WSJ What’s News - Trump Names Musk to Head Proposed Government Efficiency Commission

Episode Date: September 5, 2024

P.M. Edition for Sept. 5. Former President Donald Trump announced his economic policy plans, including an idea from Elon Musk. WSJ’s Alex Leary explains how it all fits with Trump’s campaign message. And immigration has changed the labor market. Reporter Paul Kiernan takes us through the data. Plus, Hunter Biden agrees to a surprise guilty plea in his tax case. Tracie Hunte hosts. Sign up for the WSJ's free What's News newsletter. Learn more about your ad choices. Visit megaphone.fm/adchoices

Ecolab Water for Climate. Less water, more growth. Results will vary. Learn more at Ecolab.com slash EWC. Ecolab Water for Climate. Transforming the way the world thinks about water. Trump announces a suite of economic policies, barring an idea from Elon Musk, and how immigration is changing the U.S. workforce. It's just a complicated picture, you know, it's helpful to the U.S. economy and demographics, but it creates strains and the surge that we've seen in immigration in the past few years really is historic. Plus, our best college rankings are out. Find out who takes the top spot. It's Thursday, September 5th.

I'm Tracy Hunt for The Wall Street Journal. This is the PM edition of What's News, the top headlines and business stories that move the world today. Donald Trump says he'll formally introduce a government efficiency commission and appoint Elon Musk to head it. He made the announcement today at the Economic Club of New York, where he presented a package

of economic proposals. He also said he'd cut the corporate tax rate to 15% for companies that make products in the United States and create a sovereign wealth fund. Alex Leary covers national politics for the Wall Street Journal, and he joins us now. Hi, Alex. Hi. First off, let's talk about this commission. What will it do?

How will it work? Sure. The official name is the Government Efficiency Commission, but it might as well be called the Musk Commission because Elon Musk, according to Trump, recommended this idea, and it's to look at what Trump is calling a complete financial and performance audit of the entire federal government and to make recommendations for drastic reform. Trump and many Republicans feel there's widespread waste across the government and that is causing

overspending and by consequence also inflation. So it's a big idea. We don't have a lot of idea like how it would be filled out other than Elon Musk, but presumably other top leaders of business and people with government experience would be kind of combing through the books of the federal government and looking for ways to chop. What kind of complications will arise from Musk heading this commission? There's a lot of questions about Musk's involvement. He's got a lot of business interests that are regulated by the U S government,

including Tesla and SpaceX. So for him to be involved in decisions about what government agencies do or don't do and the staffing of that, that raises some conflicts of interest for him. So how does this announcement on taxes fit his policy goals? This is quite in line with Trump's goals. Remember when he came in office in 2016, the following year, Republicans pushed through a massive tax plan that cut taxes just across the board, including lowering the corporate tax rate. Now, Trump has wanted to get that down. It's currently 21%. Trump today proposed lowering that to 15%.

And now there's a caveat. He said that companies that benefit from that reduction would have to make their products in the U.S. sort of a you know pro-USA sort of sentiment. Trump also proposed a sovereign wealth fund, which is something we're not that familiar with here in the United States. What will that do? Right. A sovereign wealth fund is sort of a novel idea. It's used in other parts of the world, including Saudi Arabia and other nations. It's basically an investment fund run by the government and Trump provided a little bit of details on that just saying that it would be used to, you know, generate money for all sorts of things from

paying for infrastructure and health care and could help pay down the national debt. Voters say the economy is their number one concern. How does today's announcement fit in with this campaign? It's absolutely, if you boil down this election between Trump and Kamala Harris, it's likely gonna come down to how people feel, how they're doing economically. There's other issues, of course, including immigration,

but the economy is foremost in most voters' minds. Trump, according to the most recent Wall Street Journal poll, does have a better rating among voters. They feel like he's more trusted on the economy. The bright spot for Harris is that she does better than Joe Biden did when he was still in the race against Trump. So she has sort of closed the gap a bit, but Trump does retain a bit of an advantage. Alex Leary is a national politics reporter for The Wall Street Journal. In business news, you might remember yesterday that we reported Verizon was planning to buy Frontier Communications. Well, they now have a deal. Verizon agreed today to buy Frontier for $9.6 billion.

Frontier has more than 2 million fiber optic connections across 25 states. Folding its network into Verizon would reach a combined 10 million fiber optic customers. We can exclusively report that AI chip giant, NVIDIA, is joining other investors in a $160 million financing round for Applied Digital, a company that operates data centers and is building a business leasing out computing power for AI. NVIDIA has more than tripled the number of its investments last year compared with the year before, supporting the ecosystem of companies that use its chips and giving it insight into the cutting edge of AI development.

US markets are an edge ahead of tomorrow's key jobs report. The S&P 500 and the Dow finished lower 0.5% and 0.3%, respectively. After the ADP employment report indicated 99,000 private sector jobs were added in August, far fewer than forecast. Weekly jobless claims also came in slightly lower than expected. Technology stocks lifted the Nasdaq 0.2%. Coming up, how immigration is changing the U.S. labor market. That's after the break. This episode is brought to you by CIBC. From closing that first sale to opening a second store,

as a business owner, you've hustled to accomplish a lot. But the rewards don't stop there. When you earn two times more points on things that matter to you and your business, easily track those business expenses, and experience flexible Aventura rewards, you'll realize how much more rewarding your hustle can be. Get up to $1,800 in value when you apply for the CIBC Aventura Visa for Business at cibc.com slash Aventura Business. Terms and conditions apply. America is seeing its biggest immigration wave in generations. Since the end of 2020,

more than 9 million people have migrated to the US. Immigration has lifted population growth to almost 1.2% a year, the highest since the early 90s. Without it, according to government estimates, the US population would be growing 0.2%. That is changing the makeup of the labor force in ways likely to reverberate through the economy for decades. The Wall Street Journal's Paul Kiernan looked at the mountains of data on this topic. My colleague Pierre Bieneme asked him what we know about the migrants who have joined

the U.S. in recent years. We don't know everything about them, but we can piece together quite a bit. Most of them are coming from Latin America. The biggest source countries are Venezuela and Mexico. Census data suggest that 78% are between the ages of 16 and 64. For the U.S. foreign population, that's 60%. So they're much more likely to be of working age. They're also much less likely to be drawing from Social Security or Medicare benefits. What about their other traits as workers or potential workers?

Beyond their ages, demographers say there's basically two kinds of immigrants. The first kind has historically come from Mexico and Central America. They've crossed the border without authorization or illegally. And this group is pretty low skilled, low formal education. The second group is highly skilled. These are people who are coming in on employment visas or H-1B visas, or they're studying in the U.S. and then finding jobs after they graduate college. The recent immigrant population, immigrants who have arrived since 2020, are more than twice as

likely than the U.S. born to not have finished high school, but they're also slightly more likely than the U.S. born to have graduated from college or have more than a college degree. What sectors are recent migrants likely to work in and where in the US? The number one job is construction laborers, the number two job is maids and housekeeping cleaners, number three job is cooks. There's also carpenters, drivers, landscaping workers, but then you get further down and there's software developers. Recent immigrants are more likely than the native born population to be software developers. There's also a fair amount who are registered nurses.

For the geographical information, we looked at filings and immigration courts. It's the border states, the southern states and New York that are getting the biggest populations. And then the top counties of recent unauthorized immigrants are Miami-Dade and Monroe County, both in Florida, followed by Queens County, New York. Anthony Comegna What could the presence of these recent migrants and arrival of the next migrants mean for the future of the U.S. economy? David Kramer The biggest thing is developed countries around

the world have aging populations and low fertility rates and Immigration is helping the economy continue to grow basically It's staving off population decline as the US born population ages and starts to need more care A lot of elder care and and child care like those are hard jobs Don't necessarily pay a lot of money They don't always require a ton of formal schooling. And then the US economy is coming out of like one of the most severe labor shortages ever after the pandemic. And one of the things

that's helped ease the labor shortage has been this influx of immigrants. And then you fast forward a few decades, the CBO doesn't doesn't project the US population declining at any point in the next three decades. And that's really thanks to immigration. Without immigration, the US would look a lot more like Japan or Italy. Politically, immigration is a really touchy thing. It's just a complicated picture. It's helpful to the US economy and demographics, but it creates strains. And the surge that we've seen in immigration in the past few years really is historic.

That was Wall Street Journal's Paul Kiernan speaking to my colleague Pierre Bienneme. In other news, Hunter Biden has agreed to plead guilty to federal tax charges today, sparing himself a trial that could have painted an unflattering picture of his past business dealings and freewheeling lifestyle. Biden's surprise plea capped a world-win morning in Los Angeles federal court, where jury selection was set to begin for his tax trial. Princeton, Babson, and Stanford universities are the top colleges in the U.S. That's according to the Wall Street Journal College Plus ranking of US colleges released today. The rankings measure how well each college sets up graduates for financial success and it

includes large and small, public and private, technical and liberal arts institutions. WSJ rankings editor Harry Carr says potential students should use the rankings to find the best fit for them. Every ranking is different and there is no ranking which can be the perfect thing for every individual reader and family who are making that kind of decision. What we emphasize in this ranking is the extent to which those schools will make you wealthier, will make sure that you're graduating, that will

ensure that you have a really positive learning experience and learning environment when you're at the college, and that you're able to mix with people from different backgrounds. We do have a range of other sub-rankings which are published alongside our main ranking. If you are interested in social mobility, we have a ranking which factors in the proportion of students who come from poorer backgrounds. If your interest is just in the best value colleges, we have one which takes everything else out and just looks at the bang for your buck that you get from the colleges. If you want to look primarily at the salary impact that you get out of each college, we

have a score which just looks at that, cuts out everything else. And if you want something which is more about the student experience whilst you're at the college, then we do have a ranking of that, which is asking about things like how nice and affordable the facilities are, the food is, the extracurricular stuff, the party scene, all that fun stuff. You can hear more about the rankings on tomorrow's Your Money Briefing podcast and head to wsj.com to see the full list. And that's what's news for this Thursday afternoon. Today's show was produced by Anthony Bansi and Pierre Bienimé with supervising producer

Michael Kosmitis. I'm Tracy Hunt for The Wall Street Journal. We'll be back with a new show tomorrow morning. Thanks for listening.