If you’re a D.C. cop this minute, to whom are you actually supposed to report? According to Attorney General Pam Bondi, it’s Drug Enforcement Administration head Terry Cole, to whom she assigned the “powers and duties vested in the District of Columbia Chief of Police” in an order last night. But D.C. Attorney General Brian Schwalb immediately denounced that order as unlawful, saying in a memo of his own that “members of MPD must continue to follow your orders and not the orders of any official not appointed by the Mayor.”

The courts will doubtless have to get involved very soon. Until then: Such law! What order! Happy Friday.

Trump, Meet Gravity

by Andrew Egger

Right now, the U.S. economy has a lot in common with Wile E. Coyote.

Like the hapless Looney Tunes predator, Donald Trump’s economy went charging off a cliff after his April 2 “Liberation Day” tariffs, which—despite endless tweaks, revisions, abrupt extensions, and equally abrupt reversals—are gradually settling into a new status quo in which the costs of global trade are far higher than before.

But we’re just starting to feel the true impact of that status quo. Because until recently, a series of ameliorating factors have kept things looking artificially normal.

Trump’s sudden about-face on the most psychotic tariff rates reassured markets that he wouldn’t simply melt the economy down to slag on a whim. Instead, he introduced traders to the TACO model and gave them an object lesson in the pleasures of buying the dip. Monthly jobs reports kept coming in strong, seeming to complicate expectations that tariffs would force companies to be more aggressive managing their payroll. And consumer prices continued to rise relatively slowly, making Trump’s insistence that companies would simply “eat” the cost of the tariffs look facially plausible.

But much of this now appears to have been a mirage. The latest jobs report found that earlier estimates of strong job growth post-April 2 had been incorrect; hiring has slowed dramatically under our new tariff regime. And the temporary lifelines that had been holding consumer prices at reasonable levels are quickly vanishing too: Companies that stampeded to import as much as they could before tariffs took effect are burning through that pre-tariff inventory.

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The result is the alarm-bell price report we got yesterday: a 0.9 percent single-month jump in the Producer Price Index, the largest since the bad old inflation days of 2022. That jump pushed PPI 3.3 percent higher compared to this time last year, while “core” PPI—which excludes more naturally fluctuating prices of food and energy—rose all the way to 3.7 percent year-over-year.

In contrast with the Consumer Price Index, which tracks the cost of final goods, PPI tracks costs through every step of the supply chain, including raw material inputs and intermediary manufacturing. PPI and CPI are closely related measures, of course, and ordinarily they track closely together. But the fact that PPI is spiking ahead of CPI right now suggests that economists’ warnings about the costs of tariffs were right. What we’re seeing is tariff-induced upward price pressure on every step in America’s globally integrated supply chains, all while businesses use every trick in the book to delay passing those costs on to consumers. But delay is all they can do; soon, consumers will be feeling the burn too.

It’s remarkable to ponder the gap between this economic picture and what voters thought they’d be getting with Trump on inflation. Many Americans seem simply to have swallowed his incredibly simplistic campaign pitch of “Biden makes prices go up, Trump will make prices go down.” The fact that they’ve kept going up even modestly so far this year has scanned as a disappointment to many. How they’ll respond to Trump actively making that inflation worse in the weeks and months ahead remains to be seen, but support for his ability to handle the economy only continues to soften. In early July, Pew found 54 of Americans either very or somewhat confident that Trump would make good decisions about economic policy. In a similar poll this week, that number was down to 44 percent.

So now we, like Wile E., are discovering too late we’ve run straight off terra firma.

But maybe a cliff isn’t quite the right analogy. What we’re seeing probably isn’t the prelude to some sort of free-fall market crash. Instead, we appear to be running headlong into a bog, sinking waist-deep in muck. Trump’s tariffs are congealing around the economy, making all international trade that much more sluggish and costly. The result is a straightforward hit to prosperity. Prices will rise, growth will slow, interest rates will stay elevated. Maybe the economy will bear up under it all and the arrow will keep pointing upward. But if it does, it’ll be doing so through a thick miasma of tariff-induced drag.