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Polls: Trump's Attacks On Democracy Alienate Normal Americans

Polls: Trump's Attacks On Democracy Alienate Normal Americans

Two very important things are concurrently ongoing in the U.S. One is fast-moving, headline-generating, relentlessly shocking, and existentially threatening to our nation’s long democratic project. The other is a slow burn, prosaically plodding along in the background, though it is equally important, perhaps even more so, than the first thing. I've written about here, but it is largely crowded out in the media by much newsier and scarier developments.

Readers know what thing one is, but just to be explicit, I’m of course talking about Trump’s attack on democracy, from sweeping tariffs, to deportations, to mass firings (including of those who produce accurate data which he doesn’t like), to weaponizing the Justice Department to go after his enemies.

But what’s thing two? It’s Trump’s fading popularity on the issues that matter most to people. It’s the fact that he’s underwater on every important issue.

This is born of the fact that he continues to exploit his extremely and uniquely concentrated power to double down on actions that turn regular, non-MAGA people off. When it comes to the economy, most people are most worried about affordability. Yet he continues to double down on big tariffs, most recently on prescription drugs, kitchen cabinets, furniture, and heavy trucks.

He and his minions are now putting themselves between you and the late-night TV you watch. I grant that a tiny share of Americans watch Jimmy Kimmel, but that’s not the point. The way this works is that people who reasonably choose to block out politics—“it’s just a bunch of rich, old men making DC noise”1—find themselves impinged upon by something close to home, as in choosing to watch what they want. That may not sound like as big a deal as weaponizing the DoJ, but there are many Americans for whom the free-speech intrusion into their everyday life feels like a bigger intrusion than the new Comey indictment.

It’s even worse, and considerably more dangerous, when they intrude in your medicine cabinet, the fact that when you open the drawer to get a Tylenol, you have to hear in your head the president warning you, against all evidence, to not go there.

I predict—and these are measurable predictions; I could, of course, be shown to be wrong—that the administration continues to double and triple down on these and many more such negative intrusions into the lives of regular people, and that as they do so, their popularity will continue to erode.

My predictions stem from my view that the two forces I’m elevating in this note are closely linked. Force one amplifies force two. The administration is increasingly drunk on its sweeping powers, unblocked by Congress and—in the part that scares me most—unleashed by what is arguably the most dangerous Supreme Court in our history.

But not unlike a drunk person endangering you on the streets, or just—and this may be a better analogy given my intrusion theory of the case—ruining your evening by shouting dumb sh— and over-laughing such that you can’t enjoy a simple meal out with the family, the further out they go from existing norms in ways—this part is critical—that show up in your everyday life, the more large shares of Americans are going to want them gone. If I’m right, then the voters that put them over-the-top will be like: “I thought I was voting for lower prices, lower interest rates, more affordable housing. I’m getting higher prices, cracks in job market such that my college-grad kid can’t find work, and a bunch of bullsh— about Tylenol.”

One objection to my rap is “they don’t care what people think about them.” Clearly true. If they did, force one would cease proliferating. But it’s not my point. My point is that they’re increasingly unpopular, and not just with the Democrats, the left, the folks reading this post. But with the large, swing share of the electorate wherein resides the precious “median voter.”

Another objection is thus, “Okay, but what if there isn’t another election?” That is a very potent challenge indeed, and should it become anything close to reality, we must fight like our lives and those of our progeny depend on it. Because they do.

Jared Bernstein is a former chair of the White House Council of Economic Advisers under President Joe Biden. He is a senior fellow at the Council on Budget and Policy Priorities. Please consider subscribing to his Substack.

Reprinted with permission from Econjared.

Trump's Negatives Up: People Want Cheaper Groceries -- And Free Speech

Trump's Negatives Up: People Want Cheaper Groceries -- And Free Speech

In numerous posts, I have expressed some degree of puzzlement as to why this administration keeps doing things that regular folks don’t like. After all, they are led by a president who, as chaotic, corrupt and self-dealing as he is, has good antennae for working-class sentiment. Today, I’d like to speak freely, while one still can, and say a few words about why I believe free speech is the latest item of that list.

Let me remind you of my rap in this space, and I’ll be brief, because I don’t want to get out of my depth. I think of myself as a political economist, and I find that works best when I weight the two sides of that equation at 30 and 70 percent, respectively.

Trump has a reliable base who will stick with him no matter what. There was some overheated journalism around the base’s negative reaction to his suppression of the Epstein files, but it predictably fizzled. These are what political consultants call “unpersuadeables.” I don’t know their share of the electorate, but people say they’re in the 35-40% range, though that could be high. His “strongly approve” poll rating typical runs short of 30%

But the folks who put him over the top electorally—the marginal Trump voter—are not in this group. They didn’t like a lot of what they saw under Biden, particularly regarding affordability, and Trump argued he could get them their old prices back (not the whole story, of course).

Those folks are not happy (see figure above) and I see little prospect of their moods improving. Trump is 25% underwater on inflation and the cost-of-living. Some of that is incumbency bias (it’s his vibecession now) but it’s also definitely his fault, as most people recognize that his tariffs push the wrong way on affordability. Health care—another big affordability issue—is closely behind the cost-of-living’s disapproval rating, and note that some of most egregious coverage cuts from Trump’s budget bill haven’t even hit folks yet.

Why, then, does he continue to dig this hole for himself? First, he doesn’t believe any of the above negative polling or data, and will fire any messengers who try to intrude on his alt reality. Second, he overestimates his ability to convince the public not to believe their lying eyes. People’s number one, top concern right now is affordability and price increases, while he and his minions endlessly rattle on about how there’s no inflation and no tariff passthrough.

Now, they’re coming for free speech. They believe they can use their powers of persuasion to build a false narrative connecting free speech to violent radicalization, and, again, that may resonate with the MAGA base (though some MAGA reps are complaining of the rise of the “woke right”).

But if they continue to overreach on suppressing free speech, it will penetrate the lives of people who pay little attention to these types of arguments, folks for whom Fed independence and government shutdowns and budget reconciliation are just more DC noise. But when your policies make groceries and furniture and toys more expensive, when they see their kids taking ever longer to find work because you cracked what was a very welcoming labor market (see figure), and when you start removing people from TV because you don’t like what they say, that far surpasses DC noise.


It doesn’t matter that Jimmy Kimmel’s audience was relatively small. It matters that you’re intruding into normal people’s lives in ways that both make those lives more expensive and more attentive to your excessive reach. “Wait, they’re now kicking late-night talk-show hosts off of TV?!” is as politically salient—and damaging—to the incumbent as “Wait, they’re making my groceries cost more?!”

Anymore of such analysis and I’ll be over my skis. And the above is testable—let’s see what forthcoming polls say on the matter. But I think I’m right based on the simple principle that eventually, policy matters and bad policy redounds on its parents, especially when it breaks through into their daily lives.

And these folks just keep shoving terrible policies down America’s throat.

Reprinted with permission from Econjared.

Democracy Needs A Stronger Labor Movement -- And Americans Can Build It

Democracy Needs A Stronger Labor Movement -- And Americans Can Build It

A few weeks ago, I interviewed John Cassidy, the New Yorker economics writer, on his latest book, Capitalism and Its Critics, which I also reviewed. I found the book to be an elucidating and well-timed look at our economic system through the eyes of capitalism’s founders, scholars, critics, and revolutionary opponents. Reading this sweeping treatment in 2025, I believed that it carried a important lesson from history as to how we got into our current mess and how to get out of it.

Towards the end of our interview, I asked John about this, and I found his answer highly resonant. We had been talking about Karl Polanyi’s concept of the “double movement,” which observes that throughout history, the push and pull of capitalism’s destructive tendencies have been offset by measures to temper such outcomes. Polanyi, a socialist who witnessed the rise of fascism, argued that without a movement to counterbalance capitalism’s inevitable trajectory towards concentrated resources and power, societies would devolve into the highly unequal, inhumane, and violent state that Polanyi himself observed in Europe in the 1930s and 40s.

Throughout history—with tragic exceptions—when the system drifted too far one way, pressure from below would push back on its hard edges through the introduction of measures like social insurance (against old-age, ill-health, unemployment), job protections, wage policies, and so on.

When I asked John about this in the current context, he said (lightly edited):

You need a political basis for any sort of lasting economic movement. And I think that's the great challenge we face now, because back in the mid-century, there was a pretty clear blueprint based on the labor movement.
The pressure came from below, but where was that pressure coming from?
It was coming from workers and the labor unions, which were very strong in the U.S., the famous Treaty of Detroit, etc., very strong in the U.K., the labor movement, the Labor Party. Same in Germany, same in France. How do you create a political movement to sort of underpin a new social bargain when you don't have a strong labor movement? That seems to me to be the central question, the sort of left, center-left, even the center, is facing in the 21st century. And I don't think we've answered it yet. I mean, Trump has got an answer. He has a movement, whatever you think of him. He has a popular movement, and he has a very simplistic economic nationalism.

Especially on Labor Day, we often think of unions as getting a better deal for their members, ensuring that they get a fairer slice of the pie they’re helping to bake. And that’s of course unquestionably the case: labor unions first responsibility is to improve the living standards of their members by improving the quality—compensation, benefits, working conditions—of their jobs. And the evidence across time and place shows that they do so.

But that’s not all they do.

There is copious analysis as to how populists—in Trump’s case, a faux populist—ascend to power. One explanation is that the labor-left party drifts right, captured by the same deep-pocketed donors that bankroll the conservative party and abandoning or ignoring the plight of the working class. Much like nature, politics abhors a vacuum, which in this case gets filled by a populist, who promises to re-elevate and address the economic concerns of the working class.

As always, nuance abounds. From the 1970s to Trump, it wasn’t that Democrats stopped opposing Republicans. But the focus shifted from the working class and the poor to just the poor. Bill Clinton was notoriously indifferent at best towards unions, especially as they fought him, unsuccessfully, on NAFTA and China’s joining the World Trade Organization, which they did to protect their constituents from competition with cheaper labor and the loss of manufacturing jobs. But Clinton also presided over the largest poverty-reducing expansion on record of refundable (meaning you get the credits even if you have no tax liability) tax credits for low-income workers (which itself was in part a response to his poverty-increasing “welfare reform”).

The working class was then left to fight it out on their own as they were thrown into global competition with much lower-wage countries. The minimum wage went on a long-slide, with insufficiently small adjustments (all by Ds, of course, including Clinton). Labor standards and protections came to be viewed by members of both parties as “rent-seeking” by workers and thereby antithetical to growth and innovation. Unions went from being viewed as a crucial partner in Democratic politics to a hindrance at best and at worst, a barrier to globalization and the power of unfettered markets.

And anyway, many high-ranking Ds thought at the time, where are they gonna go? (Not all Ds, to be clear; I admit to painting with a broad brush but I believe I’m painting the right picture). As Ds became disengaged with the unions, and certainly didn’t fight to stop their decline, they assumed that when push came to shove, they’d have their remaining votes, which turned out to be a consequential miscalculation.

This was a huge blow to the double movement, essentially taking the pressure-from-below off of the field. The result was the absence of a countervailing force, an organized workers’ movement to block the rise of a phony populist whose blatantly empty promises went largely unchallenged.

At this point, union coverage is around 10% in the U.S., though much higher in the public than the private sector (the figure below ends in 2018 but that’s still around where we are), and much lower than in most of Europe and especially in Scandinavia, where labor’s role in double movement has been especially powerful.

But what are the chances of a revived labor movement? If that’s what it takes to bring back pressure from below, we’re toast, right?

Wrong!

First, look at what happened in 1932 when union membership jumped more than 3-fold. Yes, it was the Great Depression, a massive failure of capitalism that laid bare what can happen when capital is unconstrained, thereby heralding in a strong counter-movement. But more than that, it was policy, including the National Industrial Recovery Act and the National Labor Relations Act, which, for the first time in our nation, created the legal framework supporting unionization.

In our context, it was a moment when government was forced to acknowledge and address the fact that absent pressure from below, pressure from above would break the system. And the legislation that followed unleashed strong, untapped demand for union coverage.

The thing is, that same untapped demand exists today. EPI points out that “in 2023, [when about 16 million workers were covered] more than 60 million workers wanted to join a union but couldn’t do so.” The figure below, from the Center for American Progress’ American Worker Project (a deep resource for this information), shows that union approval in public opinion ranges from two-thirds to three-quarters. Again, as these links make clear, the gap between demand for union coverage and its supply is a policy problem. The playing field is tilted against union organizing, such that in bargain-power conflicts between labor and capital, labor’s fighting with an anvil around its neck.

Look at the public sector line in the first figure above. The big difference there is that the process of forming and building public-sector unions is far more legally protected than in the private sector, where there’s virtually no penalty for blocking unions’ efforts to organize, even when such blockage violates standing labor laws. The links above explain policy proposals like the PRO Act, designed to remove these blockages, giving workers the chance they’ve long lacked to pursue their legal right to union coverage.

All of which leads to my Labor Day message. History is clear that capitalism remains a highly effective system of generating growth and technological gains. But without an organized and aptly sized political counterforce, it will concentrate wealth and power in ways that will leave huge swaths of the population behind and erode the guardrails that are essential for containing the system’s excesses.

That is where we are now, and a major reason for that, as John points out, is that the size and power of the labor movement, a force that has throughout history played this role, is insufficient.

That’s the bad news. The good news is that there is a strong demand to rebalance this skewed power imbalance, a demand that’s growing as Trump continues to build on and abuse the power of the presidency in ways that redound against the very working class he claimed he’d help. And there are policies to tap that demand.

Even without a much stronger labor movement, anti-incumbency and the sheer incompetence of the current administration may bring them down. But that’s not good enough as recent history suggests it just means we keep swinging back-and-forth from one side to other, with no foundation upon which to build a lasting coalition for economic justice and balanced power.

That foundation requires a strong labor movement and it is well within our grasp to build it.

Jared Bernstein is a former chair of the White House Council of Economic Advisers under President Joe Biden. He is a senior fellow at the Council on Budget and Policy Priorities.

Reprinted with permission from Jared's Substack. Please consider subscribing.

Jerome Powell

'True Leadership': Stark Contrast Between Jerome Powell And Donald Trump

Every year around this time, the Kansas City Regional Federal Reserve Bank hosts its symposium in Jackson Hole, Wyoming, where the big event is the Fed chair’s speech. Chair Powell has given that speech every year since 2018, expect for the pandemic years, and he did so again this morning. It was almost surely his last such speech, as his term as chair ends next May and President Trump can’t wait to replace him (I mean, legally, he kinda has to wait, so I expect Powell to serve out his term, but we’ll see).

The fact that Trump is so anxious to replace Powell is one of the many things that speak highly of the Fed chair, and I’ll use this post as a chance to say more about his tenure in a moment. But first, a few words on the speech itself.

Markets were expecting Powell to tee up a rate cut for their next meeting in mid-Sept, and that’s what he did, leading to a melt-up in the Dow, up almost 900 points at this moment (almost 2%). He mentioned the stagflation Ryan and I wrote up the other day, underscoring the challenges posed by tariffs and deportations. This ‘graf struck me as both key and correct:

Overall, while the labor market appears to be in balance, it is a curious kind of balance that results from a marked slowing in both the supply of and demand for workers. This unusual situation suggests that downside risks to employment are rising. And if those risks materialize, they can do so quickly in the form of sharply higher layoffs and rising unemployment.

We’ll see what the jobs and inflation data show between now and the Sept meeting but assuming they’re broadly consistent with the recent dataflow, I’d expect a quarter-point rate cut at that meeting, which I’d consider to be the right move.

Powell also delivered a review of the Fed’s update to their framework. Every five years, they release a “Statement of Longer-Run Goals and Monetary Policy Strategy,” aka their consensus statement which “describes how we pursue our dual-mandate goals…designed to give the public a clear sense of how we think about monetary policy.”

This was actually the more interesting part of the speech as it gave Powell a chance to reflect on changes in large and important structural trends, most notably the shift from inflation consistently coming in below target and interest rates stuck at historically low levels (he waxed about the threat of the “ELB”—the effective lower bound, meaning situations where even interest rates at zero are insufficiently stimulative) to the pandemic-induced inflationary shock, rising global interest rates, the fading of the ELB threat, and the challenge in getting inflation back down to their target.

The new framework thus reverts back to more traditional balancing of two sides of their full-employment-at-stable-prices mandate. Most notably, the former framework allowed inflation to run hotter if it had been below target for a while, their so-called “makeup strategy”:

…we returned to a framework of flexible inflation targeting and eliminated the “makeup” strategy. As it turned out, the idea of an intentional, moderate inflation- overshoot had proved irrelevant. There was nothing intentional or moderate about the inflation that arrived a few months after we announced our 2020 changes to the consensus statement…

I’ll have more to say about this is a forthcoming post. It could be interpreted as a slightly hawkish turn in Fed policy, one that would tolerate more labor-market slack, but I don’t think that’s the case. Instead, I think the former framework turned out to be too specific to a particular moment in time and the new one avoids that mistake.

Okay, enough about the speech. Let me offer a few reflections on Chair Powell’s tenure on this occasion of his last symposium keynote in the (bear-infested) Tetons (I’ve been there and they seem to make a point of freaking out us non-outdoorsy city dwellers with excessive bear warnings).

Much ink will be spilled on Powell’s tenure, and it’s certainly been quite a ride. Did your dance card have him donning a hard hat and touring the Fed renovation with Trump, cuz mine sure didn’t!? But I’m confident his time as chair will be remembered very fondly, for the following reasons.

—No one protected the independence of the institution with such relentless vigor. Speaking of bears, the dude was (and will remain) a mama-grizzly when it came to staving off Trumpian and other political interference. And that interference often turned absolutely vicious. Another person might have said “screw it, I’m out” but Powell views protecting the integrity of the central bank as the most important part of his job right now, far more historically consequential than a rate tweak.

—Data driven: I’m not saying the Fed under Powell didn’t make mistakes. He admitted as much today re misinterpreting the pandemic inflationary spike. But if there are two words Powell will be remembered for, they might well be “data-driven.” The reason I consider this so important is because my own work, undertaken with many great colleagues, has stressed that we can’t know in real time precisely what constitutes maximum employment, capacity GDP, and the slope of the Phillips Curve (the correlation between inflation and unemployment). Therefore, we must be driven by what the data tell us, or we risk, as earlier Feds did, setting u* (the unemployment rate at full employment) too high, at tremendous cost to economically vulnerable people.

“Data-driven” is even more important today, as the Trump administration clearly intends to try to cook the data. By stressing “data-driven,” Powell and his colleagues are saying facts matter when crafting economic policy. It’s a simple truth, but we’re seeing in real time the damage that’s meted out when it is ignored.

—Earnest communication. Chair Powell has never forgotten that while monetary policy can be an arcane subject, the Fed has a foundational responsibility to explain its thinking and its work in clear language to anyone willing to listen.

Even more importantly, and this is the most important and venerable aspect of Powell’s tenure, I always heard, in virtually every speech and every presser, a genuine concern and mindfulness about the regular, working people who bear the brunt of the Fed’s policies.

In today’s speech, he stressed that the “past five years have been a painful reminder of the hardship that high inflation imposes, especially on those least able to meet the higher costs of necessities.” I’ve heard countless similar references around the importance of running tight labor markets to give those same vulnerable workers a bit more bargaining clout.

I firmly believe, and in fact I know from my personal interactions with Chair Powell, that he never forgot for whom he’s ultimately working, i.e., not the politicians who showboat at his hearings, certainly not the president, not the press. It’s the people in the workforce, the people trying to stretch their paychecks to meet their family budgets, the folks just trying to keep their heads down, work hard, and get ahead.

Especially in today’s America, such true leadership—leadership that stands in stark contrast to what we’re seeing on a daily basis from most of the rest of Washington—should be recognized, elevated, honored, and replicated.

Jared Bernstein is a former chair of the White House Council of Economic Advisers under President Joe Biden. He is a senior fellow at the Council on Budget and Policy Priorities. Please consider subscribing to his column for free at Jared's Substack.

Reprinted with permission from Substack.

Bad Policy, Bad Jobs Data -- So Trump Wants To Erase The Numbers

Bad Policy, Bad Jobs Data -- So Trump Wants To Erase The Numbers

We learned two important, though entirely unsurprising, things last week. One, bad policy matters. It will eventually show up in the data. Two, when it does, the authoritarian responsible for the bad policy won’t like that data, and he will move to block it.

We now have a greater sense that the expected negative impact of Trump’s misguided economic agenda is becoming apparent through the fog.

Prior to last week, I’d often written that while I was seeing cracks in the US economy, they were much more in the soft data—confidence surveys, business plans—than in the hard data. But after last week’s dataflow, there’s more of a hard-data case that if you relentlessly throw terribly misguided policies at the economy, it will eventually cry uncle.

Last year, real GDP grew at 2.5%. So far this year, it’s growing at 1.2 percent. Last year, real consumer spending was up 3%; so far this year, it’s at 0%. This week’s core PCE inflation rate for June came in at 2.8 percemt over the past year, far above the Fed’s 2% target. A few months ago, core (non-energy) goods inflation was around zero; now it’s tracking 3 percent.

The pace of job growth over the past three months was 35,000. That’s far too slow—should it stick—to keep the jobless rate from rising, and in fact unemployment did tick up in July, from 4.1 to 4.2 percent. That’s still a pretty low rate, but we should all be worried about the direction of travel.

On that job-growth deceleration, I know some folks are trying to figure out what to make of the large negative revisions in the payroll data, about which I’ll say more in a soon-to-come future post, but the revisions, while large, made sense to me. I agree with Goldman Sachs researchers on this point:

In our view, the payrolls data had been a bit more puzzling before today’s downward revisions. Payroll growth had sharply outperformed the signal from big data indicators of job growth over the past couple of months, and now has decelerated to a pace that is closer to what other indicators show.

I take zero pleasure from the incoming evidence that President Trump is squandering his inheritance of a strong economy with his trade war, the big, ugly bill, deportations, Fed harassment, and so on. But as the researchers say above, it was more puzzling when these actions weren’t showing up in the data.

Tariff-Induced Inflation is Likely to Worsen

In a piece for msnbc.com, I recently explained why I think we’re seeing the tip-of-the-spear in tariff-induced inflation:

First, Trump is escalating the fight. There was a moment after the first “Liberation Day” on April 2 when tanking markets forced him and his team to temporarily return to reality, pausing the tariffs for 90 days and generally looking for off-ramps. But those days are behind us, in part because markets appear to have, at least for now, adjusted to the trade war, while the hit to consumers is much more of slow burn than a market crash.

Second, this Post article points out that big companies such as Procter & Gamble and Walmart are explicitly raising prices because of tariffs. Other companies, including Ford and GM, and also talking about big, tariff-induced hits to their bottom lines (Ford estimates a $2 billion hit this year). These companies know the Trump administration doesn’t take kindly to such pronouncements. Yet they’re telling it like it is, in part because more consumer pass-through — and thus more price pressures — will be forthcoming.

Third, there were two buffers that heretofore sheltered consumers, both of which are eroding. One was the inventory buildup that started when Trump returned to the Oval Office, as importing firms aggressively stocked up ahead of the tariffs. The other was squeezing profit margins built up during the pandemic to avoid immediately antagonizing inflation-weary consumers. Both buffers worked for a while, but both data and anecdote reveal that they’re winding down.

To be clear, I don’t think inflation is or will be spiraling up. This trade war will continue to cause a lot of pain both here and abroad, but we shouldn’t forget that goods imports, which were under three percent of GDP in the 1950s, are still only around 11 percent But neither would I count on trade-war inflation being any sort of one-and-done phenomenon.

The problem is the August 1, or August 7, or whatever-it-is deadline is no deadline at all. Trump will continue to war with other countries around trade issues, especially when his minions have to confess that the side deals—all those billions other countries said they’d buy from and invest in the U.S.—are all flimsy, unenforceable nonsense. My strong prior is that Trump doesn’t stop negotiating trade “deals” until he leaves the building.

Authoritarian Statistics Are Different from Real Statistics

Along with 221,000 unemployed in July, there was another consequential job loss this week: that of Erika McEntarfer, the former Commissioner of the Bureau of Labor Statistics. Ms. McEntarfer worked for me at the CEA, so I have up-close experience with her work, which is top-notch. She’s extremely knowledgeable, especially about labor-market data, and, like most people who really understand their work, can plainly explain it. And she’s all about the integrity of the numbers. Her thumbs will never be seen anywhere near the scales.

But when someone who resides in an alternative reality is hit with evidence that contradicts that reality, he can reject either his false edifice or the evidence of its falsehood. Trump, predictably, chose the latter.

Does this mean we can we now no longer trust the numbers from BLS or the other government agencies? I’ve long been asked this question a lot by people worrying that the Trump administration would have no compunction against cooking the books. I’ve always shared that worry but I know these agencies, all of which are staffed by public servants with high integrity and a strong culture of delivering the most accurate data possible. They would not play along with book-cooking.

But I’m now more worried about this than I’ve ever been. I still believe that, for now, we can trust the numbers. The staffs are still in place. If—I’d say “when”—Trump puts in a lackey as BLS commissioner with orders to serve up better jobs numbers, regardless of what the actual data say, the staff would resist and we’d likely hear about the pressure on them to lie.

But there are other ways he can go, including cutting budgets (thereby lowering survey sizes and response rates, leading to less accurate statistics), firing other key personnel, delaying publications, or whatever such chicanery they’re cooking up in their cabal of a White House.

What he showed by firing McEntarfer is that he wants to control and manipulate the facts. That’s neither new nor surprising but it is a step further than he’s gone heretofore. Before this, Trump could say the unemployment rate “is 28, 29, as high as 35. In fact, I even heard recently 42 percent,” as he did when he was running for office and lying to make things look worse, but we could pull up the data and show that he’s wrong.

We are now a firm step closer to not having, at least from an official source, that actual data. And that same firm step takes us down the path to a failed state, a banana republic, an Orwellian, authoritarian regime where the facts are what the leaders say they are.

What a Week

All that in one week.

To which I say, stay strong, my readers. This is far, far from over. The data are still intact and they’re showing with increasing clarity that Trump’s awful economic policy is hurting people. And with the tariffs, they’re hurting people in an especially economically sensitive place: by making life less affordable, which in poll-after-poll is the number one problem with which people say they’re struggling.

Trump can fire all the messengers he wants, but that’s not going to repair the damage he’s causing. It is thus up to the rest of us, with an even greater urgency than existed before, to relentlessly make sure everyone knows, in whatever outlets we can access, with whatever accurate data and anecdotes we can muster, what he’s doing and what impact it is having.

Jared Bernstein is a former chair of the White House Council of Economic Advisers under President Joe Biden. He is a senior fellow at the Council on Budget and Policy Priorities. Please consider subscribing to his column for free at Jared's Substack.

Reprinted with permission from Substack.

trump administration

Not Too Soon To Ask How We Can Repair Trump's Wreckage

One of the more interesting, and more hopeful, questions I like to think about is: how long will it take to repair the damage done by the Trump administration? As a member of the Biden admin, I have personal experience fixing some of what got broken in Trump 1. (EG, they did a good job supporting the creation of the COVID vax but blew the distribution; also, international relations).

The trade war is an obvious candidate, but we now need to think about their newly passed budget bill in this context.

The more one learns about the bill, the more it resembles a computer virus embedded in our economy and society, infecting policy in dozens of areas, and such viruses are hard to extract. The big ticket items—the upwardly skewed tax cuts and downwardly skewed spending cuts—have gotten ample attention. The cuts to renewable energy production, a bit less so; same with reductions in debt relief for college loans. And then there are a slew of “earmarks”—tax breaks for special interests—that have gotten very little attention. Politico does an excellent job collecting e.g.’s, some of which I relegate to an appendix.

Extracting such a virus will require the same type of focus and drive that Trump and the Republicans brought to the task. In a recent post, I argued that Ds need to both emulate this focused energy while reverse engineering the tariffs and budget on behalf of actually helping people who need it, versus pretending to do so while screwing them.

What will that look like?

Unwinding the sweeping (versus narrowly targeted) tariffs, given that they’re non-legislative, should be a slam-dunk, though it will require Ds not to fold when some interest group, be they industry or union, objects.

We’re also going to have to be willing to both unwind some tax cuts and seek new revenues. We already did some of the analytic work re the latter task in the Biden administration: our proposed budgets—which never got anywhere in the divided gov’t we mostly faced—proposed significant, highly progressive revenue-raising tax hikes, but only on a narrow slice at the top of the income scale. That’s not enough to get back on a more sustainable fiscal path, which is where we need to be if we’re going to not only reverse the new cuts in the safety net but also address affordability shortfalls in housing, child care, health care, and higher ed. But it’s the right place to start, as shown in this chart from Brendan Duke (see third bar).

That shouldn’t be a heavy lift for Ds, at least not for those who aren’t in the same donors’ pockets as the Rs who passed this beast. In fact, our proposed tax hikes above $400K had a lot of support from Ds, many of whom pushed us to go further.

They were right, and this means that Democrats are going need some spine to reverse tax cuts in the bill that have some constituent support but are terribly designed. The no-tax-on-tips leaves out a big group of tipped workers with no federal tax liability from which to deduct the tax break (they’d get actual, and much needed, help from an increase in the federal minimum wage, still stuck at $7.25!). And while the tip deduction may help some of the waitress, it does nothing for the cooks. The $6,000 seniors’ deduction, along with the lifting of the SALT cap, mostly give more money to people who are doing fine without the extra help.

Next, we’ll need to restore the cuts to the safety net. Again, this should not be a heavy lift for Ds, especially given the vast unpopularity of these cuts. The questions at that point will be more about expansion. Health coverage and groceries are at the heart of the affordability crisis, points that should lead attacks on the bill (the cuts mostly kick in after the midterms, so this argument must be made in bomb-defusing terms I discuss below). Thus, expanding coverage further up the income scale is worthy of consideration, as is lowering the age for Medicare eligibility. Again, this takes revenue, which circles back to reversing tax cuts and adding new revenue increases.

Then we’ll need to get back to the industrial policy that was generating important, significant investment in renewable energy production. This too shouldn’t be a heavy lift as the production tax credits that the bill ends had very broad support, which is one reason for the deep unpopularity of the Trump budget. Even traditional Rs like the Chamber of Commerce and energy companies that recognize renewable energy production is part of their and our futures don’t understand the motivation for these cuts which seem to be driven wholly by Trump’s nostalgia for coal and distaste for wind turbines blocking his view.

Reversing the harsh deportation measures, along with funding for the wall and ICE, must also be part of this effort, but this one is complex and deserves its own later post. Any Democratic action in this area must be forthright about the need to maintain secure borders. But fair-minded people should all take solace from the fact that the Trump admin’s cruelty in this place is recognized by majorities of Americans, who are both unhappy and shocked by the ongoing extremism of masked, unidentified people grabbing people off the streets and throwing them into vans and airplanes, not to mention the local realities of losing a significant chunk of their workforces.

The only way we’ll be able to do any of this is through the same budget reconciliation process that the Rs used to pass this bill (it avoids a Senate filibuster). Which is another way of saying that the ability to right the wrongs being perpetrated is conditional on Trumps’ opponents gaining power. This, in turn, requires us to deal with the timing of the bill wherein many—not all—of the goodies (tax cuts) come first and the pain (health coverage and SNAP cuts) come later. But campaigning on defusing a time bomb seems like a perfectly reasonable strategy to me, especially if we keep the pressure on by constantly pointing out the falsehoods used to sell the package.

For example, the admin claims deficit reduction from the bill starting this year, followed by quite large reductions next year. That’s unlikely, and requires tracking. Ending credits for the production of renewable energy occurs this year and next, and this too should be scrutinized for job losses and energy-cost impacts.

I hate to say it but this is only day 167 of this administration. There will be a lot more damage to reveal and elevate along with damage-reversal planning to do as the months roll on. But, especially in the days around July 4th, I like to think about this as a labor of love for this country, which needs a whole lot of that right about now.

Appendix: Earmarked tax breaks in the new bill that you might have missed.

From Politico:

Senate Republicans not only kept a House-approved provision exempting gun silencers from a long-standing $200 tax on firearms — they dumped the tax on all guns it applied to, except machine guns and what the legislation terms “a destructive device.” That cost: $1.7 billion.

There’s a new supersized deduction for business meals — though only for employees at certain Alaskan fishing boats and processing plants, with the measure stipulating the facilities must be “located in the United States north of 50 degrees north latitude” though not in a “metropolitan statistical area.”

There’s a $2 billion break important to the rum industry and, tangentially, Louisiana, said Sen. Bill Cassidy (R-La.), a tax writer…“We have the highest per capita intake of alcohol in the nation,” he said.

…an expansion of a little-known break that Silicon Valley investors have used to nix tax bills on tens and even hundreds of millions of dollars in earnings from Internet startups. Another spends $26 billion to create a new $1,700 credit for people who give to groups providing scholarships for children to attend private school.

Sen. Mitch McConnell (R-KY) secured a $7 billion tax cut for farmers that allows them to postpone paying some of the capital gains taxes they owe when selling off farmland.

…a $1 billion provision allowing “spaceports” — which the legislation defines as “any facility located at or in close proximity to a launch site or reentry site” — to sell tax-exempt bonds…Sen. Ron Wyden, the chamber’s top Democratic tax writer, said in an X post that “Trump’s wedding gift to [Jeff] Bezos and birthday gift to [Elon] Musk were tucked in the new budget bill.

Reprinted with permission from Substack.

We Can See Trump's Economic Agenda Now -- And It Won't Work

We Can See Trump's Economic Agenda Now -- And It Won't Work

At this point, it’s clear to see that the Trump administration, along with their Congressional allies, who sit on their hands when told (tariffs) and raise them when told (the budget bill), are aggressively and successfully implementing a big, new economic agenda. As I’ll describe, it won’t work. It’s wrongheaded, ill-founded, and will hurt the people they said they want to help.

But before we get into that, I will give them this: they’ve been remarkably successful at moving policy through a clunky, incalcitrant political system, in part because they’ve legislated none of it so far (should it pass, the budget bill will be their first big piece of economic legislation; their crypto/stablecoin bill is stuck in the House, though this too is part of the plan, as I note below).

When I say “remarkably successful,” I mean the rest of us should learn from them. I’ve spent many years in gov’t, including in the Obama and Biden admins, and we self-imposed infinitely more barriers on what we wanted to do then the Trumpies (the same could be said for any admin since FDR, though he, of course, went the legislative route, one the Trumpies avoid). Basically, when a lawyer said “can’t do that,” or a political adviser said, “can’t go there because X won’t like it,” we listened.

Not these folks. They just do what Trump wants, and if the courts or some constituent group doesn’t like it, too bad. Their relentless energy to jam through their agenda, evil as it is, is a site to behold. I keep thinking, what if we did this with higher minimum wages, or abortion rights, or gun control, housing and child care, etc.?

I don’t want to overstate this case. Of course, exec orders can be and are flipped on day one by a new admin. And, as a naturally cautious, risk-averse dude, I’m sympathetic to measure thrice, cut once, vs. the Trumpies, “don’t measure! Cut!” But Ds need to learn some boldness from these folks about implementing your agenda.

Okay, with that off my chest, let’s look at their economic agenda, which is now in plain sight.

—Reduce global trade in order to reduce the trade deficit and reindustrialize U.S. industry. This one will fail for many reasons. First, they mistakenly view any trade imbalance as evidence of someone ripping us off, which is no more valid than arguing your grocery ripped you off when you willingly shopped there. Second, it’s too late to unscramble the globalization omelet: almost half of our imports are inputs into our own domestic manufacturing, which is why trade wars hurt, not help, domestic production. Third, there will be no reindustrializing. Even countries with persistent trade surpluses have their manufacturing job shares in decline.

What will happen instead is higher prices for imports, some new revenue from the tariffs, some protected industries, like steel, doing better than they would have otherwise, though at the expense of other industries that buy tariff-induced, now-more-expensive outputs. Growth will, on net, be a bit slower for a time (assuming they eventually set the tariff rate and stick with it, a strong assumption), and inflation and interest rates higher for a time as well.

—Deport undocumented immigrants for the crime of being undocumented. I’ve had the misfortune of hearing Stephen Miller talk about the economics of this plan, which suggests he stuck with econ 101 for a few weeks and bailed too soon. His idea is that if we reduce the supply of labor by kicking out undocumented workers, employers will have to pay more to domestic workers.

This won’t work either. That is, as the figure shows (from Axios this AM), it will work in reducing net immigration, and, as I’ll discuss below, border control is a highly legit goal (of course, this goes way beyond that). But it will hurt the economy. For one, reducing labor supply is a negative for growth, one which will especially pinch in sectors like construction, health care, restaurants, meatpacking, hospitality services. For another, and this is a flaw in Miller and many others’ understanding of these dynamics, immigrants don’t just bring supply. They also bring demand.

With the push against immigration, "the economy will find itself slightly diminished in the long run and inflation will run a touch higher," economist Bernard Yaros writes in a report for Oxford Economics…

“The arrests cast a shadow over the local economy. Restaurant tables emptied. Kitchen workers stayed home. Fruit vendors disappeared from the streets. The number of shoppers at stores shrank, and those who still went didn't linger for long…"

"That means crops are not being picked and fruit and vegetables are rotting at peak harvest time," farmers and farmworkers told Reuters.

—Gut the safety net to very partially offset large tax cuts for the wealthy. This one is quite different from the first two because it explicitly and demonstrably hurts working class people (the above two do so as well, but as second-order effects; this one is first order). Here we have Trump in traditional R mode, passing a deficit-financed budget with which Reagan and the Bushes would be very familiar. But even they would be, like, “Wait up, Donnie. We always gave a few crumbs to the bottom end so we could say we we were helping everyone. We gave a little to the poor and a lot to the rich; we didn’t take from the bottom to give to the top.”

Like everything else here, it won’t work in terms of helping working class people because trickle-down never works. It will “work” in terms of enriching their traditional donor class. It it is also likely to eventually raise interest rates, potentially making debt service a much heavier lift than we’ve seen before (as we argue in a new paper, out soon).

—Block the production of renewable energy. This couldn’t be clearer in the big, stupid bill, and it’s so ridiculous that even traditional Rs like the Chamber of Commerce and energy companies that recognize renewable energy production is part of their and our futures don’t get it. It seems to be driven wholly by Trump’s nostalgia for coal and distaste for wind turbines blocking his view.

It won’t work in the sense that it will cost jobs, make energy more expensive, and slow us down in the global AI race.

There are other cats and dogs I won’t go into. A big one is compromising Federal Reserve independence. Kings don’t like independent Fed chairs, but this one will also backfire bigtime. History is clear that loss of central-bank independence is inflationary. (Jason Furman and I had a good talk yesterday about this and much of the rest of the above, here.) They’re also trying to normalize crypto and integrate it into the larger financial system. To say “that won’t work” is an understatement. Depending how far this highly volatile asset with zero use cases integrates into the system, it’s a future financial crisis in the making.

Also, as noted, controlling the border is, by definition, integral to having a country. And unfair trading partners exist. IOW, there are germs of truth in those parts of the agenda, but, and this is an aspect of their approach we should decidedly not emulate, they always go to the sledgehammer when the scalpel is what’s needed.

To say, as I do here, that an agenda that is in place won’t work is to make a empirical bet. I’m predicting worse growth, price, job, and interest rate outcomes than would otherwise occur. And this being economics, with millions of other variables endlessly zipping around, I could be wrong. If so—and it will take some time to know—I’ll be the first to say so. But I think and fear that I’m right.

Jared Bernstein is a former chair of the White House Council of Economic Advisers under President Joe Biden. He is a senior fellow at the Council on Budget and Policy Priorities. Please consider subscribing to his column for free at Jared's Substack.

Reprinted with permission from Substack.