Despite global chaos, America’s economy shows puzzling resilience in the face of emerging capital flight, dangerous policy uncertainty, and spiraling debt.

As global chaos erupts — from Iran to immigration raids in Big Box parking lots — James Carville’s famous dictum echoes louder than ever: “It’s the economy, stupid.”

On this week’s WhoWhatWhy podcast I talk with Noah Smith, author of the widely read substack Noahpinion. While consumer spending down, housing starts are declining, unemployment is creeping upward, and CNBC reveals more about global stability than CNN, understanding economic fundamentals becomes survival knowledge.

Smith argues that US resilience so far reflects deep institutional strength built over generations — great businesses and economic frameworks that won’t crumble overnight from policy shocks.

More alarming is emerging capital flight — foreign investors questioning US economic seriousness for the first time since the 1970s. The traditional dollar-treasury bond relationship has decoupled, signaling unprecedented loss of confidence in American economic management.

Smith traces much of this dysfunction to social media’s destruction of American solidarity, creating tribal fear that technology will empower “enemy” groups rather than benefit all Americans.

The conversation includes Smith’s stark warning: Without immediate fiscal austerity, spiraling debt could trigger sovereign default — an economic catastrophe that would require generational recovery.

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