"I've got a lot of empathy for J.D. Vance here asking for patience...I was talking to my partner last night and I asked her for patience. I'm trying to work on having a better personality...I'm not all the way there yet right now." And maybe that's how we should interpret JD's views on the economy.

My MVP for this week: I've discovered some folks who could do a much better job running American trade policy. #Econ101 #GoBlue #TeachEcon

Think of steel as flour for the manufacturing economy. A tariff is like a flour tax: the mill might add 1,000 jobs, but factories using flour cut around 75,000. That’s what happens when you tax an input instead of solving the real problem.

"there is a genuine Republican agenda, and it's about deregulation. Funny thing is there's also a White House agenda, and the White House agenda is about intervention. And this is the most interventionist White House I've ever seen."

"Look, the Fed can do a lot of things, but what it can't do is lower the price of imports. It can't make it so there are more workers for California farmers to help pick the crops." These are self-inflicted supply shocks, and the Fed can't magically undo them. (The White House can.)

Tariffs apply to goods, not services. Zero in on the goods-producing sector, and you'll discover that it's hemorrhaging jobs. Indeed, the start of the trade war marks the peak in that sector, and it's been in recession ever since.

"And so next year's economy is going to see two big things happening. It's going to see the tariffs hit and it's going to see an enormous slowdown in immigration and in population growth... and that will determine whether that turns out to be a recessionary year or not."

“If you asked me for the one single number that best summarizes how people feel about the economy, it would be the unemployment rate… when you hear from regular folks that they are finding things tough out there, this higher unemployment rate… speaks to that story.”

"The overwhelming sense I got from watching the president was just trying to count the number of lies, and I ran out of fingers and toes. He lied and said that prices are coming down. He lied when he said prices were at an all-time high under President Biden. They're at an all-time high right now."

AI is now central to the macro story: markets are booming on data-center spending. But a warehouse of servers is mostly capital, not workers. Great for stock prices, not so great for broad job growth—unless AI eventually raises productivity in other sectors too.

Monthly jobs reports are like bathroom scales: step on once and you get noise, step on for months and you see the trend. September’s number says “still standing,” the higher unemployment rate says “maybe cut back on the economic junk food.”

Why’s the Fed so divided right now? Because 3% inflation is close enough to 2% that some say we’re basically there (especially if you strip out tariffs). Others say: 3% is still above target, it’s been that way for years, and might continue. Same data, different concerns.

"We've seen the early stages of what economists call stagflation. The '-flation' part is inflation, and you've all felt that at the grocery store. The 'stag-' part is stagnation, which is we've got rising unemployment and slower economic growth than we otherwise would have."

Inflation isn’t all the same. When prices rise because demand is strong, firms earn more and can raise wages. With tariff-driven inflation, firms face higher costs, not higher revenues—so prices go up but paychecks don’t. Same pain, less gain.

Politicians target grocery tariffs because we see those prices every week and they show up in polls. But rent, furniture, appliances, daycare—those costs matter just as much and many remain tariffed or high. Watch the whole household budget, not just the shopping cart.

This quarter’s jobs numbers might end up looking weak (whenever they're published?!). But with sharp immigration shocks, tariffs flipping on and off and a long data blackout from the shutdown, it’s hard to know how much is real vs noise. Confusing times.

A bit of nuance: Tariff cuts don’t instantly slash prices. Contracts, inventories, and competition all matter. But they do remove a built‑in tax on imports that was quietly inflating your grocery bill.