I’ve been having some Internet problems in the last week, hence fewer posts. Anyhow, as we go through Trump shutdown IV, I had a few thoughts to share.
Montana Senator Steve Daines – Truth Telling Republican
At a time when Vice President Vance is running around saying that the shutdown is because Democrats want to give free health care to “illegals” and Trump is saying that the Democrats want “trans for everyone” (whatever the hell that is supposed to mean), it is refreshing to see a Republican Senator being honest about the key issue.
Senator Daines said that the Democrats want to keep the expanded Obamacare subsidies in place, keeping premium from soaring for 15 million people, and he is opposed to continuing these subsidies. While I completely disagree with his position, at least Senator Daines was honest about what is at issue. There is no way forward unless we can talk seriously about the issues separating the parties. Unfortunately, Trump, Vance, and Speaker Johnson are instead determined to spew lies and nonsense.
Trump’s New MAGA Slogan is “America Fourth
Trump’s ambassador to Israel, Mike Hucklebee, recently explained that if he seemed to be working as much for Israel as for the United States, it’s because the two countries are like husband and wife. That makes America second.
But then we got pushed back to third when Treasury Secretary Scott Bessent decided to lend Argentina $20 billion to help get Argentina’s president and Trump friend Javier Milei get through elections this month. The loan is especially embarrassing from the “America First” perspective since Argentina has largely replaced U.S. farmers as a source of soybean exports to China.
But America didn’t last long in third place in the Trump administration. Trump signed an executive order committing the United States to defend Qatar after an Israeli strike there last month. The commitment is similar to NATO’s Article 5 provision that an attack on one would be seen as an attack on all.
Those unhappy about seeing the interests of the United States fall to fourth place on the Trump agenda can take solace from the fact that a commitment from Donald Trump is pretty much worthless. Also, does anyone really think that we would go to war with Israel to defend Qatar?
Trump’s Shutdown Threats are Just Stupid
Trump is saying that he is cancelling spending in blue states and firing Democratic workers because of the shutdown. Trump doesn’t have legal authority to do either, even if the SCOTUS may allow it. As Chief Justice Roberts always says “ain’t no law with Donald Trump in the White House.”
Anyhow if Trump is allowed to cancel appropriations for states because they vote Democratic and fire government workers for the same reason, we should assume that he would do it anyhow. The shutdown might give him a convenient excuse, but so would the autumn equinox. Trump can always find some excuse to attack the people he perceives as his enemies. The shutdown is irrelevant, as anyone sharper than a political reporter for major media outlets can easily see.
It’s also clear that Trump wanted this shutdown. He prevented all negotiations through the summer and up until the very last day before the end of the fiscal year. That is not the behavior of someone interested in striking a deal.
ADP Jobs Report Was Bad Enough to Get the ADP CEO Fired
With the BLS jobs report for September being delayed by the shutdown, all of us data nerd types are turning to alternatives. The report published by the payroll processing company ADP is the next best available. This doesn’t track the monthly jobs report closely, but taken over a year, the two are generally reasonably close.
The September report showed a pretty bleak picture. The economy lost 32,000 private sector jobs. With the impact of Elon Musk’s deferred firings hitting in September, we likely lost at least 20,000 public sector jobs, for a total job loss of over 50,000. There were also downward revisions to the August data. The report also showed slowing wage growth, as have the recent BLS jobs report.
All in all, the report was bad enough that Donald Trump is probably looking to fire ADP’s CEO, like he did BLS Commissioner Erika McEntarfer after the bad July numbers were released. It looks like jobs are getting harder to find in Donald Trump’s America and the ones people do find are paying less.
There was one other very interesting aspect to the ADP report. The job losses all came from small and mid-size firms. The larger ones were doing fine.
Interestingly, this is the textbook story of what we would expect to see from a high tariff regime. The logic is that the big firms are well-connected. They can go to Mar a Lago and give Donald Trump big gold medals and get tariff relief. Small and mid-size firms don’t have the connections and the resources for these sorts of payoffs. For that reason, smaller and more dynamic firms are the ones that would be expected to suffer most in Donald Trump’s economy.
This is just one report, so it would be wrong to make too much of the story here. But it is worth noting. The stock market tells us that the larger firms are doing just fine, at least until the AI bubble collapses, but the story may not be as good lower down the corporate food chain.
The details about the soybeans is priceless! Thank you, Dean!
“America Fourth”. Actually fifth - you forgot that Trump himself is first in his pantheon.