1 00:00:02,520 --> 00:00:09,000 Speaker 1: Bloomberg Audio Studios, podcasts, radio news. Douglas Holtz Eichen was 2 00:00:09,039 --> 00:00:12,479 Speaker 1: a huge value add for years and years. For some reason, 3 00:00:12,520 --> 00:00:16,200 Speaker 1: over the last quarters we have not had the expertise 4 00:00:16,239 --> 00:00:18,680 Speaker 1: at Douglas holtz Echen and the show. We're thrilled and 5 00:00:18,720 --> 00:00:21,400 Speaker 1: he could join us in the American Action Forum. His 6 00:00:21,480 --> 00:00:26,640 Speaker 1: public service with Senator McCain years ago a GOP slant, yes, 7 00:00:27,240 --> 00:00:31,880 Speaker 1: but always just exceptional scholarship out of Dennison in Princeton. 8 00:00:32,120 --> 00:00:34,440 Speaker 1: Doug's been way way too long. Thank you so much 9 00:00:34,479 --> 00:00:39,800 Speaker 1: for joining today. How far removed Douglas holtz Eichen. It's 10 00:00:39,960 --> 00:00:46,920 Speaker 1: just traditional Republican economics and Republican labor economics. How far 11 00:00:47,000 --> 00:00:48,920 Speaker 1: removed is it from President Trump? 12 00:00:51,520 --> 00:00:54,959 Speaker 2: This is an enormous shift in the Republican Party. I mean, 13 00:00:55,200 --> 00:01:01,000 Speaker 2: it's almost unrecognizable from twenty years ago. The characteristics of 14 00:01:01,080 --> 00:01:04,320 Speaker 2: this area is that both parties are interested in using 15 00:01:04,360 --> 00:01:07,199 Speaker 2: the power of the government is a cudgel for their 16 00:01:07,240 --> 00:01:10,479 Speaker 2: for their purposes. And that's that's not a limited government 17 00:01:10,520 --> 00:01:13,080 Speaker 2: personal freedom approach, not at all. 18 00:01:13,200 --> 00:01:16,600 Speaker 1: What is Kevin Asset doing. I mean, I understand Pennsylvania 19 00:01:16,640 --> 00:01:21,080 Speaker 1: doesn't have the quality of Princeton to the far far Norris. 20 00:01:21,240 --> 00:01:23,720 Speaker 1: But you know you and I know Kevin Assen is 21 00:01:23,760 --> 00:01:28,480 Speaker 1: a legit macro economist. How is he carrying water for 22 00:01:28,520 --> 00:01:30,119 Speaker 1: the president? How do you see that? 23 00:01:30,280 --> 00:01:34,360 Speaker 2: Douglas holtecon Uh, you know, I think that's a question 24 00:01:34,440 --> 00:01:37,800 Speaker 2: you have to ask Kevin. I don't understand a lot 25 00:01:37,840 --> 00:01:41,280 Speaker 2: of the Trump administration uh messaging on their policies. I 26 00:01:41,319 --> 00:01:45,120 Speaker 2: certainly don't understand the strategy and their policies. And and 27 00:01:45,160 --> 00:01:47,240 Speaker 2: if Kevin understands it, I'd like to understand it better. 28 00:01:48,120 --> 00:01:51,040 Speaker 3: Doug. We we had some fireworks at the Bureau Labor 29 00:01:51,080 --> 00:01:53,640 Speaker 3: Statistics last week when the jobs data came out here. 30 00:01:54,000 --> 00:01:57,200 Speaker 3: Can you put that in context based upon your experience? 31 00:01:59,200 --> 00:02:01,720 Speaker 2: Well, you know, they So the assertion by the President 32 00:02:01,840 --> 00:02:05,000 Speaker 2: was that the commissioner rigged the data. And there's simply 33 00:02:05,040 --> 00:02:07,960 Speaker 2: no evidence of rigging the data. And there's no opportunity 34 00:02:08,000 --> 00:02:11,160 Speaker 2: actually for the commissioner to alter the data in any 35 00:02:11,160 --> 00:02:13,040 Speaker 2: way if you look at the procedures that are followed. 36 00:02:13,080 --> 00:02:17,760 Speaker 2: So it's a baseless assertion. It's something that I think 37 00:02:18,720 --> 00:02:22,880 Speaker 2: it is obviously detrimental to the institution. It undermines, to 38 00:02:22,919 --> 00:02:25,560 Speaker 2: some extent the credibility of the government's data and that 39 00:02:25,639 --> 00:02:28,240 Speaker 2: you don't like to see that. And it was simply 40 00:02:28,720 --> 00:02:30,880 Speaker 2: the White House trying to change the subject from the 41 00:02:30,919 --> 00:02:34,200 Speaker 2: substance of the data, which is really poor jobs numbers 42 00:02:34,200 --> 00:02:38,480 Speaker 2: over the past three months, to firing an official who's 43 00:02:38,480 --> 00:02:40,840 Speaker 2: a holdover from the Biden administration. So it's an old 44 00:02:40,840 --> 00:02:43,800 Speaker 2: playbook the White House. This White House has used a lot. 45 00:02:45,000 --> 00:02:47,560 Speaker 2: I do think it has brought to the surface something 46 00:02:47,600 --> 00:02:51,960 Speaker 2: that's really important, which is the diminishing potential quality of 47 00:02:51,960 --> 00:02:55,840 Speaker 2: the data at the BA and the BLS. And you know, now, 48 00:02:56,080 --> 00:02:58,840 Speaker 2: I think the general public understands that response rates have fallen, 49 00:02:59,360 --> 00:03:02,680 Speaker 2: that the salempling sizes have gone down, and that initial 50 00:03:02,720 --> 00:03:05,200 Speaker 2: lestements arens as firm as they might be. So now 51 00:03:05,200 --> 00:03:08,120 Speaker 2: the questions, will anyone get behind an effort to improve 52 00:03:08,160 --> 00:03:12,240 Speaker 2: those data collecting efforts and strengthen those statistical agencies. 53 00:03:12,480 --> 00:03:14,919 Speaker 3: That's a good point, Doug. I mean it kind of 54 00:03:14,960 --> 00:03:17,920 Speaker 3: seems almost antiquated, you know, going out and doing a 55 00:03:17,960 --> 00:03:22,320 Speaker 3: survey in a world of digital opportunities. 56 00:03:22,520 --> 00:03:25,240 Speaker 2: Here, can I say something about that? Paul, Yeah, you know, 57 00:03:25,720 --> 00:03:27,160 Speaker 2: a lot of a lot of people brought this up, 58 00:03:27,200 --> 00:03:29,000 Speaker 2: you know, like you should be tapping into the ADP 59 00:03:29,200 --> 00:03:33,680 Speaker 2: or other payroll processors. But at some point you actually 60 00:03:33,680 --> 00:03:36,000 Speaker 2: have to do a census of things so that you 61 00:03:36,160 --> 00:03:38,640 Speaker 2: understand what the weights are going to be on the 62 00:03:38,680 --> 00:03:42,440 Speaker 2: ADP data. They sense it over sample large firms. So 63 00:03:42,680 --> 00:03:46,240 Speaker 2: there is at some point the antiquated issue of going 64 00:03:46,680 --> 00:03:49,320 Speaker 2: figuratively door to door and finding out what's out there, 65 00:03:49,880 --> 00:03:52,560 Speaker 2: knowing what the relative composition of the labor market is. 66 00:03:53,080 --> 00:03:56,120 Speaker 2: And that's an expensive and time consuming process, but it 67 00:03:56,120 --> 00:03:58,040 Speaker 2: needs to be done, be done better. 68 00:03:58,960 --> 00:04:03,120 Speaker 1: The hallmark tea can work, folks, are single sentences that 69 00:04:03,200 --> 00:04:07,680 Speaker 1: make you stop. May I quote the non education, non 70 00:04:07,760 --> 00:04:12,680 Speaker 1: health private sector has lost forty six thousand jobs over 71 00:04:12,720 --> 00:04:16,040 Speaker 1: the past three months. Good morning, Nancy Lazar, who's been 72 00:04:16,080 --> 00:04:19,760 Speaker 1: brilliant on this. I don't think Doug that's understood that 73 00:04:19,960 --> 00:04:25,640 Speaker 1: private sector employment is terrible X the gifts of health 74 00:04:25,640 --> 00:04:26,320 Speaker 1: and education. 75 00:04:27,720 --> 00:04:30,279 Speaker 2: It's dead in the water and has been. I've been 76 00:04:31,000 --> 00:04:35,799 Speaker 2: confused by this sort of positive reactions to the recent 77 00:04:35,880 --> 00:04:38,760 Speaker 2: labor market reports because you know, even before the revision, 78 00:04:38,760 --> 00:04:41,000 Speaker 2: when we got one hundred and forty seven thousand jobs 79 00:04:41,640 --> 00:04:44,919 Speaker 2: in the previous employment report, seventy odd thousand of them 80 00:04:44,960 --> 00:04:48,080 Speaker 2: were in state and local governments. Of the remaining seventy 81 00:04:48,080 --> 00:04:51,360 Speaker 2: odd fifty eight thousand were in health. It's the only 82 00:04:51,440 --> 00:04:54,120 Speaker 2: place that was generating any jobs. Everything else is dead 83 00:04:54,120 --> 00:04:56,440 Speaker 2: in the water. So when I look at the labor market, 84 00:04:56,480 --> 00:04:58,279 Speaker 2: I see a labor market where no one gets fired. 85 00:04:58,320 --> 00:05:00,560 Speaker 2: That's great, but no one gets hired either. It is 86 00:05:00,600 --> 00:05:02,560 Speaker 2: at a standstill, and that's really quite wrong. 87 00:05:02,720 --> 00:05:04,800 Speaker 1: So so how to fold it over to FED policy here? 88 00:05:04,839 --> 00:05:07,440 Speaker 1: I mean, go to sixty thousand feet if you will. 89 00:05:07,480 --> 00:05:09,840 Speaker 1: I brought it up today for the first time. Are 90 00:05:09,839 --> 00:05:12,599 Speaker 1: we at a point now where this is so emergent 91 00:05:12,760 --> 00:05:14,960 Speaker 1: that in one week or two weeks we're gonna be 92 00:05:14,960 --> 00:05:19,159 Speaker 1: talking about a fifty be cut September seventeenth. 93 00:05:19,920 --> 00:05:23,080 Speaker 2: I don't think we do see the basis for fifty 94 00:05:23,160 --> 00:05:25,800 Speaker 2: basis points, because you know, the FED has a dual 95 00:05:25,839 --> 00:05:30,280 Speaker 2: mandate and the Trump tariffs have really put the FED 96 00:05:30,320 --> 00:05:34,400 Speaker 2: in the crossairs because the inflation prushures are there. The 97 00:05:34,480 --> 00:05:40,040 Speaker 2: labor markets, you know, really at a standstill. So the 98 00:05:40,080 --> 00:05:41,920 Speaker 2: mandates are telling you to do different things, and how 99 00:05:41,960 --> 00:05:45,200 Speaker 2: you balance that is an incredibly hard job. People put 100 00:05:45,240 --> 00:05:48,200 Speaker 2: different weights on, you know, inflation versus unemployment. They do, 101 00:05:48,880 --> 00:05:51,440 Speaker 2: and we don't know how quickly this is gonna work. 102 00:05:51,520 --> 00:05:55,960 Speaker 1: So Paul, I got to interrupt, Doug. This is too important, Paul, 103 00:05:56,080 --> 00:05:59,360 Speaker 1: get one more in here. But does it does Holtzee 104 00:05:59,360 --> 00:06:03,200 Speaker 1: can look like he could be a FED governor Noban that. 105 00:06:04,600 --> 00:06:06,480 Speaker 2: I promise you he does not look like he's going 106 00:06:06,520 --> 00:06:07,479 Speaker 2: to be a FED anything. 107 00:06:09,200 --> 00:06:11,120 Speaker 3: So Doug, let's just kind of put a bow on 108 00:06:11,120 --> 00:06:13,520 Speaker 3: this with a discussion of tariffs here. I mean, tariffs 109 00:06:13,520 --> 00:06:16,320 Speaker 3: are here. They are here to stay, it looks like, 110 00:06:16,400 --> 00:06:19,320 Speaker 3: and it's whether it's fifteen, eighteen twenty percent on an 111 00:06:19,320 --> 00:06:21,880 Speaker 3: average basis, how do you think that's going to play 112 00:06:21,880 --> 00:06:25,279 Speaker 3: out through this economy over the coming six twelve, eighteen months. 113 00:06:26,760 --> 00:06:29,400 Speaker 2: So I think number one, you have the right timeframe. 114 00:06:29,800 --> 00:06:33,120 Speaker 2: People have gotten too accustomed to the notion that a 115 00:06:33,160 --> 00:06:36,560 Speaker 2: pandemic or financial crisis hits the mainStreet economy, and we 116 00:06:36,600 --> 00:06:38,919 Speaker 2: see real quickly what's going on. This is going to 117 00:06:39,000 --> 00:06:42,760 Speaker 2: evolve over quarters and years, not weeks and months, and 118 00:06:42,839 --> 00:06:45,680 Speaker 2: so we really haven't seen the impact yet. It is 119 00:06:45,800 --> 00:06:49,600 Speaker 2: unmistakable that the tariffs of this size, so roughly three 120 00:06:49,720 --> 00:06:52,440 Speaker 2: hundred to three hundred fifty billion dollars at annualized rate, 121 00:06:52,640 --> 00:06:55,600 Speaker 2: that's a very big tax increase. It is going to 122 00:06:56,240 --> 00:06:58,920 Speaker 2: put upward pressure on prices, no way around it, and 123 00:06:58,960 --> 00:07:01,800 Speaker 2: it's going to take person power away from consumers, and 124 00:07:02,160 --> 00:07:05,400 Speaker 2: that's going to slow the economy. So at some point 125 00:07:05,520 --> 00:07:08,720 Speaker 2: over the that that six to twelve month horizon, we 126 00:07:08,800 --> 00:07:11,920 Speaker 2: are going to pay the price in inflation and slower 127 00:07:11,920 --> 00:07:14,600 Speaker 2: employment growth. And we're starting to see that and there's 128 00:07:14,600 --> 00:07:16,440 Speaker 2: no way out of that. The only question is how 129 00:07:16,440 --> 00:07:18,119 Speaker 2: big will it be and how fast will it happen? 130 00:07:18,280 --> 00:07:20,280 Speaker 1: You know it's blue tie as sort of a governor 131 00:07:20,360 --> 00:07:22,160 Speaker 1: blue tie. Sure, I think it is solid. 132 00:07:22,400 --> 00:07:22,800 Speaker 3: Douglass. 133 00:07:23,480 --> 00:07:26,040 Speaker 1: Thank you so much, wonderful, way too long, Doug. We 134 00:07:26,080 --> 00:07:29,160 Speaker 1: got to get you on your numerous times before Jackson Hole. 135 00:07:29,320 --> 00:07:32,720 Speaker 1: Douglass alts econ his public service hit CBO. He's a 136 00:07:32,800 --> 00:07:35,640 Speaker 1: president of the American Action Forum.