103. “You’re fired”: Trump’s strangest decision so far?

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Welcome to the Rest is Politics US.

Me, Katie Kaye.

And me, Anthony Scaramucci.

What are we talking about, girl?

So it's Monday.

We are going to talk about the economy.

There's problems with the job numbers, more than the fact that they are falling.

Inflation ticking up a little bit.

Donald Trump has just fired the head of the Bureau of Labor Statistics because there was a bad economic report on Friday.

We're going to ask if you can still trust the numbers that are coming out of Washington.

What happens when a country starts fiddling with its statistics?

Other countries have done that.

It hasn't always led to great things.

And questions being asked about whether America is headed in the direction more of an Argentina-style erosion of civil service neutrality.

But first, before we get to all of that, we're going to remind you about our bonus episode this week.

It's extra special because Anthony is joined by Dominic Sandbrook from The Rest is History.

You can listen to that right now, by the way, by signing up at the restispoliticsus.com to listen to Anthony and Dominic.

It's really fun.

Even as much fun almost as the Bureau of Labor Statistics.

I mean, not quite as much fun as the Bureau of Labor Statistics, but almost as much fun as

statistics.

I was sitting there feeling all flattered and puffing out my chest.

And now you just told, just compared the podcast to the Bureau of Labor Statistics.

I mean, there's a lot of things about statistics, and interesting, isn't one of them?

Of course, the famous cliché is what we're all talking about right now, which is the famous Wall Street cliché: there are lies and there are damn lies and there are statistics.

And now, Trump is saying that statistics are now beyond the damn lies.

They're into the lying, lying.

And he's blaming it on Joe Biden.

I guess sometime in January of 2029, it'll still be the Biden economy, category.

But having said that,

you know, what we know on Wall Street is that the numbers are the numbers.

And I'm just going to push this back to you and get you to react.

Yeah.

Why didn't Trump say, hey, the economy blows.

I'm doing a phenomenal job.

My tariffs are beautiful.

The big, beautiful bill is bigger and beautiful.

But look at these underlying numbers.

This is Jay Powell's fault.

He could have turned this and turned the screws deeper on Powell because when you look at this as a trained economist, you're like, okay, the Fed's got to start cutting rates because the economy is slowing down.

Right.

So the Fed has to start

to reduce the economy, right?

Correct.

So, so, so, why didn't he do that, Caddy?

Because I have my answer, but I want to hear your answer.

Why didn't the orange impresario go with the this is a lie and we're going to fire the Biden appointee.

So, let me let's just quickly fill people in on what happened.

The jobs numbers came out on Friday, showing that

net hiring of Americans has plummeted over the past three months with job grains of just 73,000 in July.

But what they really didn't like was that the numbers were revised massively downward for June and May,

down 14,000 in June, down to 19,000 in May.

So it looks like the numbers are reflecting what a lot of Americans say they have been feeling, which is this vibe session.

I mean this kind of word that was hanging around earlier this summer that the numbers were saying everything was great but people were not feeling that was everything was great so maybe actually what people were feeling was a reality and the numbers and it does happen quite often that the numbers get revised, the job numbers have been revised before and we can talk about that in a minute.

Why didn't he blame it on Jay Powell?

Is that like my pop quiz of the day?

Why didn't he, I'm trying to think that through.

Why not blame it on J-PAL, who is his favorite person to blame everything economics on?

Maybe

because the markets don't love it when he blames things on J-PAL, so he plucks up some obscure statistician whose name nobody has ever heard of, poor woman, until

Friday or this weekend, and blames it on her instead.

What do you think?

Go on.

I know you've got an answer, so tell me.

Well, again, it wasn't a stubborn question or anything.

I'm just curious because I think as a Wall Street person

that that was the right call.

He should have blamed it on Powell and said, see, I told Pow to cut rates.

The rates should be cut.

If you look at the real.

The economy is slowing down.

Yes, if you look at the real inflation data in the U.S., the inflation number is dropping and the economy is slowing down.

But he didn't do that because he is the general fighting the culture war.

But then why blame a statistician?

That's not culture.

Okay, and I'm going to answer the question.

Ready?

Jeff Epstein.

And so all roads lead back to Jeff Epstein.

So hear me out.

Hear me out.

Go on.

Because I'm inside the mind of the orange maniac.

You're there wandering around.

There's like cheese doodles in here.

There's like

wilted French fries in here.

Okay, there's cheese dogs.

There's Jimmy John sandwiches.

When I used to campaign with Trump, he would eat Jimmy John sandwiches, which literally were like widow-making heart attack

artery-clogging sandwiches.

But I'm up there with him.

I'm moving away the debris.

Ah, and here is the nervous system.

Here is the Trump Brain Central.

The amygdala.

The fear, fightful fight.

I am in the fight of my life.

I'm in the fight of my life.

I am in the Epstein files.

My buddy Elon Musk has got everybody revved up.

They're throwing Duraflame logs on this.

Even

lovely Lara Trump, the brilliant and talented Lara Trump, she can't stop Charlemagne the God from pointing out how much trouble I'm in.

And so, what do I got to do?

I got to deflect and parry Caddy K.

And so, the Washington Redskins have got to be the name from the commanders got to go back to the Redskins.

The Guardians in Cleveland got to go back to the Indians.

And I got to find things to remind my base while they're with me.

I want to arrest Barack Obama.

I want to arrest Hillary Clinton.

And, oh, by the way, these Biden people,

this deep state Biden people are hurting your MAGA Pope.

And this is all deflection, and this is all to fuel the culture war.

But okay, so, but okay, I still don't get it, really, because he could also blame Jay Powell and say it's all Jay Powell's fault.

You see, the deep state is against us.

Jay Powell is the deep state.

He's okay.

Yes, I nominate him, but let's face it, he served all through Biden.

We know Jay Powell hates MAGA.

Why go after poor.

Do you even remember her?

Had you ever even heard of this woman before this happened, Erica McIntyre?

No.

Why go after poor old Dr.

McIntyre?

Well, because she's not a political, she is a political pointee.

She is a political pointee.

She's a political pointee, but she's not political.

That is roughly apolitical job.

And by the way, Jack Welch, the legendary CEO from General Electric, he complained about Obama's numbers.

He said that Obama's numbers were fudged to make the economy look better than they actually were.

And Trump is now saying, well, these numbers are fudged to make the economy look worse than they actually are.

And they do this to each other.

Yeah, they do this to each other.

What they don't do is fire.

I mean, this is, you know, you shoot the messenger.

If you don't like the statistics, shoot the statistician.

I mean, this does start straying into the kind of behavior we see in more

authoritarian countries, right?

In more populist countries, because we've seen this playbook happen.

We've seen it happen in China,

where local authorities manipulated data earlier this century on growth targets to make Beijing happy.

We've seen it in Turkey, which also, by the way, fired its chief statistical statistical officer.

Bad time to be a statistical officer in the world.

Who knew that it was such a risky job because of inflation data there?

We've seen it in Argentina, most famously, 2000s, 2010s, where they understated their inflation figures, and that led to a huge financial crisis because of lack of confidence in the Argentinian economy.

We did also see it in Greece, where the government faked deficit

numbers for years and then criminally prosecuted the head of the statistical agency there as well.

So, I mean, which is not an authoritarian country, but it is the kind of behavior in other countries.

So,

whatever the reason that he did this, what is the implication,

Anthony?

You're a Wall Street type.

Maybe a Wall Street doesn't mind because the market's booming.

But if you're taking, trying to look at America as a serious proposition right now, and they start firing the people that come up with the numbers, what's the problem with that?

Aaron Powell, you know, this is contrarian, but this is how Wall Street thinks.

Wall Street doesn't care.

No, Wall Street doesn't care.

Wall Street has made it, Wall Street has made a decision that we've got three and a half years of Trump.

Let's hold our nose.

The tariffs, despite all the rhetoric, are going to settle out between 10 and 15 percent.

The Swiss government's panicking right now because

they've been pegged at 39 percent.

They're going to fly to Washington, kiss Trump's ring and Lutnick's ring, and then they're going to go to 10 or 15 percent, likely similar to where the EU is.

So, this is just that peacocking.

They'll have to suffer some humiliation, of course, because Trump wants that, needs to humiliate people.

But that's where Wall Street is in all this.

And so, Wall Street knows Trump's saying nonsense.

Wall Street knows that there'll be a cleanup.

All the pickle jars are getting crushed in the supermarket right now at the safe way, but there'll be a cleanup on Isle 7 in three and a half years.

It's either going to be the new president comes in, not not going to have the personality cult that Trump has, going to be a little bit more normal, frankly, because if you look at the field and a little bit more normal on the Democratic side, if they win, and there'll be a cleanup and a redo.

And so that's what I think is going to happen from the Wall Street perspective.

They'll say, no problem, let him do whatever the hell he wants.

It really doesn't matter.

And no problem on the tariff rhetoric.

I kind of thought you would say that.

That the economy is booming anyway.

The market, the market's booming.

They're getting everything they need.

They've got the tax cuts.

There's a huge AI-fueled boom happening in the American economy, which is great for markets.

And we should talk about that in an episode.

But

it was interesting, because I was on TV this morning with a whole bunch of economists and sort of political scientists, and they were suggesting that markets might not care about this because markets seem impervious to geopolitical news at the the moment, anyway.

But there is, I think, an undermining of confidence.

If you are, what are the things that make America different from a country that is a kind of dodgy country to invest in?

One is a rule of law that you can rely on, and the second is an independent civil service.

And by firing the statistician in this case, you kind of start chipping away at the perception that America has a civil service that is independent and will produce data that is reliable.

I mean, look, data fuels decision-making.

Data fuels voters' decision-making.

It was data around inflation that helped get Joe Biden thrown out of office, right?

Voters looked at the data, they didn't like it, and they threw him out of office.

So if people can't rely on the data, it does seem to me that that is a problem.

Because whether the next round of jobs data is good or bad, there's going to be a question about whether this was done in order to make Donald Trump happy.

Yeah.

Or is that not true?

I think it's true, but I guess the analysis that I'm giving you is

everything.

But everything is coming through the Jeff Epstein prism in Trump's mind now.

So when you're in the Trump Command and Control Center, you want to go back to your base and restate all the trigger buttons for them of the culture war.

Don't think that that the Center for Public Broadcasting,

which got its budget cut and they've now announced that they have to shut it down after 60 plus years, which is going to impact all these rural areas that get their news and get that news feed and get that level of entertainment.

It's all gone for them now.

And I'm saying, in the new age of technology, maybe that's not that big of a deal.

Maybe there'll be private people that come in and fill it, but it is part of the Trump culture war.

It is part of the rift.

It's part of, yeah, Reagan said he wanted to end Roe v.

Wade.

He never did it.

That was that civility in Washington.

Reagan said he would end the Center for Public Broadcasting.

He didn't, the CPB, but I'm doing it.

So what he's trying to do is drive a bigger wedge in between the two groups in the society.

No more of that civility.

Don't hang out with each other in the cloakroom or in the Senate club room to have lunch or even work out together.

Don't do any of that anymore.

Let's fight, fight, fight.

Fight, fight, fight with each other.

And oh, by the way, I am your fighter.

Please disregard the activity related to Jeff Epstein.

He's literally the wizard of MAGA behind the curtain, switching and

turning sprockets and all kinds of stuff to get the gun away from the Jeff Epstein bird.

And believe it or not, this fits into that and it's part of it.

Okay, we're going to take a break there and we'll come back and in the next half of the program, we'll talk about how the US economy is actually doing, not how the politicians say it's doing.

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Welcome back to The Rest is Politics US.

We were talking about the firing of the poor woman who ran the Bureau of Statistics, who has actually been replaced by another person who's senior in that office.

So let's hope they manage to sort out the numbers for the next time around and that we can all rely on those numbers.

The reason that Donald Trump was so unhappy was that it obviously it showed a huge revision down of the jobs numbers.

I said earlier, Anthony, that there'd been this phrase going around, a vibe session.

I've seen it in my own family that it is hard for people to get jobs, particularly these entry-level jobs, which seem to be kind of cratering at the moment.

There was a big piece out on Axios on this.

Bloomberg has had a piece on this.

LinkedIn has had a piece on this.

There have been several op-eds talking about how it's very hard for people who are going in straight from college to find jobs at the moment.

I don't know if that's what is causing the latest round of jobs numbers to be revised down.

But what do you think?

I know Kevin Hassett, who's the President's chief economics advisor, was on the Meet the Press yesterday and was pushed really hard about whether there was evidence, whether the administration had evidence that the jobs numbers had been cooked or falsified or tampered with for political reasons.

And he really didn't.

I mean, he really couldn't come up with any evidence for that.

All he said is that there'd been a huge revision and that there was evidence that there was a revision, which is not the same as there was evidence that these numbers had been tampered with.

But do you think, I mean, kind of politics aside, do you think that the jobs numbers do reflect something happening in the American economy which we spoke about last week and the question was did economists get this wrong did forecasters get this wrong and actually the American economy was going to survive the tariffs

and survive the immigration the getting rid of lots of immigrants and there seem to be lots of pieces in the press saying actually suggesting that actually the economy was doing super well despite these policies and maybe the economists and the forecasters get this got this wrong and they should all eat humble pie Do you think those jobs numbers, that one day on Friday, kind of black Friday on the statistics front, suggests an alternative scenario?

Is the American economy weaker than it looked a week ago?

I guess is the question.

So it's such a great question because

there's so much here and it's like that age-old thing, a blind person is

asked to touch an elephant and depending on where they touch the elephant, they see something.

The trunk is very different from the leg, as an example.

And so, you can look at this economy and see a lot of different things, and then you could be a pundit and write a favorable piece, or you could write an unfavorable piece.

But when you really look at the data, this is what I think is happening.

So, number one, the doom and gloom people are, in fact, wrong.

Anybody that said we're going to a great depression related to this, not going to happen.

This is basically a U.S.

consumption tax.

This is a a U.S.

VAT.

It just happens to be on imported goods, and it's going to be anywhere from 10 to 15% on average.

I predict the stuff in Canada and Switzerland will normalize.

That's my prediction.

But it does have

glowing after effects, which will imply a slowdown.

So here's what's going on right now.

We forced a tremendous amount of spending into the first quarter.

Because if you remember, Caddy, on our liberation day, okay,

when he was dropping the orange Moses tablet, he waited and said, we're going to wait till August 1st.

And he's waiting again.

No tariffs have really been implemented.

So everybody's rushing to bring the import.

They're stocking up on their kind of French Cabernet and their Italian pasta.

Correct.

Or the automobiles or even, believe it or not, steel.

and all different types of products coming into the country.

And so you can look at the charts.

We had a first quarter boom in import activity, which dramatically improved the economic data.

So if you're a Republican, ha ha ha,

ho, ho, ho.

You guys are wrong.

Trump should win the Nobel Prize in the economy system.

In economics.

Yeah.

Like, not even just in peace.

I think Peter Moron, the guy that works for Peter Navarro, said that the other day.

But that's not the whole story.

So now what's happening is you're watching the decline and the deceleration of all that stuff as the teeth of the tariffs are now starting to bite into the economy.

So the data is going to slow down the economy.

And so if Biden was printing 2.4, 27

GDP numbers, decent growth for a country our size, Trump is going to start printing 1.3,

1.2.

It's growth, but it's not the growth that you were getting under the Biden administration, who didn't have this pernicious state of tariffs.

Make one last point.

The guy's so wildly unpredictable, and he's saying such crazy things, and he's going after the judicial system.

He arrested a judge, he's doing all types of

fire the statistician.

On the margin, it's slowing down international capital allocation into the country.

The incremental dollar that's being allocated around the world, a little less of it's going into the American economy.

And you put that down to unpredictability in policymaking.

Of course.

And people like that.

And America just looks like a little bit less of a sure bet than it used to.

And people like moderate, predictable markets.

And last but not least, we've had a $90 billion

tourism shortfall that is now running its way through places like Las Vegas.

So, yep, you got no tax on tips, but guess what?

Your revenue isn't given to tips.

Yeah, your revenue is down 50%.

So can I ask you, okay, first, do you believe the

jobs data, that revision down, or do you think

that's wrong?

You do believe it.

Because it's a pretty radical revision down, and it does suggest that there has been quite a radical slowdown in hiring.

in May, June, and July of this year.

Which is not a good sign.

That is not

an indication of a healthy,

buzzing economy.

Because the alternative thing that I heard when I was speaking to an economist over the weekend was that actually Trump is, as he often is, incredibly lucky.

Because although he is doing these things which are hurting the American economy or should hurt the American economy, like

deporting immigrants from their workplaces and

hitting up a sales tax basically on imported goods,

The tech boom that is fueling America at the moment, and particularly all of the infrastructure that needs to be built around that AI boom.

I mean, I see it driving out to Virginia because we spend our weekends in a little place out in Virginia.

And it's now just like a data center highway.

I mean, it's non-stop construction of data centers.

If you know, I'm surprised it's, you know, if I would have thought it was a little bit of a national security risk having all of our data centers in one place, but anyway, but you see it, you see, I can see the AI-fueled boom, just even in the spending on the infrastructure.

So is it possible, let alone the extra growth and productivity that AI may already be bringing into the economy, is it possible that that side of things, that we're in a singular moment of huge growth and we're entering this golden era of AI-fueled productivity, and that will just blow out of the water all of these other things that Donald Trump is doing?

And I guess the short answer to that is yes.

The more nuanced answer is it it's going to take time to impact the economy.

And if you and I were having this conversation in 1995 with the introduction of the Netscape browser, people were bullion, they were very bubbly about the potential outcome of these Internet stocks, but it took five or ten years for it to really filter into the economy.

It wasn't really until 2003, four and five that we really saw, okay, wow, we're getting really dramatic effects of scale as a result of this force known as the Internet.

And so AI is going to quantumly leap the economy.

We're going to have exponentially favorable economic outcomes.

And I think this is the irony and perhaps the axiomatic statement of the modern era.

The tech and the brilliant innovators, they always outmatch the stupidity of the politicians.

So we're going to run out of oil.

I was told that in Tufts University 1985, running out of oil is known as peak oil theory.

When are we going to run out of oil, Professor so-and-so, what are we going to run?

2010.

Oh, wow, 25 years.

We're going to run out of oil.

We found more oil.

We used less oil.

We made the energy combustion more efficient.

We got GPS.

We created fracking.

We did so many different things.

We have now more oil than we know what to do with.

Of course, it's causing environmental problems.

But the point I'm making is anything you think is going to happen in a linear way in the economy or as it relates to innovation won't happen.

It happens in an exponential way.

And so, yeah, he could get bailed out by this, but I don't think in the next two quarters he's going to get bailed out by this.

And this augurs for a September rate cut, which will be good for the markets and will also send a signal to people that Jerome Powell is, you know, on his game and he's at the switch.

And by the way, he is the MVP.

If you don't like Trump, okay, this week's MVP, I would say the two-quarter MVP still to me, Prime Minister Corney, but last week's MVP

is Jerome Powell, okay?

The good doctor is sitting there with his hard hat on.

I found it conspicuous, Caddy, that the great senator from the state of South Carolina, Tim Scott, had no hard hat on.

It's probably Caddy because there was no hard hat that could fit that head.

That was like a size 14 hat.

If I was Tim Scott, I would have felt a little worried about that.

You know, they don't have to worry about it.

I mean,

you want to talk about a photo op.

Tim Scott's head is like this.

It literally looks like a pumpkin.

Okay.

He's walking around with it.

And then Trump's got the hard hat on, and Powell's got the hard hat on.

But Powell is appropriately hard-headed.

When Trump went after him, Powell slammed him around.

And that's what you got to do to Donald Trump.

You got to slam him around.

If you don't do that, you're going to get hurt by him.

And Jay Powell will cut rates on his own time when he sees

that the economy needs it.

Can I make one more point very quickly?

Jamie Dimon is in the mix.

Okay, the CEO of J.P.

Morgan has sparred with Trump for six years.

And he's in the mix.

He's going back and forth to the White House now.

And they're having lunches together.

That is a good thing for the global economy, good thing for the U.S.

economy.

And Trump obviously thinks he's 10 times smarter than Jamie.

Of course, he isn't.

But the fact that Jamie's in the room, I think, is a good thing for us.

It's helpful.

Kevin Hassett, by the way, who I mentioned earlier, who's the head of the Economics Council, who was on the Sunday shows, trying to defend firing the statistician, I think did such a feeble job of doing it in Trump's point of view that I suspect he may have just put himself out of the running as Fed chair because he didn't give a very convincing performance about why they had to be get rid of the statistician.

Okay, we're gonna leave it there.

Good to be on with you guys.

No promos from Caddy K?

All right, uh, oh well, you can do the promo because

you're playing Wall Street Guy this week.

It's good, all right.

But we're working on a very exciting, terrific,

super.

Let me look at me.

If you can see me, I'm moving my hands like a super fantastic, calibricious, the whole thing.

We're working on a Ronald Reagan.

How many parts is this going to be, Caddy?

Six?

Well, I'm going to be very honest and say that at the moment, Fiona is working on this amazing series.

It's going to be five parts, two parts before he becomes president, and three parts after he becomes president.

We've got some great interviews lined up for it.

We're excited.

A lot of it, it's interesting.

I'm reading Max Boots' book again in preparation, and there's some interesting parallels going on between then and now.

So that'll be fun to tease out too.

So if they want to listen to that series, Anthony, what do our lovely listeners have to do?

They go to our website, the RestisPoliticsUS.com, and they click on founding member and they become a founding member.

Super.

See you later this week.

Getting a B plus from Caddy Kay on my promotional performance, but that's okay.