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