BREAKING: Jobs Report Show MAJOR Miss; Warning Signs for Economy

Summary

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Podcast Summary: Bulwark Takes

Episode: BREAKING: Jobs Report Show MAJOR Miss; Warning Signs for Economy

Date: March 6, 2026
Host: JVL (The Bulwark)
Guest: Kathryn Rampel (Author, Receipts newsletter)

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Episode Overview

In this urgent breakdown, JVL and economic columnist Kathryn Rampel react to the February jobs report, which surprisingly showed a net loss of 92,000 jobs—the first six-month run of job losses during Trump’s second presidential term. The episode analyzes the implications for the broader American economy, assesses the White House's response, discusses fallout from the escalating Middle East conflict, and highlights looming inflationary dangers. The discussion centers on how trade, immigration, war, and Federal Reserve policy intersect—and the negative political and real-world consequences that are emerging as the election cycle heats up.

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Key Discussion Points and Insights

1. Surprise Job Losses and Their Context (00:45–04:55)

• February saw a net loss of 92,000 jobs, an unexpected negative turn after relatively consistent (if slow) growth.

• The Biden administration rarely saw negative job growth, making this development particularly notable.

• Some blame is attributed to a healthcare labor strike, but Kathryn emphasizes the economy “should be resilient enough to grow jobs even with a strike in one hospital system.”

• Job losses have not been consecutive, but this marks the sixth month under Trump with more jobs shed than gained.

• Job losses are now net negative since May 2025.

  “The economy should be resilient enough to still show job growth … healthcare had been basically the only reliably bright spot. So.” — Kathryn Rampel (02:12)

2. Political Spin: Immigrants and Job Creation (04:55–08:04)

• The administration claims that a drop in immigration is partly to blame for job losses—contradicting prior rhetoric that deporting immigrants would benefit native-born Americans’ employment.
• Kathryn debunks this logic, noting immigrants typically fill jobs native-born workers do not want, especially in sectors like construction, food service, healthcare, and agriculture.
• The aging U.S. population, with more retirements, means fewer native workers are available.
• Policy contradiction: “They kind of want it both ways … either way they’re just trying to cope with the fact that the numbers are not great.” — Kathryn Rampel (08:04)

3. Sectoral Weakness and Stagnation (08:24–10:49)

• Most major sectors show job losses over the last year.

• Modest gains only in healthcare, education, and leisure/hospitality.

• Blue-collar jobs (manufacturing, mining, logging)—central to Trump’s political base—are among the hardest hit.

• Kathryn links this to both immigration policies and tariffs that have raised costs for U.S. manufacturers.

  “The blue-collar sector has been doing pretty badly. The jobs that [Trump]…said he would bring back, those are struggling in part because of Trump policies like tariffs.” — Kathryn Rampel (09:37)

4. Rising Unemployment and Long-term Joblessness (10:28–12:44)

• Unemployment has ticked up to 4.4% (about 10% higher than the Biden era’s sub-4% streak).

• There is a growing pool of long-term unemployed (27+ weeks without work)—indicating deteriorating prospects for re-employment.

• Kathryn frames this as “paralysis in the economy”: companies aren’t firing en masse, but they're also not hiring.

  “If you get unemployed, your chances of getting re-employed have gotten a lot worse…. Getting back into gainful employment has gotten a lot harder recently.” — Kathryn Rampel (11:08)

5. Central Bank Dilemma: Slowing Growth vs. Inflation (12:44–14:33)

• Traditional signs point to the need for Fed rate cuts to encourage growth.

• Simultaneously, energy prices are spiking (gas up 25 cents in a week) amidst war in the Middle East, stacking on inflationary pressures.

• The Fed is “handcuffed”; lowering rates would fuel both hiring and also inflation.

  “It is almost entirely Donald Trump’s doing … If Donald Trump had just come into office and done nothing … we were very close to that coveted soft landing.” — Kathryn Rampel (14:50)

6. War in Iran: Global Ripple Effects (15:31–22:32)

• The new Middle East war is identified as a self-inflicted economic wound, with energy market disruptions already spiking oil/gas and fertilizer prices.

• 20% of global oil supply travels through the Strait of Hormuz, now frozen due to attacks and uninsurable risk.

• Kathryn walks through cascading impacts: refineries and smelters shutting down, shortages in fertilizer (impacting food prices), rising global energy and shipping costs.

  “This could very well turn into the largest disruption of oil markets in history … global oil supply goes through the Strait of Hormuz.” — Kathryn Rampel (17:07)

7. Secondary Effects & Policy Failures (22:44–29:23)

• U.S. government caught flat-footed: “Did you consider not starting a war in the Middle East?”—Kathryn Rampel (25:08)
• Energy market fallout is so acute the administration has eased sanctions on Russia to allow more oil to flow, benefiting adversaries.
• Kathryn notes: “Putin is just, like, licking his chops here…because we are loosening our sanctions for other countries to buy Russian oil.” (29:23)

8. Longer-Term Global and Domestic Fallout (29:48–36:32)

• Even a prompt end to hostilities will ripple for months: restarting refineries, reactivating smelters, filling fertilizer orders creates lagging disruptions.
• Diplomatic damage is severe: relationships with Europe, India, and Middle Eastern allies are strained or worse.
• Kathryn: “We can’t go back to the way things were…because of these domino effects you mentioned.”

9. 2026 Political Forecast: Risks for Trump and the GOP (36:32–40:42)

• Even a “best case” scenario leaves the economy 10–15% worse off than without the war and current policies—right as elections approach.
• Rising “warflation,” higher unemployment, and stagnant growth are dangerous for the president’s party.
• Affordability is “the political vulnerability…If you look at the number one reason why people who had been Trump supporters say that they have defected, it is about inflation, prices, and the economy.” — Kathryn Rampel (40:02)

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Notable Quotes & Moments

• On job losses vs. political spin:

  “Jobs numbers are not like golf. Lowest score wins. You want them to be positive, right?”
  — JVL (01:16)

• On the myth of immigrant job displacement:

  “There’s not like a queue of … native born heritage Americans who are willing and ready to fill those jobs.”
  — Kathryn Rampel (06:40)

• On Trump’s economic strategy:

  “If he had done nothing but go and play golf, he could have just coasted economically anyway...If he were trying to raise prices, I’m not sure what he would be doing differently.”
  — Kathryn Rampel (39:24, 39:48)

• On war's economic fallout:

  “We are now rolling back our sanctions on Russia … to deal with the economic fallout from our war in Iran.”
  — Kathryn Rampel (27:49)

• On the political stakes:

  “53% of voters now say they think Trump has made the economy worse than Joe Biden. Who could possibly have warned them?”
  — JVL (40:42)

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Timeline of Key Segments

| Timestamp | Segment | Notes | |---------------|--------------------------------------------------------|---------------------------------------------| | 00:45–02:12 | Initial jobs report shock | February jobs report, historical context | | 02:12–04:55 | Contextualizing job losses & healthcare strike | Immigration claim by White House addressed | | 04:55–08:04 | Political spin: immigrants & labor markets | Kathryn refutes administration’s logic | | 08:24–10:49 | Sector by sector breakdown | Focus on blue-collar job losses | | 10:28–12:44 | Unemployment & long-term joblessness trend | Labor market “paralysis” | | 12:44–14:33 | Fed’s dilemma: slow growth & rising inflation | Oil prices / global uncertainty | | 15:31–22:32 | War ramifications: energy, fertilizer, supply chain | Major commodity and shipping disruptions | | 22:44–29:23 | Administration scrambling; Russia windfall | Sanctions, policy self-sabotage | | 29:48–36:32 | Long-term, global, and diplomatic ripple effects | Refineries, supply chain lag, US allies | | 36:32–40:42 | Political outlook, “warflation”, voter sentiment | Election impacts, affordability |

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Final Thoughts

• Kathryn repeatedly warns that the economic threats and “warflation” are almost entirely the result of Trump’s active decisions, and that political fallout is likely.
• The administration’s shifting explanations and “coping” strategies are, according to the hosts, unconvincing and sometimes self-defeating.
• JVL and Kathryn set the stage for follow-ups as the crisis, and its economic repercussions, continue.

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Tone and Style

The conversation is irreverent, wonky, occasionally dryly humorous, and often biting in critique—particularly when evaluating administration narratives and policy inconsistency. JVL and Kathryn riff with frankness and wit, aiming for clarity amidst complicated economics.

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Transcript

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[JVL]

Hello, everyone. This is JVL here with my bulwark colleague Kathryn Rampel, author of the Receipts newsletter. And we have economic news. It's Friday and we have jobs reports.

[Kathryn Rampel]

And.

[JVL]

And, oh, oh, America lost jobs. Not. Not job growth. We went backwards. So. Lost 92,000 jobs in February. Catherine. Not something that happened a lot in the Biden administration.

[Kathryn Rampel]

Nope.

[JVL]

But. But here we are. And just to clarify, jobs numbers are not like golf. Lowest score wins. You want them to be positive, right?

[Kathryn Rampel]

Yes. You want them to be positive. Ideally positive enough to, you know, keep up with population growth and reduce unemployment and all of the hopefully obvious things. Instead, I think we have net job losses since May of 2025 because we. This is not the first time we've lost jobs.

[JVL]

No.

[Kathryn Rampel]

Under the Trump administration. Yeah. I think we have a chart actually showing job losses. Yeah, exactly. There. So you can see. Look at that.

[JVL]

Boy, look at all those blue lines back in 2022 and 2023 and 2024. Wow. I guess America really hated that.

[Kathryn Rampel]

Yeah, well, they did.

[JVL]

Didn't like those blue lines, huh?

[Kathryn Rampel]

America was really mad about the economy in those days.

[JVL]

So mad.

[Kathryn Rampel]

I mean, not because of the job market per se, because of other stuff happening in the economy. But, yeah, this was not sufficient at the very least to stoke a lot of enthusiasm about the Biden economy. Whereas, as you can see here, we now have six months of job losses, not consecutive, but, you know, over the course of Donald Trump's second term. So not great. I should clarify that the job losses in February were partly about the fact that there was a big strike in healthcare at a hospital system. But, like, the economy should be resilient enough to still show job growth without, you know, even with some doctors and nurses at one hospital being on strike. And actually, healthcare had been basically the only reliably bright spot. Yeah. In the economy. So.

[JVL]

So we are going to talk about the job stuff. We're going to talk about Iran and the economic ramifications of the. The new. And we're going to try to tie it all all together for people. But I just want to go back again. Expectations, very important. This jobs report seems to have come a little bit out of nowhere. Nobody seems to have expected job numbers this week. Wall street kind of having a little bit of a minor freak out this morning. And the administration's response seems to be yeah, but it's because of all the. The immigrants were deporting.

[Kathryn Rampel]

Yeah, it's that the line. That's part of the line. I think we actually have Kevin Hassett saying a version of that.

[JVL]

Can we play that asterisks in Jim's words to make this number make more sense?

[Economist Guest]

Well, I think, you know, Jim.

[Kathryn Rampel]

Yep. We had some sad.

[JVL]

Matt. Yeah, there we go.

[Economist Guest]

Many strong indicators this month that it's something of a surprise. But there are some weather, there are strikes on the west coast. And I think that we also have this birth death model, the change in the procedure at the bls. So I think what we need to start doing with these jobs numbers, at least on the payroll side, is take the average over a few months. And if you take the average over a few months, we had a surprisingly positive one last month and a surprisingly negative one this one. But on average it's about what we expect to be seeing because immigration has gone down by so much that break even employment is probably in the sort of 30 or 40,000 jobs a month range. And so, yeah, I think, I think it's consistent with everything else we're seeing, which is that the economy is really strong.

[Kathryn Rampel]

Okay, so let me decode this a little.

[JVL]

Yeah, you unpack that for us.

[Kathryn Rampel]

Sure. So aside from like the technical stuff that he talked about, which there's some truth to it in birth death model, I won't get into all of that. That would be the case in any administration, the immigration thing. So we had been hearing for years by Trump and from Trump and from his allies that if you pulled immigrants out of the economy, then you would have a lot more job openings for native born Americans that, that immigrants were stealing all of the jobs that should have gone to, you know, red blooded Americans. And therefore if you just yanked them out of the labor force, maybe yanked them out of the country, that would create, you know, an abundance of riches in terms of job opportunities for native born Americans. Heritage, many of us, American heritage Americans. Thank you. Many of us argued at the time like that's not really true. The jobs that immigrants disproportionately think fill are different from those that native born Americans disproportionately fill. For example, like immigrants are more likely to be in the construction sector, food services, healthcare, for that matter, it's not really tallied in this, this report, but agriculture. So there are a lot of sectors that if you take the immigrants out there, there's not like a queue of American, native born heritage Americans who are willing to fill those jobs, willing and ready to fill those jobs. And it's not just about like what are the jobs that people are interested in. It's also just like how many are, how many people are there because you have native born Americans being much skewing, much older skewing, more likely to drop out of the labor force because they're approaching or in retirement age. So part of the reason why we did see this, what looked like an increase in immigrant employment, such a big increase in immigrant employment versus a, for a while, what looked looked like a decrease in native born employment. I'm not actually sure that that bears out after all the revisions, but at the time, at least this was the case. It was because Americans were retiring and immigrants were coming into the country. Yes. And definitely higher than historical numbers. But also they were working age so they were coming here and they were working. So anyway, so this, that's the backdrop for all of this today. We are hearing from Kevin Hassett, your favorite economist. I know that actually when you pull those immigrants out of the labor force, maybe you don't get as much job growth. So like what is it, is it that we should have expected more job growth for native born Americans or it's like, no, obviously we, we would have expected less job growth overall. So you know, they kind of want it both ways and either way they're just trying to cope, I guess with the fact.

[JVL]

Yeah, well that's what it is, right?

[Kathryn Rampel]

Yeah. That the numbers are not great. And I do want to say like you should never read too much into one month's report. Haccid is right on that. Every economist will tell you that. But it's not just one month's report. We've seen again six months now under Trump's tenure in which we've had job

[JVL]

losses and when there's been growth, it's been really slow. So.

[Kathryn Rampel]

Yeah, and it's very, very low growth. Yeah, it's been low growth and it's again, it's been really lopsided. Can we pull up the chart actually of industries? Do we have that? So this is over the past 12 months and I'm sorry, it's a little bit ugly as a chart, but you can see that this is every major sector and most sectors have lost jobs. The ones that have not are private education and health services. And if you break that down, it's almost entirely health, leisure and hospitality has done okay. Other services have done okay. Construction, I guess, is modestly up. I don't know what that looks like in the past few months, but my guess is it's not great. Given again that we've been deporting much of the workforce.

[JVL]

So, yeah, the manufacturing, mining and logging, those are like real alpha male, Department of Labor, you know, area in picture type stuff jobs.

[Kathryn Rampel]

Yeah.

[JVL]

Not making a lot of those, are we? We're going back to those.

[Kathryn Rampel]

Exactly. The, the blue collar sector has been doing pretty badly. You know, the, the, I think this is supposed to be Trump's people like. Right, right. He cares about these macho jobs, these white collar, not white collar, blue collar, hyper masculine jobs, white people jobs. White collar, white person, blue collar jobs. Yeah. So those are the, those are the jobs that he's supposed to be most devoted to, that he said he would bring back. And instead those are struggling. And those are struggling in part because of Trump policies like tariffs. Right. So like when he tariffs steel and aluminum, you have a whole bunch of other downstream manufacturing companies that rely on purchasing steel and aluminum to make cars and appliances and other stuff.

[JVL]

So unemployment ticks up to 4.4%. Just as a reminder, that would be 10% higher than it was for almost the entirety of the Biden administration when unemployment was below 4% for something like 36 consecutive months. I don't have the exact count, but it would was, you know, it was pretty good. Wow, look at that.

[Kathryn Rampel]

So this is, this, just to clarify, this chart that we're showing is long term unemployed, which I wanted to emphasize because it's, it's like, it's the case that unemployment itself has ticked up a little bit, as you point out, you know, it's like 10 higher, but it's still, you know, it's not super high. 4.4%.

[JVL]

Not yet.

[Kathryn Rampel]

Not yet. Look, and I'm not rooting for it to, to get a lot worse, because me neither. It's disproportionately the most vulnerable in the population who bear the brunt of job losses and recessions and everything. But the reason I wanted to show this chart is that it shows that if you get unemployed, your chances of getting re employed have gotten a lot worse. That's what this is Showing. So this is how many people, of those who are unemployed, how many people are long term unemployed, which is like approximately six months, 27 weeks. And that has been growing pretty fast. And that's concerning because it used to be like every, every month, like even when we have gangbusters job numbers, a lot of people lose their jobs too. The, the, you know, it's like there's just tremendous churn. Exactly. There's tremendous churn in the economy. And the hope is that if people lose their jobs, there are still lots of openings for them to find. You know, if you lose a job at McDonald's, maybe you can get a job at Burger King, or you lose on one construction site, you can find another one. And so that doesn't seem to be happening. And I think this is partly again about the trade wars and about the fact that there's just this paralysis in the economy, that companies are actually, they're not firing in huge numbers, but they're also not hiring. So if you are one of the unlucky people to have lost your job, getting back into, you know, gainful employment has gotten a lot harder recently.

[JVL]

So I want to walk us then into the trap that America seems to be sleepwalking into. So we have, we're going backwards in terms of job creation. It is getting harder for people to find jobs once they've been unemployed. There is a real hesitancy in they just in the business community to spend money because of all the uncertainty. These are signals that traditionally would say to the Federal Reserve, hey, we got to cut rates to stimulate the economy. Correct?

[Kathryn Rampel]

Usually, yes. Usually.

[JVL]

The, the problem is that at the same time we have oil prices jumping by like, I don't know what the percentage is. I think we had a 25 cent per gallon increase this week alone in price of gas. And we have a war in the Middle east which is about to mess up huge swaths of the global economy. Not just oil, not just energy, but trade and commodities like aluminum. You mentioned aluminum already. We will talk about that. Fertilizer, which is a precursor for food production. And so it sure seems like in the short run we are headed towards a bunch of inflationary pressures. And so again, I'm just a guy on YouTube, but it seems like a moment in which the economy is slowing and moving backwards and the Fed wants to stimulate things in order to get businesses to invest a little bit more money in order to hire people. The Fed is going to feel a little bit handcuffed if there are also a bunch of inflationary pressures. Pushing up against them.

[Kathryn Rampel]

Yeah, I mean, the Fed is in the worst possible position and it is almost entirely Donald Trump's doing. I was talking with a friend earlier today about, like, can you imagine how different the economy would be if Donald Trump had just come into office and done nothing?

[JVL]

Just gone golfing.

[Kathryn Rampel]

Gone golfing as some, some of us advised him to do. I literally wrote a column way back in the day before he got into office saying just please go play golf and don't do anything on the economy. He inherited an economy with great tailwinds. We were very close to that coveted soft landing, meaning we would wring inflation out of the economy without crashing it, without having a recession. Job growth was still strong. And instead, pretty much every economic policy, or even non economic policies like bombings have made sense stuff. Worse, I mentioned the inflationary pressures on

[JVL]

the, the war stuff, because that's. Yeah, you, you wrote a great newsletter yesterday about this. People should go to the bulwark.com and subscribe to it. But I think people need to hear this and understand that there are a bunch of second and third order economic effects which stem from war, which do not seem to have occurred to anybody in the administration.

[Kathryn Rampel]

Nope. No, they do not. Yeah, like we can blow stuff up.

[JVL]

Explosions, dude, yeah, chug, chug. Without any understanding, like, oh, oh, maritime insurance. What's maritime insurance? How does it work?

[Kathryn Rampel]

How do gas prices work? Apparently, like, this is. Should have been totally obvious. This is probably obvious to most Americans, but like, you know, normies who are not paid to pay attention all of these things. And look, I want to start by saying it always feels a little icky and crass to be talking about the economic fallout of a war. The most important thing about the war is the loss of life and other casualties, including of our service members and the children's school that was destroyed and all of those things that I hope that is obvious, but I still.

[JVL]

I'm sorry, I have to interrupt you here to say that the reason we do have to talk about this stuff is not to be callous, but because wars are about political will. Right? This is what bombs do not win. Wars. Political will is what determines the outcome of wars. And in America, it is well established that our political will largely follows economics

[Kathryn Rampel]

and gas prices in particular. Yes, yes.

[JVL]

There is a strategic reason why we have to talk about the economics of this as it relates to war. So don't feel like you need to apologize for this. This is, it's all very.

[Kathryn Rampel]

I just. Well, I'm not apologizing. I'm Just trying to put stuff in context because I don't want people to think like that's the only calculus that we should care about.

[JVL]

Sure.

[Kathryn Rampel]

In any event, sorry for that throat clearing. It also matters, by the way, because I'm not sure a lot of, like, most Americans have heard all that much about the war, and they may be dimly aware of it. There's some polling, I think, from Ipsos that showed that. I forget what the share was, but it was only like a quarter of Americans had heard a lot about the war. And, you know, it's going to come home to them. Like, they may not be aware of what's going on in the world. They may not be aware even of service members who have died, but they will notice when they go to their local gas station. And gas is a lot more expensive. So, yes, gas, gasoline. The most obvious disruption here. I think S and P Global had said that this could very well turn into the largest disruption of oil markets in history because about 20% of global oil supply goes through the Strait of Hormuz, which is on Iran's southern coast. And if you look at what has happened to traffic on Iran's southern coast in the Strait of Hormuz, it has rapidly declined. I think we actually have a chart showing how it's. Yes. So this is, you know, another. Another chart. This was research. So that blue line, you can see, like, that's how much the daily ship crossings have plummeted there. I think they're not quite at zero, but they're. They're pretty close. And would you want to go through this straight, given that you're probably uninsurable? I think, like, nine different ships of various kinds have been attacked at this point, mostly by Iran, but I'm not sure all of them have been attributable to one side or the other. So it's very dangerous. And the results of all of that is that, as you can see, the shipments have been coming to a virtual standstill. And also production has been cut back a lot. So, like in Iraq, they have dramatically cut back oil production because they can't ship it and they're running out of storage. And you have a bunch of refineries in the region in, I think Bahrain, maybe uae, Saudi, Kuwait, announced that they were. I don't remember. There are a bunch of them. Like, I feel like every day there, there's another one that again, have either been shutting down entirely or have been having to scale back because there's nowhere to send the oil to. So that's going to Trickle down to gasoline prices. You also have liquefied natural gas which is used to power factories, among other things.

[JVL]

Industrial. Yeah, it's hugely important for industrial based manufacturing.

[Kathryn Rampel]

Exactly. Including in that region. I mean, a lot of the LNG that comes from the Middle east goes to China and goes to Europe, but it's also used for production just in the Middle East. And so you've had aluminum, I think you mentioned this, an aluminum smelter has been shut down. You've had disruptions in production of various kinds of chemicals, including fertilizer or component ingredients that go into fertilizer. So you have this cascading effect from the energy markets getting massively disrupted. And then you have all of the downstream companies that don't have energy or otherwise would ship stuff through the, the straight and they can't, they can't produce, they can't ship it. So you're going to have all of these effects throughout the world, not just on energy prices, but also on fertilizer, which as you point out is a feedstock into literal food. You're going to see food prices go up. Probably not immediately, but you know, probably long term.

[JVL]

Right.

[Kathryn Rampel]

That's longer term.

[JVL]

Right.

[Kathryn Rampel]

And then you also have lots of other products that people may not realize that use. Yep. Oh, here we go. Thank you. This is, this is a measure of fertilizer prices. Urea is a very common fertilizer ingredient. You can see prices have gone way up. And that's I think as of yesterday, I think that chart is. I don't know what it looks like today, but in any event, so fertilizer prices are going to go up, that's going to get passed along to food prices. You have a lot of other products, as I was about to say, that include oil and gas or the sort of cast off products from oil and gas refineries that will also get more expensive in the longer term. So it's almost, it's amazing like how many products I was looking through this list that the Department of Energy put out, but it's like shampoo, shaving cream, footballs, almost anything made out of plastic, anything with petroleum.

[JVL]

Petroleum, all petroleum products. This is. Yeah, every that.

[Kathryn Rampel]

So garbage bags, all that stuff. And then just the last thing, sorry is that of course anything that gets shipped, even if it doesn't include petrochemicals in it, freight uses energy. So that stuff's going to get more

[JVL]

expensive too when energy costs go up. That is an underlying inflation for everything.

[Kathryn Rampel]

Correct.

[JVL]

Right. And so this is one of, you know, when, when oil Prices go up, it pushes up inflation because anything that needs to get shipped than has increased costs. I just want to explain to people a little bit about the insurance problem.

[Kathryn Rampel]

Yeah.

[JVL]

So for people who don't maybe think about this a lot about shipping and maritime, big ships, supertankers, cargo ships, they are enormous capital investments. They're incredibly expensive. And the stuff they carry is also incredibly expensive. You know, a fully laden oil tanker is worth hundreds of millions of dollars. If you are the owner, operator of the, the ship or you are the owner of the cargo and are paying to have it move from one place to another. Losing an entire shipment of something can be economically catastrophic, which is why you insure it. And when maritime insurers come in and say, no, we will not write policies for a ship going in this area that makes it so that it's just not viable for you to do. You can't, simply can't tolerate that risk. And this is again, just jumping back. When the Pentagon was planning this war, they seem to have said to themselves, we believe we can prevent the Iranians from militarily closing the strait. And so what they mean was, we can stop them from getting their, their capital boats out there and undergoing a mining operation. So they, they were concerned with the Iranian navy mining the strait and making it literally impassable. They do not seem to have considered the fact that by simply presenting a threat profile to shipping, that would make insurers unable to take on the risk of issuing insurance, which would then prevent the shipping from happening. Just as a matter of economics, which is stunning to me. It is stunning to me that they thought that the, the only consideration they had to take into account was like, the bomb stuff. But can we stop them from laying sea mines? If the answer is yes, then shipping will be fine.

[Kathryn Rampel]

There are so many obvious things that they didn't consider. There was this almost comical story in Politico a couple of days ago that said that Chief of Staff Susie Wiles had tasked everyone in the White House with brainstorming ideas for how to get gasoline prices down. And it's like, did you consider not starting a war in the Middle East?

[JVL]

Here's one. Don't start a war.

[Kathryn Rampel]

Yeah, that would have been brilliant. That. I mean, whatever the other considerations they have had, they may have had militarily, geopolitically, like maybe if you really care about gas prices, which, by the way, kind of sank Democrats in the 2022 midterms, and then again the Democrats in 2024, you know, Biden inflation was, was still a Major issue. But I remember talking with the Biden White House in 2022 about how they were also, like, leaving no stone unturned to try to figure out how to get gasoline prices down. How do we get companies to pump more oil? And at the time, people like myself were writing things like, look, presidents don't control gas prices. You know, voters think that, you know, this is very salient for voters and voters always blame the president. But the president doesn't really have control over gas prices per se. They wish they had a dialogue. Unless he starts a war of choice. And then it turns out they do have a lot of upside control for gas price.

[JVL]

They can do upward pressure.

[Kathryn Rampel]

Yeah.

[JVL]

Harden the downward pressure.

[Kathryn Rampel]

And, and it's been interesting to see what their solutions, such as they are for dealing with the very predictable energy market fallout of their war of choice is. Right. So Donald Trump said that he was going to have naval ships, like, escort these tankers through the strait. Good luck with that. I mean, think about how much, think about how much fuel it would use just to have like a fleet of naval warships escorting what had been, whatever it was, like 40 different tankers every day prior to this war. He said that he was going to provide insurance. It's not clear what that means. I saw that today. I think it was Scott Besant. I don't know if we have this tweet, but if we do, I'd love to pull it up. Scott Besant basically said, yeah, to enable oil to keep flowing to the global market, the Treasury Department is issuing, issuing a temporary 30 day waiver to allow Indian refiners to purchase Russian oil. So again, to decode this, because they did not think about what the fallout would be for oil prices, for gasoline prices, we are now rolling back our sanctions on Russia, which is supporting Iran, in order to deal with the fallout, the economic fallout from our war in Iran. I mean, there are a lot consumers.

[JVL]

Yes. So, I mean, let's just. Again, I'm going to underline this. So we have a report today that Russian intelligence is providing all sorts of assets to the Iranian government, including targeting information on U.S. forces and positions and information about U.S. air defenses. And so the Trump administration's solution to the war they started is to ease sanctions on a country which is helping our opponent target American military assets.

[Kathryn Rampel]

Yes. Yeah, it's, it's insane. It's totally insane. And as much as voters and consumers and businesses in the United States may be, you know, sort of the, the losers in terms of the effect on gas prices, there are Some definite winners. Some of them will be oil and gas producers in the United States. But another big one is Russia, because Russia is still a petro state. I mean, they, they, they are less so than they used to be, in part because of sanctions, but they're going to get a lot more money now for their war in Ukraine, for their other kinds of military operations, including apparently providing guidance to the Iranians because we are driving up oil prices, which in and of itself would be a windfall, and because we are loosening our sanctions for other countries to buy Russian oil. So Putin is just, like, licking his

[JVL]

chops here while we're also messing up our relations with India, which are already sort of in the toilet anyway. That's another. We don't have to do that. But go, go look up the Indian naval exercises and the. And Iran, if you guys are interested in a little bit of trivia about what's happened in the last week. All right, so, Catherine, I want to paint a picture for you, and then you tell me you poke holes in it.

[Kathryn Rampel]

Okay.

[JVL]

Or not. My operating theory is that there are lots of outcomes which are possible from where we sit, but that the most likely of these outcomes is probably that Trump sees things going south economically, declares victory, and just walks away. And it doesn't matter what's broken, it doesn't matter what humanitarian crises are left behind, et cetera. But you're just like, we won. We won the biggest war that anybody's ever won. Strong alpha America. Man with tears in his eyes told me that he saw a. A bald eagle mating with a ram pickup truck. And it's. It's so great. It's. It's huge. It's so strong. At which point the hope would be like, okay, things can kind of go back to normal. But what warning the following ZipRecruiter radio spot you are about to hear is going to be filled with F words.

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[JVL]

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[JVL]

and games at Chumbacasino. It is. Play hundreds of free social casino games. No downloads needed. Want the chance to redeem incredible prizes? Why wait? Play your way anytime, any place [e-mail] no purchase necessary. VGW Group void were prohibited by law 21/ terms and conditions apply. And so this would avoid like catastrophe. So you do not wind up with 20,000American troops stationed in Iran and you know, on the ground fighting in Iran for a year or anything like that. The Strait of Hormuz gets basically opened back up. Global commerce can basically restart. And so like, you know, it's not great, but it's not terrible. The problem is that there are a bunch of lag effects that happen here. And so for instance, refineries as you mentioned in places are getting shut down because they don't have places to store the oil which is coming off of the line. Well, it takes time to restart these things. It isn't like flipping a switch. And the, the best example of this is the aluminum smelter. So I, I am simply reporting something I learned three days ago. I did. It's not like I am an expert in smelting processes, but a smelter is such a complicated piece of equipment and the, the heat requirements needed for it are such that it takes almost a full year once you have gone into shutdown on a smelter to make it fully operational again. Like everything has to happen really, really slowly. And there are a bunch of things in the system like that. Right. So you've, you've got a gap in the supply that you normally get of precursor chemicals for fertilizers. And so the people who normally make the fertilizers are going to be late in delivering the fertilizers to the people who are the end users. And there's just going to be like 150 things like that that even if we end the war in two weeks and everything goes back to normal, you do have these economic disruptions which are just going to have like ripple effects that are going to last for a while.

[Kathryn Rampel]

Yep. That's, that's crazy. Yeah. I mean, again, I'm not really equipped to assess like whether we're better or worse off from a national security standpoint. If this scenario you mentioned were to transpire, I will leave that to some of our colleagues.

[JVL]

Just pretend that it goes back to what it was before. But like 15 messier.

[Kathryn Rampel]

But there are other geopolitical consequences, including that we will have pissed off some, so many of our allies in the Middle east and elsewhere, many of whom had, besides like probably buying a whole bunch of crypto, Trump crypto, you know, had promised to make investments in the United States if those, if any of those were real. Some of that stuff gets, you know, pared back. And there, I think there was reporting in the FT about that specifically today, we have again quadruply pissed off our allies in Europe by driving up their energy prices. They've actually seen a lot more pain already than we have. So our relationships are hurt in addition to the sort of like logistical nuts and bolts of cascading supply chain disruptions and what does that mean for us going forward? So yeah, there's a ton of fallout. It's not like, you know, Donald Trump's specialty is always repackaging the status quo as a victory. And so like, this is what he, this is what he does with trade wars and negotiations. Like, oh, we're just going to go back to the way things were. What a victory. We can't go back to the way things were. And it's partly because of these domino effects that you mentioned. It's partly because we will have irreparably destroyed or afraid at the very least many of our relationships with allies in the region which will have national security consequences but also economic consequences. So yeah, there are just so many reasons why again, I'm not commenting on like the military strategical wisdom of all of this, just from a like obvious things that they did not account for perspective. When it comes to energy markets, when it comes to fertilizer markets, when it comes to our relationships with all of what had been our friends in the region and elsewhere. It is very clear that none of this was been thought through. Has been thought through.

[JVL]

Yeah. And again, I, I, you know, we're not, we're not doomers. I don't think you're a little bit of a doomer.

[Kathryn Rampel]

I'm a little bit, a little bit of a doomer.

[JVL]

But what I'm saying is I think like the, the doomy scenario here is on the very low probability end of the spectrum and that the, the most likely outcome is like, yeah, things are like 10 or 15% crappier than they would have been otherwise. And they're like that for the next several months. Like, you know, maybe four months, maybe 10 months, maybe 14 months. Not for forever, because supply chain disruptions do work themselves out over time. But critically, there isn't a, there is a, a political set of elections coming during what they have a time. And so this is where I again, look projecting a little bit forward with the rising unemployment, with the inflationary pressures, with the Fed being a little bit handcuffed then in what it can do with an election now, what, it's March, so eight months out, it doesn't seem like there's a lot of economic upside available. Like, even if everything works out, the best case scenario seems to be like, like maybe things could get 5% better. Like, you know, if, if we're born under a lucky star or something like that. And maybe they can get a lot worse or maybe they'll just like, continue sort of like they are and, and get marginally worse, even if we leave Iran in two weeks. And. Well, yeah, that's political danger, I think, for the Trump administration. I guess this is what I'm sort of building up to here, is that all of this is good for Democrats in the midterms.

[Kathryn Rampel]

Yes. That doesn't mean Democrats won't still screw it up. But yes, the, the prospect of higher gas prices alone is usually a major problem for the incumbent party. And the idea that actually voters might be correct in attributing those higher gas prices to the president or to actions taken by the president seems especially dangerous for the president's party. You know, lots of things could change between now and then, but there are vulnerabilities in the job market, there are vulnerabilities in what I will call warflation that are caused by this president. And it's not obvious to me that any, that things will be calmer or that they will not make more unforced errors, I guess is how I should put it. Like, the problems that we have with the economy right now are mostly of Trump's doing. If he had done nothing but go and play golf, he could have just coasted economically anyway.

[JVL]

On Joe Biden's economy.

[Kathryn Rampel]

On Joe Biden's economy.

[JVL]

Which America hated.

[Kathryn Rampel]

Which America did hate. Yes, he, he, he would have been in a much better position, certainly, than he is now. And instead, you know, I, I ask, like, I don't think he's trying to raise prices, but if he were, I'm not sure what he would be differently at this point.

[JVL]

It's like the Russian asset thing. I don't think Donald Trump is a Russian asset, but if he were, if he were a Manchurian Candidate style, what would he have done differently? I don't know.

[Kathryn Rampel]

Exactly. Exactly. So he. Yeah.

[JVL]

And.

[Kathryn Rampel]

And affordability is, I think, not just among his major political vulnerabilities or the GOP's major political vulnerabilities. It is the political vulnerability. On top of Epstein, on top of people being upset about being promised no foreign wars and all of the other reasons why people might not be super enthused with this president, things that are dragging down his approval ratings. If you look at the number one reason why people who had been Trump supporters say that they have defected, it is about inflation. It is about prices, cost of living, and the economy. And he seems to be doing his darndest to drive them away further.

[JVL]

Yeah. 53% of voters now say that they think Trump has made the economy worse than Joe Biden. Who could possibly have warned them? I mean, I don't blame these voters. They, you know, they. They saw this guy from television and he promised that he would impose deflation and it would be good for everybody. And how are they supposed to know? All right, Catherine, thank you for coming. We're gonna probably try to do this every Friday. We're gonna try to do this around 12:30 on Friday, sit and have a little bit of economy nerd talk about the world around us. I am super excited to talk with Catherine about repaying tariffs that the government now seems to be saying we don't know where the money is. I know we took all the money. We had the money, but it's. It might be in the couch cushions or something. I don't think we can give it back.

[Kathryn Rampel]

Maybe it's been used to give bonuses to our troops or pay for the other tax cuts from last year or what were the other things? Pay for child care or pay for our military. Like, there are so many things that it has paid for.

[JVL]

We may need to bring in a gazillion times over that with us. Because one of the things that I. Whatever, I. Not to send us out of here on a tangent, but I am fascinated by the question of, okay, the court says you have to give it back. You, the government, and you, the government says, well, we can't because it's gone. What is the law's response to that? You can't send the man. Right? Like, how does that work? Anyway, we'll be back. We'll do this next Friday. And I, you know, I, I bet you Catherine, things won't be much better.

[Kathryn Rampel]

See, there's that humorism again.

[JVL]

No, no, it's optimism because it means we'll have a lot to talk about.

[Kathryn Rampel]

Fair enough.

[JVL]

Guys, thanks for hanging with us. Do me a quick solid hit. Like hit subscribe and follow the channel. That helps us a lot. The algorithm needs to see or signal that you enjoy it, otherwise it punishes us. Good luck, America.

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