Jay Shambaugh

This is awful. Reliable economic data is a key strength of the US economy.

When Argentina and Greece faked economic data it contributed to major crises.

I don't think Trump will be able to fake the data given the procedures. But there is now a risk plus an awful appearance.

For six months, I've said that threats to economic data have been more collateral damage than intentional harm.

No longer.

Firing the head of the BLS is five-alarm intentional harm to the integrity of US economic data and the entire statistical system.

Proposed SNAP cuts would permanently undermine recession readiness and responsiveness - The Hamilton Project Lauren Bauer and Diane Whitmore Schanzenbach warn that the budget bill would undermine SNAP's role as an automatic stabilizer during recessions.

I guess we're past the point of persuasion, but don't say we didn't warn you.

www.hamiltonproject.org/publication/...

China’s Xi singles out ‘disorderly low-price competition’ for attention Officials have favoured a vaguer term – “involutionary competition” – but president cut to the chase at top-level economic meeting.

Xi is *this* close to saying "overcapacity". On the tip of his tongue!

China needs to “lawfully regulate enterprises’ disorderly low-price competition, guide companies to improve product quality, promote the orderly exit of outdated production capacity”

www.scmp.com/economy/chin...

Evaluating the impact of two decades of USAID interventions and projecting the effects of defunding on mortality up to 2030: a retrospective impact evaluation and forecasting analysis USAID funding has significantly contributed to the reduction in adult and child mortality across low-income and middle-income countries over the past two decades. Our estimates show that, unless the a...

Elon Musk casually, and illegally, dismantled USAID. According to a new study in the Lancet, that action will lead to *14 million* premature deaths between 2025 and 2030.

Again: Elon Musk is directly responsible for 14 million coming deaths. 4.5 million will be children.

USAID programs have had meaningful impacts around the world, saving lives and bolstering U.S. soft power.

The cuts by the Trump admin have already killed thousands and millions more will die over the next few years. A tragedy.

Sometimes in policy, there are tradeoffs, but this 1 horrible bill is just awful in all dimensions.

It blows out the debt and deficit leaving us worse prepared for real challenges

Does serious damage to the safety net

Crushes US clean energy industry

Undermines long run growth

Truly awful

This story does an excellent job walking through why PEPFAR has been so critical to saving lives and what a successful program it has been. Destroying it and so much else of our overseas aid quickly and haphazardly has been a disaster for people and for US reputation and soft power.

This is an important issue raised by Gillian Tett. One part of the dollar’s central role in the global economy has been the ability / willingness of the Fed to provide liquidity globally via swap lines. If that is called into doubt, it will shift others’ willingness to be exposed to the dollar.

I’m on the Econofacts podcast with @mwkleinphd.bsky.social this week. Give it a listen to hear about China and international debt. Stick to the end to hear Michael and me discuss the talent in the civil servants at Treasury and why they should be lifted up, not treated like they’re disposable.

80:1 New #tariffs on steel and aluminum will destroy jobs. @kadeeruss.bsky.social & @lydiacox.bsky.social published original research in @econofact.bsky.social showing that the ratio of jobs that use steel in production to those that make steel is 80:1. econofact.org/will-steel-t...

Seems like if we want to increase a culture of work etc etc, this might be more promising than taking food benefits away from 60 year olds or parents of 9 year olds. Of course funding things like this wouldn’t open up budgetary space for tax cuts for rich people.

One thing that we mentioned but didn’t emphasize is how the 30% current tariff is on top of prior tariffs on China (or general MFN tariffs) so total right now is in the 30-80% range. This is still prohibitive for many firms.

Me on a podcast with @soumayakeynes.ft.com discussing interactions with China in Biden and Trump admins. There are many real issues to tackle. Trump leading with bluster and focusing (wrongly) on the bilateral trade deficit is counter productive.

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It is good for American consumers (&Apple) that it seems smartphones will not face a tariff. The need for the exemption highlights the damage tariffs can do to some sectors. It also highlights the damage less politically connected firms will face as their inputs/goods face tariffs.

Opinion | Why Trump’s Tariff Math Is a Joke A look inside the administration’s methodology is a real eye-opener.

www.nytimes.com/2025/04/07/o.... Brent Neiman points out that even if you grant the goals (which we shouldn’t) and the methodology (which we shouldn’t) to the Trump Admin, they still did the tariff math wrong. (Including using the wrong number from his research).

‘The Tsunami Is Coming’: China’s Global Exports Are Just Getting Started A staggering $1.9 trillion in extra industrial lending is fueling a continued flood of exports that could be spread even wider across the world by the Trump tariffs.

www.nytimes.com/2025/04/07/b.... Good article by Keith Bradsher reminding that there are fundamental challenges in the global economy. the world’s largest manufacturer has massive loan growth from state owned banks to industrial firms. That, not bilateral trade deficits needs attention.

Trump’s tariff announcement on April 2 was so big, @soumayakeynes.ft.com joined @chadpbown.com
for an emergency episode. They cover history, the dollar, and even the U.S. legal system to clarify what we know about the tariff actions so far.

EPISODE #207: tradetalkspodcast.com/podcast/207-...

I would love for a reporter to ask what tariff and nontariff barriers the US has that is generating the bilateral surplus with Australia or the UK, and if those countries would be justified in putting tariffs on the US. It’s a silly gotcha question but it highlights the inanity of this approach.

Very good thread on the economics of tariffs from @johnmclaren.bsky.social

Hard to watch this. But it’s important to understand how other countries are viewing this moment. The era of decades of US global leadership focused on rules and institutions is over. We are heading into a very different world.

USTR: "The elasticity of import prices with respect to tariffs, φ, is 0.25. The recent experience with U.S. tariffs on China has demonstrated that tariff passthrough to retail prices was low (Cavallo et al, 2021)."

Cavallo et al: φ is 0.945.
www.aeaweb.org/articles?id=...

Last point. The whole exercise is revealed as ridiculous in that we are saying a bilateral deficit is evidence of cheating. But we run surpluses with many countries. And we are still putting a 10% tariff on them! By the theory they’ve outlined, we should have negative tariffs on these countries.

The silliness of using bilateral balances to calculate all this would be laughable. But it’s not funny. This affects people’s livelihoods and businesses.

There are countries with higher barriers than what our tariffs were prior to this policy. This policy does not target them. And, other countries really don’t have much ability to tilt the bilateral balance. It’s not a policy choice of theirs.

I’ve met with Australian policymakers many times. They’ve never complained about our surplus. They want things we sell. Australia runs a huge surplus with China. They are not cheating China. Nor do they have barriers tilting that trade. China just wants their minerals.

These are not retaliatory tariffs & the media should not use that term. They are based on US bilateral trade balance with each country. This makes no sense. A bilateral surplus is not a reflection of “cheating”. We run a surplus with Australia, not because we cheat but bc they want things we make.