1 00:00:00,280 --> 00:00:07,240 Speaker 1: Bloomberg Audio Studios, podcasts, radio news. 2 00:00:08,360 --> 00:00:10,600 Speaker 2: A lot of people are saying Trump wanted this, that 3 00:00:10,680 --> 00:00:13,000 Speaker 2: I wanted this closing, and I didn't want it, But 4 00:00:13,880 --> 00:00:15,760 Speaker 2: a lot of people are saying it because I'm allowed 5 00:00:15,800 --> 00:00:19,560 Speaker 2: to cut things that should have never been approved in 6 00:00:19,600 --> 00:00:20,280 Speaker 2: the first place. 7 00:00:29,680 --> 00:00:32,520 Speaker 3: I'm Steady Flanders, head of Government and Economics at Bloomberg 8 00:00:32,600 --> 00:00:34,960 Speaker 3: and this is Trumponomics, the podcast that looks at the 9 00:00:35,000 --> 00:00:37,960 Speaker 3: economic world of Donald Trump, how he's already shaped the 10 00:00:37,960 --> 00:00:41,200 Speaker 3: global economy and what on earth is going to happen next. 11 00:00:43,240 --> 00:00:46,320 Speaker 3: This week, we're asking why is this US government shut 12 00:00:46,360 --> 00:00:50,200 Speaker 3: down so different from others we've seen, and what could 13 00:00:50,200 --> 00:00:53,680 Speaker 3: it mean for the US economy. Now, government shutdowns in 14 00:00:53,800 --> 00:00:56,920 Speaker 3: Washington aren't new, but they have become more common in 15 00:00:56,960 --> 00:01:01,360 Speaker 3: a politically polarized country in which the two main parties 16 00:01:01,440 --> 00:01:03,880 Speaker 3: don't want to agree on anything. And his latest one 17 00:01:03,920 --> 00:01:06,600 Speaker 3: is the third shutdown under President Trump. He had two 18 00:01:06,600 --> 00:01:08,959 Speaker 3: in his first term, including one in twenty eighteen that 19 00:01:09,040 --> 00:01:12,640 Speaker 3: lasted thirty five days, the longest on record. Now, as 20 00:01:12,640 --> 00:01:15,880 Speaker 3: we record this on Wednesday, the eighth of October, the 21 00:01:15,959 --> 00:01:19,880 Speaker 3: shutdown is entering its second week, having started at midnight 22 00:01:20,000 --> 00:01:23,640 Speaker 3: on October first, when Congress failed to pass a stopgap 23 00:01:23,680 --> 00:01:27,160 Speaker 3: funding measure. But already it feels a bit different politically 24 00:01:27,240 --> 00:01:31,160 Speaker 3: and economically different politically because this time around, both sides 25 00:01:31,200 --> 00:01:34,360 Speaker 3: seemed to want to shut down, and the standoff between 26 00:01:34,400 --> 00:01:37,480 Speaker 3: them feels less like a dispute about funding than a 27 00:01:37,520 --> 00:01:41,840 Speaker 3: constitutional struggle over the relative strength of the executive in 28 00:01:41,880 --> 00:01:45,320 Speaker 3: America's political system. And that's a feeling that's intensified by 29 00:01:45,319 --> 00:01:48,120 Speaker 3: the body language of both sides and the Director of 30 00:01:48,160 --> 00:01:51,440 Speaker 3: the Officer Management and Budget, Russell Voyd, seeming to relish 31 00:01:51,520 --> 00:01:55,200 Speaker 3: the opportunity of talking about mass layoffs and holding up 32 00:01:55,200 --> 00:01:59,360 Speaker 3: billions of investment funds earmarked for projects in democratic controlled state. 33 00:02:00,000 --> 00:02:03,120 Speaker 3: There's one reason why the economic stakes also seem unusually 34 00:02:03,200 --> 00:02:06,680 Speaker 3: high this time. I mean, typically any economic impact of 35 00:02:06,880 --> 00:02:10,240 Speaker 3: the federal workers not getting paid during a shutdown gets 36 00:02:10,240 --> 00:02:12,720 Speaker 3: completely offset when the government reopens and they get the 37 00:02:12,720 --> 00:02:16,000 Speaker 3: money their own. If that doesn't happen, or if there's 38 00:02:16,080 --> 00:02:19,320 Speaker 3: deeper cuts, it could have a more lasting impact, and 39 00:02:19,440 --> 00:02:22,320 Speaker 3: at a particularly sensitive time for the economy, when the 40 00:02:22,360 --> 00:02:25,560 Speaker 3: labor market's already weakening and many think we could be 41 00:02:25,600 --> 00:02:28,800 Speaker 3: on the brink of a recession. Deepening government cuts and 42 00:02:29,200 --> 00:02:32,880 Speaker 3: heightened uncertainty could just push the economy over the edge. 43 00:02:33,400 --> 00:02:36,040 Speaker 3: But the longer the shutdown continues, the less likely we're 44 00:02:36,040 --> 00:02:38,880 Speaker 3: going to know what's really happening, because those crucial economic 45 00:02:38,919 --> 00:02:43,079 Speaker 3: statistics aren't being gathered by all those furloughed federal workers, 46 00:02:43,680 --> 00:02:46,160 Speaker 3: and neither with the Federal Reserve know what's going on 47 00:02:46,240 --> 00:02:48,799 Speaker 3: potentially as it goes into its next meeting at the 48 00:02:48,919 --> 00:02:50,639 Speaker 3: end of the month. So there really is a lot 49 00:02:50,680 --> 00:02:53,959 Speaker 3: at stake here and more than enough to talk about 50 00:02:54,040 --> 00:02:57,040 Speaker 3: with my guests. Matthew Glassman, a senior fellow at the 51 00:02:57,040 --> 00:03:01,480 Speaker 3: Government Affairs Institute at Georgetown University and former appropriation staffer 52 00:03:01,520 --> 00:03:04,480 Speaker 3: on Capitol Hill. Matt, thanks very much for joining us, 53 00:03:04,919 --> 00:03:07,640 Speaker 3: Thanks for having me, and as ever from Washington, our 54 00:03:07,639 --> 00:03:10,640 Speaker 3: own Anna Wong, chief US economist at Bloomberg Economics, and 55 00:03:10,680 --> 00:03:13,720 Speaker 3: reminding you she was also an economist at the Federal 56 00:03:13,760 --> 00:03:16,280 Speaker 3: Reserve before she joined us and on to comment to 57 00:03:16,320 --> 00:03:19,919 Speaker 3: the White House Council of Economic Advisors during President Trump's 58 00:03:19,919 --> 00:03:22,040 Speaker 3: first term. Anna, welcome back. 59 00:03:22,440 --> 00:03:23,520 Speaker 1: Happy to be here again. 60 00:03:28,840 --> 00:03:30,920 Speaker 3: Matt. One of the reasons that we invited you on 61 00:03:31,040 --> 00:03:34,080 Speaker 3: is you've written an excellent piece for Politico on this 62 00:03:34,200 --> 00:03:37,120 Speaker 3: topic and we allow people who listen to Trump nomics 63 00:03:37,120 --> 00:03:42,000 Speaker 3: to read non Bloomberg publications. Your big assertion there was 64 00:03:42,080 --> 00:03:44,480 Speaker 3: that this was a different kind of shutdown and we 65 00:03:44,520 --> 00:03:46,680 Speaker 3: should perhaps take it a bit more seriously than the 66 00:03:46,680 --> 00:03:49,840 Speaker 3: shutdowns we've seen in the past. So broadly, why do 67 00:03:49,880 --> 00:03:51,200 Speaker 3: you think there's so much at stake? 68 00:03:52,120 --> 00:03:55,800 Speaker 4: I think in past shutdowns, we've typically had one party 69 00:03:55,880 --> 00:03:58,320 Speaker 4: trying to leverage the shutdown to achieve a policy goal. 70 00:03:58,400 --> 00:04:00,400 Speaker 4: So you can think about the Republicans in twenty three 71 00:04:00,400 --> 00:04:02,720 Speaker 4: they want to repeal Obamacare, right, so they're going to 72 00:04:03,040 --> 00:04:05,120 Speaker 4: proudly say we are not going to fund the government 73 00:04:05,160 --> 00:04:07,040 Speaker 4: until you do this. It did work, of course, and 74 00:04:07,080 --> 00:04:09,360 Speaker 4: in twenty eighteen, same thing with Trump and the Wall. 75 00:04:09,680 --> 00:04:11,880 Speaker 4: I am not going to vote for spending buil or 76 00:04:11,920 --> 00:04:13,680 Speaker 4: sign a spending bill until you give them my wall. 77 00:04:13,880 --> 00:04:16,000 Speaker 4: Or the Democrats with DACA, we are not going to 78 00:04:16,040 --> 00:04:17,640 Speaker 4: go with the spending bills till you give us DACA. 79 00:04:17,839 --> 00:04:20,159 Speaker 4: And those are all sort of like policy fights. Here 80 00:04:20,200 --> 00:04:23,080 Speaker 4: we have something a little deeper, and that is democratic 81 00:04:23,160 --> 00:04:27,880 Speaker 4: concern with Trump's unilateral spending moves. Right there are bargains 82 00:04:27,920 --> 00:04:30,280 Speaker 4: for proporations bills because they can be filled us from 83 00:04:30,279 --> 00:04:32,480 Speaker 4: the Senate, so the parties have to work together, and 84 00:04:32,640 --> 00:04:35,080 Speaker 4: those have been sort of undone by the Trump administration 85 00:04:35,200 --> 00:04:39,760 Speaker 4: this year through processes called recisions and also things called impoundments, 86 00:04:39,800 --> 00:04:42,480 Speaker 4: where the president is unilaterally trying to cancel some of 87 00:04:42,560 --> 00:04:45,960 Speaker 4: that spending and that makes bargaining for the next bills impossible. 88 00:04:46,000 --> 00:04:47,880 Speaker 4: How can you bargain if the president is just going 89 00:04:47,920 --> 00:04:49,640 Speaker 4: to pull the rug out from under you? And so 90 00:04:49,760 --> 00:04:52,400 Speaker 4: that's underlying what the Democrats are doing here, or real 91 00:04:52,480 --> 00:04:56,360 Speaker 4: fight over the very appropriations process, and that's something different 92 00:04:56,400 --> 00:04:59,520 Speaker 4: than sort of a policy hostage situation. It's a little 93 00:04:59,520 --> 00:05:02,160 Speaker 4: weird of cour because they have translated that into a 94 00:05:02,200 --> 00:05:05,680 Speaker 4: fight over healthcare where they're claiming they want to extend 95 00:05:05,760 --> 00:05:09,560 Speaker 4: ACA subsidies, which is sort of like a classic policy 96 00:05:09,600 --> 00:05:12,040 Speaker 4: hostage shutdown. But we do have this bigger issue in 97 00:05:12,080 --> 00:05:14,000 Speaker 4: the background, which is how can they bargain with someone 98 00:05:14,000 --> 00:05:16,120 Speaker 4: who is just going to turn around and cancel the bargain. 99 00:05:16,520 --> 00:05:18,600 Speaker 3: I said at the beginning, both sides seem to want 100 00:05:18,600 --> 00:05:21,160 Speaker 3: the government to shut down. Why is that not being 101 00:05:21,279 --> 00:05:23,720 Speaker 3: the case in the past in pass shutdowns? 102 00:05:23,720 --> 00:05:25,680 Speaker 4: The side that wasn't trying to sort of leverage the 103 00:05:25,720 --> 00:05:29,040 Speaker 4: shutdown to Win policies had had a clear message, reopened 104 00:05:29,080 --> 00:05:31,320 Speaker 4: the government and then maybe we'll negotiate with you. We 105 00:05:31,360 --> 00:05:35,080 Speaker 4: don't want a government shutdown. Here, it's more complicated because 106 00:05:35,120 --> 00:05:39,120 Speaker 4: the Trump administration sees this democratic and do shutdown as 107 00:05:39,120 --> 00:05:41,960 Speaker 4: a way for them to further their ideological project of 108 00:05:42,080 --> 00:05:45,479 Speaker 4: shrinking the federal workforce and increasing sort of presential control 109 00:05:45,520 --> 00:05:48,520 Speaker 4: over the agencies. So the administration, and this is President 110 00:05:48,560 --> 00:05:52,200 Speaker 4: Trump and omb Director of Vote Have you know, said 111 00:05:52,279 --> 00:05:54,000 Speaker 4: if you shut down the government, we are going to 112 00:05:54,080 --> 00:05:56,720 Speaker 4: do things like start cutting federal workers or potentially even 113 00:05:56,800 --> 00:06:01,000 Speaker 4: closing whole agencies or defunding things completely permanent. And so 114 00:06:01,320 --> 00:06:04,239 Speaker 4: there's a sense that this shutdown is not simply open 115 00:06:04,320 --> 00:06:07,359 Speaker 4: or closed, but can the Trump administration leverage this to 116 00:06:07,440 --> 00:06:10,760 Speaker 4: sort of further their own separate ideological ends, and that 117 00:06:10,800 --> 00:06:13,440 Speaker 4: gives both sides incentives. There is this big group of 118 00:06:13,440 --> 00:06:15,760 Speaker 4: Republicans caught the middle who really just want the government open, 119 00:06:15,839 --> 00:06:18,560 Speaker 4: like sort of a traditional anti shutdown view, but the 120 00:06:18,600 --> 00:06:21,880 Speaker 4: administration certainly sees this as an opportunity to take advantage of. 121 00:06:22,400 --> 00:06:24,880 Speaker 3: We'll come back to you on the sort of constitutional 122 00:06:24,920 --> 00:06:29,080 Speaker 3: aspects of this. But Anna simply why the economic state's 123 00:06:29,200 --> 00:06:30,120 Speaker 3: particularly high. 124 00:06:30,920 --> 00:06:35,200 Speaker 1: As you mentioned, the economy is in a particularly fragile 125 00:06:35,240 --> 00:06:38,960 Speaker 1: state right now, and it's even perhaps at a turning 126 00:06:39,000 --> 00:06:42,839 Speaker 1: point stage. Is it turning toward a deeper recession into 127 00:06:42,880 --> 00:06:46,200 Speaker 1: a new recession or is it actually in the phase 128 00:06:46,320 --> 00:06:50,719 Speaker 1: of recovery. And even before the shutdown, the economic picture 129 00:06:50,839 --> 00:06:56,720 Speaker 1: was particularly blurry. Economic data was sending various message and 130 00:06:56,800 --> 00:06:59,719 Speaker 1: now we are at a very sensitive point of the 131 00:06:59,760 --> 00:07:03,359 Speaker 1: mind Tarry policy cycle where the FED is on the 132 00:07:03,480 --> 00:07:08,679 Speaker 1: cusp of cutting again. But it's unclear whether this cutting 133 00:07:08,720 --> 00:07:13,520 Speaker 1: cycle would continue or would it be cut short because 134 00:07:13,520 --> 00:07:18,320 Speaker 1: of concerns of rising inflation or actual actually rising inflation. 135 00:07:18,800 --> 00:07:22,720 Speaker 1: So without the data, it's just very difficult. 136 00:07:22,960 --> 00:07:25,400 Speaker 3: Just remind us how would you normally think about the 137 00:07:25,440 --> 00:07:28,160 Speaker 3: economic impact of all these furloughed workers. 138 00:07:29,000 --> 00:07:32,840 Speaker 1: So for each week of shutdown, there's a rule thumb 139 00:07:32,880 --> 00:07:35,200 Speaker 1: that says it will knock off about zero point two 140 00:07:35,240 --> 00:07:39,880 Speaker 1: percentage point off the annualized quarterly GDP growth. However, once 141 00:07:39,960 --> 00:07:43,800 Speaker 1: the shutdown is over, then you'll see a commensurate rebound 142 00:07:44,080 --> 00:07:47,200 Speaker 1: in GDP. So as long as this shutdown is over 143 00:07:47,280 --> 00:07:52,920 Speaker 1: by mid November, the fourth quarter GDP should be relatively unaffected. However, 144 00:07:53,080 --> 00:07:57,200 Speaker 1: in terms of labor as statistics, furloughed workers would be 145 00:07:57,280 --> 00:08:02,440 Speaker 1: counted as temporarily unemployed if they're recorded correctly, And so 146 00:08:02,560 --> 00:08:06,040 Speaker 1: that means that seven hundred and fifty thousand furlold workers 147 00:08:06,360 --> 00:08:09,880 Speaker 1: will roughly translate it to an increase of the unemployment 148 00:08:09,960 --> 00:08:13,120 Speaker 1: rate from currently four point three percent to four point 149 00:08:13,160 --> 00:08:16,080 Speaker 1: six to four point seven percent in a non farm 150 00:08:16,120 --> 00:08:19,360 Speaker 1: payrolls for LOLd workers would still be counted as employed, 151 00:08:19,440 --> 00:08:21,400 Speaker 1: as they will be continued to be paid. 152 00:08:22,000 --> 00:08:25,720 Speaker 3: And Matt, how do you view the sort of aggressive 153 00:08:25,800 --> 00:08:30,040 Speaker 3: posture of certainly Russell Voyd from the Office for Management Budget, 154 00:08:30,040 --> 00:08:34,240 Speaker 3: who's had this very kind of matcho stance writing memos 155 00:08:34,280 --> 00:08:38,280 Speaker 3: about accelerating the shrinking of the federal workforce. But it's 156 00:08:38,320 --> 00:08:42,760 Speaker 3: not supposed to be even possible to not pay furloughed workers, 157 00:08:43,040 --> 00:08:46,080 Speaker 3: and it's not even clear that he can fire workers 158 00:08:46,120 --> 00:08:47,920 Speaker 3: in response to a shutdown. So how do you think 159 00:08:47,960 --> 00:08:49,240 Speaker 3: that's going to play out? I mean, are we going 160 00:08:49,320 --> 00:08:51,480 Speaker 3: to see more cases going to the court. 161 00:08:52,000 --> 00:08:54,960 Speaker 4: Perhaps, But the thing pushing back on this is sort 162 00:08:54,960 --> 00:08:57,880 Speaker 4: of the political position of the Republicans. The way to 163 00:08:58,000 --> 00:08:59,920 Speaker 4: sort of win a shutdown if someone else is trying 164 00:09:00,080 --> 00:09:02,640 Speaker 4: to use it against you is to just say, Nope, 165 00:09:02,679 --> 00:09:04,920 Speaker 4: we are not giving into your demands. We don't know. 166 00:09:05,000 --> 00:09:08,000 Speaker 4: We don't give into demands of hostage takers. Reopen the government. 167 00:09:08,000 --> 00:09:11,960 Speaker 4: We're negotiate votes. Actions are sort of undermining that by 168 00:09:12,080 --> 00:09:14,480 Speaker 4: doing things to leverage the shutdown from their own side. 169 00:09:14,520 --> 00:09:16,480 Speaker 4: And you saw the reaction of Republican senators when he 170 00:09:16,480 --> 00:09:19,320 Speaker 4: said they might not pay furloughed workers. That's totally off 171 00:09:19,360 --> 00:09:21,560 Speaker 4: message politically, and all of a sudden, it looks like 172 00:09:21,600 --> 00:09:23,400 Speaker 4: both sides are trying to leverage the shutdown. So I 173 00:09:23,400 --> 00:09:25,680 Speaker 4: think there was a pretty strong reaction on Capitol Hill 174 00:09:26,160 --> 00:09:29,480 Speaker 4: towards O and B director and the President just being like, stop, 175 00:09:29,760 --> 00:09:32,480 Speaker 4: stop trying to leverage this, and just let us tell 176 00:09:32,480 --> 00:09:34,920 Speaker 4: them to reopen the government. And you can see reflected 177 00:09:34,960 --> 00:09:37,840 Speaker 4: in public opinion. In past shutdowns, the side that just 178 00:09:37,880 --> 00:09:40,120 Speaker 4: wanted to reopen the government and then continue to negotiate 179 00:09:40,320 --> 00:09:42,920 Speaker 4: has always politically had the upper hand, and we're not 180 00:09:42,960 --> 00:09:45,800 Speaker 4: seeing that this time. The Democrats currently are doing better 181 00:09:45,840 --> 00:09:47,719 Speaker 4: in the polling than the Republicans, and I think that's 182 00:09:47,720 --> 00:09:50,120 Speaker 4: in part because the administration is muddy in the waters 183 00:09:50,360 --> 00:09:52,160 Speaker 4: by themselves trying to leverage the shutdown. 184 00:09:52,200 --> 00:09:54,400 Speaker 3: To their own ends, and you've had this kind of 185 00:09:54,400 --> 00:09:56,199 Speaker 3: funny thing on social media. Well, on the one hand, 186 00:09:56,240 --> 00:09:59,160 Speaker 3: you've got Karlyn Levitt in the White House briefing room 187 00:09:59,240 --> 00:10:02,160 Speaker 3: saying no, no one is enjoying the shutdown, and at 188 00:10:02,200 --> 00:10:05,280 Speaker 3: the same time, the President tweeting out memes that suggest 189 00:10:05,320 --> 00:10:07,360 Speaker 3: that maybe he is having a bit of fun. But 190 00:10:07,720 --> 00:10:10,440 Speaker 3: you mentioned the public. You could say that the Democrats 191 00:10:10,480 --> 00:10:14,280 Speaker 3: are also not negotiating. There's been no negotiations happening on 192 00:10:14,320 --> 00:10:16,800 Speaker 3: the Hill. So is it What are the risks here 193 00:10:16,840 --> 00:10:18,720 Speaker 3: for the Democrats in terms of public opinion? 194 00:10:19,600 --> 00:10:22,480 Speaker 4: The risks are that they will be perceived as the 195 00:10:22,520 --> 00:10:25,719 Speaker 4: party not wanting to just cleanly reopen the government. That's 196 00:10:25,720 --> 00:10:27,880 Speaker 4: always been the risk in pass shutdowns, and we've seen 197 00:10:27,880 --> 00:10:30,760 Speaker 4: this with the Republicans in thirteen and Trump in eighteen, 198 00:10:30,840 --> 00:10:32,720 Speaker 4: that you just lose the public if you try to 199 00:10:32,760 --> 00:10:36,520 Speaker 4: demand policy concessions in order to reopen the government. That said, 200 00:10:36,559 --> 00:10:39,160 Speaker 4: the Democrats have done an excellent job so far of 201 00:10:39,200 --> 00:10:41,960 Speaker 4: turning this into a fight over healthcare subsidies rather than 202 00:10:41,960 --> 00:10:44,520 Speaker 4: a fight over whether the government should be open or closed. 203 00:10:44,800 --> 00:10:47,520 Speaker 4: In pass shutdowns, it's been almost impossible for the party 204 00:10:47,559 --> 00:10:49,880 Speaker 4: shutting the government down to get their message through, and 205 00:10:49,920 --> 00:10:51,760 Speaker 4: the issue has always come down to should the government 206 00:10:51,800 --> 00:10:55,400 Speaker 4: be open or closed because of sort of the mixed 207 00:10:55,440 --> 00:10:57,840 Speaker 4: messages from the Republican side. I think the healthcare message 208 00:10:57,840 --> 00:10:59,680 Speaker 4: and the unity of the Democrats have brought that through 209 00:11:00,040 --> 00:11:01,679 Speaker 4: in a way that has really turned this into sort 210 00:11:01,720 --> 00:11:04,240 Speaker 4: of a healthcare subsidy debate rather than should the government 211 00:11:04,240 --> 00:11:06,880 Speaker 4: be open or close debate, And so for now I 212 00:11:06,920 --> 00:11:09,360 Speaker 4: think that's the Democrat's best issue. It's not a secret 213 00:11:09,360 --> 00:11:11,559 Speaker 4: why they're turning this into healthcare. It's by far their 214 00:11:11,559 --> 00:11:13,560 Speaker 4: best issue with voters. And to the degree that this 215 00:11:13,600 --> 00:11:16,720 Speaker 4: becomes a healthcare debate, they will benefit from it politically. 216 00:11:16,880 --> 00:11:18,640 Speaker 4: The degree it becomes a debate whether the government should 217 00:11:18,640 --> 00:11:20,760 Speaker 4: be open or closed, they will be hurt. But for 218 00:11:20,880 --> 00:11:24,480 Speaker 4: now they're doing fine. That's said. Shutdowns aren't static, like 219 00:11:24,520 --> 00:11:26,679 Speaker 4: they get worse and worse and worse in terms of 220 00:11:26,720 --> 00:11:30,360 Speaker 4: their impact on actual citizens, on agencies and federal workers. 221 00:11:30,520 --> 00:11:33,160 Speaker 4: Military paychecks are going to get missed next Wednesday, civilian 222 00:11:33,200 --> 00:11:37,000 Speaker 4: paychecks this Friday, and those sorts of things. Programs start 223 00:11:37,040 --> 00:11:39,240 Speaker 4: to run out of money, airport lines get longer, and 224 00:11:39,240 --> 00:11:41,160 Speaker 4: those sort of things build up the pressure and so 225 00:11:41,320 --> 00:11:43,920 Speaker 4: you could very easily see public opinion reverse in the 226 00:11:43,920 --> 00:11:46,360 Speaker 4: Democrats here and really start to hurt them. 227 00:11:46,960 --> 00:11:50,400 Speaker 3: Yeah, we've been monitoring that on just on the airlines, 228 00:11:50,440 --> 00:11:53,280 Speaker 3: for example, because there's a core staff who are still working, 229 00:11:53,320 --> 00:11:55,640 Speaker 3: but then they're calling in sick, and we've seen some 230 00:11:55,720 --> 00:11:58,800 Speaker 3: delays at airports yesterday. It looks like the fear is 231 00:11:58,840 --> 00:12:13,400 Speaker 3: that could intensify. Matt you're describing something where for the 232 00:12:13,440 --> 00:12:17,200 Speaker 3: first time in a while, the Democrats are potentially losing 233 00:12:17,440 --> 00:12:20,040 Speaker 3: at least one small part of a political battle. It's 234 00:12:20,080 --> 00:12:21,960 Speaker 3: not been a good year for them. And I just 235 00:12:22,000 --> 00:12:25,199 Speaker 3: wondered the President's quite good at noticing those things and 236 00:12:25,600 --> 00:12:28,520 Speaker 3: you know, turning things around. I wonder how you read 237 00:12:28,600 --> 00:12:30,520 Speaker 3: what the comments he had at the beginning of the 238 00:12:30,559 --> 00:12:32,880 Speaker 3: week where he seemed to also recognize that it just 239 00:12:32,920 --> 00:12:35,000 Speaker 3: being about healthcare was not going to be good for him, 240 00:12:35,000 --> 00:12:36,640 Speaker 3: and that maybe if there was a deal to be done, 241 00:12:36,760 --> 00:12:38,600 Speaker 3: he could be the one to get the credit for it. 242 00:12:39,400 --> 00:12:41,959 Speaker 4: Yeah, for sure. And I think this is one spot 243 00:12:42,000 --> 00:12:45,480 Speaker 4: where you see differences between Trump and the congressional Republicans 244 00:12:45,520 --> 00:12:48,960 Speaker 4: quite starkly. They each have sort of their own ideological projects, 245 00:12:49,200 --> 00:12:51,920 Speaker 4: and Trump's has been going after his enemies, which he 246 00:12:52,040 --> 00:12:54,920 Speaker 4: I think largely perceives as this professional liberal class of 247 00:12:55,000 --> 00:12:57,800 Speaker 4: government workers are very often in his target zone. Whereas 248 00:12:57,840 --> 00:13:00,040 Speaker 4: Republicans on the hill, their ideological project has for a 249 00:13:00,120 --> 00:13:03,880 Speaker 4: long time been sort of cribbing or reducing or eliminating Obamacare. 250 00:13:04,040 --> 00:13:06,680 Speaker 4: The President is perfectly happy to compromise on healthcare, just 251 00:13:06,679 --> 00:13:09,040 Speaker 4: as he seemed perfectly happy to compmise on things like abortion. 252 00:13:09,160 --> 00:13:12,360 Speaker 4: He doesn't have sort of that traditional Republicans streak about 253 00:13:12,360 --> 00:13:15,000 Speaker 4: those things that throws them off message because they are 254 00:13:15,000 --> 00:13:17,760 Speaker 4: caught between sort of their ideological view of health care 255 00:13:17,840 --> 00:13:20,040 Speaker 4: and then their desire to be in line with Trump, 256 00:13:20,080 --> 00:13:22,880 Speaker 4: particularly in the House. I do think a healthcare compromise 257 00:13:22,960 --> 00:13:25,400 Speaker 4: is coming. One of the weirdest things about this shutdown is, 258 00:13:25,440 --> 00:13:28,439 Speaker 4: in the past shutdowns, the policy demand of the people 259 00:13:28,440 --> 00:13:30,920 Speaker 4: shutting the government down has been a non starter. Like 260 00:13:31,000 --> 00:13:34,400 Speaker 4: President Obama was never going to sign a law repealing Obamacare, right, 261 00:13:34,440 --> 00:13:36,160 Speaker 4: and the Democrats were never going to go for a 262 00:13:36,160 --> 00:13:39,199 Speaker 4: border wall. But a healthcare compmise to extend these subsidies 263 00:13:39,320 --> 00:13:41,720 Speaker 4: is something a lot of the moderate Republicans want and 264 00:13:41,760 --> 00:13:43,480 Speaker 4: I think is going to happen, whether there's a shutdown 265 00:13:43,559 --> 00:13:46,120 Speaker 4: or not. So this shutdown is about, like now turned 266 00:13:46,160 --> 00:13:49,679 Speaker 4: into an issue that is actually solvable through compromise, and 267 00:13:49,720 --> 00:13:51,800 Speaker 4: that makes it a little bit different than pass shutdowns too. 268 00:13:53,360 --> 00:13:55,560 Speaker 3: I mean, just sort of switching back to the economy. 269 00:13:55,679 --> 00:13:57,880 Speaker 3: I mean, it obviously is going to make a difference 270 00:13:57,960 --> 00:13:59,640 Speaker 3: in people's cost of living if some of these big 271 00:13:59,640 --> 00:14:01,800 Speaker 3: increases in health insurance come through, but we won't know 272 00:14:01,840 --> 00:14:03,560 Speaker 3: what's going to happen with that for a few months. 273 00:14:03,800 --> 00:14:05,720 Speaker 3: If you're the Federal Reserve, and we've talked about the 274 00:14:05,720 --> 00:14:07,640 Speaker 3: FED a lot in different contexts than the threats to 275 00:14:07,679 --> 00:14:09,920 Speaker 3: its independence and other things over the last few months, 276 00:14:09,920 --> 00:14:13,760 Speaker 3: but even if they weren't facing a quite aggressive White 277 00:14:13,800 --> 00:14:15,840 Speaker 3: House in the last few months, they'd be facing a 278 00:14:15,840 --> 00:14:18,440 Speaker 3: tough choice when it comes to the economy. So talk 279 00:14:18,480 --> 00:14:22,040 Speaker 3: us through how problematic it is for them if some 280 00:14:22,080 --> 00:14:24,920 Speaker 3: of these sort of core economic data are not available 281 00:14:24,920 --> 00:14:26,720 Speaker 3: when they go into that next meeting at the end 282 00:14:26,760 --> 00:14:27,240 Speaker 3: of the month. 283 00:14:27,840 --> 00:14:30,920 Speaker 1: So the next meeting is October twenty eighth to twenty ninth, 284 00:14:31,040 --> 00:14:34,640 Speaker 1: and before that, we were supposed to have received the 285 00:14:35,080 --> 00:14:41,119 Speaker 1: September CPI report on October fifteenth, and also weekly jobless 286 00:14:41,160 --> 00:14:44,280 Speaker 1: Claims OUR reports and also of course the non farm 287 00:14:44,320 --> 00:14:50,040 Speaker 1: payroll for September. And if the shutdown last beyond October eighteenth, 288 00:14:50,080 --> 00:14:54,120 Speaker 1: for example, then the collection of the unemployment rate for 289 00:14:54,440 --> 00:14:59,200 Speaker 1: October would be disrupted and price quotes for CPI for 290 00:14:59,520 --> 00:15:04,000 Speaker 1: October would also be disrupted. So basically the FED would 291 00:15:04,040 --> 00:15:07,560 Speaker 1: be going into not just the October meeting, but also 292 00:15:07,880 --> 00:15:11,240 Speaker 1: going into the December meeting sort of flying blind on 293 00:15:11,320 --> 00:15:15,240 Speaker 1: both inflation and jobs. And this is quite different than 294 00:15:15,560 --> 00:15:19,400 Speaker 1: the twenty eighteen shutdown, for example, because back in twenty eighteen, 295 00:15:19,520 --> 00:15:23,560 Speaker 1: the BLS was actually funded, so CPI and non farm 296 00:15:23,600 --> 00:15:27,440 Speaker 1: pay was not actually disrupted. And so to see how 297 00:15:27,520 --> 00:15:31,160 Speaker 1: shutdown affected collection of economic statistics, you have to go 298 00:15:31,240 --> 00:15:35,240 Speaker 1: back to twenty thirteen. But even then the shutdown lasted 299 00:15:35,280 --> 00:15:38,920 Speaker 1: only two weeks, and that already reduced the CPI price 300 00:15:39,040 --> 00:15:42,840 Speaker 1: quotes by twenty five percent for collection in October, and 301 00:15:43,040 --> 00:15:47,640 Speaker 1: also disrupted or reduced the number of responses in the 302 00:15:47,720 --> 00:15:52,000 Speaker 1: unemployment survey, causing more error in the unemployment survey. 303 00:15:52,760 --> 00:15:55,240 Speaker 3: And just to be clear, what happens if you've just 304 00:15:55,360 --> 00:16:00,600 Speaker 3: not collected the data the labor for survey, for example, 305 00:16:00,920 --> 00:16:02,960 Speaker 3: that goes uncollected for that month, right, I mean, what 306 00:16:03,000 --> 00:16:03,840 Speaker 3: would they normally do. 307 00:16:04,520 --> 00:16:08,080 Speaker 1: Yeah, So for the Unemployment rate survey in twenty thirteen, 308 00:16:08,400 --> 00:16:12,840 Speaker 1: a BLS resumed collection a week after they normally do it, 309 00:16:12,840 --> 00:16:16,000 Speaker 1: and they have to kind of ask the responders what 310 00:16:16,680 --> 00:16:20,240 Speaker 1: was your status two weeks ago? So they're basically asking 311 00:16:20,280 --> 00:16:23,400 Speaker 1: people to recollect something that happened in the past, as 312 00:16:23,400 --> 00:16:27,680 Speaker 1: opposed to asking them what happened just you know, just now, right, 313 00:16:28,040 --> 00:16:30,520 Speaker 1: So this is a sampling error. 314 00:16:30,600 --> 00:16:34,480 Speaker 3: And again in practice, how could that affect what the 315 00:16:34,520 --> 00:16:37,320 Speaker 3: Federal Reserve does at the end of October or do 316 00:16:37,320 --> 00:16:39,080 Speaker 3: you think that their decision is kind of baked in 317 00:16:39,120 --> 00:16:39,800 Speaker 3: at this point. 318 00:16:39,960 --> 00:16:42,760 Speaker 1: So in the last FMC meeting, they flagged in the 319 00:16:42,840 --> 00:16:47,360 Speaker 1: dot plot the median wanted to cut fifty basis points more. 320 00:16:48,080 --> 00:16:50,880 Speaker 1: It was a very close call, and without a shutdown, 321 00:16:51,040 --> 00:16:54,680 Speaker 1: I would have thought that given indications of many inflation 322 00:16:54,840 --> 00:16:59,359 Speaker 1: measures edging up again, they would not be cutting in October. 323 00:16:59,400 --> 00:17:03,080 Speaker 1: But because of the shutdown and the uncertainty to economic 324 00:17:03,120 --> 00:17:07,480 Speaker 1: activity and also increased upside risk to employment, I think 325 00:17:07,480 --> 00:17:10,120 Speaker 1: they will follow through with a twenty five paces point 326 00:17:10,119 --> 00:17:11,280 Speaker 1: cut this October. 327 00:17:12,040 --> 00:17:14,440 Speaker 3: Interesting, well, Matt, I mean that would be an upside 328 00:17:14,480 --> 00:17:17,240 Speaker 3: for the president from all this. The tradition of the 329 00:17:17,440 --> 00:17:19,880 Speaker 3: podcast these days, At the moment you decide to talk 330 00:17:19,880 --> 00:17:22,040 Speaker 3: about the shutdown, the government's going to reopen again. So 331 00:17:22,240 --> 00:17:25,320 Speaker 3: even even as people are listening, something miraculous might have 332 00:17:25,400 --> 00:17:29,440 Speaker 3: happened on late Wednesday night or something. But given your 333 00:17:29,480 --> 00:17:33,239 Speaker 3: experience and given the analysis of what's going on and 334 00:17:33,280 --> 00:17:36,040 Speaker 3: how much each side has at stake, but also, as 335 00:17:36,080 --> 00:17:38,320 Speaker 3: you said yourself, the fact that it's actually over something 336 00:17:38,760 --> 00:17:41,880 Speaker 3: quite doable on both sides, the sticking point, even though 337 00:17:41,880 --> 00:17:44,359 Speaker 3: there's these very high stakes, Actually the single thing that 338 00:17:44,359 --> 00:17:46,760 Speaker 3: the Democrats are focused on is something that could be fixed. 339 00:17:47,280 --> 00:17:48,760 Speaker 3: How do you think this is going to end? 340 00:17:49,400 --> 00:17:53,679 Speaker 4: I mean, I think how it ends is relatively clear. 341 00:17:54,160 --> 00:17:58,040 Speaker 4: You will get a Democrats voting to reopen the government 342 00:17:58,119 --> 00:18:03,960 Speaker 4: unconditionally and Republican promising a good faith negotiation over the 343 00:18:04,000 --> 00:18:07,120 Speaker 4: healthcare subsidies which will be extended. And so that sort 344 00:18:07,119 --> 00:18:10,720 Speaker 4: of allows everybody to win in some sense politically. Leader 345 00:18:10,760 --> 00:18:14,000 Speaker 4: Schumer of the Democrats will get sort of the credit 346 00:18:14,000 --> 00:18:17,960 Speaker 4: for having fought that his liberals want, and the Republican 347 00:18:18,040 --> 00:18:21,520 Speaker 4: moderates will get their healthcare subsidies. The Republican leaders will 348 00:18:21,560 --> 00:18:24,920 Speaker 4: have not just given away the healthcare subsidies angering their base, 349 00:18:25,240 --> 00:18:28,080 Speaker 4: and Trump will end up with no further restrictions on 350 00:18:28,440 --> 00:18:31,119 Speaker 4: sort of executive spending encroachments that have gone on. That's 351 00:18:31,119 --> 00:18:33,760 Speaker 4: sort of the terms that I think are mostly imaginable 352 00:18:33,960 --> 00:18:36,240 Speaker 4: as to how long it goes. I think there's a 353 00:18:36,240 --> 00:18:38,760 Speaker 4: bunch of pressure points, and the first one is really 354 00:18:38,800 --> 00:18:41,800 Speaker 4: next Wednesday with the military pay and the eighteen shutdown. 355 00:18:41,800 --> 00:18:44,399 Speaker 4: In the long shutdown, DoD was funded so we didn't 356 00:18:44,400 --> 00:18:48,480 Speaker 4: have this issue of soldiers missing checks. But that pressure point, 357 00:18:48,560 --> 00:18:50,480 Speaker 4: to me is sort of the front end window of 358 00:18:50,480 --> 00:18:53,520 Speaker 4: when this would end sometime middle of next week. If 359 00:18:53,560 --> 00:18:56,200 Speaker 4: they go through that and they're still on a stalemate, 360 00:18:56,680 --> 00:18:59,679 Speaker 4: then you start to talk about longer term. But I 361 00:18:59,720 --> 00:19:01,720 Speaker 4: do think there's a good pressure point to end this 362 00:19:02,280 --> 00:19:03,439 Speaker 4: sometime next week. 363 00:19:03,960 --> 00:19:06,359 Speaker 3: But what you've described is something that they could do tomorrow. 364 00:19:06,440 --> 00:19:09,560 Speaker 3: If you think the Democrats are actually willing to give 365 00:19:09,600 --> 00:19:15,040 Speaker 3: in without having a solid assurance on the health insurance subsidies, 366 00:19:15,640 --> 00:19:17,920 Speaker 3: then it just seems odd that they would hold out 367 00:19:17,960 --> 00:19:20,280 Speaker 3: this far and make that their point and then only 368 00:19:20,320 --> 00:19:22,920 Speaker 3: accept a sort of good faith promise from an administration 369 00:19:23,000 --> 00:19:25,680 Speaker 3: and from a Republican leadership that is not they would 370 00:19:25,680 --> 00:19:27,439 Speaker 3: say not shown them a lot of good faith, you know, 371 00:19:27,480 --> 00:19:30,280 Speaker 3: with the rescinding of past funding and other things. 372 00:19:30,720 --> 00:19:32,800 Speaker 4: Yeah, I mean, And that sort of highlights how sort 373 00:19:32,800 --> 00:19:35,600 Speaker 4: of this shutdown is both very high stakes over these 374 00:19:35,680 --> 00:19:38,920 Speaker 4: constitutional issues of executive power and also very low stakes. 375 00:19:39,160 --> 00:19:41,639 Speaker 4: It's over a healthcare policy that was probably going to 376 00:19:41,640 --> 00:19:44,359 Speaker 4: be compromised anyway in the next couple of months, whether 377 00:19:44,359 --> 00:19:46,560 Speaker 4: there was a shutdown or not. And so part of 378 00:19:46,600 --> 00:19:49,880 Speaker 4: what you're seeing here is that the sort of going 379 00:19:49,880 --> 00:19:53,399 Speaker 4: through the motions of the shutdown is a exercise in 380 00:19:53,480 --> 00:19:57,160 Speaker 4: coalition management. Remember, Schumor did not go to shut down 381 00:19:57,200 --> 00:20:00,560 Speaker 4: the government last March, and that really had much of 382 00:20:00,600 --> 00:20:02,800 Speaker 4: the liver wing of his party sort of nipping at 383 00:20:02,840 --> 00:20:04,760 Speaker 4: him pretty bad over the last six months, and for 384 00:20:04,840 --> 00:20:07,720 Speaker 4: him to not engage in a shutdown now probably would 385 00:20:07,760 --> 00:20:09,760 Speaker 4: have lost them forever and maybe cost him his job, 386 00:20:09,800 --> 00:20:12,359 Speaker 4: if not his seat in the Senate going forward. And 387 00:20:12,400 --> 00:20:15,160 Speaker 4: so part of what both sets of leaders are doing 388 00:20:15,200 --> 00:20:19,600 Speaker 4: right now is fighting for their basis admiration. And yes, 389 00:20:19,640 --> 00:20:22,000 Speaker 4: you could end the shutdown today, but is the left 390 00:20:22,000 --> 00:20:24,080 Speaker 4: flank of your party for Schumer or the right flank 391 00:20:24,119 --> 00:20:26,040 Speaker 4: of your party for Johnson and Thune. And in some 392 00:20:26,119 --> 00:20:29,120 Speaker 4: ways Trump going to accept that as a worthy effort 393 00:20:29,200 --> 00:20:31,520 Speaker 4: and a worthy fight. And I think the answer today 394 00:20:31,560 --> 00:20:33,360 Speaker 4: is no, And I think the answer next week might 395 00:20:33,400 --> 00:20:35,200 Speaker 4: be maybe, And I think in a month the answer 396 00:20:35,240 --> 00:20:36,240 Speaker 4: would definitely be yes. 397 00:20:37,119 --> 00:20:39,760 Speaker 3: And what will the public think about it? Who will 398 00:20:39,800 --> 00:20:41,280 Speaker 3: benefit in the end? Do you think? 399 00:20:41,960 --> 00:20:43,639 Speaker 4: Unknown? I mean, the one thing we do know about 400 00:20:43,640 --> 00:20:46,280 Speaker 4: shutdowns is traditionally the party trying to leverage it has 401 00:20:46,320 --> 00:20:49,920 Speaker 4: lost politically. But in every case, both parties have seen 402 00:20:50,400 --> 00:20:54,080 Speaker 4: blame taken upon them. It's kind of like you know, war, right, 403 00:20:55,320 --> 00:20:58,639 Speaker 4: you can't increase, sort of like the overall happiness with 404 00:20:58,760 --> 00:21:00,760 Speaker 4: both parties. Both parties are going to see a negative. 405 00:21:00,760 --> 00:21:02,680 Speaker 4: It just who sees a more negative. And I think 406 00:21:02,680 --> 00:21:04,399 Speaker 4: we're seeing that in the polling right now, like the 407 00:21:04,440 --> 00:21:07,320 Speaker 4: typical citizen is not thrilled with either party in these situations. 408 00:21:07,560 --> 00:21:10,000 Speaker 4: I suspect, you know, the longer it's dragged on, the 409 00:21:10,080 --> 00:21:12,119 Speaker 4: more it would tend to shift to hurt the Democrats. 410 00:21:12,119 --> 00:21:14,040 Speaker 4: But so far they've defied that, and they've done an 411 00:21:14,040 --> 00:21:16,320 Speaker 4: excellent messaging job. And I think the President has made 412 00:21:16,320 --> 00:21:19,720 Speaker 4: some sort of errors in judgment about how to approach this, 413 00:21:19,840 --> 00:21:22,040 Speaker 4: such that right now, if it ended, it would probably 414 00:21:22,040 --> 00:21:24,240 Speaker 4: call it a draw, but no harm to the Democrats, 415 00:21:24,280 --> 00:21:26,960 Speaker 4: which would be exceeding expectations in these things where going 416 00:21:26,960 --> 00:21:28,600 Speaker 4: into this, I don't think anyone thought sort of the 417 00:21:28,600 --> 00:21:30,480 Speaker 4: Democrats were going to come out better on the other 418 00:21:30,520 --> 00:21:31,000 Speaker 4: side of this. 419 00:21:32,280 --> 00:21:36,199 Speaker 3: Interesting. I remember when I was in the US treasurer 420 00:21:36,200 --> 00:21:38,040 Speaker 3: in the late nineties, and there was one time when 421 00:21:38,040 --> 00:21:40,000 Speaker 3: we thought we were heading into a shutdown, and of 422 00:21:40,040 --> 00:21:43,359 Speaker 3: course the big debate internally was about everybody wanted to 423 00:21:43,400 --> 00:21:45,439 Speaker 3: be considered an essential worker, and it was kind of 424 00:21:45,440 --> 00:21:48,680 Speaker 3: insulting not to be an essential worker. But it does 425 00:21:48,720 --> 00:21:52,000 Speaker 3: seem like the definition of an essential worker has been 426 00:21:52,119 --> 00:21:55,280 Speaker 3: much tighter this time around. Even in this conversation, we've said, 427 00:21:55,320 --> 00:21:58,680 Speaker 3: you know, previously the Pentagon was funded, this time it isn't. 428 00:21:58,720 --> 00:22:01,840 Speaker 3: Previously the BLS was that, this time it isn't. I mean, Matt, 429 00:22:01,880 --> 00:22:04,000 Speaker 3: is there a sense of which the administration has heightened 430 00:22:04,000 --> 00:22:04,760 Speaker 3: the cost of this? 431 00:22:05,840 --> 00:22:08,160 Speaker 4: Yeah, I mean, and I think that's that's something all 432 00:22:08,200 --> 00:22:10,439 Speaker 4: administrations do on the margins. If you think about the 433 00:22:10,480 --> 00:22:13,840 Speaker 4: twenty thirteen shutdown. Obama was against the shutdown, of course, 434 00:22:14,160 --> 00:22:16,680 Speaker 4: and so what did he do. He immediately made sure 435 00:22:16,720 --> 00:22:19,040 Speaker 4: the national parks were closed, the Washington Monument was closed 436 00:22:19,040 --> 00:22:21,280 Speaker 4: so that would inconvenience tourist who would publicly see it. 437 00:22:21,440 --> 00:22:23,399 Speaker 4: And then in the twenty eighteen shutdown, when Trump was 438 00:22:23,440 --> 00:22:26,120 Speaker 4: in favor of the shutdown, he left those things open, 439 00:22:26,240 --> 00:22:28,600 Speaker 4: left the parks open, and left the monuments open and 440 00:22:28,600 --> 00:22:30,640 Speaker 4: things like that. So the president has some wiggle room. 441 00:22:30,840 --> 00:22:33,000 Speaker 4: The key question, and the key discretion is about what 442 00:22:33,160 --> 00:22:36,600 Speaker 4: is an accepted or sometimes people say essential worker. And 443 00:22:37,359 --> 00:22:40,280 Speaker 4: in the laws Congress have written about this essentially comes 444 00:22:40,320 --> 00:22:42,399 Speaker 4: down to people doing sort of life safety things, so 445 00:22:42,480 --> 00:22:45,680 Speaker 4: that's soldiers, law enforcement, people feeding the animals at the zoo. 446 00:22:45,960 --> 00:22:48,800 Speaker 4: But there's also an exception for people essential to the 447 00:22:48,840 --> 00:22:52,520 Speaker 4: constitutional process, so aiding the present or aiding Congress in 448 00:22:52,880 --> 00:22:56,000 Speaker 4: sort of ending the shutdown, right, and so that definition 449 00:22:56,080 --> 00:22:58,640 Speaker 4: can be stretched so widely. Is some person at Treasury 450 00:22:58,680 --> 00:23:00,960 Speaker 4: important to that that's really in the eye of the beholder. 451 00:23:01,000 --> 00:23:04,400 Speaker 4: And so presidents absolutely do use this discretion to help 452 00:23:04,440 --> 00:23:07,159 Speaker 4: them politically and substantially in these shutdowns. And the Toy 453 00:23:07,160 --> 00:23:11,720 Speaker 4: administration certainly is, like with many things, using that latitude 454 00:23:11,760 --> 00:23:14,879 Speaker 4: to stretch it beyond perhaps what sort of a neutral 455 00:23:14,880 --> 00:23:16,720 Speaker 4: reserver would say is reasonable. 456 00:23:16,840 --> 00:23:19,280 Speaker 3: Although these days it seems like soldiers are much more 457 00:23:19,359 --> 00:23:22,920 Speaker 3: essential to curb crime and disarray in our cities settle 458 00:23:23,040 --> 00:23:25,200 Speaker 3: on anything else. But that's a whole other issue. Anna, 459 00:23:25,440 --> 00:23:27,520 Speaker 3: I guess the last word for you. I mean, if 460 00:23:28,000 --> 00:23:30,320 Speaker 3: just listening to Matt, it does sound like there will 461 00:23:30,359 --> 00:23:32,480 Speaker 3: be a sort of decision point coming in the middle 462 00:23:32,520 --> 00:23:35,680 Speaker 3: of next week around the military pay. Do you think 463 00:23:35,720 --> 00:23:38,359 Speaker 3: that could also be significant in terms of the economic 464 00:23:38,440 --> 00:23:41,000 Speaker 3: impact and the lack of economic data. You know you're 465 00:23:41,000 --> 00:23:43,400 Speaker 3: going to get bigger aera statistics all of those things. 466 00:23:43,880 --> 00:23:47,479 Speaker 1: Yes, absolutely, If the shutdown does end next week, sometime 467 00:23:47,560 --> 00:23:50,560 Speaker 1: next week, then we'll basically get barely a blip in 468 00:23:50,680 --> 00:23:54,000 Speaker 1: terms of the sampling error that I mentioned just now, 469 00:23:54,200 --> 00:23:57,760 Speaker 1: and also the jobless claims. If so far from the 470 00:23:57,800 --> 00:24:00,720 Speaker 1: state level jobless claims, the shutdown has not led to 471 00:24:00,760 --> 00:24:04,640 Speaker 1: a spike, but with next week's jobless claims, we were 472 00:24:04,880 --> 00:24:08,119 Speaker 1: expecting that we would start seeing a drift shop. So 473 00:24:08,320 --> 00:24:11,560 Speaker 1: if the shutdown resolved by then, I think things will 474 00:24:11,560 --> 00:24:12,800 Speaker 1: go on as usual. 475 00:24:13,040 --> 00:24:14,960 Speaker 3: And not get the extra cut or the cut that 476 00:24:15,000 --> 00:24:17,040 Speaker 3: you might you wouldn't have expected to have otherwise. 477 00:24:17,359 --> 00:24:19,760 Speaker 1: Well, I still think that there will be a cut, 478 00:24:19,760 --> 00:24:23,160 Speaker 1: because it's already mid October, and I think the job 479 00:24:23,240 --> 00:24:26,560 Speaker 1: report is still going to be pretty modest enough to 480 00:24:26,640 --> 00:24:29,679 Speaker 1: warrant some concerns to buy insurance for the labor market. 481 00:24:30,840 --> 00:24:40,040 Speaker 3: Anna Wong, Matthew Glassman, thank you so much. Thanks for 482 00:24:40,080 --> 00:24:42,480 Speaker 3: listening to Trumponomics from Bloomberg. It was hosted by me 483 00:24:42,600 --> 00:24:45,680 Speaker 3: Stephanie Flanders. I was joined by Anna Wong, chief US 484 00:24:45,720 --> 00:24:49,399 Speaker 3: economists for Bloomberg Economics, and Matthew Glassman, a Senior Fellow 485 00:24:49,440 --> 00:24:56,240 Speaker 3: at the Government Affairs Institute at Georgetown University. Trumponomics was 486 00:24:56,280 --> 00:24:59,160 Speaker 3: produced by Samasadi and Moses and Them, with help from 487 00:24:59,200 --> 00:25:03,600 Speaker 3: Andrew Derker and Chris marklou Amy Keen is our executive producer, 488 00:25:03,800 --> 00:25:07,560 Speaker 3: and sound designers by Blake Maples and Kelly Gary Sage. 489 00:25:07,600 --> 00:25:10,960 Speaker 3: Bowman is Bloomberg's head of podcasts and to help others 490 00:25:11,000 --> 00:25:14,280 Speaker 3: find us, please rate and review us highly wherever you 491 00:25:14,320 --> 00:25:15,240 Speaker 3: listen to podcasts.