Let’s party like it’s 2009!
Layoffs announced by U.S.-employers jumped to levels not seen since the last two recessions amid mass federal government job cuts, canceled contracts and fears of trade wars, offering the clearest sign yet of the toll taken on the labor market by the policies of President Donald Trump’s administration.
Global outplacement firm Challenger, Gray & Christmas said on Thursday that planned job cuts vaulted 245% to 172,017 last month, the highest level since July 2020, when the economy was in the grips of the COVID-19 pandemic. It was the highest February total since the Great Recession 16 years ago.
These numbers won’t show up in the jobs numbers for a couple of weeks but they’re going to show up. I’m sure the Trump henchmen will be seeking some way to fudge those numbers but it won’t change the fact that it’s happening, first because of the massive federal layoffs and then when private employers, seeing the recession on the wall, start doing it too.
The Wall St. Journal reported earlier this week:
Stagflation has entered the chat. President Trump’s decision to dramatically raise tariffs on imports threatens the U.S. with an uncomfortable combination of weaker or even stagnant growth and higher prices—sometimes called “stagflation.”
The U.S. has imposed 25% tariffs on Mexico and Canada, and another 10% hike on China following last month’s 10% increase. They “will be wildly disruptive to business investment plans,” said Ray Farris, chief economist at Prudential PLC. “They will be inflationary, so they will be a shock to real household income just as household income growth is slowing because of slower employment and wage gains,” he said.
Trump announced today that he has rolled back the tariffs on Mexico and Canada for another month. The markets were not impressed. This incoherence is making them crazy.
I’m sure most of you remember 2008/2009 and 2020/2021. It would be foolish not to see this unpredictable moron’s wild incoherence as a serious danger to our economic well-being.
Meanwhile, here’s the Treasury Secretary today:
“Access to cheap goods is not the essence of the American dream,” Bessent said during a speech to the Economic Club of New York.
That’s going to come as a surprise to your buddy Jeff Bezos, fella:
Canada immediately imposed 25% tariffs on C$30 billion of U.S. imports and Trudeau said those measures would remain in place until the Trump administration ended its trade action.
Bessent made clear the administration’s unhappiness, telling an event in New York that “If you want to be a numbskull like Justin Trudeau and say ‘Oh we’re going to do this’, then tariffs are going to go up”.
He seems nice. He’s also stupid. He seems to think that being an erratic, unstable thug toward our friends and allies is a successful economic strategy and it is not. Trump is nuts, true, and everyone knows it including him. He just thinks they can get through this, tell Trump he’s a genius and give him a parade and everything will be ok.
Just two days ago Steven Rattner published an article in the New York Times describing the mood among big-business leaders, which I would summarize as smug complacency. Donald Trump, they appeared to believe, was basically their guy, someone who would cut their taxes and remove those pesky environmental and financial regulations. He might be saying some crazy things about trade wars, appointing strange people to top policy positions and threatening our allies, but no need to take that stuff seriously.
Are they still feeling smug? Or are they starting to realize that Trump’s ignorance, irresponsibility and whiny belligerence weren’t an act?
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One thing that really struck me from Rattner’s piece — something I’ve heard from other sources — is that big businessmen think Elon Musk is doing a good job. I guess this is one of those cases where power and privilege make you blind to things that are obvious to everyone else.
What those of us not cocooned in our corner offices see is that Musk let a bunch of Dunning-Kruger kids — too incompetent to realize that they’re incompetent — loose on federal agencies, where they began firing workers without trying to understand what these workers do or why it might be important. These firings have been followed in several cases by desperate attempts to rehire the lost workers, who turn out to have been doing things like, um, securing the nation’s nuclear weapons.
Now, Musk’s DOGE claims that it has already saved taxpayers tens of billions of dollars, but it has provided no evidence to back those claims. Instead, last month it released what it called a “wall of receipts,” purportedly documenting some of the claimed savings. That document, however, turned out to be riddled with huge errors, including misreading an $8 million contract as $8 billion and counting the same canceled contract three times. Last week it released a revised, much smaller “wall” — but that version also turns out to be full of major errors, and DOGE has already retracted 5 of its 7 biggest claims about cost savings.
Krugman points out that if someone did this in the private sector they would be fired immediately. But not, of course, by Donald Trump who is too stupid to understand what he doesn’t understand and only listens to people who are slurping on his golf shoes.
I don’t know what will make these Big Money Boyz see that Trump is not a supernatural genius who can act like a petty tyrant on the world stage and empower a drug-addled weirdo like Musk to dismantle the government and come out a winner. Maybe when the stock market really crashes and burns?
They’re all in and they’re going to take us over the cliff. And frankly, I think that may be the only way they can be stopped. The question is how much people have to suffer in the meantime. And once it’s done, I’m afraid we’ll look around at the wreckage and have to accept that we will never be the same.