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    ‘So many are devastated’: Trump’s federal firings and their ripple effect

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    Naomi Anderson was on leave looking after her young baby when she was told her US Department of Agriculture job helping farmers in developing countries was being cut. A former volunteer with the Peace Corps, which sends young Americans overseas to projects in emerging economies, Anderson had expected to spend her whole career in international development.“I had taken this job two years ago expecting to stay here for at least 10 years, and you know, we had started to make a community and build up our life here. In January, we had started looking at buying a home,” she says.Now Anderson is having to consider giving up the apartment in the Washington DC commuter town of Reston, Virginia, that she shares with her husband and their four-month-old baby and almost two-year-old toddler.“Financially, it’s a little bit precarious, and honestly we’re not sure what we’re going to do,” says Anderson, who is also an activist with the local branch of the AFSCME union and dabbles in selling political merchandise. “We’re thinking about moving back to Ohio, where I’m from, where my family is. You know, it’s a lot cheaper there.”Anderson is far from alone. “In our apartment complex, there’s been lots of yard sales, people selling things and moving away. It really does seem like people are just picking up and leaving, because it’s too expensive to live here without a job,” she says.Tough life-decisions like these have been forced on hundreds of thousands of former federal employees in the past couple of months, as the so-called department of government efficiency (Doge), which is headed up by Donald Trump’s favourite tech billionaire, Elon Musk, has slashed jobs in a cost-cutting spree.Data from the latest monthly Challenger jobs report suggests Doge has been responsible for 281,452 job cuts so far – almost eight times the number of workers the government let go in the entire year to April 2024.Brendan Demich is among those to be dismissed, losing his job as an engineer at the National Institute for Occupational Safety and Health (NIOSH) in Pittsburgh, Pennsylvania. All his colleagues working on mine safety, as well as those in their sister laboratory testing equipment such as respirators, are also leaving – more than 200 in total – as part of a wave of cuts initiated by Trump’s health secretary, Robert F Kennedy Jr.“So many people are devastated,” says Demich, chief steward of the local AFGE union branch. He says so many workers have been removed at once that their colleagues have barely been able to give them any kind of send-off. “It’s just unceremoniously leaving, because they had their package processed and they had to walk out the door.”Each of these cuts has its own human impact, but experts are warning of a growing risk that they combine to trigger an economic retrenchment – particularly in areas with a heavy concentration of government jobs.View image in fullscreenLiz Shuler, the president of the AFL-CIO federation of 63 trade unions, which together represent more than 15 million US workers, is trying to build a nationwide campaign to highlight the devastating impact.“The trick is connecting the dots because there’s already a national narrative around what’s happening but it’s not quite being felt yet,” Shuler says. “Elon [Musk] has his ‘department of government efficiency’. We established the ‘department of people who work for a living’. That’s kind of cheeky, but it’s kind of serious, because we’re saying we’re the ones working on the frontlines. We know what’s efficient and what’s not.“Obviously as the labour federation we’re worried about jobs and people’s livelihoods, but it’s also connected to community, and the fact the economy is being impacted in such a stark way, that ripples out across all of the industries that we represent,” she adds.These ripples are being felt especially strongly in the towns and counties around Washington DC, where job losses and government cuts crop up constantly in conversation.Kate Bates is the president of the chamber of commerce in affluent Arlington, Virginia, across the Potomac River from the US capital. She compares the current uncertainty to the pandemic, “but during Covid, the federal government was the backstop, whereas right now it’s the federal government that’s causing a lot of this,” she says.Bates reports that her members are warning of a slowdown across real estate and hospitality, as well as among government contractors, with several reporting they have already had to make job cuts.“What we hear from a lot of people is that if they could plan for the cuts, they would be in an OK position, right? But because things are changing, going back and forth, that’s causing a lot of stress,” she says.View image in fullscreenBusinesses that rely on government workers for custom are also feeling the chill. Saamir Nizam, the general manager of Arlington’s Barley Mac restaurant, which is part of a small family-owned chain, has noticed trade declining in just about every one of their usual customer groups.The nearby hotels are less occupied; bookings for “happy hour parties” by the accountants and consultants who serve the federal government are down by two-thirds; and many older local residents have been spooked by market volatility.“We can only do so much to turn things around: we can’t pull people to Washington, or convince companies to go out and do things,” Nizam says. “Barley Mac serves great food, it gives great service, but it exists, like many restaurants, on the financial margin. And if the whole year is on the margin then restaurants like ours will go under, because we’re not part of a huge national chain which has deep pockets.”View image in fullscreenJess Miller, who set up Rock Spring Real Estate Solutions a couple of years ago, has been hosting a breakfast roundtable for clients, on the top floor of an as yet unoccupied new office block in Arlington.skip past newsletter promotionafter newsletter promotionShe has noticed clients responding to the shifting climate, pulling out of deals and hoping to negotiate unusually short leases. The owners of this building are splitting the floors instead of looking for one anchor tenant.“Just how they’re making decisions is different – the cutbacks we’re seeing,” Miller says. “It hit the NGOs first and then it hit, you know, the corporations and the contractors, and it’s a lot of the senior management.”Katherine D’Zmura Friedman is a co-founder and the chief executive of Thumbprint, an Arlington-based startup offering an artificial intelligence platform for designing office layouts.View image in fullscreen“There’s no universe in which something like the last few months happens and there’s not serious consequences,” she says. “We’ve had family friends, we’ve had neighbours lose their jobs, and these are not people who would normally be subject to layoffs. These are people who are at the peak of their career, and hyper-specialised.”As far as the business effects are concerned, D’Zmura Friedman says: “Certainly on the commercial side, there’s been hesitancy about launching into things.”At her office nearby, Renata Briggman, a residential estate agent, plays down the idea that the housing market in Arlington could be hit, pointing to the many local employers broadly unaffected by federal spending – such as Amazon, which is headquartered here.However, she does acknowledge signs of change. “It’s definitely shifting. We’re not seeing any fire sales, it’s too soon for that. It’s very, very slow, and we’re just going to start seeing it, it’s just on the cusp … end of June, we’ll have a better idea.”View image in fullscreenSuch challenges are being replicated across the region. Jimmy Olevson, the president and chief executive of National Capital Bank, which serves Washington DC and the surrounding areas, says the bank is not yet seeing signs of financial distress, such as rising arrears, but the mood is “uneasy”. Many customers who have had a recent mortgage application approved seem to have put house-hunting on hold.Some experts fear this widespread mood of unease bodes badly for the coming months. Analysis by Dr João Ferreira, an expert in regional economics at the University of Virginia, suggests more than 320,000 people in the state are employed directly by the federal government – and another 441,000 jobs depend on taxpayer-funded contracts, of the kind that are being cut.In some sectors – construction, for example – the same firms fretting about whether their contract will be cut are also contending with the rising price of materials, as a result of tariffs. Although some of the border taxes have been paused or reduced, those restrictions that remain mean costs are still far higher than at the start of the year.In theory, the Trump administration could lift the gloom by drawing a line under budget cuts as Musk heads back to his day job running the electric carmaker Tesla. But key members of the cabinet, including Kennedy and the defence secretary, Pete Hegseth, have boasted of how much they plan to slash from their budgets – and White House trade policy continues to see-saw.Ferreira says: “I think, as an economist, I’ve never seen so many things happening at the same time. But they all lead to the same direction, and that’s a recession.”He says Virginia has often been cushioned from economic downturns in the past by federal funding, but in this cycle he expects the state to lead the way. “We definitely might see that Virginia, and other regions like Maryland, will be the frontrunners in this recession period,” Ferreira says.Meanwhile, for many of the affected individuals, the future looks highly uncertain – despite the US treasury secretary Scott Bessent’s suggestion they should go work in manufacturing. “For us on our team, we work in international development,” says Anderson. “We have a background in humanitarian work, and the Trump administration is trying to cut international foreign aid. So where do you go from there?” More

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      China and US agree 90-day pause to trade war initiated by Donald Trump

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      China and the US have agreed a 90-day pause to the deepening trade war that has threatened to upend the global economy, with reciprocal tariffs to be lowered by 115%.Speaking to the media after talks in Geneva, the US treasury secretary, Scott Bessent, said both sides had shown “great respect” in the negotiations.Bessent said: “The consensus from both delegations this weekend was neither side wants a decoupling.”The 90-day lowering of tariffs applies to the duties announced by Donald Trump on 2 April, which ultimately escalated to 125% on Chinese imports, with Beijing responding with equivalent measures.China also imposed non-tariff measures, such as restricting the export of critical minerals that are essential to US manufacturing of hi-tech goods.The US trade representative, Jamieson Greer, said China’s retaliation had been disproportionate and amounted to an effective embargo on trade between the world’s two biggest economies.With the 115% deduction, Chinese duties on US goods will be lowered to 10%, while the US tax on Chinese goods will be lowered to 30%. That is because the US tariffs include a 20% rate imposed by Trump before the latest trade war, which the president said was related to China’s role in the US’s fentanyl crisis. The fentanyl-related tariff will still apply.A spokesperson for China’s ministry of commerce said: “This move meets the expectations of producers and consumers in both countries, as well as the interests of both nations and the common interest of the world.“We hope that the US side will, based on this meeting, continue to move forward in the same direction with China, completely correct the erroneous practice of unilateral tariff hikes, and continually strengthen mutually beneficial cooperation.”China’s yuan jumped to a six-month high on the signal that the trade war would be paused. Up to 16m jobs were at risk in China, according to some estimates, while the US faced rising inflation and empty shelves thanks to dizzying tariffs on the biggest supplier of US goods.Bessent said he was impressed by the level of Chinese engagement on the fentanyl issue during the talks in Switzerland. “For the first time the Chinese side understood the magnitude of what is happening in the US,” Bessent said.A joint statement published by the US and China on Monday said that both sides would “continue to advance related work in a spirit of mutual openness, continuous communication, cooperation and mutual respect”.William Xin, the chair of the hedge fund Spring Mountain Pu Jiang Investment Management, told Reuters: “The result far exceeds market expectations. Previously, the hope was just that the two sides can sit down to talk, and the market had been very fragile. Now, there’s more certainty. Both China stocks and the yuan will be in an upswing for a while.”skip past newsletter promotionafter newsletter promotionHu Xijin, the former editor of the nationalist Chinese tabloid the Global Times, said on social media the agreement was a “great victory for China in upholding the principles of equality and mutual respect”. Hu noted on Weibo that the recently agreed UK-US trade deal maintained the US’s 10% tariff on UK imports, “while the UK did not implement reciprocal measures”.Wang Wen, the head of the Chongyang Institute for Financial Studies at Renmin University in Beijing, said: “This is an unexpected achievement in Sino-US tariff negotiations.”However, Wang also urged caution, as he said the agreement “does not represent the resolution of the structural contradictions between China and the United States, nor does it mean that there will be no friction and serious differences between China and the United States in the future”.Stock markets across Europe rose in the aftermath of the US-China announcement. Germany’s DAX index jumped by 1.5%, with Mercedes-Benz, Daimler Trucks and BMW among the biggest risers. France’s CAC index rose by 1.2%.Additional research by Lillian Yang More

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      Why is Trump so fixated on toys for little girls? | Moira Donegan

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      Donald Trump has found a new target for his trademark mockery and dismissal: little girls.In comments at a 30 April cabinet meeting, the president seemed to dismiss the economic impact of his chaotic tariff regime on American consumers by citing girls as the primary complainants. “Somebody said, oh, the shelves are going to be open,” Trump said. “Well, maybe the children will have two dolls instead of 30 dolls. And maybe the two dolls will cost a couple bucks more than they would normally.”Trump is prone to odd non-sequiturs, but the dolls have become something of a sticking point. Onboard Air Force One on 4 May, he doubled down on his insistence that American girls should have fewer toys. “All I’m saying is that a young lady, a 10-year-old girl, nine-year-old girl, 15-year-old girl, doesn’t need 37 dolls,” he told reporters. “She could be very happy with two or three or four or five.”In an interview with Kristen Welker of Meet the Press that same day, Trump again mentioned the dolls. “I don’t think a beautiful baby girl needs – that’s 11 years old – needs 30 dolls,” Trump said. “I think they can have three dolls or four dolls because what we were doing with China was just unbelievable.” He went on to assert that American children also have too many pencils. “They don’t need to have 250 pencils. They can have five.”In some respects, the comments seem like a rare bit of honesty from the president: an acknowledgment of the reality that his tariffs will hurt consumers and lower the American their standard of living. With steep tariffs on many consumer goods, particularly those made in China, and supply chain issues caused by retailers and producers frantic attempts to offset the costs of the new tariffs, many common products – yes, including children’s toys – will become shorter in supply and steeper in cost. Because of Trump’s policies, it is indeed true that there will be fewer presents for children underneath American Christmas trees this year – a trend that is likely to continue for years to come if Trump’s trade war triggers an economic recession, as is widely expected. Americans themselves don’t have much say in this, but Donald Trump wants us all to know that he’s comfortable with us, and our children, having less.But the selection of dolls, in particular, as Trump’s stand-in for consumer prices reflects the gendered ideas about work, money and purchasing that animate Trump’s chaotic economic policy. After all, Trump did not talk about the impact of his trade regime on toy trucks or GI Joe action figures – and he certainly didn’t mention its likely impact on things like video games, basketballs, squat racks or protein powders. The tariffs will increase prices across economic sectors and hurt consumers of all kinds of goods. But Trump did not speak in general terms about those who might like to buy a house one day, or about who will be hurt by his tariffs on Canadian lumber, or about those who would like to be treated for their illnesses but who have to pay steeper prices for the medicines they need when tariffs hit pharmaceuticals. He didn’t talk about any of the consumption that Americans are uniformly agreed to think of as reasonable, dignified or aspirational. He chose, instead, something seen as trivial, childlike, and only for girls.The comments aim to cast the pain that consumers will face as ultimately feminine and frivolous, their complaints petulant and childlike. In this respect, Trump is drawing on a long tradition of economic rhetoric that aims to cast consumption as feminine, decadent and morally suspect – and to contrast it with the supposedly more manly and virtuous productive side of the economy. It’s a laughably stupid symbolism, one that only works for those deeply committed to their ignorance about how the economy actually works: in truth, everyone consumes, and people of all genders participate in the productive economy. But Trump does not argue based on the facts: he asserts dominance. And here, he casts those Americans who would complain about the economic pain that he is inflicting on them as feminine and hence as contemptible, deserving no more respect than spoiled children.The project of masculinizing the economy – perhaps especially at children’s expense – is one that the Trump administration seems to be pushing more broadly. Trump claims, despite the near-universal assertions of economists to the contrary, that his tariffs will shift the US away from the primarily female service sector industries that have dominated the American economy since the 1970s back to a more masculine manufacturing base.To this end, his commerce secretary, Howard Lutnick, a billionaire former CEO, went on MSNBC late last month to describe his vision for the future of the American worker. “It’s time to train people not to do the jobs of the past but to do the great jobs of the future,” Lutnick said, arguing that fewer people should be aspiring to bachelor’s degrees and should expect to occupy themselves in lower-skill factory work instead. “This is the new model, where you work in these kind of plants for the rest of your life, and your kids work here, and your grandkids work here.”This is the vision for your children’s future that the Trump administration wants to put forward: deprived of material comforts and joy in childhood, then deprived of the hope for upward mobility in adulthood. They want you, and your kids, to be poor, desperate and ignorant. They want you to work in repetitive, dangerous, back-breakingly physical jobs, and they want you to have no aspiration to anything better. They want you to imagine your future, and your children’s futures, not as an open horizon of freedom and potential, but as a dark and desperate struggle, devoid of the notion that we might be anything more than useful instruments for the needs of capital. What do they offer Americans as compensation for this loss? Virtually nothing, aside from misogynist contempt, and the assurance that as our living standards sink and our prospects disappear, in our suffering, at least, we are masculine.On Fox News this past Tuesday, the treasury secretary, Scott Bessent, tried to put this spin on things. Describing what he would say to a little girl who would be denied dolls because of Trump’s tariff policy, Bessent insisted that it was for her own good. “I would tell that young girl that you would have a better life than your parents,” Bessent said. But the Trump administration is doing everything in its power to ensure that America’s children – and in particular, its little girls – have it worse.

      Moira Donegan is a Guardian US columnist More

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      Federal Reserve warns of inflation and jobs risks amid Trump’s erratic trade strategy

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      The Federal Reserve kept interest rates on hold and called out growing dangers in the US economy amid Donald Trump’s erratic rollout of an aggressive trade strategy.Jerome Powell, the US central bank’s chair, cautioned that the president’s tariffs were likely to raise prices, weaken growth and increase unemployment if maintained.Fed policymakers cautioned that “the risks of higher unemployment and higher inflation have risen” as they opted to maintain the benchmark interest rate for the third time in a row. “Uncertainty about the economic outlook has increased further,” they said in a statement.With inflation expectations – how consumers think prices will move – rising,Powell, the Fed chair, said the “driving factor” appeared to be Trump’s tariffs.At a press conference, he said: “If the large increases in tariffs that have been announced are sustained, they are likely to generate a rise in inflation, a slowdown in economic growth, and an increase in unemployment.”The US president has repeatedly demanded in recent months that the Fed cuts rates – and even raised the prospect of firing Powell, before walking back the comments – as Trump’s tariffs plan appeared to knock the US economy.The Fed has been sitting on its hands for months, however, citing heightened uncertainty. It last cut rates in December, to a range of between 4.25% and 4.5%.As Trump pushed ahead last month with sweeping tariffs on imported goods from much of the world, Powell cautioned this would probably raise prices and slow growth – despite the administration’s pledges to revitalize the US economy and reduce the cost of living for millions of Americans.US gross domestic product (GDP) shrank for the first time in three years during the first quarter, raising fears of recession as Trump’s tariffs – and threats of tariffs – cast a shadow over the world’s largest economy.Asked whether he was trying to take responsibility for stronger parts of the economy, while blaming his predecessor, Joe Biden, for any sign of weakness, Trump told NBC’s Meet The Press: “I think the good parts are the Trump economy, and the bad parts are the Biden economy. Because he’s done a terrible job.”After Fed policymakers finished their latest two-day meeting on Wednesday, the central bank reiterated in its statement that they would “carefully assess incoming data, the evolving outlook, and the balance of risks” ahead of future meetings.Its callout of greater risks in the US economy amounted to “a thinly veiled critique of the new administration’s import tariffs”, said Samuel Tombs, chief US economist at Pantheon Macroeconomics, “and represents an assertion of independence”.Addressing reporters after the meeting, Powell said he could not provide a timeframe for rate cuts. “We are going to need to see how this evolves,” he said. “There are cases in which it would be appropriate for us to cut rates this year. There are cases in which it wouldn’t. And we just don’t know.”While concern over the economic outlook is mounting, Powell stressed there had been no “big economic effects” in the data so far. “People, they are worried now about inflation, they are worried about a shock from the tariffs,” he said. “But they really haven’t – that shock hasn’t hit yet.”Asked how Trump’s demand for rate cuts affected the Fed’s latest decision, and the difficulty of his job, Powell responded bluntly. “Doesn’t affect doing our job at all,” he said.He reserved perhaps his briefest response for when a reporter asked what he thought when Trump said last month he had “no intention” of firing him – days after saying his termination could not come fast enough. “I don’t have anything more for you on that,” said Powell. More

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      Why Donald Trump’s plan to weaken the dollar is flawed | Kenneth Rogoff

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      Now that US President Donald Trump’s tariff war is in full swing, investors around the world are asking: what’s next on his agenda for upending the global economic order? Many are turning their attention to the “Mar-a-Lago Accord” – a plan proposed by Stephen Miran, chair of Trump’s Council of Economic Advisers, to coordinate with America’s trading partners to weaken the dollar.At the heart of the plan is the notion that the dollar’s status as the world’s reserve currency is not a privilege but a costly burden that has played a major role in the deindustrialisation of the American economy. The global demand for dollars, the argument goes, drives up its value, making US-made goods more expensive than imports. That, in turn, leads to persistent trade deficits and incentivises US manufacturers to move production overseas, taking jobs with them.Is there any truth to this narrative? The answer is yes and no. It’s certainly plausible that foreign investors eager to hold US stocks, bonds, and real estate could generate a steady flow of capital into the United States, fuelling domestic consumption and boosting demand for tradable goods such as cars and non-tradables such as real estate and restaurants. Higher demand for non-tradable goods, in particular, tends to push up the dollar’s value, making imports more attractive to American consumers, just as Miran suggests.But this logic also overlooks crucial details. While the dollar’s reserve-currency status drives up demand for Treasuries (Treasury bills, Treasury bonds, and Treasury notes), it does not necessarily increase demand for all US assets. Asian central banks, for example, hold trillions of dollars in Treasury bills, to help stabilise their exchange rates and maintain a financial buffer in the event of a crisis. They generally avoid other types of US assets, such as equities and real estate, since these do not serve the same policy objectives.This means that if foreign countries simply need to accumulate Treasury bills, they don’t have to run trade surpluses to obtain them. The necessary funds can also be raised by selling existing foreign assets such as stocks, real estate, and factories.That is precisely what happened in the 1960s through the mid-1970s. By then, the dollar had firmly established itself as the global reserve currency, yet the US was almost always running a current account surplus – not a deficit. Foreign investors were accumulating US Treasuries, while American firms expanded abroad by acquiring foreign production facilities, either through direct purchases or “greenfield” investments, in which they built factories from the ground up.The postwar era was hardly the only time when the country issuing the world’s reserve currency ran a current account surplus. The British pound was the undisputed global reserve currency from the end of the Napoleonic wars in the early 1800s until the outbreak of the first world war in 1914. Throughout that period, the UK generally ran external surpluses, bolstered by high returns on investments across its colonial empire.There is another way to interpret the US current account deficit that helps explain why the relationship between the exchange rate and trade imbalances is more complicated than Miran’s theory suggests. In accounting terms, a country’s current account surplus equals the difference between national savings and investment by the government and the private sector. Importantly, “investment” here refers to physical assets such as factories, housing, infrastructure, and equipment – not financial instruments.When viewed through this lens, it is clear that the current account deficit is influenced not just by the exchange rate but by anything that affects the balance between national saving and investment. In 2024, the US fiscal deficit was 6.4% of GDP, significantly larger than the current account deficit, which was under 4% of GDP.While closing the fiscal deficit would not automatically eliminate the current account deficit – that would depend on how the gap is closed and how the private sector responds – it is a far more straightforward fix than launching a trade war. Reducing the fiscal deficit would, however, involve the difficult political task of convincing Congress to pass more responsible tax and spending bills. And unlike a high-profile trade confrontation, it wouldn’t cause foreign leaders to curry favour with Trump; instead, it would shift media attention back to domestic politics and congressional negotiations.Another key factor behind the current account deficit is the strength of the American economy, which has been by far the most dynamic among the world’s major players in recent years. This has made US businesses particularly attractive to investors. Even manufacturing has grown as a share of GDP. The reason employment has not kept pace is that modern factories are highly automated.skip past newsletter promotionafter newsletter promotionMiran’s plan, clever as it might be, is based on a flawed diagnosis. While the dollar’s role as the world’s leading reserve currency plays a part, it is just one of many factors contributing to America’s persistent trade deficits. And if the trade deficit has many causes, the idea that tariffs can be a cure-all is dubious at best. Kenneth Rogoff is professor of economics and public policy at Harvard University. He was the IMF’s chief economist from 2001-03.© Project Syndicate More

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      Trump’s tariffs get one thing right: capitalism is changing | Avram C Alpert

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      Trying to understand Donald Trump’s across-the-board tariffs based solely on economic theory won’t work. As the US president himself said: “Chronic trade deficits are no longer merely an economic problem, they’re a national emergency that threatens our security and our very way of life.” That may be why, as many economists have pointed out, there’s simply no good economic case for his plans.But few commentators have understood that facts and figures aren’t the whole point of the tariffs. As always, economics is part of a broader political vision. The tariffs help Trump make his claim that a way of life is under threat and he alone can protect it.Indeed, the political meaning of Trump’s tariffs is in the idea itself: “protectionism”. He is not just telling people that he’s going to improve the economy. He’s signaling that he’s going to protect a way of life, even – or especially – if it hurts others, by creating, in theory, good-paying factory jobs that could sustain local communities. (Never mind that the key to any industry’s ability to sustain communities are the practices of labor organizing Trump opposes.) On the campaign trail, he said: “Whether the women like it or not, I’m going to protect them.” He’s now saying the same thing to the country as a whole.Such non-economic justifications for economic policy are nothing new. They are part of what the sociologist Max Weber called “the spirit of capitalism”. Weber argued that capitalists had to justify a claim unique in human history: profit is good. For millennia before, philosophers had argued the opposite. Jesus, for example, told his disciples that it was likelier for a camel to go through the eye of a needle than for a rich man to get into heaven.But with capitalism, the pursuit of profit became good. How did it justify this? Weber said that’s where “spirit” comes in. He pointed to notions of work as a holy value in Protestantism and Calvinist ideas about how monetary success proved you were among God’s chosen few. These spiritual views engendered a work ethic and made capitalist excess palatable. At least for a time.When capitalist greed becomes unpalatable, new spirits emerge. To understand Trump’s protectionist spirit, we have to understand this preceding history.After the Great Depression, people saw that they might lose everything no matter how hard they worked and so the work ethic spirit lost its power. In its place, social democratic states gave a new collectivist spirit to capitalism. Social democracy limited excess and provided a moral logic by offering stability to all through a linked system of jobs and life-long public services.This collectivist spirit began to break down in the 1960s under the pressures of stagflation, oil shocks, and criticisms of a conformist, consumerist lifestyle. In response, capitalism’s spirit transformed itself again. According to two scholars of this transitional period, Luc Boltanski and Ève Chiapello, it did so by ingeniously incorporating the criticisms: it became about nomads, connections, flexibility, creativity.It was no longer the staid cubicle office man; it was now the exciting creative entrepreneur who knows no allegiances and is at home in the chaos of disruption. Hence Silicon Valley. Hence the destroyed manufacturing bases where jobs were converted to low-wage poverty traps and where Trump now finds many of his most loyal supporters. Hence his protectionist vision of a new spirit of capitalism.There is some merit in this desire to help those who lost out, but, as Weber noted, the spirits of capitalism can mask more sinister desires. By also pushing massive tax breaks for the wealthy, Trump is hoping that tariffs can provide rhetorical appeal without radically changing the social order.The tariffs say: we will protect your community by hurting those who profited off your pain and became rich through globalization. That’s why Trump blamed “globalists” for the dip in the stock market after the tariffs were announced: “A lot of [those selling stocks] are globalist countries and companies that won’t be doing as well … Because we’re taking back things that have been taken from us many years ago.” But that ignores the real ways in which jobs have been lost and communities upended. What the tariffs leave unsaid is that they won’t address the real issues underlying today’s economic pain: gutting welfare, failing to retrain workers, under-utilizing technology, and letting inequality rise relentlessly.Trump is right that capitalism, in a period of untrammeled greed and injustice, needs a new spirit to show it the way. But the trouble with a protectivist spirit is that it implies that some get protected while others get hurt. That will just create new cycles of dismay – as we are already seeing with the tariff whiplash and draconian immigration policies.What we need is a democratizing spirit, one that isn’t about protecting some and hurting others, but instead guides us to work collectively to ensure that all people can lead decent and meaningful lives even in a chaotic world. There are economic policies for this, such as fair trade, meaningful industrial policy, more worker representation on corporate boards, and more cooperatively owned businesses.But Democrats also need to learn from Trump and emphasize the spirit. They need to show that their democratic vision is not just technocratic, but as powerful and affirming as the feeling of being protected.The desire for this spirit may be why the rallies of Bernie Sanders and Alexandria Ocasio-Cortez have drawn record crowds. Most attenders say they aren’t there to hear the policies, which they already know. They’re there for the “community”, and to experience the “closest thing to a version of America you actually want to live in”, one that works for all of us. If the Democratic party can catch that spirit, they will not only win elections; they might just bring an end to decades of destruction.

      Avram Alpert is a lecturer in the Princeton Writing Program. His most recent book is The Good-Enough Life More

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      Donald Trump’s cartoon-like chaos leaves US economy on unstable course | Heather Stewart

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      Ten days reporting from the US – in Pittsburgh, Washington DC, and just across the Potomac River in Arlington, Virginia – gave me a fascinating snapshot of what feels like the slow-motion unravelling of the world’s largest economy.So many conversations featured uncertainty and wariness; and weariness, too, as businesses and consumers weigh up every decision, against the backdrop of the chaos emanating from the White House.Even the president conceded last week that the economy was in a “transition period”, claiming he had warned of this during his campaign. (When challenged, the White House could not come up with any examples of when he had done so.)The problem for Trump and his supporters, many of whom remain staunchly loyal, is that the transition period in question is starting to resemble that felt by the classic Looney Tunes character Wile E Coyote between charging off a cliff into midair and plunging to the ground.So far, the hard data from the US economy is holding up well. Friday’s payrolls report was strong, and the negative first quarter gross domestic product reading, while worrying, was hard to take a clear reading from because of the rise in imports as companies stocked up ahead of tariffs.There is little sign of anything as dramatic as mass job cuts, or a sudden stop in consumer spending – although the recent crop of data mainly relates to the period before “liberation day”.Look at the forward-looking surveys, though, and there are clear signs of anxiety. The long-running Michigan consumer sentiment index just had its steepest quarterly decline since the 1990 recession.Spend any amount of time talking to US consumers and businesses, and it is abundantly clear why: there are so many sources of policy ambiguity as to make the future not just uncertain but completely unknowable.There is a cliche that “markets hate uncertainty”, but in truth the same applies to everyone in the real economy, too: the company wondering what size order to put in and how many people to hire and the family thinking about buying that fridge or booking that holiday.It is not surprising they are uncertain. No one, even inside the administration, can say with any confidence what the tariff rates on imports from specific countries will be in July.Even if the tariff policy was crystal clear, its impact on prices would be hard to gauge – depending, as it does, on how much of the cost companies are willing to bear (or “eat”, as the Americans have it) at the expense of reduced profits, and how much is passed on to consumers.For the moment, as the Treasury secretary, Scott Bessent, has admitted, the tariffs on China, at 145%, are now so high as to amount to an effective trade embargo.Not every company will have the deep pockets and global reach of Apple to be able to bend its supply chain away from China to manufacture products for the US elsewhere (in the iPhone-maker’s case, India). Instead, many will be scrambling to find substitutes, which may be more expensive or not exist at all. Shortages of some products seem a distinct possibility.At the same time, sharp cuts in federal budgets, many of which have an ideological taint, including Robert F Kennedy Jr’s decimation of the National Institutes of Health, are raising short-term questions about unemployment and much longer-term worries about the US’s world-leading science base.Some of the most heartbreaking conversations I had were about aspects of Trump’s immigration policy: the man who said a Guatemalan friend’s six-year-old son had stopped going to school in case his mum was snatched by the authorities while he was there, and the restaurant manager who said it was becoming harder to hire Latinos because even fully documented workers feared they could face deportation anyway.skip past newsletter promotionafter newsletter promotionThese are first and foremost human tragedies, but clearly they also have an economic dimension. The credit rating agency Fitch warned in a report last week: “Risks associated with mass deportations could include potential worker shortages, production delays and increased wage inflation that hinders revenue growth, weakens profitability and lowers return on investment.”Of course, because the US economy’s abrupt gearshift has been driven by deliberate policy actions, it’s tempting to think: “It doesn’t have to be like this.”Much more of the real economy impact so far results from this widely shared uncertainty – or perhaps it is better to call it fear – than from the specifics of Trump’s policies.Business owners told me that if they just knew what the final tariffs on products from the various countries in their supply chain would be, for example, then over time they could adapt.It is not completely out of the question that a more settled policy position could arrive in the coming weeks.Certainly, Bessent appears to be trying to manoeuvre Trump towards striking a series of “deals” (in effect, promises of concessions in exchange for tariff carve-outs) with key economies.Yet the president appears to have such a love of political drama – and such an inability to choose a course and stick to it – that the unknowability of future policy seems to be the very essence of Trump 2.0.It seemed to be the mighty bond markets, driving up the cost of US borrowing, that checked Trump’s initial “liberation day” drive, prompting the “pause”.But if time drags on with no agreements in sight, the next wave of distress signals are likely to come not from Wall Street but from main street – in soaring prices and empty shelves. How Trump responds then is anyone’s guess. More

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      Trump’s promised ‘golden age’ for the US economy is off to a chaotic start

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      Donald Trump promised to usher in a new “golden age” for the US economy – one with lower prices, more jobs and greater wealth. This week, his first quarter report card came in, and the new age is off to a chaotic start.Gross domestic product (GDP) shrank for the first time in three years during the first quarter, abruptly turning negative after a spell of robust growth as trade distortions and weaker consumer spending dampened activity.It took the US president all of 43 minutes to distance himself from the dismal reading, released on Wednesday morning.“Our Country will boom, but we have to get rid of the Biden ‘Overhang’,” Trump wrote on Truth Social, his social media platform. “This will take a while, has NOTHING TO DO WITH TARIFFS, only that he left us with bad numbers, but when the boom begins, it will be like no other. BE PATIENT!!!”By Trump’s telling, any bad numbers are the fault of Joe Biden – but this attribution does not extend to the good ones.March’s strong jobs report demonstrated how “the private sector is roaring back under President Donald J. Trump”, according to a statement issued by the White House. “IT’S ALREADY WORKING,” the president declared the day it was published.But April’s less buoyant jobs report, released on Friday, prompted a more tepid response. He wrote: “Just like I said, and we’re only in a TRANSITION STAGE, just getting started!!!”So which is it? Is the “golden age” of America well under way? Or will it take a while?Growth in the first three months of the year – no matter how much Trump wants to blame the 19 or so days he was not yet in office – was significantly challenged by the new administration’s plans to overhaul the world economy. US goods imports surged 41% as companies scrambled to pre-empt tariffs, while consumer spending on durable goods fell 3.4% as sentiment came under pressure.And the first quarter figures raised troubling questions about the second. Activity weakened largely as firms braced for the lion’s share of Trump’s tariffs, which he only unveiled in early April. How those firms, and their customers, ultimately respond to those tariffs – and the confusion around them – is widely expected to have a greater impact on growth.Trump’s erratic rollout of 10% tariffs on goods from much of the world, and 145% on China, “have altered the picture dramatically” since the end of the first quarter, Oliver Allen, senior US economist at Pantheon Macroeconomics, observed. “Any support to spending from pre-tariff purchases will unwind soon now that substantial new tariffs have been imposed.“Consumers’ spending will also be weighed down by a hit to confidence and real incomes from higher prices, while intense uncertainty will put the freeze on business investment, and exports – especially to China – will suffer.”It is too soon to say whether tariffs, which the administration insists will revitalize the US economy, will, in fact, set the stage for a recession: two consecutive quarters of contraction. On Trump’s watch, the landscape shifts rapidly from one day to the next, let alone during an entire quarter.Trump is right, to a point: most of his tariffs are not to blame for the stunning reversal of growth in the first quarter. The US only hiked duties on China and imposed its blanket 10% levy on many other countries last month, days into the second quarter.The foundations of a potential Trumpcession were not laid in the early months of the year by the tariffs themselves, but by his administration’s execution of them.From repeated jerks and jolts around sweeping duties on Canada and Mexico to announcing “reciprocal” tariffs on dozens of nations which were ultimately imposed for less than a day, widespread confusion and uncertainty is now embedded into the world’s largest economy. Businesses inside it and out are not happy.Scott Bessent, Trump’s treasury secretary, has coined an interesting term for this playbook of threats, theatrics and social media broadsides. “President Trump creates what I would call ‘strategic uncertainty’ in the negotiations,” he told a press briefing on Tuesday. “As we start moving forward, announcing deals, then there will be certainty. But certainty is not necessarily a good thing in negotiating.”However useful Trump and his officials find “strategic uncertainty” during trade negotiations, it has different consequences for those paying bills they were repeatedly assured would swiftly fall, trying to grow a business in a market with leaders locked in a war of words with the White House, or planting a crop without knowing what the economic realities will be by the harvest.Trump returned to office after winning the backing of rural and lower-income voters in significant numbers last November. He needs to preserve his base if Republicans are to maintain power in Washington during his second term.Polling suggests these groups are concerned. A PBS News/NPR/Marist survey, published this week, found 48% of rural voters disapproved of Trump’s handling of the economy. The same was true for 57% of voters with a household income of less than $50,000.As apprehension grows, the US president has sought to play down the risks. In one of the more peculiar moments in another bizarre week, he appeared to play down the threat of empty store shelves.“Well, maybe the children will have two dolls instead of 30 dolls, y’know,” Trump said during a cabinet meeting on Wednesday. “And maybe the two dolls will cost a couple of bucks more than they would normally.”China has “ships that are loaded up with stuff, much of which – not all of it, but much of which – we don’t need”, he continued.It is typically up to the American consumer, not their president, to decide what they do and don’t need to buy. For a man whose fortune and image are built around conspicuous consumption, the comments seemed very off-brand. “Skimp on the Barbie” read the front page of the often Trump-friendly New York Post. It is still early days for Trump. But already the Biden “overhang” argument is wearing thin. It will be up to US voters, not their president, to deliver a verdict on his handling of the economy. More

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      One hundred days in, Donald Trump faces a problem: he can rage, but he can’t govern | Jonathan Freedland

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      He says it’s the “best 100-day start of any president in history”, but you can file that along with his boast about crowd sizes and his claim to have won the 2020 election. In truth, the first three months of Donald Trump’s second presidency have been calamitous on almost every measure. The single biggest achievement of those 100 days has been to serve as a warning of the perils of nationalist populism, which is effective in winning votes but disastrous when translated into reality. That warning applies across the democratic world – and is especially timely in Britain.Start with the numbers that matter most to Trump himself. A slew of polls appeared this week, but they all told the same story: that Trump’s approval ratings have collapsed, falling to the lowest level for a newly installed president in the postwar era. He has now edged ahead of his only rival for that title: himself. The previous low watermark for a president three months in was set by one Donald Trump in 2017.Back then, 42% of Americans approved of the way Trump was doing his job. The latest Ipsos survey for the Washington Post/ABC News has Trump at just 39%. This, remember, is meant to be the honeymoon period, yet Trump is 10 points behind where Joe Biden stood at this point, 30 points behind Barack Obama and 44 points behind Ronald Reagan. Remember: US presidents tend to get less, not more, popular as time goes on.Perhaps most significant is that Trump is weak even in those areas where he’s meant to be strong. Confidence in his ability to handle immigration has tumbled and the same is true, even more critically, of his management of the US economy. On the latter, just 37% back Trump, a depth he never plumbed during his first term, even as the economy seized up under Covid. For the first time since 2001, a majority of Americans believe their economic situation is getting worse.With good reason. Because the economic data is almost as troubling for Trump as his poll numbers. This week, official figures showed that the US economy contracted by 0.3% in the first quarter of the year, further fuelling fears of a recession. Trump wasted no time in blaming the shrinkage on Biden, who was in charge for just 20 days of the first three months of 2025, an argument only slightly weakened by the fact that the last quarter with Biden in charge saw growth of 2.4%.It’s a precipitous drop, and the cause of it is hardly mysterious. Economists agree that the culprit is Trump’s tariffs, which prompted a surge in imports, as companies scrambled to buy in goods from abroad before the president’s on-again-off-again levies kicked in. Because those imported goods and services are not produced in the US, they’re subtracted from the headline GDP figure. Hence the contraction. Meanwhile, the chaos and volatility unleashed by Trump’s tariff policy has dented consumer confidence, now down to its lowest level since the recession of 1990, leaving Americans hesitant to spend money amid so much uncertainty. Even though the latest job numbers look healthy, analysts say the underlying picture is alarming. As Bloomberg reports, “corporate investment plans and expectations for growth and jobs have all plummeted – and the key reason is Trump’s trade war.”Trump knows that the warnings from retail giants Walmart and Target, of empty shelves as supplies from heavily tariffed China dry up, have cut through. He addressed that anxiety this week, but in a way that should make even Trump’s admirers, those who usually praise his ability to connect with ordinary folk, worry that he’s losing his touch.Asked about potential shortages of toys at Christmas, Trump said, “Well, maybe the children will have two dolls instead of 30 dolls, and maybe the two dolls will cost a couple of bucks more.” Bit late in his career for Trump to don the saffron robes and preach a Zen flight from consumerist materialism. His two-toys remark – which strangely did not feature as one of his campaign pledges in 2024 – has already cast him as the Grinch set to ruin Christmas.“BE PATIENT!!!” he urges on his social media platform, as he insists that the vertiginous downward slide of the stock market either doesn’t matter or is all Biden’s fault. But the whiff of desperation is strong as Trump begins to see why the one idea he actually believes in and has believed in for decades – tariffs – is an object of near-universal contempt among economists. Yes, tariffs may have succeeded in persuading Apple to shift manufacturing away from China. But those jobs are not about to move to the US. Apple has announced instead that it will assemble its US-bound iPhones in India. Better restitch those red baseball caps with a revised slogan: make India great again.By now, you’ll recall, Trump was meant to have ended the wars in Ukraine and Gaza, indeed he promised to do that by 21 January. But after a brief ceasefire, Israel’s war against Hamas in Gaza has resumed, the Trump administration having apparently lost interest. As for Ukraine, Trump got to brag of a breakthrough this week, with an agreement that gives the US a stake in Ukraine’s mineral wealth. But it’s far from the deal he sought.The case he always made was that the US had to be reimbursed for the billions it had given Ukraine in military support under Biden – plucking the entirely bogus figure of $350bn out of the air. But this week’s arrangement includes no such payback. On the contrary, the deal is one Kyiv can look on with quiet satisfaction. It seems the Ukrainians could smell Trump’s need to have something to shout about in time for his 100th day, and they leveraged that eagerness to their advantage.As for his expansionist threats to gobble up Panama, Greenland and Canada, the only concrete result those have brought is defeat in Canada’s general election for the pro-Trump Conservatives and a back-from-the-dead success for the Liberal party that vowed to defy him. Such is Trump’s narcissism that he even boasted about that, citing it as evidence of how much he matters in the world. As he put it, just before Canadians voted: “You know, until I came along, the Conservative was leading by 25 points,” he mused. “I was disliked by enough of the Canadians that I’ve thrown the election into a close call.”The promise was that this second Trump term would be different, that the chaos and churn of Trump 1.0 would be gone. But on Thursday, we were back to the good old days, with the firing of his national security adviser, Mike Waltz, partly for his accidental admission of a journalist into a Signal group chat that discussed attack plans for Yemen, partly for advocating a tougher stance on Vladimir Putin, and partly for earning the hostility of far-right conspiracist Laura Loomer, who has the ear of the president.So it’s fair to say the 100 days have not gone as Trump would have wished. And thanks to those serial failures, you can see the first, small signs that his power to terrify is fading. Witness the handful of senate Republicans who voted with Democrats against his tariff policy. And note how the reliably rightwing editorial page of the Wall Street Journal is now a fierce critic, slamming Trump as a “bully” and denouncing tariffs as “the biggest economic policy mistake in decades”. For a few short hours, even Jeff Bezos seemed ready to take a stand, amid reports that Amazon was about to itemise the cost of tariffs to US customers, before the company backed down.Of course, none of this should be a surprise. Trump’s conman promises and delusional dreams of turning the clock back were always bound to fail. This is the nature of nationalist populism, whether it wears a red cap in Michigan or a turquoise rosette in Runcorn. It is expert at turning grievance, division and nostalgia into votes. But when it comes to governing, it will always fail. It offers an outlet for complaint – and has no answers at all.

      Jonathan Freedland is a Guardian columnist More