Marketplace: What Happens If Trump Brings Back Schedule F? Marketplace Episode Released on October 31, 2024

1. Economic Overview: Inflation and Workforce Costs Timestamp: 00:38 – 03:51

Host Kai Rysdahl opens the episode by discussing the latest economic indicators. The Personal Consumption Expenditures (PCE) Price Index revealed a favorable year-over-year inflation rate of 2.1% (00:38). Additionally, the Employment Cost Index indicated that labor costs rose by nearly 4% in the third quarter compared to the previous year, slightly tapering from prior increases but still outpacing inflation by about 2 percentage points (00:38).

Justin Ho from Marketplace highlights that maintaining a balance between inflation and wage growth hinges on increasing worker productivity. Preston Mouy, a senior economist with Employ America, underscores that productivity has surged in six of the last seven quarters, aided by low unemployment rates and significant governmental investment in American manufacturing and supply chains (01:52; 02:11; 02:23). Tim Dewey of SGH Macro Advisors explains that the Federal Reserve views the current 4% wage growth as sustainable, provided it continues to be supported by rising productivity (02:43; 03:00).

Notable Quote:

"As long as productivity is high enough, then it will be sustainable and it will not create higher inflation."
— Preston Mouy, Senior Economist, Employ America (02:43)

2. Energy Sector: Rise of Natural Gas Production Timestamp: 03:51 – 06:51

Elizabeth Troval reports on the significant increase in natural gas and crude oil production in key regions like the Permian Basin, Eagle Ford, and Bakken over the past decade (04:42). Letitia Gonzalez from Natural Gas Intelligence notes that advancements in fracking have substantially lowered natural gas prices, enabling the U.S. to become a net exporter of natural gas. This abundance has benefited domestic consumers by providing lower energy bills and aiding the phase-out of coal in electricity generation (05:07; 05:36).

However, Kerry King from UT Austin points out that despite its benefits, natural gas remains a hydrocarbon with environmental impacts. Decarbonizing the supply chain poses challenges, as it could reduce company profits and requires significant effort to make the industry cleaner (06:00; 06:16).

Notable Quote:

"We're not really doing anything different in terms of natural gas and making it lower carbon."
— Kerry King, UT Austin (06:12)

3. Schedule F: Potential Reinstatement and Its Implications Timestamp: 06:51 – 20:29

Kai Rysdahl delves into the core topic of the episode: the possible reinstatement of Schedule F under a second Trump administration. Schedule F, detailed in the Heritage Foundation's "Project 2025," aims to reclassify federal workers, stripping them of civil service protections and making them political appointees (06:51).

Historical Context and the Pendleton Civil Service Act: Nancy Unger, a history professor at Santa Clara University, along with Mark Summers from the University of Kentucky, provide a historical backdrop. They explain the Spoils System established during Andrew Jackson's presidency, where federal jobs were awarded based on political loyalty rather than merit (07:47; 08:30). The detrimental effects of this system, such as inefficiency and corruption, led to the Pendleton Civil Service Act of 1883, which mandated that federal positions be awarded based on merit through competitive exams, thus professionalizing the federal workforce (10:09; 11:22).

Impact of Schedule F: Transitioning to modern implications, Justin Ho and Nancy Unger discuss how Schedule F could undermine the federal workforce by politicizing agencies. This would potentially erode the merit-based system established by the Pendleton Act, leading to decreased efficiency and increased political interference (12:15; 13:12).

Expert Opinions: Keith Hall, former commissioner of the Bureau of Labor Statistics (BLS), expresses grave concerns about Schedule F's impact on the integrity of economic data. He emphasizes that BLS data is crucial for households, businesses, and policymakers, and politicizing it could lead to biased reporting and diminished trust (16:26; 18:01). Eric Groschen, Senior Economic Advisor at Cornell ILR School and former BLS commissioner, rates his concern about Schedule F at a 10 out of 10, highlighting the risk of “spinning release narratives” and undermining the objectivity of critical economic data (18:36; 19:50).

Notable Quotes:

"It would be frustrating for them to see politics come into what they do as a manager of some of these places... you run a danger there."
— Keith Hall, Former BLS Commissioner (18:29)

"I really think that the norms in the agencies are absolutely critical to their success, and Schedule F would just really undermine those norms."
— Eric Groschen, Senior Economic Advisor, Cornell ILR School (19:50)

4. Stock Market Updates Timestamp: 13:51 – 16:26

Briefly, Kai Rysdahl provides a snapshot of the stock market's performance:

• Dow Industrial: Down 378.9 points (-1.10%)
• NASDAQ: Dropped 512 points (-2.25%)
• S&P 500: Fell 108 points (-1.18%)

Tech giants saw significant declines:

• Meta (Facebook): -4%
• Microsoft: -6%
• Alphabet (Google): -1.9%

Automotive sector news includes Ford halting production of its F150 Lightning due to overstock concerns, reflecting the broader slowdown in electric vehicle (EV) sales (13:51; 15:00).

5. Farmers Market Pricing Strategies Timestamp: 20:29 – 24:42

Shifting focus, the episode explores how small-scale farmers manage pricing at markets. Catherine Wheeler from North Country Public Radio reports on initiatives by Cornell University researchers to develop weekly pricing reports. These reports aim to assist farmers in setting competitive and profitable prices by analyzing data from multiple markets.

Matt LaRue of Cornell explains that the tool eliminates guesswork by providing weighted average prices, helping farmers like Morgan Leeson balance affordability with sustainability (22:02; 23:07). This system supports farmers who typically rely on wholesale orders and community-supported agriculture, enabling better financial outcomes from market sales (23:31; 24:30).

Notable Quote:

"Those markets aren't usually the way they pay their bills. They rely on wholesale orders or community supported agriculture subscriptions... earning a little more could make the markets a better investment."
— Letitia Gonzalez, Natural Gas Intelligence (24:37)

6. Closing Economic Notes Timestamp: 24:42 – 26:04

Kai Rysdahl concludes with a nod to consumer spending, highlighting projections from the National Retail Federation that Halloween 2024 will see Americans spending over $11.5 billion. This consumer activity significantly contributes to the economy, showcasing the ongoing vitality of retail sectors (26:04).

Conclusion This episode of Marketplace provides a comprehensive examination of potential policy changes under a second Trump administration, specifically the reinstitution of Schedule F, and its broader implications on the federal workforce and economic data integrity. Additionally, the podcast offers insights into current economic indicators, energy sector developments, stock market movements, and innovative solutions for small-scale farmers. Through expert interviews and detailed analysis, Marketplace equips listeners with nuanced understandings of how policy and economic trends interconnect and impact everyday life.

Notable Quotes Summary:

1. Preston Mouy:
   "As long as productivity is high enough, then it will be sustainable and it will not create higher inflation." (02:43)

2. Kerry King:
   "We're not really doing anything different in terms of natural gas and making it lower carbon." (06:12)

3. Keith Hall:
   "It would be frustrating for them to see politics come into what they do as a manager of some of these places... you run a danger there." (18:29)

4. Eric Groschen:
   "I really think that the norms in the agencies are absolutely critical to their success, and Schedule F would just really undermine those norms." (19:50)

5. Letitia Gonzalez:
   "Those markets aren't usually the way they pay their bills. They rely on wholesale orders or community supported agriculture subscriptions... earning a little more could make the markets a better investment." (24:37)

For more detailed insights and ongoing economic news, tune into Marketplace daily with host Kai Rysdahl.