1) Trump Stumps the Chumps

As you've probably heard, the GDP growth for Q3 came in at a red hot 4.3%.  What you may not know is that about 90% of the professional economists got it wrong - all underestimating the strength of the Trump economy. QED: these weren't random errors. These were "hate Trump" errors.

We looked back at the Blue Chip forecast for 2025: the estimate was 2.1% - unless Trump's policies made it even worse!

The chart below shows the actual numbers for Q2, Q3, and the most recent (Dec. 23) estimate Atlanta Federal Reserve Bank for Q4.

If the Atlanta Fed gets it right, the full year will come in at 2.6%, beating the Blue Chip by a full half point. But the third quarter GDP print beat the Atlanta Fed estimate by 0.8% - a similar miss would put full year GDP growth at 2.8%. And this is all including the -0.6% first quarter, before Trump's policies had time to take effect.

Starting in the second quarter, GDP has been nearly twice as high as predicted.

To quote the inimitable Maxwell Smart: "Missed it by that much."

This isn't the first time the whiz kids whiffed on the Trump economy. These are the same Keynesian economists who warned at the start of Trump's first term that we would see a stock market crash and maybe a second Great Depression. Time to send back Ivy League PhDs and admit they have no idea what they are talking about.  Nor do they learn their lessons about underestimating Trump policies.  

The latest blue chip forecast for GDP in 2026 is 1.9%.  We will take the over on that one.

2) 401(k)s Are OK, Again

Our new UP study by economist EJ Antoni quantifies another Trump victory for workers: the average 401(k) increased by more than $20,000 this year.

During the four years Biden was in office, these accounts lost about that much money:

The study was featured in the New York Post:

After four bruising years in which inflation and declining bond markets slammed Americans' nest eggs, retirement accounts made a big comeback in 2025 -- regaining much of what was lost while feeling how deeply policy shifts can hit workers' savings.

The average 401(k) balance jumped about $23,200, or 16.9%, from the first quarter through the third quarter of 2025, according to a new study by E.J. Antoni, a senior fellow at the conservative Unleash Prosperity think tank.

The full study is available here, or by clicking below:

3) DEI Is SO Yesterday - Except at the New York Times and Washington Post

Race and gender identity politics have been in decline in recent years, except, alas, at universities (see our HOTLINE item last week on how Republicans are an endangered species in the Yale faculty lounge) and in the newsrooms.  

The Washington Post maintains a page on its website with the makeup of its workforce - even broken out by different sections within the paper. Sounds like quotas to us.

Not to be outdone, The New York Times, publishes a "diversity and inclusion" report:

The Times also maintains a Wirecutter section - focused on reviews of consumer products - and there is a page on its website that breaks out the demographic profile of its writers. We guess it's good to know that a diverse workforce is behind reviews of everything from sweaters to carpet cleaners.

Here's a radical idea for the Post, the Times, and every other media outlet: publish data on ideological diversity. For example, what percentages of staff at these publications have ever voted Republican in a presidential campaign? Tell us how many of the writers and editors are registered D versus R.

Fat chance of that ever happening.  

4) It’s Official: No More Federal Dollars for California's High Speed Train to Nowhere

Here's a cheerful development and a nice Christmas gift to taxpayers outside of California.  We will not have to pay for Gavin Newsom’s multi-billion dollar high-speed rail boondoggle:

California has withdrawn a lawsuit against the Trump administration that sought to recover roughly $4 billion in federal funds pulled from the state's long-delayed high-speed rail project, after concluding it can no longer rely on the federal government to help deliver the system.

The suit was filed after the Federal Railroad Administration began canceling federal grants for the project totaling about $4 billion, arguing the California High-Speed Rail Authority had failed to deliver on commitments amid years of delays and cost overruns.

State officials challenged the action in court, saying that the administration was violating binding grant agreements. But California has now opted to drop the case and press ahead without backing from the federal government under President Donald Trump.

Congrats to UP Senior Fellow Wendell Cox for almost single-handedly derailing this money sinkhole.  

Derailed

5) Made It - Now What Happens With the Toys and Jewelry Is Anyone's Guess

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