MAGAnomics Isn’t Working — A dismal jobs report affirms earlier warnings about the economic impact of Donald Trump’s tariffs, immigration restrictions, and DOGE-led firings

New Yorker’s John Cassidy:

*[…] Even as he subjected the economy, a colossus that generates more than thirty trillion dollars’ worth of goods and services annually, to a one-two-three punch of high tariffs (which raise prices), immigration restrictions (which reduce the labor supply), and DOGE-led job cuts in the federal government, things seemed, until recently, to be moving slowly ahead and defying the direst predictions about the consequences of MAGAnomics.*

*The G.D.P. growth rate turned negative during the first three months of this year, but that was largely a by-product of American households and businesses rushing to import more stuff before the tariffs went into effect. (G.D.P. measures domestic production of goods and services; imports don’t count and they make the growth rate appear weaker.)*

*Spurred partly by corporate investments in A.I., over-all spending and job creation looked to be holding up, and, at the end of July, when the Department of Commerce reported that G.D.P. growth had rebounded to an annualized rate of positive three per cent in the second quarter, the White House hailed “America’s Golden Age,” adding, “The so-called ‘experts’ were wrong (again).”*

*Hubris is a killer.*

 

*[…] Another report that the B.L.S. released last week showed that, in July—for the first time since April, 2021, when the economy was still recovering from COVID-19 shutdowns—there were more unemployed people than job openings. Although the unemployment rate is still pretty low on a historical basis, job seekers are having a tougher time of it, and that includes everyone from high-school dropouts to recent college graduates.*

*In response to Friday’s jobs report, Mark Zandi, the chief economist at Moody’s Analytics, said the economy is now in a “jobs recession.” The question facing Federal Reserve policymakers, who will meet next week, is whether the employment numbers presages a broader slump.*

*[…] In a poll for The Economist that YouGov carried out over Labor Day weekend, just twenty-seven per cent of self-identified Republicans said they were better off financially than they were a year ago, and a similar number—twenty per cent—said they were worse off. In the survey as a whole, sixteen per cent of respondents said they were better off, while thirty-eight per cent said they were worse off.*

*Doubtless, these findings are connected to Trump’s failure to fulfill his campaign pledge to bring down prices, along with his punishing tariffs and the bleak developments in the labor market. Eight months into his second term, Americans aren’t buying his new “Golden Age,” and for good reason. MAGAnomics isn’t working. ♦*

If only there was some way this could have been prevented. It’s not like Republicans went around waving a playbook in the air that said: “We’re going to ruin your lives and wreck the economy.” /s

I’m not sure that is true.

Hyperscalers are still spending on cap ex at record levels keeping their valuation and essentially the entire market at very high valuations relative to earnings. Tons of crypto offerings are going out and making billions for people like the Trump family. Inflation has not skyrocketed as the libs said it would and housing prices have not collapsed.

So in sum, wages are not going up, household costs are going up, profitable companies are firing high paid employees to fund investment in AI, the nation is divided and at each others throat, citizens are getting used to seeing soldiers on the streets of large liberal cities and immigrants are being terrorized to the thrill and joy of MAGA…

What could be better?

The doubt creep has started for me. I think this was presented purposely to get something. Rate cuts, blame Biden, I don’t know. But the funny business at BLS sticks with me and I think there is a motive