Greg Sargent: This is The Daily Blast from The New Republic, produced and presented by the DSR network. I’m your host, Greg Sargent.
Alex Shephard: It’s great to be here.
Shephard: The whole thing is ridiculous because I think all of this top-line economic data from the Biden administration was pretty positive, even if you factor in the inflationary issue. Trump inherited this and essentially ... In some ways, it’s not that dissimilar to what he did with the 2017 tax cuts, right? He was gifted this well-oiled, big-picture economy—in which I think a lot of people were nevertheless understandably, in many cases, frustrated—and immediately just pushed it off a cliff.
Sargent: Except maybe the beginning of Trump’s first term (laughs). So Trump unloaded about this twice. First, he erupted on Truth Social saying, “Our Country will boom, but we have to get rid of the Biden ‘Overhang.’ This will take a while, has NOTHING TO DO WITH TARIFFS, only that he left us with bad numbers, but when the boom begins, it will be like no other. BE PATIENT!!!” And there are lots of all caps lines in there. Then Alex, speaking to reporters, he said this.
Sargent: So as you said, the opposite of all this is true. Trump was left an economy that was the envy of the post-Covid Western world—and that wasn’t an easy thing to accomplish, right? The entire world was struggling with post-Covid shock, and we did better than pretty much any country on Earth. And then Trump immediately started sabotaging what he had been gifted with his tariff threats and the buffoonishly incompetent Elon Musk’s huge DOGE cuts to the government. Now, Trump is trying to say his policies didn’t kick in during the first quarter, but isn’t the fact clear that the economy was reacting to his erratic announcements, which created vast uncertainty? Isn’t that what happened?
It’s in some ways an even more demented version of the response to the Great Depression in 1929 and 1930, except this time we know it doesn’t work. I found the tweet and the statements after to be funny in part because I think that the more all caps there is, the more panicked he is. But the overall message [is] if you’re an investor or you run a business that relies on any goods from overseas, which is [many of them], or if you work at one of those businesses, I think you should be very, very worried. The contraction, I think, is only causing Trump to lean further into an economic idea that seemingly only he believes will work.
Shephard: Yeah. And I think that the economic failure is a literal [example of] “the beatings will continue until morale improves,” like the tariffs will continue until the economy recovers. And I think that that’s really scary. This is not an economic miracle cure. Nobody believes that it is, right? As somebody who generally is supportive of tariffs and targeted [tariffs]—like the way that the Biden administration used them in issues like solar, for instance—in this instance, they just make no sense. I was talking to a guy who owns a coffee shop, and [he’s] like, The U.S. can’t produce coffee, so why are we putting huge tariffs on it? It just makes absolutely zero sense whatsoever. And again, what we’re seeing now is relatively small. There aren’t supply shortages right now. There probably will be in the next few months, few weeks even.
Sargent: I find that really interesting because when he reverses on the tariffs, everybody rushes in to try to provide positive reinforcement. Fox News people go out and say what a great genius he is. In fact, you may remember that some of his aides, when he reversed the tariffs the first time, went out and called it the greatest economic decision by any president or any leader in all of human history. And of course, he doesn’t actually take any real message from that. This is where I want to bring in the adulation of his other aides that happened on Wednesday at Trump’s cabinet meeting. They really went full North Korea with the subservience, with the adulation. First, here’s Attorney General Pam Bondi.
Sargent: Second, here’s Secretary of the Interior Doug Burgum.
Sargent: Alex, at first you look at this and you think each one of them is just trying to survive in the snake pit administration by staying in Trump’s good graces, but it seems like it might be darker than that. It looks to me like the adulation of Trump grows in direct proportion to the terrible news that Trump gets, along with the terrible news that Trump gets. What are they trying to accomplish here with this kind of stuff, do you think?
In a lot of ways, it’s how he uses social media as well, especially in this first term. And I think that what you’re also seeing here—and what really stands out to me about these meetings with the exception of Marco Rubio, who, once again, looks like he would rather be literally anywhere else in the world—is that he now is surrounded by people who can aid his reality-altering project. And he’s trying to use that to at least justify the crazy, fascistic things that he’s doing.
Shephard: Yeah. I think that what we’ve entered is what would ordinarily be a terminal phase of any presidency. We know what the conditions are for the rest of this presidency essentially, even if he ... He’s not going to back down from the tariffs, and he, in some ways, can’t. This trade uncertainty is going to continue forever even if he were to pause “Liberation Day” temporarily. At the same time, I think the damage there is already done. We’re going to have supply shocks simply because of that announcement in and of itself.
Relatedly, I don’t think I did mention in my piece but we’re heading toward a huge confrontation with the Federal Reserve if that happens—one that I think will further sap investors’ confidence in this administration. It will cause the stock market to spiral down. And even if Trump were to get what he wanted, which is someone who will aggressively cut interest rates, I’ve talked to a bunch of people in economic policy and economists who are just not convinced that it would make a huge difference. So the big picture trends economically are bad enough—and even if you were to reverse course, they wouldn’t change.
Sargent: I’d like to close by getting at what I think is a really deep tension that flows out of Trump’s pathologies. As we talked about earlier, when Trump actually seems to learn something from the markets and adjust accordingly, like when he dialed back some of the tariff stuff, a bunch of people that he seems to respect on Fox News rush in to provide this positive reinforcement by saying, That was a great decision, Mr. President, in hopes that he’ll learn from that. But then on the other hand, when the news gets really bad like it just did, there’s this intense internal pressure inside MAGAworld to build a wall around Trump and turn the adulation and the sycophancy and the North Korea–level subservience up to 11, which works against the goal of getting him to course correct. Can you talk a little bit about that? It seems to me like that latter force is the more powerful one within MAGA. And as a result, as the crises get worse, they will become more dug in against correcting.
There’s another element as well, which is that this administration does seem to be guided, for the most part, by...whoever has the most extreme idea of enforcement gets to go ahead and do it. Part of that is that Trump himself only really cares about immigration policy and tariffs, and he has empowered people that have the extremist or alarmist or most insane ideas in each of those areas. Then everywhere else—you’re seeing this particularly at Health and Human Services and other things—there’s a vacuum. No one is going to tell them no, and they have to tailor what they’re doing to be part of this larger remaking the American government. That to me is a really big part of it: this sense of these people having to say, We are the most important presidency since Lincoln or Washington—
Shephard: —ever.
Shephard: Yeah, it’s real fun. Thanks.
Sargent: You’ve been listening to The Daily Blast with me, your host, Greg Sargent. The Daily Blast is a New Republic podcast and is produced by Riley Fessler and the DSR Network.
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