Powell’s Last Stand

Powell’s last speech: Federal Reserve Chair Jerome Powell is expected to give (what will probably be) his last address today in Jackson Hole, Wyoming, laying out how he believes the central bank should help manage the economy in an increasingly weird time—and, possibly, tackling President Donald Trump’s increasing attacks on the Fed’s independence, and the pressure placed on them to lower the cost of borrowing.

With a labor market deteriorating (and recent jobs numbers revisions signaling this has been going on for a few months longer than some observers realized), it’s possible Powell will portend rate cuts, which the Trump administration has been requesting. But the Fed’s job isn’t to curry favor with the administration through its policies (something Powell rightly chafes at). It’s to manage two massive risks and the interplay between them: inflation, rising with tariffs, and slowing job growth. “If the Fed puts more weight on the threat of resurgent price pressures and holds interest rates steady when it meets next month, that could raise the odds of an economic downturn,” notes The New York Times. “If the Fed instead moves to shore up the labor market by restarting interest rate cuts that were put on hold in January, inflation may be more likely to get stuck above the central bank’s 2 percent target.”

Back in 2020, the Fed made a few significant changes to its framework: It “said it would allow inflation to run modestly above its 2% target for periods to make up for times when it had fallen short” and that it “would focus only on the unemployment rate being too high, rather than also worrying about the rate being too low, removing some urgency to pre-emptively raise rates and prevent the economy from running too hot,” per The Wall Street Journal. Now, “officials have signaled they are likely to back off from the more ambitious employment goal that returns the Fed to some version of the framework that existed before the more novel changes.” (This isn’t some sort of ad hoc revision, but rather the Fed committing to its plan to review the framework every five years or so.)

Odd new executive order: President Donald Trump just tapped Joe Gebbia, the Airbnb co-founder who’s lately been hard at work redesigning the government’s Social Security processing, to serve as “chief design officer” for the federal government via executive order. “It is the policy of my Administration to deliver digital and physical experiences that are both beautiful and efficient, improving the quality of life for our Nation,” reads the order, signed by Trump.

No, this does not mean Gebbia is tasked with making federal buildings pretty or returning to marble and stained glass (as far as we know). He will instead be redesigning government forms and processes to “prioritize improving websites and physical sites that have a major impact on Americans’ everyday lives.” Think: income tax filings, Social Security applications, Medicare enrollment, and immigration services, per Bloomberg.

I like this, provided it can be done well (and efficiently). Federal employees going into retirement used to have to deal with an entirely paper-based process, up until Gebbia’s involvement. This summer, the process was digitized; paper forms were phased out for new retirees and online portals were created. The old limestone mine in Pennsylvania, which housed the federal government’s retired records (seriously!), will at some point become totally defunct, thanks to the digitization efforts of this administration.

If Gebbia and Co. can give other bureaucratic processes similar updates, the American people stand to gain. Of course, if interactions with the government become too pleasant, maybe libertarians and anarchists will have worse grounds to make our arguments that they ought to be downsized or abolished, but let’s cross that bridge when (if!) we get there.

Scenes from New York: Decades ago, Robert Moses really messed things up for people living in the Bronx when he razed whole communities to make the Cross Bronx Expressway. Now, much-needed repairs—and the possibility of building a new overpass to accommodate them—threaten to do the same thing all over again.

QUICK HITS

• “A federal judge has ordered that the government dismantle much of ‘Alligator Alcatraz,’ one of the flagship immigrant detention facilities in President Trump’s enforcement effort,” reports The Wall Street Journal. “U.S. District Judge Kathleen Williams of the Southern District of Florida said Thursday that the government had 60 days to remove fencing, lighting, generators, sewage facilities and other major parts of the Florida facility. She also ordered a halt to new construction and said it shouldn’t accept any new detainees.”

• A needlessly antagonistic Matt Bruenig piece (but I repeat myself!) responding to Kelsey Piper casting doubt on the efficacy of universal basic income measures.

• “Two-thirds of [Syrian] asylum-seekers who arrived [in Germany] a decade ago now have jobs,” reports Bloomberg. But…is that the standard timeline? That strikes me as a fairly long time horizon. “More than 83,000 Syrians became German citizens last year, the largest group by far. And about two-thirds of refugees who arrived from 2013 to 2019 now have jobs, with their employment level just 9 percentage points below the national average, according to the Institute for Employment Research.”

• Interesting findings:

• Yes:

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