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    The Guardian view on Trump and the Fed: independence is no substitute for accountability | Editorial

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    Donald Trump’s attempt to sack the Federal Reserve governor, Lisa Cook, is the familiar authoritarian trick of bending institutions to serve the leader’s immediate ends. The widespread condemnation is deserved. This is not some daring experiment in popular control of monetary policy. Yet what should follow censure is reflection. For the furore over Ms Cook has revealed a peculiar reflex: to defend the Fed’s independence as though it were synonymous with democracy itself.But is independence of the Fed, or central banks generally, really that? Eric Levitz at Vox thinks so, or at least that it is close enough. He argues that Congress sets the Fed’s objectives; independence applies only to the means. Without independence, politicians would be free to game rates for votes – as Richard Nixon did in 1972, leaning on the Fed to juice growth before the election. On this view, independence is not anti-democratic but prudent delegation.The historian Adam Tooze says that argument misses the point. The Fed, he says, is not a neutral technocracy: its regional boards give business elites formal seats at the table, while labour and consumers are marginal or absent. Independence is not independence from politics; it is independence from electoral accountability. To defend this arrangement as democracy’s bulwark, Prof Tooze maintains, is to confuse professional consensus with popular legitimacy.The leftwing economist Michael Roberts goes further. In his blog this week he argues that central bank independence was never really about technocratic efficiency at all. It blossomed in the neoliberal era because it suited finance. He notes that the 1980s and 90s saw a sharp rise in central bank independence while inflation fell. The correlation has been taken as proof of causation. Yet Mr Roberts argues that the decline in prices owed more to slowing global growth and the end of one-off supply shocks.Central banks proved no better than anyone else at forecasting crises: the former Fed chair Alan Greenspan admitted the 2008 crash left him in “a state of shocked disbelief”. Turkey’s recent bout of hyperinflation was blamed on presidential meddling – but Mr Roberts suggests the real culprits were trade deficits, political instability and a collapsing lira. Monetary policy is too blunt an instrument, as many commentators concede, to deal with today’s volatile world. So where does this leave informed opinion? Certainly not with Mr Trump. To replace one form of unaccountability with a demagogic strongman is no gain. The real task is to ask what a democratic politics of central banking would look like.The academic Saule Omarova’s People’s Ledger is one radical answer: treat the Fed as a public utility, offering universal bank accounts and explicitly aligning its balance sheet with public priorities. A National Investment Authority could channel long-term finance towards infrastructure and decarbonisation, rather than leaving investment decisions to Wall Street. Efforts could be made to broaden board representation beyond business, require distributional impact assessments and tighten “for cause” clauses so that presidents cannot hound governors from office on flimsy pretexts.Mr Trump’s assault must be denounced – and Ms Cook defended. But if voters stop there, a deeper lesson will be missed. Central bank independence was never democracy incarnate. At best it was a compromise suited to an earlier era. Today’s challenge is to rebuild monetary authority on firmer, more democratic ground.Do you have an opinion on the issues raised in this article? If you would like to submit a response of up to 300 words by email to be considered for publication in our letters section, please click here. More

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      Federal Reserve set to cut interest rates – but still Trump won’t be happy

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      Stocks soared on Friday following the strongest signal yet that US the Federal Reserve is gearing up to start cutting interest rates again this fall. But how long can this celebration last?While Wall Street cheered the biggest headline from the speech by the Fed chair, Jerome Powell, at the annual Jackson Hole symposium in Wyoming, Powell also delivered a reality check on where interest rates could settle in the longer term.“We cannot say for certain where rates will settle out over the longer run, but their neutral level may now be higher than during the 2010s,” said Powell.In other words: even if the Fed does start cutting interest rates again this year, they may not fall back to their pre-pandemic levels. It’s a signal, despite the short-term optimism on potential rate cuts, that the Fed’s long-term outlook is more unstable.“Markets might be ahead of their skis on how aggressive the Fed is going to be in reducing interest rates, because the neutral rate might be higher than some believe,” Ryan Sweet, an economist at Oxford Economics, said.Higher rates means borrowing money for loans, such as mortgages, will be more expensive. The average 30-year fixed mortgage rate was just under 3% in 2021, when interest rates were near zero.Now the average mortgage rate is closer to 6.7%. Paired with home prices at near-record highs, elevated mortgages mean many Americans will continue to struggle to purchase a home.Although Trump has been pushing the Fed for months to decrease rates to 1%, claiming that Powell is “hurting the housing industry very badly”, it seems unlikely that rates will return to such a level any time soon.The Fed is trying to achieve a Goldilocks balance. Rates that are too high risk unemployment, while rates that are too low could mean higher inflation. Policymakers are searching for a “neutral” level, where everything is just right.Many economists believed the central bank was close to achieving this balance before Trump started his second term. In summer 2022, as inflation scaled its highest levels in a generation, the Fed started raising rates, at the risk of hurting the labor market, in an attempt to get inflation down to 2%.Rates rose to about 5.3% in less than two years, but the jobs market remained strong. Unemployment was still at historically low even as inflation came down. Although some economists had feared rapidly increasing rates would throw the US economy into a recession, instead the Fed appeared to achieve what is known as a “soft landing”.But things were thrown into a tailspin when Trump returned to office, armed with campaign promises to enact a full-blown trade war against the US’s key trading partners.The president has long argued that tariffs would boost American manufacturing and set the stage for better trade deals. “Tariffs don’t cause inflation. They cause success,” Trump declared back in January, acknowledging that there might be “some temporary, short-term disruption”.But so far, success has been limited. Economists doubt the policies will generate a manufacturing renaissance, and Trump’s trade war has inspired new commercial alliances that exclude the US.All the while, US consumers are starting to see higher prices due to Trump’s tariffs.At Jackson Hole on Friday, Powell said tariffs had started to push some prices up. In June and July, inflation was 2.7% – up 0.4 percentage points since April, when Trump first announced the bulk of his tariffs.This is still only a modest increase in price growth, but the bulk of the White House’s highest tariffs only went into effect in early August. Fed policymakers are waiting to see whether Trump’s aggressive trade strategy will cause a one-time shift in price levels – or if the effects will continue.The once strong labor market has grown sluggish. Though there are fewer job openings, there are also fewer people looking for jobs. Powell called it “a curious kind of balance” where “both the supply of and demand for workers” have slowed. He noted that the balance was unstable and could eventually tip over, prompting more layoffs and a rise in unemployment.This instability in the labor market has made Fed officials more open to a rate cut. Powell pointed to a slacking in consumer spending and weaker gross domestic product (GDP), which suggests an overall slowdown in economic activity.Although it set the stage for a rate cut as soon as next month, Powell’s speech was far from optimistic.“In this environment, distinguishing cyclical developments from trends, or structural developments is difficult,” he said. “Monetary policy can work to stabilise cyclical fluctuations but can do little to alter structural changes.”From Powell, who is typically diplomatic and reserved in his public statements, this seemed to be a careful warning: when executive policies destabilise the economy, the Fed can only do so much to limit the damage. More

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      Trump’s promise of a US manufacturing renaissance leaves experts scratching their heads

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      Donald Trump’s hugely disruptive trade war is setting the stage for a manufacturing renaissance in the US, administration officials say. Outside the White House, many economists are skeptical.Global trade experts point to many reasons they believe the president’s tariffs will fail to bring about a major resurgence of manufacturing, among them: Trump’s erratic, constantly changing policies, his unfocused, across-the-board tariffs, and his replacing Joe Biden’s carrot-and-sticks approach to brandish sticks at the world.“I think [Trump’s tariffs] will reduce the competitiveness of US manufacturing, and will reduce manufacturing employment,” said Michael Strain, an economist at the conservative American Enterprise Institute (AEI). “They’re raising the costs of production to US manufacturing companies, and that makes manufacturers less competitive. There will be some winners and some losers, but the losers will outnumber the winners.”‘Trump keeps changing his mind’The president and his aides insist that higher tariffs on more than 100 countries – making goods imported from overseas more expensive – will spur domestic manufacturing. “The ‘Made in USA’ label is set to resume its global dominance under President Trump,” White House spokesperson Kush Desai claimed recently.But few economists see that happening. Ann E Harrison, an economics professor and former dean of the Haas School of Business at the University of California, Berkeley, said the erratic, on-again-off-again rollout of Trump’s tariffs has already gone far to doom the president’s hopes of inspiring a huge wave of manufacturing investment.“For the policy to be successful, it has to be consistent over a long period,” she told the Guardian. “People need to believe it’s going to last. Some factories take five years to plan and build. You’re talking a long-term play. But Trump keeps changing his mind. Even over the last six months, we’ve had very little consistency.“The other problem is that he’s old, and no one is sure he’s going to be around that long. These policies need to be consistent, and that’s not happening.”Economists point to another question mark that is causing corporate executives to think twice about building factories in the US. In May, the US Court of International Trade ruled that Trump’s blanket tariffs are illegal – a decision that is under appeal.Strain, at the AEI, said: “When you add into the equation the erratic nature of president Trump’s tariff regime, when you add the question of its questionable illegality, when you add that none of this is going through Congress, when you add that even when the US secures a ‘deal’ with another country, it’s not really a deal, there are major outstanding questions.”France doesn’t think its alcohol exports will be hit by tariffs as part of the European Union’s agreement to pay 15% tariffs, noted Strain. “That’s a big question mark that would never go unresolved in any regular, traditional trade deal,” he said. “That’s all part of the massive uncertainty we’re seeing.”The Biden administration used deliberate industrial policies to boost several strategic industries, most notably semiconductors and electric vehicles, including a 100% tariff on EVs from China and 25% on lithium-ion EV batteries, as well as subsidies to buy EVs and build EV-related factories. The policies resulted in a surge in new factories to build semiconductors, electric vehicles and EV components.Biden “said we care about semiconductors and national security, and what he’d try to do is get actual investors to invest in it”, said Dani Rodrik, an economist specializing in trade and industrial policy at Harvard’s Kennedy School of Government, who predicted Trump’s blanket tariffs will prove less successful in inspiring investment. “If you really want to increase manufacturing and employment in the US, you’d go about it in a very different way, through industrial policies that first identify specific segments you care about.”When China, Japan and South Korea adopted policies to build their electronics and auto industries, they insisted that the corporations that benefited from those policies compete with foreign companies to help make them globally competitive. “For industrial policy to succeed, it has to work to promote more competition,” said Harrison, at the Haas School of Business. “The problem with tariffs is they do just the opposite. They restrict competition.”Susan Helper, an economist at Case Western Reserve University who worked on industrial policy in the Biden and Obama administrations, said Trump’s tariff rates on some countries and markets – like 15% on the EU, Japan and South Korea – are too low to spur much investment, questioning why a company would build a major factory to circumvent such a duty.“A [semiconductor fabrication] plant, that’s a billion dollars. You need to get a payback and that takes several years,” Helper said. “If the tariffs are 145% [as Trump once imposed on China], that’s attractive for building a plant. But if they fall back to 15%, then it’s really hard to get a return on your investment.”The administration boasts that several of its trade deals have specific commitments to spur huge manufacturing investment. It says its deal with the EU includes a $600bn investment pledge; with Japan, a $550bn investment pledge; and with South Korea, $350bn. Jamieson Greer, US trade representative, wrote in the New York Times: “These investments – 10 times larger than the inflation-adjusted value of the Marshall Plan that rebuilt Europe after World War II – will accelerate US reindustrialization.”But these supposed pledges have attracted skepticism. After all, this president claimed during his first term that “the eighth wonder of the world” was being built in Wisconsin after FoxConn pledged to invest $10bn and create 13,000 jobs at an electronics plant. But that promise fell embarrassingly short.Many economists question whether the EU, Japan or South Korea can force corporations to make a specific investment in the US. Indeed, an EU Commission spokesperson said the bloc had expressed “aggregate intentions” that are “in no way” binding. “These large numbers really sound like window dressing, some round numbers they’re throwing around,” said Harvard’s Rodrik.“Some include investments you were already going to make, and some are aspirational,” said Todd Tucker, a trade and industrial policy expert at the Roosevelt Institute. “Once we’ve had time to evaluate whether the investment happens or not, Trump will be on to the next press cycle.”In recent years, manufacturing employment has been trending downward – not just in advanced industrial countries, but also in China, as new technologies enable factories to churn out goods more efficiently, with fewer workers. That trend raises questions whether Trump’s trade policies can increase factory jobs in the US.‘An island of backwardness’The US is past its manufacturing peak, Berkeley’s Harrison noted. “That was actually during World War Two, and it has been declining ever since,” she said. “I don’t see manufacturing’s share of the economy or manufacturing employment reversing.”She added: “If the question is, are you going to bring about a major resurgence in manufacturing employment, it’s not just unlikely, the answer is no. More and more manufacturing is robot-driven and not done by people.”Auto industry officials in the US complain that Trump’s 50% tariffs on steel and aluminum have increased their costs and injured their competitiveness. “In manufacturing, for every one job in steel production, there are 80 jobs that use steel,” the AEI’s Strain said. “So putting tariffs on imported steel might help that one guy, but you’re hurting the other 80 people.”A study by Federal Reserve economists found that the tariffs Trump imposed in his first term were actually associated with a reduction in factory jobs nationwide, because increased input costs and retaliatory tariffs outweighed import protection from tariffs.Helper, at Case Western Reserve University, warned that the US auto industry will be hurt badly by Trump’s mishmash of tariffs coupled with his slashing subsidies for EVs. “Trump’s policies are setting the auto industry up to be an island of backwardness,” she said. “The rest of the world is going to be making EVs, but we’re going to be focused on making really high profits on pickup trucks that will be bad for the climate and won’t sell in the rest of the world.“We’ll have a great, competitive position in large, gas-guzzling pickups, but we’ll fall further behind in EVs. That’s a very risky and dangerous path.” More

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      Despite Trump, the US economy remains surprisingly resilient. But for how long? | Richard Partington

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      Chaotic and unpredictable, keeping up with Donald Trump’s volatile trade war – never mind his presidency – can be tough.Back in April after his “Liberation Day” tariff announcement, the talk was of the president crashing the global economy. Then, after a Wall Street backlash, the world learned the acronym “Taco”, which stands for “Trump Always Chickens Out”. Now, things are heating up again.The president’s decision to hit US trading partners – including Canada, Brazil, India and Taiwan – with new tariffs after his self-imposed 1 August deadline certainly reignites a threat to the world economy. Dozens of countries have been left reeling, and US consumers are expected to pay a heavy price.However, there is a sense that things could have been worse. Nowhere more clearly is this reflected than on Wall Street: despite the chaos of the president’s trade war, the stock market remains close to record levels.After the latest escalation on Friday, and some worrying US jobs numbers, share prices took a hit, sliding by about 1%. But this is a setback rather than a rout.A further slide could be ignited by this capricious president. Trump’s decision to fire the official in charge of labour market data and his war on the independence of the US Federal Reserve will make matters worse.But despite the warnings of untold economic damage from the US tariff war earlier this year, the American economy has proven surprisingly resilient in recent months.Last week, the president seized on US growth figures showing the economy had expanded at an annualised rate of 3% in the second quarter, far in excess of the 2.4% rate predicted on Wall Street. Could the “fake news” media have it wrong? Are tariff wars “good, and easy to win,” as Trump claims?While inflation has ticked up, from 2.4% in May to 2.7% in June, it is well below the peak that followed the height of the pandemic disruption and Russia’s invasion of Ukraine, and is far from hitting the levels feared.Back in April, in a country wrought with division, Democratic voters reckoned inflation was on track to hit 7.9% within a year, while Republicans said it would collapse to 0.9%.Butthere is good reason why the US economy has so far defied the prophecies of Armageddon. For starters, the hot-cold nature of Trump’s tariff war means investors still anticipate further deals will be done to avoid the worst threats from ever materialising. The toughest tariffs introduced on Friday are only just arriving, too, meaning any impact has yet to emerge.Most countries have not hit back with retaliatory measures, which would have dramatically worsened things by putting international trade into a deeper tailspin.Meanwhile, knowing full well the dangers of this erratic president, businesses have been planning for months to avoid the worst-case scenarios.US companies rushed to stockpile goods before the trade war, helping them to keep prices down for now. Some firms have taken a hit to profits, according to analysts at Deutsche Bank, reckoning this is better than testing struggling American consumers – worn out by years of high inflation – with further price increases.The tariff costs are also being spread by multinationals, by increasing prices across the markets they operate in. In one high-profile example, Sony has put up the price of its PlayStation 5 by as much as 25% in some markets, including the UK, Europe, Australia and New Zealand. But not in the US.Still, there are signs that consequences are coming. When US businesses exhaust their pre-tariff stockpiles, it is likely that prices will creep higher. Meanwhile, the uncertainty of an erratic president is hitting jobs and investment.skip past newsletter promotionafter newsletter promotionLast week’s US jobs market data has reignited fears over the resilience of the American economy. Tariffs are weighing on business confidence and steadily creeping into consumer prices.GDP growth of 3% might appear robust on the face of things, but this figure was heavily influenced by the 0.5% fall in output in the first quarter, when the surge in US firms rushing to beat Trump’s tariffs distorted activity. Growth in the first half averaged 1.25%, markedly slower than the 2.8% rate for 2024 as a whole.Part of the reason Wall Street remains sanguine about this is the continued belief that things could have turned out worse. Deals are still expected, with the pause in tariffs for key US trade partners Mexico and China suggesting this most clearly.The investor view is that rather than tariffs the president would prefer a string of box-office moments in front of the TV cameras with trade partners paying tribute to the court of Trump.However, it would be wrong to underestimate the self-described “tariff man’s” love of border taxes. And even though his most extreme threats will be negotiated down, the final destination will still be much worse than before. An economic hurricane might be avoided but a storm is still the last thing businesses and consumers need.Britain’s US trade deal is a case in point. A 10% US tariff on British goods has been welcomed as a big victory for Keir Starmer given the alternative, but it is still far worse than before.British cars will face a tariff rate four times higher than previously, costing jobs and growth in Britain while hitting American consumers in the pocket.For the US consumer, the average tariff had been close to 2% before Trump’s return to the White House. After his 1 August escalation, that figure leaps to about 15% – the highest level since the 1930s.Almost a century ago a similar wrong-headed protectionist approach in Washington made the Great Depression far worse: the Smoot-Hawley tariffs hit the US and triggered a domino effect among the main industrialised nations, ultimately leading to the second world war.In the unpredictability of Trump’s trade war, hope remains that similar mistakes can be avoided. But significant damage is still being done. More

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      Good, mad and ugly: the US economy’s performance under Trump – in charts

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      According to Donald Trump’s White House, the US economy is booming, inflation is dead and jobs are surging. A blizzard of economic reports has cast a pall on such claims in recent days.This week’s data on Trump’s early economic record was mixed – good, mad and ugly – with jobs numbers so weak he reached for the catchphrase he once used to build himself into a reality TV star: you’re fired.The picture is chaotic, with robust headline growth in the world’s largest economy, wild swings in trade, and a remarkable slowdown in the labor market.For six months, Trump has staged an extraordinary campaign to overhaul the global economy and extract concessions from Washington’s allies and rivals by threatening and imposing steep tariffs on their US exports.But the unpredictable, erratic rollout of this strategy has already had bizarre consequences.Resilient-ish growthOn the surface, at least, this week’s deluge of data opened with good news: the US economy returned to growth in the second quarter, with gross domestic product (GDP) – a broad measure of economic health – expanding at a rate not seen since last summer.But this followed an unexpected contraction in the first quarter, and underlined some more concerning figures, such as a 15.6% drop in private domestic investment. Businesses have been struggling to keep up with the hour-by-hour jerks and jolts on sweeping economies policies.Yes, there was good growth in the last quarter but in the first six months, the US economy grew at a mediocre 1.2%. The Wall Street Journal called it “the weirdest GDP report ever”.Imports surge and plungeDelve a bit deeper, and you start to see how the US economy is grappling with a series of extraordinary forces as Trump hammers out his trade strategy.Firms spent much of the first quarter waiting for the president to reveal his plans for tariffs: which countries would be targeted, at what rates, and when. They stockpiled, triggering an unprecedented surge in imports that pushed growth into the red.In the second quarter, however, as Trump started to ramp up his economic attacks, imports tumbled at an equally astonishing pace. Net exports – how much a country exports more than it imports – boosted GDP.Interest rates on holdThis is Trump’s least favorite chart. Despite his many public demands, threats and attacks, the Federal Reserve has not yet cut interest rates this year.Why? Jerome Powell, the central bank’s chair, has repeatedly argued it should wait and see the impact of the president’s trade strategy before moving. Fed officials are worried that inflation – despite Trump’s claims that it has collapsed on his watch – has actually remained stubborn, and might rise as a result of his tariffs.This has gone down extremely poorly in the White House, where officials are counting down the weeks until Powell’s term as chair ends next May.Jobs growth stallsData released on Friday fundamentally changed the way US policymakers and politicians think about the economy. Until then, many inside the Fed thought everything was broadly ticking over nicely – and Trump administration officials claimed they were overseeing a boom in activity.But July’s employment report revealed far fewer jobs were created that month than economists had expected, and revised down estimates for May and June by an astonishing 258,000. Job creation has stalled.“Look, this jobs report isn’t ideal,” Stephen Miran, chairman of the White House council of economic advisers, told CNN, before suggesting that fading uncertainty around trade and fiscal policy would lead to significant improvement.“It’s all going to get much, much better from here,” he added. More

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      Trump fires labor statistics chief hours after data showed jobs growth slowed

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      Donald Trump fired the federal government official in charge of labor statistics, hours after data revealed jobs growth stalled this summer, prompting accusations that he is “firing the messenger”.The US president claimed that Erika McEntarfer, commissioner of labor statistics, had “faked” employment figures in the run-up to last year’s election, in an effort to boost Kamala Harris’s chances of victory.Trump later claimed: “Today’s Jobs Numbers were RIGGED in order to make the Republicans, and ME, look bad”.He produced no evidence for these allegations, and insisted that the US economy was, in fact, “BOOMING” on his watch.But Friday’s employment figures told a very different story, and raised questions about the state of the labor market since Trump’s return to office.“We need accurate Jobs Numbers,” he wrote on Truth Social. “I have directed my Team to fire this Biden Political Appointee, IMMEDIATELY. She will be replaced with someone much more competent and qualified.”McEntarfer was contacted for comment. The Bureau of Labor Statistics (BLS) confirmed in a brief statement that she had been dismissed. William Wiatrowski, the agency’s deputy commissioner, will serve as acting commissioner.Trump’s abrupt announcement came as administration officials scrambled to explain a lackluster employment report. Not only did jobs growth fail to meet expectations in July, but previous estimates for May and June were revised significantly lower.The president was promptly accused of trying to hide accurate statistics. “Trump is firing the messenger because he doesn’t seem to like jobs numbers that reflect how badly he’s damaged the economy,” said Lily Roberts, managing director for inclusive growth at the Center for American Progress, a thinktank, said.“Politicizing our country’s collection of data on what’s going on in the economy … will make it harder to create an economy that makes sure everyone has a good job,” added Roberts. “Borrowing from the authoritarian playbook fuels more uncertainty that will cost Americans for years to come.”Paul Schroeder, executive director of the Council of Professional Associations on Federal Statistics, described the president’s allegation as “very damaging and outrageous”, adding: “Not only does it undermine the integrity of federal economic statistics but it also politicizes data which need to remain independent and trustworthy. This action is a grave error by the administration and one that will have ramifications for years to come.”McEntarfer is a widely respected economist and veteran employee of the federal government. She previously worked at the US Census Bureau under George W Bush and at the US census bureau under Barack Obama, Trump and Joe Biden.skip past newsletter promotionafter newsletter promotionIn January 2024, before McEntarfer’s confirmation for her current post by the US Senate, her nomination was backed by four former BLS commissioners.In a letter also signed by organizations including the American Statistics Association and a string of senior economists, they said there were “many reasons” to confirm McEntarfer as commissioner of labor statistics, citing her “wealth of research and statistical experience”.She was ultimately confirmed by a vote in the Senate, with 86 votes cast in favor and eight against.Gene Sperling, chair of the national economic council under Bill Clinton and Obama, and who worked as an official under Biden, said he expected Trump to “destroy the credibility” of economic data when his administration suffered its first bad jobs report. “Now: first bad job report, and he just fired BLS head over absurd claims of bias,” Sperling wrote on X, formerly Twitter.Trump’s decision to fire McEntarfer was “outrageous but not surprising”, said Julie Su, former acting US labor secretary under Biden. “He hates facts, so he blames truth-tellers.”The US “needs and deserves trustworthy economic data”, added Su. “This is a pathetic attempt by the president to gaslight everyone about the consequences of his disastrous economic policies.” More

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      Trump’s first-term labor statistics chief denounces ‘groundless firing’ of successor – live

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      Bill Beach, a former Heritage foundation economist who was picked by Donald Trump in 2018 to oversee labor statistics, denounced on Friday what he called the “totally groundless firing of Dr Erika McEntarfer, my successor as Commissioner of Labor Statistics at BLS”.Beach added that Trump’s order to remove the bearer of bad news on jobs “sets a dangerous precedent and undermines the statistical mission of the Bureau”.He also co-signed a statement with Erica Groshen, who served as the commissioner before him, from 2013 to 2017, which began:
      Today, President Trump called into question the integrity of the Employment Situation report that the BLS released this morning. He accused BLS Commissioner Erika McEntarfer of deliberately reporting false numbers to reflect poorly on this administration. This baseless, damaging claim undermines the valuable work and dedication of BLS staff who produce the reports each month. This escalates the President’s unprecedented attacks on the independence and integrity of the federal statistical system.
      The President seeks to blame someone for unwelcome economic news. The Commissioner does not determine what the numbers are but simply reports on what the data show. The process of obtaining the numbers is decentralized by design to avoid opportunities for interference. The BLS uses the same proven, transparent, reliable process to produce estimates every month. Every month, BLS revises the prior two months’ employment estimates to reflect slower-arriving, more-accurate information.
      This rationale for firing Dr McEntarfer is without merit and undermines the credibility of federal economic statistics that are a cornerstone of intelligent economic decision-making by businesses, families, and policymakers. US official statistics are the gold standard globally. When leaders of other nations have politicized economic data, it has destroyed public trust in all official statistics and in government science.
      Other experts and elected officials were equally scathing in their response to Trump’s move.“This will make it difficult to trust government sources on economic and financial data,” Rohit Chopra, the former director of the Consumer Financial Protection Bureau, wrote. “Many businesses and investors use these data sets to determine where they want to launch or grow, so this will have real costs.”“Instead of helping people get good jobs, Donald Trump just fired the statistician who reported bad jobs data that the wanna-be king doesn’t like,” Elizabeth Warren, the Massachusetts senator and bankruptcy law expert, posted.“No. Mr. President,” Bernie Sanders, the Vermont senator, wrote. “In America, you do not fire the head of the Bureau of Labor Statistics for releasing a jobs report that you don’t like. That’s what authoritarians do. We need serious economists in these positions, not hacks who will only tell you what you want to hear.”US stocks slumped on Friday, with the S&P on track for its biggest daily percentage decline in more than three months as Donald Trump unveiled new import tariffs on dozens of trading partners and a surprisingly weak jobs report spurred selling pressure.Shares in Amazon also fell after the company failed to meet expectations for its Amazon Web Services cloud computing unit.Just hours before Trump’s latest self-imposed tariff deadline on Friday, the president signed executive orders imposing import taxes on goods imported from around the globe, including key trading partners such as Canada, Brazil, India, Japan, South Korea, Taiwan and the 27-nation European Union.Investor confidence was also hit by new data showing that US job growth slowed more than expected in July, and was significantly lower than previously reported in May and June. Those job numbers prompted Trump to fire the messenger, commissioner of labor statistics Erika McEntarfer.The jobs report significantly pushed up expectations that the Federal Reserve will cut interest rates at its next meeting in September.According to preliminary data, the S&P 500 lost 101.60 points, or 1.60%, to end at 6,237.79 points, while the Nasdaq Composite fell 472.78 points, or 2.24%, to 20,649.67. The Dow Jones industrial average lost 543.97 points, or 1.23%, to close at 43,587.01.

      Donald Trump said he had ordered two nuclear submarines to be positioned in “appropriate regions” in response to “highly provocative statements” from former Russian president Dmitry Medvedev, who said yesterday that the US president should remember Moscow had Soviet-era nuclear strike capabilities. It comes amid a spiralling war of words with Medvedev as tensions rise over Trump’s efforts to get Russia to end its war in Ukraine or face economic sanctions. Medvedev had earlier said that Trump’s threats to sanction Russia and a recent ultimatum were “a threat and a step towards war”.

      Leaders of more than 60 countries were plunged into a fresh race to secure trade deals with the US after Trump unleashed global chaos with sweeping new tariff rates last night. Our story is here and a table of all the tariff rates for each country is here.

      Trump ordered the firing of the federal government official in charge of labor statistics, hours after data revealed jobs growth stalled this summer, prompting accusations that he is “firing the messenger”. In a Truth Social post, Trump claimed (with no evidence) that Erika McEntarfer had “faked” employment figures in the run-up to last year’s election, in a bid to boost Kamala Harris’s chances of victory, and implied she “manipulated” today’s numbers for political reasons. “We need accurate Jobs Numbers. I have directed my Team to fire this Biden Political Appointee, IMMEDIATELY. She will be replaced with someone much more competent and qualified,” Trump wrote.

      The Bureau of Labor Statistics released revised job stats today which showed the US economy added only 73,000 jobs in July, far lower than expected, amid ongoing concerns with Trump’s escalating trade war. In the report, the BLS also slashed the number of jobs added in May, revising the figure down by 125,000, from 144,000 to only 19,000, and in June, which was revised down by 133,000, from 147,000 to just 14,000 – a combined 258,000 fewer jobs than previously reported.

      Trump also said once again that Federal Reserve chair, Jerome Powell, should also be “put out to pasture”, as he continued to insist the US economy is booming on his watch and implore the Fed to lower interest rates. The Fed later announced that Federal Reserve governor Adriana Kugler will resign from the central bank’s board as of 8 August, leaving a key vacancy for Trump to fill ahead of schedule.

      Ghislaine Maxwell was “routinely moved” to a minimum-security federal prison camp in Texas, a senior administration official has told NBC News, due to safety concerns. “Any false assertion this individual was given preferential treatment is absurd. Prisoners are routinely moved in some instances due to significant safety and danger concerns,” the official said of Jeffrey Epstein’s accomplice, who is serving a 20-year sentence for sex trafficking and other crimes. She has appealed to the supreme court to overturn her conviction.
      Continuing his attacks and baseless claims that the employment figures released today were “manipulated” for political reasons, Trump said the numbers were “rigged” to make him and his party look bad.He wrote on Truth Social:
      In my opinion, today’s Jobs Numbers were RIGGED in order to make the Republicans, and ME, look bad – Just like when they had three great days around the 2024 Presidential Election, and then, those numbers were ‘taken away’ on November 15, 2024, right after the Election, when the Jobs Numbers were massively revised DOWNWARD, making a correction of over 818,000 Jobs — A TOTAL SCAM. Jerome ‘Too Late’ Powell is no better! But, the good news is, our Country is doing GREAT!
      The Federal Reserve has announced that Adriana D Kugler will step down early from her position as governor of the Federal Reserve Board on 8 August.Her term was due to expire in January, but her early resignation gives Donald Trump an opportunity to more quickly appoint someone who could eventually replace Jerome Powell as chair.In a speech earlier this month, the New York Times notes that Kugler said the Fed should not cut interest rates “for some time” as tariffs trickle through to consumer prices.Responding to Ghislaine Maxwell’s move to a minimum-security federal prison camp in Texas, a senior administration official has told NBC News that prisoners are “routinely moved” due to safety concerns.“Any false assertion this individual was given preferential treatment is absurd. Prisoners are routinely moved in some instances due to significant safety and danger concerns,” the official said of Jeffrey Epstein’s accomplice.In a statement earlier today responding to Maxwell’s move from a Florida facility to the one in Texas, the family of Virginia Giuffre, along with Maxwell and Epstein accusers Annie and Maria Farmer, said:
      It is with horror and outrage that we object to the preferential treatment convicted sex trafficker Ghislaine Maxwell has received.
      The New York Times (paywall) notes that the Senate confirmed Erika McEntarfer to the post of commissioner of the Bureau of Labor Statistics in 2024 in an overwhelmingly bipartisan vote. Among her supporters at the time was then senator and now vice-president JD Vance.Lori Chavez-DeRemer, Trump’s labor secretary, has said she “wholeheartedly” supports the president’s firing of Erika McEntarfer to “ensure the American People can trust the important and influential data coming from [the Bureau of Labor Statistics]”.Trump ordered McEntarfer’s firing hours after data revealed that jobs growth had stalled this summer and administration officials scrambled to explain the lackluster report.“A recent string of major revisions have come to light and raised concerns about decisions being made by the Biden-appointed Labor Commissioner,” Chavez-DeRemer wrote in a post on X.She said William Wiatrowski, the deputy commissioner, would serve as acting commissioner during the search for McEntarfer’s replacement.California’s governor, Gavin Newsom, may call a special election in November to begin the process of redrawing the state’s congressional maps in response to Texas’s plans to change their own maps to help Republicans keep their majority in the House of Representatives.Donald Trump is pushing Texas and other Republican-dominated states to carry out mid-decade redistricting that will favor the GOP and potentially stop Democrats from retaking control of the House in next year’s midterm elections. Governors in Democratic-led states have responded by warning they will move to redo their own maps if Texas goes ahead with its plans, which could create an additional five Republican-leaning districts.California is viewed as the best opportunity for Democrats to pick up seats through gerrymandering, but voters will first have to approve changes to an independent redistricting commission that was given the power to draw congressional districts in 2010.Speaking at a Thursday press conference, Newsom said “a special election would be called, likely to be the first week of November” to approve the changes.“We will go to the people of this state in a transparent way and ask them to consider the new circumstances, to consider these new realities,” the governor added.The party out of power typically regains control of the House in a president’s first midterm election, as the Republicans did under Biden in 2022 and Obama in 2010, and Democrats did during Trump’s first term in 2018.Newsom argued that another two years of unified Republican control of Congress would be especially harmful for California, noting that Los Angeles residents were still waiting for lawmakers to approve aid from the wildfires that ravaged the region earlier this year.“They’re doing a midterm rejection of objectivity and independence, an act that we could criticize from the sideline, or an act that we can respond to in kind – fight fire with fire,” Newsom said.While Republicans could gain the most seats by redrawing Texas’s maps, Ohio, another red state, must also redraw its maps before next year’s election, and there’s talk of redistricting to the GOP’s advantage in Missouri and Indiana.Democrats are seen as having a more difficult path to improving their odds of winning the House majority through redistricting, often due to their states’ embrace of independent commissions intended to draw fair congressional amps.Voters created the California Citizens Redistricting Commission in 2008 to draw its legislative maps, and in 2010 expanded its powers to congressional districts. Newsom said, “We’re not here to eliminate the commission,” but rather to respond to what he described as “the rigging of the system by the president of the United States.“And it won’t just happen in Texas. I imagine he’s making similar calls all across this country. It’s a big deal. I don’t think it gets much bigger,” Newsom said.In the same Truth Social post, Trump said Federal Reserve chair Jerome Powell should also be “put out to pasture”, as he continued to insist the US economy is booming on his watch.
      The Economy is BOOMING under ‘TRUMP’ despite a Fed that also plays games, this time with Interest Rates, where they lowered them twice, and substantially, just before the Presidential Election, I assume in the hopes of getting ‘Kamala’ elected – How did that work out? Jerome ‘Too Late’ Powell should also be put ‘out to pasture’.
      Donald Trump has said he’s ordered the firing of Erika McEntarfer, the commissioner of the US Bureau of Labor Statistics, hours after data showed US employment growth was weaker than expected for the last few months.McEntarfer was nominated by former president Joe Biden to serve in the role in 2023 and was confirmed by the US Senate the following year.In a Truth Social post, Trump suggested (with no evidence) McEntarfer had “faked” the employment figures in the run-up to last year’s election, in a bid to boost Kamala Harris’s chances of victory, and implied she “manipulated” the numbers for political reasons.“We need accurate Jobs Numbers. I have directed my Team to fire this Biden Political Appointee, IMMEDIATELY. She will be replaced with someone much more competent and qualified,” Trump wrote.“Important numbers like this must be fair and accurate, they can’t be manipulated for political purposes.”The bureau released revised job stats today which showed the US economy added only 73,000 jobs in July, far lower than expected, amid ongoing concerns with Trump’s escalating trade war.In the report, the BLS also slashed the number of jobs added in May, revising the figure down by 125,000, from 144,000 to only 19,000, and June, which was revised down by 133,000, from 147,000 to just 14,000 – a combined 258,000 fewer jobs than previously reported.Here is my colleague Andrew Roth’s report:Donald Trump has said that he has deployed nuclear-capable submarines to the “appropriate regions” in response to a threatening tweet by Russia’s former president Dmitry Medvedev, suggesting that he would be ready to launch a nuclear strike as tensions rise over the war in Ukraine.In a post on Truth Social on Friday, Trump wrote that he had decided to reposition the nuclear submarines because of “highly provocative statements” by Medvedev, noting he is now the deputy chairman of Russia’s security council.Medvedev had earlier said that Trump’s threats to sanction Russia and a recent ultimatum were “a threat and a step towards war”.Donald Trump also continues to voice his frustration over the war Russia continues to wage in Ukraine, writing on Truth Social earlier (before the submarine announcement):
      I have just been informed that almost 20,000 Russian soldiers died this month in the ridiculous War with Ukraine. Russia has lost 112,500 soldiers since the beginning of the year. That is a lot of unnecessary DEATH! Ukraine, however, has also suffered greatly. They have lost approximately 8,000 soldiers since January 1, 2025, and that number does not include their missing. Ukraine has also lost civilians, but in smaller numbers, as Russian rockets crash into Kyiv, and other Ukrainian locales. This is a War that should have never happened — This is Biden’s War, not ‘TRUMP’s.’ I’m just here to see if I can stop it!
      As Trump and Medvedev have traded taunts in recent days following Trump saying on Tuesday that Russia had “10 days from today” to agree to a ceasefire in Ukraine or be hit, along with its oil buyers, with tariffs, Moscow has shown no sign that it will comply with Trump’s deadline.As my colleague Shaun Walker reports from Kyiv, Vladimir Putin has not responded to Trump’s ultimatum. He has claimed he wants a “lasting and stable peace” in Ukraine but has given no indication that he is willing to make any concessions to achieve it, after a week in which Russian missiles and drones again caused death and destruction across Ukraine.“We need a lasting and stable peace on solid foundations that would satisfy both Russia and Ukraine, and would ensure the security of both countries,” said Putin, speaking to journalists on Friday, a week before Trump’s new deadline for hostilities to cease.Trump has said if Russia and Ukraine do not come to an agreement to end the war by next Friday, 8 August, he will impose a package of economic sanctions on Russia.Per my last post, Medvedev on Monday accused Trump of engaging in a “game of ultimatums” and reminded him that Russia possessed Soviet-era nuclear strike capabilities of last resort after Trump told Medvedev to “watch his words”.Medvedev has emerged as one of the Kremlin’s most outspoken anti-western hawks since Putin sent tens of thousands of troops to launch his full-scale invasion of Ukraine in 2022.Reuters notes that while Kremlin critics deride him as an irresponsible loose cannon, some western diplomats say his statements illustrate the thinking in senior Kremlin policymaking circles.The Associated Press also notes that with his frequently wielded nuclear threats and lobbing of insults at western leaders on social media, some observers have argued that Medvedev is seeking to score political points with Putin and Russian military hawks with his extravagant rhetoric.The escalation from Trump comes amid a spiralling war of words with the former Russian president over Trump’s efforts to get Russia to end its war in Ukraine.Trump yesterday called Medvedev a “failed former president”, writing on Truth Social that he should “watch his words” and is “entering very dangerous territory”.
      Russia and the USA do almost no business together. Let’s keep it that way, and tell Medvedev, the failed former President of Russia, who thinks he’s still President, to watch his words. He’s entering very dangerous territory!
      Medvedev, who was prime minister of Russia from 2012 to 2020 and is a very vocal supporter of its invasion of Ukraine, has ridiculed Trump’s ultimatum to the Kremlin to reach a peace deal. He wrote on X earlier this week:
      Trump’s playing the ultimatum game with Russia: 50 days or 10 … He should remember 2 things:
      1. Russia isn’t Israel or even Iran.
      2. Each new ultimatum is a threat and a step towards war.
      Not between Russia and Ukraine, but with his own country. Don’t go down the Sleepy Joe road!
      In another post on X, Medvedev, the deputy chair of Russia’s security council, called US senator Lindsey Graham “gramps”, after he told him to “get to the peace table”.
      It’s not for you or Trump to dictate when to ‘get at the peace table’. Negotiations will end when all the objectives of our military operation have been achieved. Work on America first, gramps!
      The jabs continued on Telegram, where Medvedev threatened Trump with a cold war-era doomsday weapon known as the “Dead Hand” – a Russian nuclear system designed to automatically launch a retaliatory strike.
      If a few words from a former Russian president can cause such a nervous reaction from the supposedly powerful President of the United States, then clearly Russia is right about everything and will continue its own way.
      And as for the ‘dead economies’ of India and Russia and ‘stepping into dangerous territory’ – well, let him recall his favorite movies about the ‘walking dead,’ as well as how dangerous the supposedly non-existent ‘Dead Hand’ can be.
      Donald Trump has said he had ordered two nuclear submarines to be positioned in “appropriate regions” in response to threats from former Russian president Dmitry Medvedev, who said on Thursday that Trump should remember Moscow had Soviet-era nuclear strike capabilities.Trump said in a post on Truth Social:
      Based on the highly provocative statements of the Former President of Russia, Dmitry Medvedev, who is now the Deputy Chairman of the Security Council of the Russian Federation, I have ordered two Nuclear Submarines to be positioned in the appropriate regions, just in case these foolish and inflammatory statements are more than just that. Words are very important, and can often lead to unintended consequences, I hope this will not be one of those instances. Thank you for your attention to this matter! More

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      The key to understanding Trump? It’s not what you think

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      View image in fullscreenDonald Trump embodies dealmaking as the essence of a particular form of entrepreneurship. Every deal begins with his needs and every deal feeds his wants. He thus appears to be like other super-rich people: seemingly bottomlessly greedy, chasing the next buck as if it is the last buck, even when they have met every criterion of satiation.But Trump is different, because his brand of greed harks back to an idea of leadership that is primarily about adversarial dealmaking, rather than about innovation or improved managerial techniques. Trump’s entire career is built on deals, and his own narcissism is tied up with dealmaking. This is because of his early socialization into his father’s real-estate dealings in and around New York. Real estate in the United States, unlike the money-making modes of super-rich individuals in other countries, relies on deals based on personal reputation, speculation on future asset values, and the ability to launder spotty career records. Profits and losses over time can be hard to identify and quantify precisely, as Trump’s auditors and opponents have often confirmed, since profits, which depend on speculation and unknown future value, are by definition uncertain.Trump’s incessant boasts about being an apex dealmaker cast light on almost every aspect of his approach to his presidential decision-making. Numerous observers have long cast doubt on Trump’s image as a consummate dealmaker, pointing to his many failures in his long real-estate career, his abortive political and diplomatic deals, his backsliding and reversals, and his overblown claims about deals in progress. But these criticisms miss the point.Deals, whether in finance, real estate, or in any other part of the economy, are just one step in the process of reaching full-fledged, binding agreements subject to the force of law. They are a stage in the negotiation process that has no force until it is finalized as a contract. It is, at best, an agreement to agree, which can turn out to be premature, poorly conceived or unacceptable to one or other party. Put another way, it is an engagement, not a wedding. A deal allows a negotiator like Trump to claim victory and blame the other party or some other contextual variable if things do not work out.In fact, in the hands of someone like Trump, deals are ways to evade, postpone or subvert the efficient work of markets. Trump does not like markets, precisely because they are impersonal and invisible. Their results – for corporations, entrepreneurs, investors and shareholders – are subject to clear measures of success and failure.Because deals are personal, adversarial and incomplete, they are perfect grist for Trump’s relentless publicity machine, and allow him to polish his brand, massage his ego and signal his prowess to opponents – without the regulations and measurable consequences of regular market risks. The downside risk for an aborted or interrupted deal is negligible, and the upside is guaranteed by the legal power of fully completed contracts.Trump has figured out to an exceptional degree that dealmaking does not need to be successful in order to massively increase his wealth. Whether or not true, his claims to successful deals are the key to his brand and profitmaking worldwide, either directly or through the business endeavors of his sons. These range from his latest Trump perfume and Trump mobile telephone services, his Maga accessories, Trump golf courses around the world, his real estate and resorts, and of course his highly profitable cryptocurrency holdings. In every case, his deals either lead to further deals, which service his branding machine, or they lead to direct increases in his personal and corporate wealth. Deals, successful or not, are Trump’s magic means to amass money and feed his avarice.Avarice is a vice with a long history in Christian theology. It is widely defined as an excess of greed, an inordinate level of greed, an insatiable greed. It has been viewed by economic historians as a passion that must be curbed and replaced by calculated, moderated self-interest in order for the rationality of the modern market to function as a dominant economic principle. From this perspective, greed can have numerous objects – such as food, sex and power – whereas avarice is single-minded in its focus on money.Trump exemplifies this focus. Though he has to function in a world where avarice is meant to be regulated by the market mechanisms of price and competition, he has managed to successfully pursue his avarice with little obstacle.This driving desire defines Trump’s “egonomics” – the intimate connection between his narcissistic urges and his wish for increasing his stock of money. The governing principles of his economic policy have nothing to do with America getting its due, as his messaging about tariffs argues, or about restoring dignity to the working class, as he signals to his Maga base. Nor are they about power or prestige. The object of everything he does is money, and in the service of the boundlessness of money, which Trump has made the defining object of his desire. Other commodities are of interest to him only insofar as they serve his desire to acquire, hoard and increase his stock – of money.View image in fullscreenMoney for what?The first – and most soothing – theory is that Trump wants money to buy power – more of it, perhaps all of it. More power than China, than his generals, than Harvard. We all know power – via our parents, our teachers, our bosses, our police. It is a force we understand, a pull we recognize. If Trump only wants more of something that many people have, and even more want, he is legible, he is like us.But power for what? To do what? To get what?Perhaps he is chasing an unassailable place in history, both human and eternal. So then it is not just power he endlessly chases, but glory. For this we have some evidence in the clownish thesaurus of words that he uses to describe his achievements, his looks, his wit, his wisdom, his all-round superhumanity: best, most, only, incredible, ever, more. In this orgy of superlatives, he is always curled high up in the clouds, like a Maurice Sendak toddler. But since Trump, from his perspective, brooks no real competition in life, in politics, in real estate, or even in history, there can be no glory for him which is not tainted by the mediocrity of his competitors. And true glory usually requires some form of self-sacrifice, some sense of compassion, some ability to transcend oneself. Given his woeful deficits in these areas, the glory game cannot be the key to understanding Trump.And so we go to a more familiar space: the realm of prestige, status and stardom. This realm is wired into competitions, tournaments and casinos of every sort, where winning is well-defined, losing is for losers and there is usually only one survivor and one winner who takes all. The competition for status is as old as recorded human history and accompanies every human society that has had leaders and followers, more and less skilled competitors for food, shelter and sexual partners. It begins with simple rules for coming out on top and evolves over time into the most elaborate forms of status competition, often driven by males – including wartime exploits, trophy wives, palatial homes and bottomless conspicuous consumption.These tournaments of value can be observed in settings as disparate as auctions, horse races, philanthropic gifts and corporate mergers and acquisitions. There is widespread consensus among thinkers from many eras and regions that status is a limited good, which has its own economics of supply and demand, distinct from those of pecuniary gain. This insight looks, at first, like the key to Trump.But attractive as this argument may seem, it too is a red herring.View image in fullscreenTrump’s signature riffAmong Trump’s own tactics, the one he loves to use most is tariffs. Trump’s obstinate insistence on tariffs as the key to restoring American manufacturing, swelling the US treasury and reducing American consumer prices has flummoxed most mainstream economists. Tariffs are for Trump the ideal way to combine dealmaking, status-grabbing and his penchant for money as its own bottomless value.It is evident that Trump’s understanding of the trade-offs of globalization is rudimentary and often internally contradictory. Indeed, he shows signs of believing that making deals of any sort requires only outsize confidence, charismatic force and bottomless access to financial backing. In fact, Trump’s view of himself as an incomparable dealmaker (a claim at odds with his many entrepreneurial disasters) conceals his deep distaste of real markets – in which a large apparatus of binding promises, the tendency to stable price equilibria, and the connection of supply and demand through pricing – can frustrate his brand of deal-making, which is always oriented to maximizing his personal prestige.Trump’s deep-seated desire to be the winner who takes all in the global prestige economy sheds some light on his weaponization of tariffs. We can catch a glimpse of this logic in a most unlikely context. It was captured in detail by one of the fathers of British social anthropology, Bronisław Malinowski, in his 1922 book on a unique trading system that he found in the Trobriand Islands of Oceania, on several trips there in the years between 1915 and 1917. This anthropological classic, Argonauts of the Western Pacific, casts new light on Trump’s tariff mania.What Malinowski described is a system of trading across about 18 coral islands within a 175 sq mile (453 sq km) area, between “big men”, leaders of lineages who exchanged highly specific valuables (such as decorated shell necklaces and bracelets) and their counterparts in this network of islands. Called the kula system, it had a highly codified set of rules to hedge voyagers against oceanic weather dangers and hostile groups in other islands, some of whom were cannibals. The goods appropriate to kula exchange could never be hoarded, marketed or bartered like normal utilitarian goods. This was a strictly ceremonial system geared to enhancing the prestige of male elites, of moving these well-known objects in a circuit which could last for years.The diplomatic rituals of these exchanges were ensconced in an atmosphere of pretend hostility between the parties, often because other groups in these islands were real enemies, always poised for real warfare. Hanging on the knife-edge between trade and war, these exchange circuits were strictly distinguished from barter or money transactions (what we would today call market transactions). The kula system was a way of organizing exchange, averting war, signaling prestige and making allies through a tightly regulated flow of valuables outside market exchange circuits.Trump does not care about Malinowski, the Trobriand Islands, non-capitalist exchange systems or “big man” politics in kinship-based polities. But his operating system belongs in this type of diplomatic world, one that requires nothing except a non-negotiable interest in winning deals. Trump’s onslaught of tariffs, falling on everyone like nuclear ash, is meant to make him the king of the global prestige market, no matter the cost to diplomatic traditions, financial markets, customer capacities or fair balances of trade. Trump appears to be undistracted by any other economic priority outside the aim to be the apex dealmaker.The kula system is grounded in a non-monetary system of honor, prestige and reciprocity, which helps us understand Trump’s tariff strategy but does not fit his narcissist drive to crush all his fellow players. Even the kula system is about relationships. Trump is strictly about winning deals.So we must beware of seeing the urge to dominate all prestige markets as Trump’s bottom line. Trump’s bottom line is money. Being an avaricious man, Trump worships money – both its power and its pomp – and he seeks it through his extensive networks of children, clients, tax lawyers and cronies, all devoted to the increase of his wealth. This pecuniary drive has a transcendent, epic and unquenchable force which cannot be explained by reference to the other things that money can buy. Even his quest for prestige through arm-twisting tariff deals is primarily about positioning himself to secure future deals in his individual capacity. His is a special brand of avarice.View image in fullscreenThe new cryptocracyThere is no better way to explore the ways in which Trump’s various egonomic strategies come together than in the recent invention and propagation of cryptocurrency, which has spawned a shadow world of speculators, fraudsters, legal hucksters, elected and unelected lobbyists. Their usual victims are vulnerable citizens, low-level grifters, pensioners, badly informed investors and other natural prey. The entire industry lives in a gray economy, attached to mainstream markets, assets and regulators like the tiny remora fish that feast off sharks. It survives in a legal twilight zone, where its currency is accepted only by some businesses as legal tender, and where smart players use pump-and-dump tactics to make fast profits with short-lived “coins” of various kinds. Whatever the utility of cryptocurrency in the real world of goods and services, it is mainly a tool for amassing wealth by gambling on its future convertibility to real money in specialized currency exchanges.Cryptocurrency puts Trump in the position of being a player and the owner of a casino-like system at the same time, so that he always wins, if not in one role, then in the other. The outrageous self-enrichment schemes of Trump and his family in the crypto industry, which have been carefully exposed in several media outlets recently, establish new frontiers for Trump’s shameless violation of even the simplest norms about conflict of interest. The best example of these ventures is his memecoin, $Trump, which has made him and his close associates a fortune by selling access to Trump through a barely regulated crypto mechanism. By some estimates, Trump has gained several billions of dollars in his net worth through his crypto ventures, which combine nepotism, influence-peddling and dealmaking in a unique package.Through cryptocurrency, Trump has found the ultimate way to attach his core impulse – avarice – to the larger machinery of the markets. There is some truth to the argument that Trump wants more of everything he can get, including power, glory and prestige. But what he wants more than anything else is money, which is just a temporary token of more money, and more money for ever more.The unique instinct behind Trump’s avarice, which sets him apart from other billionaires who continue to chase wealth, is that he has found a way to build his fortune through deals – whether deals that make him money by inflating the value of his brand, which can then make him more money through more deals, or through the enforceability of completed contracts.Through his dealmaking, Trump has managed to triumph over the market, making it work for him to amass greater and greater sums of money, whether his deals are seen through to fruition or not. We can summarize Trump’s approach to markets by adapting a famous sentence, spoken by him, about how he grabs women: Trump grabs markets by the deal. Illustrations by Joao Fazenda

      Arjun Appadurai, professor emeritus at New York University, is the former provost of the New School. More

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      FTSE 100 breaks through the 9,000-point barrier to reach new record high

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      Britain’s blue-chip stock index has risen through the 9,000-point mark to touch a new record high.The FTSE 100 share index hit 9,016.98 points in early trading on Tuesday, taking its gains during 2025 to more than 10%.Analysts said the London stock market had benefited from a range of factors this year, including a move by some investors to diversify away from US shares due to concerns over Donald Trump’s economic policies.The US president’s trade war has also helped UK stocks, as Britain is one of the few countries to have reached a trade deal guaranteeing lower tariffs.The AJ Bell investment analyst Dan Coatsworth said: “With the UK having already reached an agreement on a 10% tariff for trade with the US, with exemptions for certain industries, the country is now seen to have an advantage in terms of trade relations.”In recent years, the London stock market has been derided as a “Jurassic Park” index, due to its reliance on companies in long-established industries and a shortage of fast-growing tech companies. However, that has proved an asset in uncertain times.“The UK stock market is the calming cup of tea and biscuit in an uncertain world. There’s nothing fancy on offer, just reliable names that do their job day in, day out. That’s an underrated characteristic and a reason why investors are finally warming to the UK stock market’s appeal in 2025,” Coatsworth added.However, Trump’s trade war has created choppy conditions in financial markets throughout 2025. The FTSE 100 index fell as low as 7,544 points in early April, when tariff announcements sent shares tumbling. It then recovered sharply, as traders embraced the “Taco trade” – the idea that Trump always chickens out if his policies spook investors.The precious metals producer Fresnillo has been the top riser on the FTSE 100 so far this year, up by 155%. It has benefited from surging prices, with gold hitting several record highs this year and silver trading at a 14-year peak this week.The prospect of higher military spending has pushed up shares in the defence contractor Babcock by 120% this year, with BAE Systems up 66%. The engineering firm Rolls-Royce has gained 75%, as its turnaround plan has yielded results.skip past newsletter promotionafter newsletter promotionJohn Moore, a wealth manager at RBC Brewin Dolphin, said “strong earnings momentum in the banking and defence sectors” had helped push the FTSE 100 to a record high.Moore also credited the UK’s “relative political stability”. “While there may be tax increases to come, which was part of the reason for the sell-off of the pound in early June, the government has a clear mandate and tenure for the next few years.“That compares favourably to other parts of Europe, even, where coalition governments are having a tough time,” he said. More