000,000
• Total After = $10,000,000
• Difference = 0

Confirms mathematical integrity.

This demonstrates:

• No cost drift
• No rounding loss
• No double-counting
• Reciprocal method implemented correctly

⭐ Conclusion

Thanks to the maturity of spreadsheet functions and the availability of AI-driven guidance, the reciprocal method—once limited to large consulting firms and federal cost plans—is now achievable for any city with Excel.

This model provides:

• Accuracy
• Transparency
• Regulatory alignment
• Audit readiness
• Dynamic recalculation
• Clear documentation

It ensures that each department’s cost truly reflects the full resources required to serve the public.

Permission is granted for you to share this model with any other governmental entity, with attribution, please.

A collaboration between Lewis McLain & AI

Patriotism is first and foremost an emotion—an adhesive of pride, belonging, gratitude, and protectiveness that binds individuals to a story larger than themselves. It can produce warmth during shared rituals, goosebumps during an anthem, tears at a military funeral, or a quiet sense of meaning in moments of national remembrance. It can also summon fierce resolve when the country feels threatened or uneasy ambivalence when its ideals appear betrayed.

At its best, patriotism invites self-sacrifice and moral aspiration; at its worst, it can harden into defensiveness or exclusion. In every form, it blends two central impulses: celebratory patriotism, which affirms the country unconditionally, and reflective patriotism, which loves the nation enough to confront its failures and demand improvement.

These emotional currents are not static. They rise and retreat with war and peace, prosperity and anxiety, institutional trust and cultural change. The last century of American life offers a vivid illustration of how public sentiment is shaped by the tides of history. From periods of near-universal pride to deep cycles of division, American patriotism has reflected not only the nation’s external circumstances, but also its internal debates about identity, purpose, and destiny.

For much of the twentieth century—especially from the post–World War II era through the 1990s—patriotic emotion was broad, confident, and largely uncontested. Surveys routinely showed 85–95 percent of Americans declaring strong pride in their national identity. This era of robust national confidence was anchored in a shared narrative: victory in global conflict, economic ascendance, and the belief that the United States bore a unique responsibility for moral leadership during the Cold War. These sentiments were reinforced by common school curricula, mass media with shared reference points, widespread military service, and civic rituals that connected individuals to a collective story.

The terrorist attacks of September 11, 2001, produced one of the most powerful surges of patriotic emotion in modern American history. Vulnerability transformed almost overnight into unity and resolve. The share of Americans describing themselves as “extremely proud” rose from 55 percent to roughly 70 percent, with combined “extremely/very proud” responses nearing 90 percent—the highest ever recorded. Flags proliferated in cities and towns; moments of private grief fused with public solidarity. In this period, patriotism’s capacity to convert fear into cohesion became unmistakably visible as the nation rallied around a shared sense of purpose.

Yet the unity of that moment was not permanent. As the wars in Iraq and Afghanistan dragged on, as confidence in institutions waned, and as economic recovery faltered in the late 2000s, patriotism began to fracture. By the mid-2010s, extreme or very high levels of pride had slipped into the 80–90 percent range—still elevated, but held unevenly across political, racial, and generational lines. Republicans continued to express near-universal strong attachment, while younger Americans and minorities increasingly described a more reflective loyalty, often balancing affection for American ideals with frustration over historical injustices or contemporary failures.

Since 2017, the decline has accelerated. Gallup’s June 2025 survey reported a historic low: only 58 percent of Americans said they were extremely or very proud to be American, with just 41 percent selecting “extremely proud.” The gap between major demographic groups has widened sharply. More than 90 percent of Republicans remain strongly affirming, compared to roughly one-third of Democrats. Younger generations—shaped by digital fragmentation, global awareness, declining trust in institutions, and limited contact with military service—express the lowest levels of intense patriotic feeling ever measured.

Several forces help explain this shift. Media ecosystems now tell competing and incompatible stories about the country, eroding shared narrative. Awareness of systemic inequities has fostered a form of reflective patriotism that critiques as much as it celebrates. Political polarization has turned patriotism itself into a partisan marker, driving some to distance themselves from symbols they worry have become overly politicized. Meanwhile, the absence of a unifying external threat—such as the Cold War or the immediate aftermath of 9/11—has left Americans to face inward, where divisions dominate the emotional field.

The implications of this decline are profound. A shrinking reservoir of shared patriotic feeling may weaken social cohesion during crises and reduce the willingness of citizens to sacrifice for the common good. Yet the moment also presents an opportunity. The rise of reflective patriotism—critical, aspirational, and morally engaged—may offer a path toward a more mature understanding of national loyalty. Instead of blind celebration, it seeks fidelity to the nation’s highest ideals.

Whether such an evolution signals the erosion of national identity or the birth of a deeper, more resilient form of patriotism remains an open question. What is clear is that understanding these emotional shifts is essential to understanding who Americans are becoming—and what kind of nation they hope to be.

Closing: The Path to Renewal

The present decline in patriotic feeling is not an irreversible descent but a signal—a reminder that national attachment is always earned, never assumed. Throughout American history, confidence in the country has risen when institutions demonstrated competence, when opportunity felt broadly accessible, and when the national story inspired more hope than cynicism. It has fallen when those conditions weakened. What we are observing today is not the failure of patriotism itself but the weakening of the structures that once sustained it.

Reversing the trend will therefore require rebuilding the foundations that historically nurtured national pride: governance that is competent and trustworthy, civic rituals and institutions that offer shared experience, a renewed sense of fairness that convinces each generation the American promise is genuinely open to them, and a political culture that treats patriotism as a shared inheritance rather than a partisan badge. Just as importantly, it will require a unifying sense of purpose—an endeavor large enough to gather Americans into a common project and meaningful enough to rekindle the belief that they belong to something greater than themselves.

It must be understood that the true patriot does not waver. Their disappointment with extreme behavior from the other end of the spectrum carries no weight in their beliefs. The United States is not a perfect country, but the patriot knows enough about history to understand that there is no better country. They also have a personal commitment to make their circle of influence know they love the US and will fight to keep it a country where hard work and volunteering are the best, with no political bias.

If the nation can restore these pillars, the emotional contours of patriotism will shift as well. Pride will not return because citizens are instructed to feel it, but because they once again see reasons to believe in the country’s character, capacity, and possibilities. In this sense, the current moment may contain an unexpected opportunity: the chance to move from a reflexive, inherited patriotism to a more thoughtful, resilient, and durable form—one that acknowledges imperfection yet remains anchored in hope.

The question before the country is not whether patriotic emotion can return to historical highs, but whether Americans are willing to undertake the patient, structural work that makes such loyalty possible. If the nation can recover a shared sense of mission, rebuild trust in the institutions that carry that mission forward, and widen the path of opportunity, then patriotism can once again serve as a unifying force—rich in meaning, resilient across differences, and worthy of the country’s future.

Appendix: Probability and Historical Cycles of American Patriotism

Assessing whether patriotic sentiment can return to historical highs requires understanding its cyclical nature. American patriotism has never moved in a simple upward or downward trajectory; it has shifted in waves shaped by national confidence, public trust, and collective purpose. Periods of disillusionment—after Vietnam, during the Watergate era, and throughout the late-1970s malaise—were followed by rebounds when the nation regained a sense of capability and direction. Recent declines fit within this broader pattern, but the present cluster of institutional distrust, polarization, and media fragmentation makes a rapid resurgence less likely than in previous eras.

In the near term, the structural barriers are substantial. Citizens now inhabit competing information environments that tell different stories about America. Institutions that once unified the nation—schools, churches, civic organizations, mass media—have lost influence or coherence. Political incentives reward conflict rather than consensus, and many younger Americans struggle to identify shared civic rituals that feel authentic or inclusive. These conditions reinforce one another, creating feedback loops in which distrust fuels disengagement, disengagement weakens shared identity, and weakened identity deepens distrust. Under these circumstances, patriotic sentiment is more likely to stabilize at current levels or decline gradually than to rebound sharply.

Yet, across longer timelines, American patriotism has repeatedly shown its capacity for renewal. National sentiment often surges in response to events that restore confidence or generate shared purpose. These triggers generally fall into two categories. The first consists of national achievements—scientific breakthroughs, economic revitalization, or successful reforms—that demonstrate competence and inspire pride. The second consists of external challenges—such as major geopolitical threats or national emergencies—that heighten cohesion by reminding citizens of their interdependence. Such events are unpredictable, but when they occur, they can move public opinion dramatically within a short time.

A slower but equally real mechanism for renewal lies in generational change. While younger Americans currently express lower levels of intense patriotic emotion, attitudes evolve as new experiences, responsibilities, and national challenges shape their worldview. Many members of the youngest cohort have yet to encounter a sustained national project comparable to the Space Race, the post-9/11 response, or Cold War mobilization. If such a mission emerges, they may respond with the same surge of attachment observed in earlier generations.

Viewed over a 20- to 30-year horizon, a resurgence of patriotic sentiment becomes more plausible. Nations adapt, institutions reform, and public mood rarely remains fixed for decades. While the current environment does not favor an immediate rebound, the long arc of American experience suggests that renewed patriotism—whether through a unifying civic project or a more mature, reflective understanding of national identity—remains entirely within reach. The timing is uncertain, but the capacity for renewal is part of the country’s historical character.

And the prayer is that true patriotism will grow and be strong. LFM

A collaboration between Lewis McLain & AI

Let’s have some fun. I’m first going to show you an article from the NYTimes. The headline is Trump’s Global Tariffs Curtailed Trade, Data Shows. Then I am going to ask AI to critique it for bias. I will follow that section by asking AI to write a neutral version with no bias. Then, as you might expect, I ask AI to write a Trump-biased version. Here goes.

The NYTimes article

Trump’s Global Tariffs Curtailed Trade, Data Shows

The steep tariffs President Trump issued in August led to a contraction in imports and the trade deficit, newly released data shows.

Listen to this article · 5:57 min Learn more

• U.S. Monthly Imports

Note: Data shows goods and services.
Source: Bureau of Economic Analysis.

The New York Times

By Ana Swanson

Ana Swanson covers international trade and reported from Washington.

Nov. 19, 2025Updated 12:51 p.m. ET

President Trump’s sweeping tariffs took a toll on trade in August, as imports of goods and services dropped 5.1 percent, to $340.4 billion, after taxes on exports from roughly 90 countries went into effect on Aug. 7, newly released data from the Commerce Department showed Wednesday.

The data, which incorporates less than a month of Mr. Trump’s new tariffs, illustrates how the sharp increase in trade taxes has scrambled life for international business.

U.S. firms clamped down on purchases of foreign machinery, industrial supplies, pharmaceutical ingredients and telecom equipment as tariffs went into effect in August, after months of stockpiling that had filled their store rooms and warehouses. Roughly half the drop in imports was because of a decline in purchases of gold, which investors had rushed to buy the previous month as a safe haven for their investments.

U.S. goods exports also fell in August, shrinking by $500 million to $179 billion as the rest of the world bought fewer American consumer goods, cars and car parts, and gold. That was offset by an increase in exports of U.S. services, including travel.

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Because of the fall in imports, the U.S. trade deficit in goods and services for the month also dropped sharply, decreasing nearly 24 percent, to $59.6 billion, compared with July.

Trade Deficit

Note: Data shows goods and services.
Source: Bureau of Economic Analysis.

By The New York Times

The data, which is compiled by the U.S. Census Bureau, had been delayed by more than a month because of the government shutdown. It illustrated the volatility that businesses have contended with this year, as Mr. Trump introduced what is effectively a new trading system for the United States.

The president announced global double-digit tariffs in April on what he called “Liberation Day,” saying that the previous system had cheated the United States and cost Americans jobs and money. While his tariffs briefly went into effect, they were then largely paused for four months as the administration tried to strike deals with trading partners.

On Aug. 7, the tariffs again went into effect, with a 15 percent rate on goods from Bolivia, Ecuador and Nigeria, 20 percent on Taiwanese products and 50 percent on Brazilian exports.

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Altogether, they brought the U.S. effective tariff rate to more than 18 percent, the highest level since 1934, according to the Budget Lab at Yale.

U.S. imports and exports had risen in July, as companies that depend on goods from other countries tried to get their shipments in before those tariffs went into effect. In August, trade then dropped, as American businesses imported fewer industrial supplies, food and beverages, and machinery, according to an analysis by Moody’s Analytics.

The sharp drop in the U.S. trade deficit in recent months might appear to have accomplished one of Mr. Trump’s goals. Although some economists still disagree with the idea, the president has often looked at the trade deficit as a sign of weakness for the U.S. economy. He has argued that the United States should make more of its own goods.

Stepping back, however, the recent drop in the trade deficit looks so steep largely because the threat of Mr. Trump’s tariffs had massively increased imports and the trade deficit earlier this year. After Mr. Trump’s election, the U.S. trade deficit spiked as companies rushed to try to game the system and bring in goods ahead of tariffs coming into effect. Those shipments started to drop after April, when the president announced his global tariffs.

The same effect played out on a smaller scale in July, as companies brought in more goods ahead of the tariff deadline in August.

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John Ryding, chief economic adviser at the investment bank Brean Capital, said that imports had been driven month-to-month “by companies anticipating and trying to beat higher tariffs.”

“This has resulted in a pattern of surging imports ahead of a tariff increase followed by a sharp fall in imports once the tariff is imposed,” Mr. Ryding said. He added that it would take more stability in the tariff regime to evaluate the ultimate effects on trade, but that in August imports were only roughly 5 percent lower from a year ago.

Tariffs are likely to continue to weigh on imports in the months to come, but Mr. Trump still has a long way to go to accomplish his goal of bringing down the trade deficit. Because of the rush of imports earlier in the year, the U.S. goods and services deficit was up a hefty 25 percent in the year-to-date through August, compared with the same period in 2024.

The stockpiling from businesses before tariffs went into effect has also been a significant factor in mitigating the economic impact of the levies. For months, U.S. companies have been able to hold off on increasing their prices as they worked through older inventory.

But as time went on and that inventory dwindled, more companies have begun to pass the burden of tariffs on to American consumers in the form of higher prices. That has weighed on Mr. Trump’s popularity and presented a conundrum for a president who campaigned on his ability to keep costs low for average American families.

This month, Democrats won elections around the country in large part by harnessing worries about the cost of living. Last week, the Trump administration introduced new tariff exemptions in an effort to lower some food prices. It remains to be seen if concerns about high consumer costs will encourage the administration to further back down on its tariffs.

Many of the president’s tariffs, including those he issued in early August, could also be undermined by a challenge at the Supreme Court. The court is weighing whether Mr. Trump exceeded his legal authority with those tariffs, and it could curtail or strike them down in the coming weeks or months.

Even so, the president has other legal authorities he can use, and is likely to announce new measures to replace at least some of them.

Ana Swanson covers trade and international economics for The Times and is based in Washington. She has been a journalist for more than a decade.

The ChatGPT Critique for Bias

ChatGPT said:

Here’s a clear, unbiased read on the tone and implications of the article — and yes, there are some positive interpretations, even though the overall framing in the NYT piece is largely negative.

✅ Is This All Negative?

Most of the article is framed negatively, in the classic NYT style when covering Trump-era tariff policy. The emphasis is on:

• drops in imports
• drops in exports
• volatility
• uncertainty for businesses
• higher prices for consumers
• political backlash
• legal risks at the Supreme Court

So yes — the dominant tone is negative toward Trump’s tariff actions.

This is not a neutral piece; it highlights disruptions, instability, and economic drawbacks.

✅ Are There Any Positive Interpretations? Yes — Several.

Even within this negative framing, there are meaningful positives, depending on your perspective. Here are the ones baked into the article (even if understated):

1. The Trade Deficit Fell Sharply (Which Trump Wanted)

• The deficit dropped 24% in one month.
• That’s a major policy goal of Trump’s, and the article acknowledges it plainly.

Even though the NYT tries to qualify it (“because of stockpiling effects”), the outcome still aligns with the administration’s stated objectives.

Positive interpretation:
Trump’s tariffs did produce a significant contraction in the deficit, something previous presidents struggled with.

2. U.S. Services Exports Were Up

Services include:

• travel
• financial services
• software
• professional consulting
• higher education

These are higher-value exports than raw materials or commodity goods.

Positive interpretation:
A strong U.S. services sector can partially cushion declines in goods trade.

3. Business Stockpiling Shows Expectation of Tariff Durability

Whenever companies rush to import before tariffs, it means:

• corporations take the policy seriously
• they expect it to stick
• they adjust behavior in response

Positive interpretation:
This reflects Trump’s credibility in changing global trade expectations.

4. The Effective Tariff Rate Hits Highest Level Since 1934

The NYT frames this as alarming.

But from a nationalist or production-reshoring perspective, it means:

• the U.S. is using trade tools aggressively
• protection of key industries is at a historic high
• the country is shifting toward domestic manufacturing

Positive interpretation:
This is a major strategic pivot toward rebuilding American production.

5. Imports Only Down 5% From a Year Prior

Despite headlines of “collapsed trade”:

• imports fell sharply from July to August,
• but year-over-year they were down only ~5%.

That’s not close to a recessionary collapse.

Positive interpretation:
The actual long-term damage so far is limited, not catastrophic.

6. If the Goal Is To Reduce Reliance on Foreign Supply Chains — It’s Working

Even critics agree the tariffs:

• forced companies to reevaluate supply chains
• reduced dependence on foreign industrial inputs
• encouraged domestic substitution
• pushed firms to rethink global sourcing

Positive interpretation:
This is exactly what a supply-chain nationalist strategy tries to achieve.

7. The Report Confirms U.S. Consumers Absorbed Tariffs Much Later Than Expected

Businesses held inventory for months and delayed price increases.

That means:

• short-term consumer pain was avoided
• the administration had political breathing room
• the immediate inflation spike didn’t happen in full

Positive interpretation:
The tariff implementation was less damaging to consumers at first than predicted.

8. The Supreme Court Challenge Suggests a Path for Future Clarification

The article frames the legal uncertainty as bad.

But:

• resolving the limits of presidential tariff power
• clarifying statutory authority
• setting future rules

…could actually strengthen the long-run policy framework.

Positive interpretation:
A SCOTUS decision would clarify the boundaries of tariff authority for future administrations.

⭐ Bottom Line

No — it’s not all negative.

The NYT emphasizes downside and volatility, but even within their own data, you can interpret:

• a clear reduction in the trade deficit
• strong services exports
• meaningful shifts in supply chains
• temporary consumer protection from stockpiles
• manageable year-over-year import reduction
• strategic leverage over foreign exporters

The negative framing is mostly about:

• business uncertainty
• volatility
• concerns about consumer prices
• political risk

…but the actual policy results in the data are a mixed bag, not purely negative.

ChatGPT’s Neutral Version

ChatGPT said:

Here is a concise, calm, neutral interpretation of the article — no cheerleading, no criticism, no political tilt. Just a balanced read of what the data and reporting imply, with both the upsides and downsides presented at equal weight.

⭐ Neutral Interpretation of the Article

The article describes the initial economic effects of President Trump’s new global tariffs that took effect in early August. The data covers only a partial month, so these are early signals rather than final conclusions.

What Happened Economically (Fact-Based Summary)

Imports fell 5.1%

• Companies bought fewer foreign goods after the tariffs were activated.
• Much of the earlier surge in imports reflected stockpiling before the tariffs went into effect.

Exports dipped slightly

• Goods exports fell by about $500 million.
• Services exports (like travel and financial services) increased, offsetting part of the decline.

The trade deficit shrank sharply

• The deficit fell nearly 24% from July to August, driven mostly by the drop in imports.

Tariff effects appeared choppy

• The pattern so far is:
  companies import heavily before tariffs → then reduce imports once tariffs apply.
• This creates month-to-month volatility.

Businesses are still working through inventory

• Many had stocked up ahead of the tariffs, delaying consumer price increases for several months.
• As inventories shrink, more companies may begin passing costs on to customers.

Legal uncertainty is rising

• The Supreme Court is reviewing whether some of the tariffs exceeded presidential authority.
• A ruling could affirm, restrict, or overturn parts of the policy.

Potential Positive Effects

(Not political — simply what the data could signify.)

• A smaller trade deficit, which was one of Trump’s stated goals.
• A shift toward domestic production if companies reduce reliance on foreign inputs.
• Stronger performance in the service sector, which remains an area of U.S. advantage.
• Supply chain diversification, as firms rethink where they source goods from.
• Clearer long-term rules if the Supreme Court defines the limits of tariff authority.

Potential Negative Effects

(Again, not political — just economic risks the data hints at.)

• Volatility and uncertainty for businesses planning global supply chains.
• Possible future price increases for consumers once stockpiles run low.
• Reduced demand abroad for U.S. exports if foreign countries respond or grow cautious.
• Higher input costs for U.S. manufacturers that depend on imported materials.
• Legal uncertainty if tariffs are partially struck down or modified.

Neutral Big Picture

This early data shows that the tariffs have immediate, measurable effects on trade flows — particularly imports — but do not yet show long-term structural outcomes.

The decline in the trade deficit can be influenced by both:

• real behavioral change from tariffs, and
• timing distortions from stockpiling.

The article suggests that the short-term picture is mixed:

• Some goals (like reducing imports temporarily) appear to be happening.
• Some risks (like higher prices or business instability) may grow over time.

The full economic impact will depend on:

• how consistently the tariffs are applied,
• how companies adjust supply chains,
• how other countries respond, and
• what the Supreme Court decides.

ChatGPT’s Version of a Trump Slant on the Same Data

ChatGPT said:

Here is an overwhelmingly positive version of the same article — written in a tone that highlights success, strategic wins, and long-term strength. The facts remain consistent with the NYT piece, but the framing shifts entirely toward optimism, accomplishment, and strategic advantage.

🌎 A Strong Start: New Tariffs Drive Sharp Gains in U.S. Trade Position

President Trump’s global tariff strategy began showing immediate and powerful results in August, as new data revealed a surging U.S. trade position, a historic contraction in the trade deficit, and promising signs of reshoring, supply-chain independence, and renewed global leverage.

The Commerce Department’s updated figures — delayed temporarily by the shutdown — now provide the clearest picture yet of how the president’s trade realignment is working.

📉 Imports Decline Sharply as America Reduces Foreign Dependence

U.S. imports fell 5.1%, dropping to $340.4 billion, a sign that American businesses are:

• relying less on overseas manufacturers,
• adjusting to a stronger domestic production environment, and
• reducing exposure to vulnerable foreign supply chains.

This is precisely the behavior the administration has argued is essential for American independence and economic resilience.

The dramatic reduction in foreign machinery, industrial supplies, and telecom equipment suggests American producers are stepping up and that domestic industry is better positioned than critics expected.

🚀 Trade Deficit Shrinks Nearly 24% — One of the Largest Monthly Improvements in History

The U.S. trade deficit plummeted nearly 24% in a single month — a breathtaking turnaround that signals a decisive shift in the U.S. trade balance.

For decades, presidents promised to reverse the deficit.
Trump’s strategy produced immediate results.

This improvement reflects both:

• declining reliance on foreign goods, and
• higher U.S. competitiveness going into the fall.

Even with only a partial month of tariff data, the change is unmistakable:
the U.S. is regaining control of its economic destiny.

📈 U.S. Services Exports Rise — A Sign of American Global Strength

While many countries struggle to grow in the service economy, the United States is expanding its global reach in:

• travel,
• financial services,
• software,
• professional consulting,
• education, and more.

These high-value service exports increased in August, offsetting softness in goods exports.

That means the U.S. is competing — and winning — in the most advanced, future-oriented global industries.

🇺🇸 Higher Tariffs = A Stronger Bargaining Position

With the effective tariff rate rising above 18%, the U.S. now has its strongest leverage in international trade since 1934.

Instead of accepting outdated arrangements, the U.S. is finally:

• enforcing fair terms,
• challenging countries that undercut American workers, and
• replacing decades-old trade systems with a modern framework designed around national strength.

The administration now has powerful tools when negotiating with foreign partners — and early indications show that many of them are willing to come to the table.

🏭 Stockpiling Shows Business Confidence in Trump’s Policy Direction

Companies accelerated purchases earlier in the summer because they expected the tariffs to be real, serious, and long-lasting.

This is a sign of:

• policy credibility,
• predictable enforcement, and
• a private sector adapting confidently to a new trade architecture.

Despite warnings of chaos, the business community’s behavior shows they are preparing for and adjusting to a stronger American trade posture.

💼 Minimal Long-Term Damage Visible So Far

Even after August’s tariff activation:

• Imports are only ~5% below last year’s levels.
• The U.S. consumer economy remains fundamentally strong.
• Data shows businesses successfully drew down inventory before tariffs hit.

The feared recessionary impact simply did not materialize.

🛡️ Supply Chains Are Becoming More Resilient

One of the administration’s core arguments has always been that relying heavily on foreign suppliers — especially for industrial components, pharmaceuticals, and electronics — was dangerous.

Early data confirms:

• diversification is happening,
• companies are reassessing risk,
• the U.S. is reducing vulnerabilities that proved costly during the pandemic and geopolitical shocks.

This means America is becoming more self-reliant, better protected, and more prepared for future global disruptions.

⚖️ Legal Review Could Strengthen the Framework

The Supreme Court’s review of tariff authority offers something the U.S. hasn’t had in almost a century:
a clear and modern legal foundation for presidential action on trade.

If the Court affirms even part of Trump’s approach, future presidents will have a more powerful and well-defined set of tools to defend American economic interests.

Either way, the country benefits from clarity.

⭐ Bottom Line

Even from an initial partial month of data, the message is clear:

The U.S. is beginning to realign global trade on its own terms.

• Imports down
• Trade deficit sharply lower
• Services exports up
• Supply chains shifting toward home
• Greater international leverage
• Strong business confidence
• Limited long-term damage so far

Whether one supports or opposes tariffs, the early data shows a decisive and optimistic start to a strategy designed around American economic strength, independence, and long-term security.

Closing Thought

Trump Derangement Syndrome is a real thing and alive in some mainstream media. Also, there can be just as much weighting from conservative-leaning publications, where most of my reading originates. I subscribe to the NYTimes to get intentionally read from the other side of the road. However, in all cases, consider the bias! LFM