WEBVTT - American Action Forum President Douglas Holtz-Eiken

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<v Speaker 1>Bloomberg Audio Studios, podcasts, radio news. Douglas Holtz Eichen was

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<v Speaker 1>a huge value add for years and years. For some reason,

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<v Speaker 1>over the last quarters we have not had the expertise

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<v Speaker 1>at Douglas holtz Echen and the show. We're thrilled and

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<v Speaker 1>he could join us in the American Action Forum. His

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<v Speaker 1>public service with Senator McCain years ago a GOP slant, yes,

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<v Speaker 1>but always just exceptional scholarship out of Dennison in Princeton.

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<v Speaker 1>Doug's been way way too long. Thank you so much

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<v Speaker 1>for joining today. How far removed Douglas holtz Eichen. It's

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<v Speaker 1>just traditional Republican economics and Republican labor economics. How far

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<v Speaker 1>removed is it from President Trump?

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<v Speaker 2>This is an enormous shift in the Republican Party. I mean,

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<v Speaker 2>it's almost unrecognizable from twenty years ago. The characteristics of

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<v Speaker 2>this area is that both parties are interested in using

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<v Speaker 2>the power of the government is a cudgel for their

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<v Speaker 2>for their purposes. And that's that's not a limited government

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<v Speaker 2>personal freedom approach, not at all.

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<v Speaker 1>What is Kevin Asset doing. I mean, I understand Pennsylvania

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<v Speaker 1>doesn't have the quality of Princeton to the far far Norris.

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<v Speaker 1>But you know you and I know Kevin Assen is

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<v Speaker 1>a legit macro economist. How is he carrying water for

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<v Speaker 1>the president? How do you see that?

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<v Speaker 2>Douglas holtecon Uh, you know, I think that's a question

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<v Speaker 2>you have to ask Kevin. I don't understand a lot

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<v Speaker 2>of the Trump administration uh messaging on their policies. I

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<v Speaker 2>certainly don't understand the strategy and their policies. And and

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<v Speaker 2>if Kevin understands it, I'd like to understand it better.

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<v Speaker 3>Doug. We we had some fireworks at the Bureau Labor

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<v Speaker 3>Statistics last week when the jobs data came out here.

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<v Speaker 3>Can you put that in context based upon your experience?

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<v Speaker 2>Well, you know, they So the assertion by the President

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<v Speaker 2>was that the commissioner rigged the data. And there's simply

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<v Speaker 2>no evidence of rigging the data. And there's no opportunity

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<v Speaker 2>actually for the commissioner to alter the data in any

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<v Speaker 2>way if you look at the procedures that are followed.

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<v Speaker 2>So it's a baseless assertion. It's something that I think

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<v Speaker 2>it is obviously detrimental to the institution. It undermines, to

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<v Speaker 2>some extent the credibility of the government's data and that

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<v Speaker 2>you don't like to see that. And it was simply

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<v Speaker 2>the White House trying to change the subject from the

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<v Speaker 2>substance of the data, which is really poor jobs numbers

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<v Speaker 2>over the past three months, to firing an official who's

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<v Speaker 2>a holdover from the Biden administration. So it's an old

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<v Speaker 2>playbook the White House. This White House has used a lot.

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<v Speaker 2>I do think it has brought to the surface something

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<v Speaker 2>that's really important, which is the diminishing potential quality of

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<v Speaker 2>the data at the BA and the BLS. And you know, now,

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<v Speaker 2>I think the general public understands that response rates have fallen,

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<v Speaker 2>that the salempling sizes have gone down, and that initial

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<v Speaker 2>lestements arens as firm as they might be. So now

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<v Speaker 2>the questions, will anyone get behind an effort to improve

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<v Speaker 2>those data collecting efforts and strengthen those statistical agencies.

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<v Speaker 3>That's a good point, Doug. I mean it kind of

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<v Speaker 3>seems almost antiquated, you know, going out and doing a

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<v Speaker 3>survey in a world of digital opportunities.

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<v Speaker 2>Here, can I say something about that? Paul, Yeah, you know,

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<v Speaker 2>a lot of a lot of people brought this up,

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<v Speaker 2>you know, like you should be tapping into the ADP

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<v Speaker 2>or other payroll processors. But at some point you actually

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<v Speaker 2>have to do a census of things so that you

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<v Speaker 2>understand what the weights are going to be on the

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<v Speaker 2>ADP data. They sense it over sample large firms. So

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<v Speaker 2>there is at some point the antiquated issue of going

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<v Speaker 2>figuratively door to door and finding out what's out there,

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<v Speaker 2>knowing what the relative composition of the labor market is.

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<v Speaker 2>And that's an expensive and time consuming process, but it

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<v Speaker 2>needs to be done, be done better.

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<v Speaker 1>The hallmark tea can work, folks, are single sentences that

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<v Speaker 1>make you stop. May I quote the non education, non

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<v Speaker 1>health private sector has lost forty six thousand jobs over

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<v Speaker 1>the past three months. Good morning, Nancy Lazar, who's been

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<v Speaker 1>brilliant on this. I don't think Doug that's understood that

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<v Speaker 1>private sector employment is terrible X the gifts of health

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<v Speaker 1>and education.

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<v Speaker 2>It's dead in the water and has been. I've been

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<v Speaker 2>confused by this sort of positive reactions to the recent

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<v Speaker 2>labor market reports because you know, even before the revision,

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<v Speaker 2>when we got one hundred and forty seven thousand jobs

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<v Speaker 2>in the previous employment report, seventy odd thousand of them

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<v Speaker 2>were in state and local governments. Of the remaining seventy

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<v Speaker 2>odd fifty eight thousand were in health. It's the only

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<v Speaker 2>place that was generating any jobs. Everything else is dead

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<v Speaker 2>in the water. So when I look at the labor market,

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<v Speaker 2>I see a labor market where no one gets fired.

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<v Speaker 2>That's great, but no one gets hired either. It is

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<v Speaker 2>at a standstill, and that's really quite wrong.

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<v Speaker 1>So so how to fold it over to FED policy here?

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<v Speaker 1>I mean, go to sixty thousand feet if you will.

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<v Speaker 1>I brought it up today for the first time. Are

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<v Speaker 1>we at a point now where this is so emergent

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<v Speaker 1>that in one week or two weeks we're gonna be

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<v Speaker 1>talking about a fifty be cut September seventeenth.

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<v Speaker 2>I don't think we do see the basis for fifty

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<v Speaker 2>basis points, because you know, the FED has a dual

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<v Speaker 2>mandate and the Trump tariffs have really put the FED

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<v Speaker 2>in the crossairs because the inflation prushures are there. The

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<v Speaker 2>labor markets, you know, really at a standstill. So the

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<v Speaker 2>mandates are telling you to do different things, and how

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<v Speaker 2>you balance that is an incredibly hard job. People put

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<v Speaker 2>different weights on, you know, inflation versus unemployment. They do,

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<v Speaker 2>and we don't know how quickly this is gonna work.

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<v Speaker 1>So Paul, I got to interrupt, Doug. This is too important, Paul,

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<v Speaker 1>get one more in here. But does it does Holtzee

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<v Speaker 1>can look like he could be a FED governor Noban that.

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<v Speaker 2>I promise you he does not look like he's going

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<v Speaker 2>to be a FED anything.

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<v Speaker 3>So Doug, let's just kind of put a bow on

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<v Speaker 3>this with a discussion of tariffs here. I mean, tariffs

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<v Speaker 3>are here. They are here to stay, it looks like,

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<v Speaker 3>and it's whether it's fifteen, eighteen twenty percent on an

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<v Speaker 3>average basis, how do you think that's going to play

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<v Speaker 3>out through this economy over the coming six twelve, eighteen months.

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<v Speaker 2>So I think number one, you have the right timeframe.

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<v Speaker 2>People have gotten too accustomed to the notion that a

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<v Speaker 2>pandemic or financial crisis hits the mainStreet economy, and we

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<v Speaker 2>see real quickly what's going on. This is going to

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<v Speaker 2>evolve over quarters and years, not weeks and months, and

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<v Speaker 2>so we really haven't seen the impact yet. It is

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<v Speaker 2>unmistakable that the tariffs of this size, so roughly three

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<v Speaker 2>hundred to three hundred fifty billion dollars at annualized rate,

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<v Speaker 2>that's a very big tax increase. It is going to

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<v Speaker 2>put upward pressure on prices, no way around it, and

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<v Speaker 2>it's going to take person power away from consumers, and

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<v Speaker 2>that's going to slow the economy. So at some point

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<v Speaker 2>over the that that six to twelve month horizon, we

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<v Speaker 2>are going to pay the price in inflation and slower

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<v Speaker 2>employment growth. And we're starting to see that and there's

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<v Speaker 2>no way out of that. The only question is how

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<v Speaker 2>big will it be and how fast will it happen?

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<v Speaker 1>You know it's blue tie as sort of a governor

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<v Speaker 1>blue tie. Sure, I think it is solid.

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<v Speaker 3>Douglass.

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<v Speaker 1>Thank you so much, wonderful, way too long, Doug. We

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<v Speaker 1>got to get you on your numerous times before Jackson Hole.

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<v Speaker 1>Douglass alts econ his public service hit CBO. He's a

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<v Speaker 1>president of the American Action Forum.