Speaker 1: Bloomberg Audio Studios, podcasts, radio news. Douglas Holtz Eichen was
Speaker 1: a huge value add for years and years. For some reason,
Speaker 1: over the last quarters we have not had the expertise
Speaker 1: at Douglas holtz Echen and the show. We're thrilled and
Speaker 1: he could join us in the American Action Forum. His
Speaker 1: public service with Senator McCain years ago a GOP slant, yes,
Speaker 1: but always just exceptional scholarship out of Dennison in Princeton.
Speaker 1: Doug's been way way too long. Thank you so much
Speaker 1: for joining today. How far removed Douglas holtz Eichen. It's
Speaker 1: just traditional Republican economics and Republican labor economics. How far
Speaker 1: removed is it from President Trump?
Speaker 2: This is an enormous shift in the Republican Party. I mean,
Speaker 2: it's almost unrecognizable from twenty years ago. The characteristics of
Speaker 2: this area is that both parties are interested in using
Speaker 2: the power of the government is a cudgel for their
Speaker 2: for their purposes. And that's that's not a limited government
Speaker 2: personal freedom approach, not at all.
Speaker 1: What is Kevin Asset doing. I mean, I understand Pennsylvania
Speaker 1: doesn't have the quality of Princeton to the far far Norris.
Speaker 1: But you know you and I know Kevin Assen is
Speaker 1: a legit macro economist. How is he carrying water for
Speaker 1: the president? How do you see that?
Speaker 2: Douglas holtecon Uh, you know, I think that's a question
Speaker 2: you have to ask Kevin. I don't understand a lot
Speaker 2: of the Trump administration uh messaging on their policies. I
Speaker 2: certainly don't understand the strategy and their policies. And and
Speaker 2: if Kevin understands it, I'd like to understand it better.
Speaker 3: Doug. We we had some fireworks at the Bureau Labor
Speaker 3: Statistics last week when the jobs data came out here.
Speaker 3: Can you put that in context based upon your experience?
Speaker 2: Well, you know, they So the assertion by the President
Speaker 2: was that the commissioner rigged the data. And there's simply
Speaker 2: no evidence of rigging the data. And there's no opportunity
Speaker 2: actually for the commissioner to alter the data in any
Speaker 2: way if you look at the procedures that are followed.
Speaker 2: So it's a baseless assertion. It's something that I think
Speaker 2: it is obviously detrimental to the institution. It undermines, to
Speaker 2: some extent the credibility of the government's data and that
Speaker 2: you don't like to see that. And it was simply
Speaker 2: the White House trying to change the subject from the
Speaker 2: substance of the data, which is really poor jobs numbers
Speaker 2: over the past three months, to firing an official who's
Speaker 2: a holdover from the Biden administration. So it's an old
Speaker 2: playbook the White House. This White House has used a lot.
Speaker 2: I do think it has brought to the surface something
Speaker 2: that's really important, which is the diminishing potential quality of
Speaker 2: the data at the BA and the BLS. And you know, now,
Speaker 2: I think the general public understands that response rates have fallen,
Speaker 2: that the salempling sizes have gone down, and that initial
Speaker 2: lestements arens as firm as they might be. So now
Speaker 2: the questions, will anyone get behind an effort to improve
Speaker 2: those data collecting efforts and strengthen those statistical agencies.
Speaker 3: That's a good point, Doug. I mean it kind of
Speaker 3: seems almost antiquated, you know, going out and doing a
Speaker 3: survey in a world of digital opportunities.
Speaker 2: Here, can I say something about that? Paul, Yeah, you know,
Speaker 2: a lot of a lot of people brought this up,
Speaker 2: you know, like you should be tapping into the ADP
Speaker 2: or other payroll processors. But at some point you actually
Speaker 2: have to do a census of things so that you
Speaker 2: understand what the weights are going to be on the
Speaker 2: ADP data. They sense it over sample large firms. So
Speaker 2: there is at some point the antiquated issue of going
Speaker 2: figuratively door to door and finding out what's out there,
Speaker 2: knowing what the relative composition of the labor market is.
Speaker 2: And that's an expensive and time consuming process, but it
Speaker 2: needs to be done, be done better.
Speaker 1: The hallmark tea can work, folks, are single sentences that
Speaker 1: make you stop. May I quote the non education, non
Speaker 1: health private sector has lost forty six thousand jobs over
Speaker 1: the past three months. Good morning, Nancy Lazar, who's been
Speaker 1: brilliant on this. I don't think Doug that's understood that
Speaker 1: private sector employment is terrible X the gifts of health
Speaker 1: and education.
Speaker 2: It's dead in the water and has been. I've been
Speaker 2: confused by this sort of positive reactions to the recent
Speaker 2: labor market reports because you know, even before the revision,
Speaker 2: when we got one hundred and forty seven thousand jobs
Speaker 2: in the previous employment report, seventy odd thousand of them
Speaker 2: were in state and local governments. Of the remaining seventy
Speaker 2: odd fifty eight thousand were in health. It's the only
Speaker 2: place that was generating any jobs. Everything else is dead
Speaker 2: in the water. So when I look at the labor market,
Speaker 2: I see a labor market where no one gets fired.
Speaker 2: That's great, but no one gets hired either. It is
Speaker 2: at a standstill, and that's really quite wrong.
Speaker 1: So so how to fold it over to FED policy here?
Speaker 1: I mean, go to sixty thousand feet if you will.
Speaker 1: I brought it up today for the first time. Are
Speaker 1: we at a point now where this is so emergent
Speaker 1: that in one week or two weeks we're gonna be
Speaker 1: talking about a fifty be cut September seventeenth.
Speaker 2: I don't think we do see the basis for fifty
Speaker 2: basis points, because you know, the FED has a dual
Speaker 2: mandate and the Trump tariffs have really put the FED
Speaker 2: in the crossairs because the inflation prushures are there. The
Speaker 2: labor markets, you know, really at a standstill. So the
Speaker 2: mandates are telling you to do different things, and how
Speaker 2: you balance that is an incredibly hard job. People put
Speaker 2: different weights on, you know, inflation versus unemployment. They do,
Speaker 2: and we don't know how quickly this is gonna work.
Speaker 1: So Paul, I got to interrupt, Doug. This is too important, Paul,
Speaker 1: get one more in here. But does it does Holtzee
Speaker 1: can look like he could be a FED governor Noban that.
Speaker 2: I promise you he does not look like he's going
Speaker 2: to be a FED anything.
Speaker 3: So Doug, let's just kind of put a bow on
Speaker 3: this with a discussion of tariffs here. I mean, tariffs
Speaker 3: are here. They are here to stay, it looks like,
Speaker 3: and it's whether it's fifteen, eighteen twenty percent on an
Speaker 3: average basis, how do you think that's going to play
Speaker 3: out through this economy over the coming six twelve, eighteen months.
Speaker 2: So I think number one, you have the right timeframe.
Speaker 2: People have gotten too accustomed to the notion that a
Speaker 2: pandemic or financial crisis hits the mainStreet economy, and we
Speaker 2: see real quickly what's going on. This is going to
Speaker 2: evolve over quarters and years, not weeks and months, and
Speaker 2: so we really haven't seen the impact yet. It is
Speaker 2: unmistakable that the tariffs of this size, so roughly three
Speaker 2: hundred to three hundred fifty billion dollars at annualized rate,
Speaker 2: that's a very big tax increase. It is going to
Speaker 2: put upward pressure on prices, no way around it, and
Speaker 2: it's going to take person power away from consumers, and
Speaker 2: that's going to slow the economy. So at some point
Speaker 2: over the that that six to twelve month horizon, we
Speaker 2: are going to pay the price in inflation and slower
Speaker 2: employment growth. And we're starting to see that and there's
Speaker 2: no way out of that. The only question is how
Speaker 2: big will it be and how fast will it happen?
Speaker 1: You know it's blue tie as sort of a governor
Speaker 1: blue tie. Sure, I think it is solid.
Speaker 3: Douglass.
Speaker 1: Thank you so much, wonderful, way too long, Doug. We
Speaker 1: got to get you on your numerous times before Jackson Hole.
Speaker 1: Douglass alts econ his public service hit CBO. He's a
Speaker 1: president of the American Action Forum.