WSJ What’s News: "Shutdown Pain Spreads Across America"

Date: October 8, 2025
Host: Caitlin McCabe

Episode Overview

This episode unpacks the escalating impact of the ongoing U.S. government shutdown, with a focus on threatened back pay for furloughed workers, disruptions across industries (especially aviation), and ripple effects felt by small businesses and farmers. The episode also explores Milan’s transformation into a haven for the ultra-rich due to favorable tax policies and touches on political developments in France and the tech sector.

Key Discussion Points & Insights

1. Growing Strains of the U.S. Government Shutdown

• Furloughed Workers Face Uncertainty

  • The shutdown has now lasted a week, with uncertainty brewing over whether furloughed workers will receive back pay once the government reopens.
  • New White House Memo: A memo argues the administration isn’t obligated to pay furloughed employees under the 2019 law previously guaranteeing back pay.
  • Presidential Remarks:
    • Donald Trump, when asked about worker pay:

      “I would say it depends on who we’re talking about. I can tell you this, the Democrats have put a lot of people in great risk and jeopardy, but it really depends on who you’re talking about. But for the most part, we’re going to take care of our people. There are some people that really don’t deserve to be taken care of, and we’ll take care of them in a different way.”
      — Donald Trump [02:09]

• Aviation System Under Pressure

  • Over 9,000 flights were delayed in two days, partly due to an increase in air traffic control workers calling out sick—a direct response to missed paychecks.
  • Essential Workers: TSA and FAA staff, deemed essential, are working without pay.
  • On Worker Hardship:

    “These are folks who, many of whom work paycheck to paycheck, live paycheck to paycheck. And so as they continue to work without receiving compensation, that is creating a major toll. And so as a result, you are starting to see some workers choosing to call out sick in response.”
    — Jacob Passi, WSJ travel reporter [03:19]

  • Affected airports: Chicago O’Hare, Nashville International, and Hollywood Burbank.

• Broader Economic Ripples

  • Small businesses and entrepreneurs tied to federal contracts or regulatory approvals face mounting frustration and uncertainty.
  • Economic Impact: Oxford Economics forecasts a 0.2 percentage point annual GDP loss for each week the shutdown continues.
  • Jobs Market Concerns: Federal data delays mean markets rely on alternative data, which now suggests slowing job growth, higher unemployment, and fewer companies hiring.
  • Notable Data Points:
    • Bank of America sees rising unemployment among customers.
    • Goldman Sachs’s labor market tightness index has fallen back to 2015 levels.

2. Trade Tensions, Farmers, and Geopolitical Fallout

• Soybean Farmers' Predicament

  • China, the largest buyer of U.S. soybeans, has ceased purchases as the harvest looms, using soy as leverage in the trade war.
  • Farmers scramble to find new markets in Vietnam and the Philippines.
  • The Trump administration considers $10–14 billion in farmer aid, likely using tariff revenue.
  • President Trump to decide with Agriculture Secretary Brooke Rollins on the aid mechanism.

• Legal and Social Developments

  • The Supreme Court debates the constitutionality of state bans on conversion therapy for minors, with psychiatric associations backing the ban as legitimate therapeutic policy.

3. Milan’s Metamorphosis: New Capital for the Ultra-Rich

[07:20 – 10:53]

• Rising Appeal & Urban Renewal
  • Milan is attracting the global ultra-wealthy by combining fashion, finance, a cosmopolitan vibe, and significant tax incentives.
  • London’s loss of “non-dom” tax privileges has benefitted Milan as high-net-worth individuals relocate.
  • Urban Transformation:
    • Skyscrapers, new metro lines, improved parks, bicycle lanes, and a boom in upscale restaurants, art galleries, and real estate.
  • Tax Incentives Explained:

    “Italy introduced a series of tax breaks, some of them aimed at high net worth individuals… anyone who moves to Italy… gets to pay a lump sum tax… either €100,000 or €200,000 on all foreign income… basically no inheritance tax in Italy.”
    — Margarita Stancati, WSJ Rome correspondent [09:18]

  • Lifestyle Attraction:

    “Some people compared Milan to London, Paris and New York, but without the chaos. Someone said, you know, it’s as though you put all those cities in a shrinking machine and you get Milan.”
    — Margarita Stancati [10:12]

4. Global Business and European Politics

[10:59 – End]

• Tech Sector News

  • Swiss tech giant ABB selling its robotics business to Japan’s SoftBank for over $5 billion, bolstering SoftBank's AI and robotics ambitions.

• French Political Instability

  • French President Emmanuel Macron faces deepening isolation after the abrupt resignation of a fourth prime minister in just over a year.
  • Macron’s struggle to govern without a majority and refusal to step down is fueling constitutional stress and warnings from former allies.
  • Host’s Reflection:

    “For a president once hailed as France’s great modernizer, the question now is whether Macron’s determination to stay in power is a source of even greater instability for France.”
    — Caitlin McCabe [12:31]

Notable Quotes & Memorable Moments

• “There are some people that really don’t deserve to be taken care of, and we’ll take care of them in a different way.”
  — Donald Trump [02:09] (on back pay for federal workers)
• “You are starting to see some workers choosing to call out sick in response.”
  — Jacob Passi [03:19] (on the aviation impact)
• “It’s as though you put all those cities [London, Paris, New York] in a shrinking machine and you get Milan.”
  — Margarita Stancati [10:12] (on Milan’s livability)

Key Segment Timestamps

• 00:44 — Main news headlines introduction
• 01:16 — Shutdown enters its second week; pay uncertainty for federal workers
• 02:09 — Donald Trump on which federal workers deserve back pay
• 03:19 — Aviation and travel woes; reporter Jacob Passi on worker stress
• 04:37 — Economic impacts and farmer fallout from China trade tensions
• 07:20 — Milan’s makeover and the global ultra-rich migration (interview with Margarita Stancati)
• 10:59 — SoftBank-ABB tech deal, Macron’s political crises

Summary

This episode expertly weaves together the social, economic, and political threads tying the current U.S. government shutdown to broader global developments. It offers a human lens into the struggles of American workers and businesses, the international reverberation of trade wars, and dynamic shifts in global wealth havens and political authority. The tone is urgent, informative, and grounded in on-the-ground reporting, with well-chosen voices and analysis anchoring the key stories of the day.