Feb
2026
The Times They are A-Changin’: Reflections on Perceptions
DIY Investor
25 February 2026
“In you I put
All my hope and trust”
“Perception is reality” is a commonly cited phrase, often attributed to 1980s American political strategist Lee Atwater. The phrase suggests that how we perceive situations, people, or events shapes our experienced reality more than the objective truth highlighting that beliefs, biases, and experiences dictate actions and perspectives.
Two events have dominated recent news; Andrew whatever being arrested on suspicion of misconduct in public office. However, in most people’s eyes he’s just another pervert getting his comeuppance.
As readers will know, I have largely steered clear of Andrew, Epstein, et al, whilst expressing my disgust at their behaviour, sympathy for their victims, and views that the monarch is an out-of-date, unnecessary expense.
Andrew is, unfortunately, the worst example of someone offered every opportunity in life and wasting them all. His perception was, “I’m royal, I’m different to all of you, I’m better, and I’m above the law”.
Unfortunately for him, the reality is somewhat different!
‘the worst example of someone offered every opportunity in life and wasting them all’
The other news was Trump’s tariff defeat in the supreme court. Interestingly, Trump’s perception was based on the same as Andrew whatever.
In addition, Trump perceived that America’s dominance allowed him to use instruments such as tariffs to beat foreign friends and foes.
Friday’s supreme court ruling, which declared Trump’s sweeping tariffs unlawful, destroyed these perceptions.
The basis for their judgement was explained by exclaimed Barb McQuade, a law professor at the University of Michigan., who said the court had remembered “that Congress is a separate and co-equal branch of government … One of Trump’s favourite levers is removed from the arsenal of extortion.”
Trump, is his usual magnanimous style took the defeat graciously!
Writing on social media, he described the three liberal-leaning justices who were part of the majority ruling as “FOOLS” and “LAPDOGS”. He continued, saying that the six who had voted against his tariffs were universally beholden to foreign countries, while the three right-wingers who dissented were imbued with “strength, wisdom, and love of our Country”.
Two of the justices, Neil Gorsuch and Amy Coney Barrett, were singled out for specific criticism, with Trump writing: “I think their decision was terrible. I think it’s an embarrassment to their families.”
Again, it was his perception that led him to believe that the supreme court was there to support him. After all, even before he was re-elected, the justices gave him the authoritarian’s gift of Trump v US, with a ruling that gave him absolute immunity from criminal prosecution for official presidential acts, or as some observers framed it, the “power of a king”.
Following his re-election, the court has issued 24 temporary rulings on its opaque “shadow docket”, otherwise known as emergency decisions, giving Trump the benefit of the doubt, overturning efforts by lower court judges to contain him.
Their decision in Learning Resources v Trump dismisses Trump’s invoking of the International Emergency Economic Powers Act (IEEPA) as justification for his global tariffs.
The ruling found that the legislation did not give Trump the authority to impose tariffs. Tariffs are taxes, and the power of taxation, is solely bequeathed to Congress as the keeper of the nation’s purse.
Going forward, it will be interesting to see if this demonstration of the courts independence is a sign of things to come, and will they seek to overturn other unconstitutional actions, such as Trumps’ attempt to destroy birthright citizenship as enshrined in the 14th amendment.
However, rather than gloating we need to manage our own perceptions of this ruling.
In an immediate response to the ruling, Trump effectively ignored it, implementing a new 10% global tariff and said that his administration would conduct additional “investigations” into unfair trading practices using Section 122 of the 1974 Trade Act. Trump’s perception is that he can to continue his trade war because the court curbed his powers under the IEEPA only: “We have other ways. While I am sure that they did not mean to do so, the supreme court’s decision today made a president’s ability to both regulate trade and impose tariffs more powerful and more crystal clear, rather than less.”
The 1974 Act allows tariffs of up to 15% to address “fundamental international payments problems”, however the tariffs can only be in-force for 150 days whilst the president addresses alleged “large and serious” deficits in the country’s balance of payments.
Trump acknowledged that the White House would have to do more work but said, ultimately, that the tariffs would not stop: “We’re using things that some people thought we should have used in the first place but it’s a little more complicated. The process takes a little more time, but the end result is going to get us more money.”
Tariff revenues for last year are estimated to have been between $240bn and $300bn, most of it owing to US manufacturers and consumers. The cost to the US government could be vast if it is forced to pay the money back to US importers.
Erin McLaughlin, senior economist of US thinktank the Conference Board, says that “many studies show that US firms have paid 90% of that”, with much of it passed on to the consumer through price rises in shops.
Foreign exporters into the USA have paid just over 10% of the total tariffs, proving the oft made point that tariffs are a consumption tax, a view supported by the Congressional Budget Office, The US Tax Foundation and Yale’s Budget Lab. All of whom support the findings of the NY Fed, that tariffs are a consumption tax that will impact GDP, and raise overall taxation without increasing revenues because the rich pay less when taxation is regressive, and foreign economies suffer less.
‘tariffs are a consumption tax that will impact GDP, and raise overall taxation without increasing revenues’
It is therefore, hardly surprising that the Fed is getting nervous on inflation and an overheating economy, and could slow down plans to further ease interest rates.
There has been suggestions that the US administration may be forced to refund tariffs paid. Justice Brett Kavanaugh addressed the issue, said: “The court says nothing today about whether, and if so how, the government should go about returning the billions of dollars that it has collected from importers.” He added that “refunds of billions of dollars would have significant consequences for the US treasury”.
Trump on Friday dismissed the idea of any refunds. “It’s not [being] discussed. We’ll end up being in court for the next five years.”
Fed Ex, are reported to have filed their claim, seeking a “full refund” for duties paid to the US.
The idea behind the tariffs was to address the US trade deficit, by forcing overseas firms to produce goods locally in the US. This is a very real issue as, for the fifth straight year, their trade deficit with the world topped $1 trillion, reaching a record $1.24 trillion.
At first glance, the US deficit with China appears to confirm that tariffs are effective. Trump originated these tariffs in 2018, and they continued through the Biden years, resulting in imports from China decreasing by 34.39%, to $202.07 billion.
Unfortunately, things aren’t that simple as demand patterns didn’t change, and US producers didn’t pick-up the slack.
Today, the single-largest increased deficit from 2020 is with Taiwan; growing from $30.22 billion to $116.54 billion, an increase of 385.70%, based on a combination of AI and China tariffs, the latter leading to sourcing shifts. Taiwan is becoming a dominant source for much of the power required to build-out the computer hardware that powers the AI programs for the likes of ChatGPT, Perplexity, Claude and Gemini.
Whatever the data, the overriding reality is that, for many in the US, there is still increasing inequality. Trumps’ message, which was designed to create the perception that this would change, is proving increasingly incorrect.
Economists like to talk about the “shape” of economies. Currently they might refer to “K”; an economic pattern where the rich see their stock-fuelled wealth rise dramatically while low-income households slide downward under rising costs and low wages.
‘the rich see their stock-fuelled wealth rise dramatically while low-income households slide downward under rising costs and low wages’
There is, however an alternative being put forward by analysts from Bank of America, who have replaced “K” with “E”. This research is based not only on the growing gap between the top and bottom of the economic ladder, but also a widening chasm between the middle class and the very rich.
Staying with economies, perhaps one of the greatest mistaken perceptions in recent years, was that of the electorate towards the Major government.
In April 1992 John Major was riding high, winning an election against the odds, selling himself as the everyman leader voters could relate to.
Then, in September, “Black Wednesday” happened; the sterling crisis which led to us leaving the European exchange rate mechanism (“ERM”). After this Major could do nothing right, he became a figure of fun.
In people’s perception, he was hapless, and, as a result of this, Major lost the 1997 election by a landslide.
The great irony was that post leaving the ERM the economy had performed strongly.
There was a shift in monetary policy, as the government ceased trying to keep Sterling artificially high, allowing interest rates to be lowered significantly to stimulate growth. This made our exports cheaper and more competitive, helping to end the 1990-1992 recession.
Fears that devaluing Sterling would lead to high inflation proved unfounded, due to the new focus on explicit inflation targeting which kept inflation low throughout the 1990s.
As a result, the period post the ERM, from 1992 to 2007, marked one of the longest sustained periods of economic expansion in our history.
A prime beneficiary was job creation, with unemployment falling from nearly 3 million in 1992 to around 800,000 in subsequent years.
If Major was seen as the change candidate post-Thatcher, the same could be said of Kier Starmer, who was meant to be change candidate post-14 yrs of Tory misgovernment.
Unlike Major, who was undone by one black swan event, Starmer has just disappointed. Not helped by a drip feed of bad news, and a right-wing media overplaying every single misstep.
Economically, growth is weak and unemployment has risen to its highest in almost five years.
‘Unlike Major, who was undone by one black swan event, Starmer has just disappointed’
Most of Starmer’s problems can be attributed to the perception that you can only win elections from the right, and the machinations of a Mandelson inspired cohort within the party.
To satisfy this perception, and the right-wing media, Starmer has persisted with the tired-old Tory dogma of fiscal discipline. This straightjacket means that whatever the government might want to do, such as improving public services, or raising defence spending to 5% of GDP, there are always “tough choices”, “difficult decisions”; the result being that nothing has changed.
There is the usual ongoing obsession with growth, which on its own means little or nothing to the majority of the electorate, who see nothing trickling down to them. Instead, a contra, Keynesian inspired approach, such as using defence spending to generate growth, would enable the chancellor to reshapes the fiscal arithmetic. However, investment of this nature takes time to bear fruit, while the chancellor remains preoccupied with self-imposed metrics..
We finish with what years ago would have been described as self-loathing, but has now osmosed into “incel”. In its most basic form, incel describes someone, usually a male, who is frustrated by their lack of sexual experiences, and has become a frequent topic in discussions about gender, misogyny, violence and extremism.
There was an interesting, but fundamentally disturbing articled written by a 15-yr old girl who, along with too many others, is the victim of abuse from boys who are incel. I wont elaborate on this, if you want to understand the abuse, she details if far better than I can
All I will say is this; these boys are incel because they regard woman as second-class citizens there for their pleasure. Change your attitude and your luck might change with it!
“But girls, they wanna have fun
Oh girls just wanna have”
@coldwarsteve
Philip Gilbert is a city-based corporate financier, and former investment banker.
Philip is a great believer in meritocracy, and in the belief that if you want something enough you can make it happen. These beliefs were formed in his formative years, of the late 1970s and 80s
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