The Two-Handed Economist

12: Shutdown Economics, AI Layoffs, and Trade Deals in Asia

John Diamond argues that the government shutdown has become an economic tax on ordinary Americans. Meanwhile, the Federal Reserve is heeding warning signals from the labor market as artificial intelligence and automation rewrite the rules for major industries, prompting companies like Amazon, UPS, and Intel to lay off thousands of workers.
In other news, President Donald Trump is busy signing trade deals in China and Southeast Asia. But the deals’ actual value depends on how long they’re sustained.
This episode was recorded on Oct. 29, 2025. 
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11: Mounting Shutdown Costs and a Knife’s Edge Economy

As the government shutdown drags on, the economic and political costs are mounting. John W. Diamond explains the impacts for workers, markets, and economic policymaking. Meanwhile, the U.S. economy is still expanding. But the tug-of-war between demand and supply shocks — notably, declining immigration and President Donald Trump’s tariff policies — amount to a fragile equilibrium.
This conversation was recorded on Oct. 15, 2025.
Mentioned:
Bill King, “Republicans Getting the Blame for the Shutdown,” https://www.billkingblog.com/blog/republicans-getting-the-blame-for-the-shutdow 
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10: Why Government Shutdowns Don’t Work — and Keep Happening Anyway

A congressional standoff over Affordable Care Act premium subsidies has triggered another government shutdown. John explains how we got here, why shutdowns aren’t effective policy tools, and what these recurring episodes reveal about budgetary and policymaking dysfunction in Washington.
Then, he turns to the Trump administration’s proposal to overhaul the H-1B visa lottery system by favoring higher-wage positions. John examines whether this could better align the temporary, nonimmigrant visa program with its statutory mission: filling high-skilled labor shortages in specialty occupations.
This conversation was recorded on Oct. 1, 2025.
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You can follow @BakerInstitute on X, Instagram, LinkedIn, and YouTube. Learn more about our data-driven, nonpartisan policy research and analysis at bakerinstitute.org.

9: High-Skilled Immigration and the Future of US Competitiveness

President Trump’s new $100,000 fee on H‑1B visa petitions has catalyzed a fresh debate: will it protect U.S. workers — or hobble innovation? In this episode, John Diamond explores both sides. He digs into how H‑1Bs shape firm behavior, labor markets, and the role of startups versus incumbents. What’s the real cost — and who pays it?
This conversation was recorded on Sept. 24, 2025. 
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You can follow @BakerInstitute on X, Instagram, LinkedIn, and YouTube. Learn more about our data-driven, nonpartisan policy research and analysis at bakerinstitute.org.

8: The Federal Budget Process Is Broken

John Diamond explains why a weakening labor market is pushing the Federal Reserve to cut the federal funds rate (even in the face of sticky inflation). He also unpacks the looming government shutdown — and why, unless Washington reforms its budget process, we should expect bigger deficits and higher inflation risk.
This conversation was recorded on Sept. 16, 2025. 
Clips used in this episode:
“Revised job numbers raise new concerns about economic slowdown,” PBS News, Sept. 9, 2025.
Follow John Diamond on X (@jw_diamond) and LinkedIn.
You can follow @BakerInstitute on X, Instagram, LinkedIn, and YouTube. Learn more about our data-driven, nonpartisan policy research and analysis at bakerinstitute.org.

7: Trump Tariff Ruling, the De Minimis Exemption, and an Economy Losing Steam

John Diamond breaks down three major developments. First, a federal appeals court has ruled that President Donald Trump unlawfully invoked the International Emergency Economic Powers Act to impose his sweeping tariffs. Second, a new executive order from Trump eliminates the de minimis exemption, which had allowed imports worth $800 or less to enter the country tax-free. Third, new jobs numbers show an increasingly fragile labor market.
This conversation was recorded on Sept. 3, 2025. 
Clips used in this episode:
“BREAKING: U.S. appeals court rules Trump's global tariffs are illegal,” NBC News, August 29, 2025.
“‘US will be destroyed if…’” The Economic Times, September 1, 2025.
“Trump ends tariff exemption for low-value packages,” CNN, August 29, 2025.
“US July Jolts Report: Job openings fall by 176,000,” Bloomberg Television, September 3, 2025.
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You can follow @BakerInstitute on X, Instagram, LinkedIn, and YouTube. Learn more about our data-driven, nonpartisan policy research and analysis at bakerinstitute.org.

6: Should the Federal Reserve Cut Interest Rates?

The Federal Reserve’s dual mandate — keeping prices stable and achieving maximum employment — is being tested.
At its Sept. 17 meeting, the central bank must decide whether or not to cut interest rates, a decision complicated by persistent inflation, a cooling labor market, and an escalating pressure campaign waged by the Donald Trump administration. Trump has pushed for steep rate cuts, repeatedly called for Fed chair Jerome Powell to step down, and more recently moved to fire Fed governor Lisa Cook in a broader effort to gain leverage over the independent agency.
John Diamond lays out the political and monetary challenges facing the Fed and explains what really matters for the country’s long-term economic health.
This conversation was recorded on Aug. 27, 2025.
Clips used in this episode:
“Trump calls Fed chair Powell ‘stupid person,’” Reuters, June 18, 2025.
“New Fed statement about Trump plan to fire Lisa Cook,” CBS News, August 26, 2025.
“Fed Chair Powell: Labor market is in a ‘curious kind of balance,’” CNBC, August 22, 2025.
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You can follow @BakerInstitute on X, Instagram, LinkedIn, and YouTube. Learn more about our data-driven, nonpartisan policy research and analysis at bakerinstitute.org.

5: The One Big Beautiful Bill Act Kicks the Fiscal Can Down the Road

Last month, President Donald Trump’s massive tax bill passed the Republican-led House in a 215-214 vote. The White House has said the bill won’t add to the federal deficit, while the nonpartisan Congressional Budget Office projects that the bill would add to the debt by approximately $2.3 trillion from 2025 to 2034. Who’s right? John Diamond reviews the numbers and explains why the tax bill, as written, can’t increase growth enough to offset its trillions in revenue declines, plus why ongoing uncertainty regarding Trump’s tariff policy will only further reduce economic growth. Mentioned in this episode: Congressional Budget Office, Estimated Budgetary Effects of H.R. 1, the One Big Beautiful Bill Act, https://www.cbo.gov/publication/61461   White House Council of Economic Advisers, Preserving and Expanding Low Tax Rates to Create American Economic Prosperity, https://www.whitehouse.gov/wp-content/uploads/2025/03/Preserving-and-Expanding-Low-Tax-Rates-to-Create-American-Economic-Prosperity.pdf   Tax Foundation, “Big Beautiful Bill” House GOP Tax Plan: Preliminary Details and Analysis, https://taxfoundation.org/research/all/federal/big-beautiful-bill-house-gop-tax-plan/   This conversation was recorded on June 3, 2025.   A transcript is available here: https://bit.ly/4kq8QnD  Follow John Diamond on X (@jw_diamond) and LinkedIn. You can follow @BakerInstitute on X, Instagram, LinkedIn, and YouTube. Learn more about our data-driven, nonpartisan policy research and analysis at bakerinstitute.org.

4: UK and China Trade Deals, the GOP’s ‘One Big, Beautiful’ Tax Bill, and Trump’s Plan to Slash Prescription Drug Costs

John Diamond explains why President Donald Trump’s recently announced trade deal with the United Kingdom is a net negative for the U.S. and why despite an additional trade deal with China, we’re still worse off than we were five months ago. Then, he reviews the progress of Republicans’ “one big, beautiful” tax bill and explains what makes fiscal sense and what doesn’t. Finally, he explores an executive order from Trump that aims to slash prescription drug prices and explores the potential trade-off between lower consumer costs and incentivizing pharmaceutical innovation. This conversation was recorded on May 13, 2025.  Follow John Diamond on X (@jw_diamond) and LinkedIn. You can follow @BakerInstitute on X, Instagram, LinkedIn, and YouTube. Learn more about our data-driven, nonpartisan policy research and analysis at bakerinstitute.org.

3: What Congress Should Consider As It Weighs TCJA Extensions

John Diamond outlines what Congress should consider as it prepares to extend key provisions of the 2017 Tax Cuts and Jobs Act that expire at the end of 2025. He covers: how tweaks to the tax system can encourage U.S. companies to return production from overseas; why it’s important to incentivize investment in research and development (R&D); and how policymakers can tackle the budget deficit by taxing economic rents. This episode was recorded on April 22, 2025. You can follow @BakerInstitute on X, Instagram, LinkedIn, and YouTube. Learn more about our data-driven, nonpartisan policy research and analysis at bakerinstitute.org.