Andrew Ross Sorkin Discusses Trump’s Economic Debacle

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3:06Ben Meiselas:J.D. Vance speaking in Allentown, where a lot of the Trump policies have been harming that community. And he was asked, so what rate, what grade do you give Donald Trump's economy? Here's what he says. Play this clip. President Trump last week gave his economy a grade of A++++. What grade would you give the economy today? A+++. But then they also blame former President Biden for the A++++ economy. I'm just trying to figure it out. Then you had Caroline Levitt, Donald Trump's chief propagandist, just lying about the inflation numbers and just saying they are what they aren't. Here, just play this clip.

3:47Ben Meiselas:Just first very quickly clarifying Caitlin's question. You acknowledged that CPI in January when you took office was 3 percent. And in September, the last month for which we had data, it was also 3 percent. So inflation. No, it's 2.5 percent. Not in September. It's 2.5 percent. The average CPI right now, I have it in front of me. In President Trump's first eight months in office, inflation is measured by the overall consumer price index has slowed to a 2.5 average pace. This is down from the 2.9 % inherited in January. January is one month. What they do to manipulate the data is notice the word average.

4:25Ben Meiselas:So they talk about what Trump did before his liberation day, which I call liquidation day. And then they blend it as what they call an average. So I'm 40 years old. It would be saying like my average age is 20 years old. And using that, I'm 20 years old. That's my average age. Then you had Trump's Treasury Secretary, Scott Besant. He was on recently at the Dealbook Summit with Andrew Ross Sorkin. And the point that they're trying to push in MAGA, which is just entirely false, is that inflation, it's really just a blue state issue. It's not really all that bad in the red states or it's so much worse in blue states.

5:01Ben Meiselas:And then Andrew Ross Sorkin came with the facts. Let's play it. that her people in her district are having an affordability problem.

5:11Andrew Ross Sorkin:I should have said, well, she's in a red state. Affordability is worse. I mean, in a blue state, affordability is worse than a blue state. We can debate that, but keep going. There's no debate. The number of 50 basis points higher inflation, the 10 highest inflation rates, they are in blue cities but just just so you know because i went to look at this uh this is the joint economic committee 2000 since 2021 uh the highest uh inflation of the past four years has been in red states especially florida i'm talking about current current current not over the past four years right today okay i would think four years would be a reasonable

5:59Ben Meiselas:trend line to look at today like more data would be better to look at let's bring in new york times best-selling author andrew ross sorkin also co-host of squawk box which we cover here sometimes on the minus touch network and author of the new book 1929 inside the greatest crash in Wall Street history and how it shattered a nation. It's not just a great look back there. It's also a look present and look forward. You talk about these seductive illusions that were taking place back then and the warning signs that it gives us for the present. So it's great to have you here. It's great to have me.

6:40Andrew Ross Sorkin:Appreciate it.

6:41Ben Meiselas:It's great to read your book. Let's just start there with these Trump regime officials who you've interviewed, who go on Squawk Box, and they're giving you these data points that you know are not accurate. How do you as a reporter deal with that? We saw you there deal with it. How do you process what they're spewing?

7:03Andrew Ross Sorkin:Look, I think the role that I'm supposed to play is to the extent that you can fact check in real time, which unto itself is a complicated and oftentimes challenging thing to do. You know, in that instance, he had made a comment like that earlier, about a week earlier. And I had actually, after hearing it, had gone and looked up some of the math and was not confused by it, but I saw the math and it didn't seem to translate. So I thought, well, if he brings that up, then we can actually talk about the numbers. And by the way, it comes from a place of curiosity more than anything else. It's not coming from a place of, you know, here I am trying to prove him wrong.

7:39Andrew Ross Sorkin:It was I really wanted to understand he has a perspective and thinks that this is these are the numbers to focus on. Clearly, there are these other numbers that contradict those numbers. How is the public supposed to think about that? But I think the larger point that underlies this is, you know, you have an administration that oftentimes is trying to jawbone their way towards a specific goal, irrespective of the facts. And by the way, you know, that's almost a political thing to say about this administration. But you could say the same thing about the previous administration. There was a period of time where the Biden administration was telling people, you know, that the economy was better than it really was.

8:18Andrew Ross Sorkin:And you go on TikTok, go on X, go, you know, back then people would say, but I'm feeling something very different. And I think that's the same thing that's actually in some ways happening right now, which is, you know, the president saying a plus plus plus plus economy and everybody else is saying, but that's not the economy I see.

8:35Ben Meiselas:you know, you take a look at, I think, some of the mistakes that you mentioned in the Biden administration. They're just telling people they were feeling good when they weren't feeling good. But do you think that's a bit different, though, than telling people it's A++++? But setting aside that, the Trump regime outright saying something like this, which I don't think we've really ever heard in any administration. I say this from an apolitical point. I say this as a data junkie who just cares about like can you just give me like the real numbers right like when they go they brought in 23 trillion dollars and they'll have someone like lutnik commerce secretary or besant they know they're not that that money doesn't exist and they'll say with the straight face that we've brought in and then you'll get them to say ah commitment commitment it's a this and of that

9:27Andrew Ross Sorkin:Oh, all the big numbers that they've bandied about, about investments in the U.S., sovereign investments from Saudi Arabia, from all of these other countries. You know, I think Bloomberg did a really good look at this recently. I think of the$23 billion figure that the administration's put out publicly, I think we'll be lucky, lucky if we get$7 billion. And in fact, I said this to the Treasury Secretary on that stage. and he said something to the effect of, well, isn't$7 billion, you know, extraordinary? And I said to him, it is extraordinary, but just go with that number. Go with the 7 billion.

10:04Andrew Ross Sorkin:You don't need to go with the$23 billion if that's the case. But I think that we've seen this over and over again. It's the same story with the inflation story, which is, you know, they've said repeatedly, tariffs do not create inflation. And yet it is very hard to find a real economist in this country or elsewhere that will tell you that tariffs don't cause inflation. Invariably, they cause inflation. Invariably, they are a tax to some degree on the American public. That's just what they are. And so when you tell everybody that there's something that they're not, when, you know, it's literally, right now, by the way, it's sunny here in New York.

10:40Andrew Ross Sorkin:It's literally like telling somebody it's raining right now, even though I can see that it's sunny.

10:46Ben Meiselas:You know, and one of the things that I love dissecting as a law professor or just as someone who's hungry for information is that when a big trade deal is announced that is said to be on the scale of like the United States, Mexico, Canada agreement or that's big, it's a big, these big types of shift. And when the Trump regime says, hey, we've got this deal that we just made with China or we made a deal with Japan or we made a deal with the European Union. I go, okay, well, where's the, let me read it. Like, let me look at it. Where are the terms? And then you sometimes get a press release or you get maybe a statement and then you don't get a statement from China.

11:33Ben Meiselas:How do you process that though? Because these things are, I always wonder this from a financial reporter's perspective, when they're out there saying these are deals that are happening, but there's the most basic - Look, I think I'm doing what I imagine

11:46Andrew Ross Sorkin:I'm doing what I think the investor class is doing, which is that at some level you have to discount what's being said. So we are living in a policy by press release environment right now. And you have to look at that press release and you have to almost put a haircut on it. You know, earlier this year, the president came out and said that, you know, China was going to buy what, 12 million or whatever the number was, billion. 12 million metric tons of soybeans. metric tons of soybeans by the end of the year. I repeatedly asked members of the cabinet administration over the last couple of weeks, I said, you know, the end of the year is like here, like we're we're it's 15 days away at this point, it's coming.

12:28Andrew Ross Sorkin:And I think it's I think we've sold 300 some odd thousand metric tons. So 300 ,000, how are you going to get to 12, 12 million? It's just the math doesn't add and you can never get a straight answer. And then, of course, you know, just in the past week or so, they've said, well, it's not actually the end of the year. It's it's the growing season. And so, you know, you tell me what the growing season is, and everybody has a different view about that. So this could get extended out several months and call me in March or April, whatever you think the end of the growing season is. And you tell me whether we have 12 million pounds.

13:03Ben Meiselas:You take the average of years multiplied by the cosine divided by 12 times. Maybe we'll get there.

13:10Andrew Ross Sorkin:I don't know. By the way, maybe we get to$23 trillion worth of investments in 30 years from now. I don't know.

13:16Ben Meiselas:But they'll go on the shows in the morning with a straight face and Brooke Rollins will say, look, under Biden, no one's ever bought this many metric tons of soybeans. And I'm sitting there, you're pushing back. Quintanilla pushes back. But then occasionally, you know, other people are like nodding their heads. And I'm like, no, no, no. Under Biden, it was 27 million metric tons. Right now it's 300 ,000. But that brings me to the broader point about your book, though, which is -

13:41Andrew Ross Sorkin:Well, hold on, I'll say one thing. the other crazy part, the crazy part, it's not just the administration saying these things. It's that business leaders make these commitments publicly. These are publicly traded. Putting aside the sovereign, the big investments from countries, think about all of the business leaders who announced these gigantic investment plans that when you actually read through them, they've either already made half of the commitments before or they're doubling, double counting this and double counting that because it's all an audience of one. And I do think that the investors in particular, I think, look through all of this.

14:16Andrew Ross Sorkin:And I hope that journalists are trying to point these things out because that's our job. Having said that, there are clearly supporters of this president and this administration who don't want you to do that. And I hear from them. Trust me.

14:30Ben Meiselas:And to your point, I mean, just look at the first week of this administration. You had SoftBank, OpenAI, the whole tech crew right there. And what did they, I forget the number that they did, that we've committed immediately like$1 trillion in AI infrastructure projects together. And, you know, it's like the soybeans. I don't think they, as that group, first off, looking at that group, you're like, these people are going to work together, aren't they? That's a strange crew to work together. But, you know, they all wanted to be there in the Oval. They've done nothing. You look at Zuckerberg. He was there at one of those meetings and he's like, what number do you want me to use?

15:08Ben Meiselas:800 billion? 800 billion. I mean, he literally said that. And so your point, though, is, is that when you speak to a lot of business leaders in Wall Street, they know they have that audience, number one. But two, smart money is actually putting a lie discount into what the guy said. So he's out there and the street's like, don't even listen to this guy. He's a freaking liar.

15:30Andrew Ross Sorkin:Listen, the only thing there, when they're looking, when the investor class is looking at meta and what Mark Zuckerberg is saying, they're looking at the quarterly reports. They're looking at what he is saying and what the company is saying genuinely, quote, unquote, on the record, in those statements, in those press releases, on those analyst calls, because it is those numbers that they're going to ultimately be held responsible for. It would actually be very interesting to see if, in fact, some of these numbers that are said publicly in these other environments, whether shareholders or others, sue at some point trying to claim that they were misled.

16:05Andrew Ross Sorkin:It would be very interesting to see what kind of case could be brought because they could make these arguments that their intention over a much longer period of time is to, in fact, make these investments. But I think it's a little bit hard to measure. Right.

16:19Ben Meiselas:I mean, back in the day when I was a practicing lawyer and I would deal with SEC types of cases, the level of meticulousness and carefulness of a CEO before just saying a number like that, because they were aware that an SEC would take that and look at it and say, you just made a material misrepresentation on the market. You're the CEO of a publicly traded company. You said it in the overall law.

16:46Andrew Ross Sorkin:The SEC is not doing that.

16:47Ben Meiselas:Exactly. And that's an issue that part of the open season is that the SEC said, go for it, basically, which brings us to the thesis of your book and the framework that I wanted to establish there is this seductive illusion. You know, you talk about these big personalities in 1929 and, you know, the similarities here with Trump throwing a Gatsby party, which is a little party never killed nobody with half-naked women in martini glasses. I think the symbolism may be a little bit too real, especially with what your book is. But here we are right now, you know, and it just feels like with all, with this deluge of disinformation, we are treading water, you know, and people are still treading water, but there's so much disinfo out there.

17:35Ben Meiselas:And we're looking at the numbers, 54 % job losses year over year. Like that's a bad number. Inflation actually rising. The job report number, unemployment up 4.6%. What do you see in the parallels and what made you write this book now?

17:50Andrew Ross Sorkin:Look, I think there's some parallels. There's some things that in truth are different. You know, you mentioned the Gatsby party. There actually was a famous party that took place March 1929. By the way, at Mar-a-Lago in 1929, it was owned, Mar-a-Lago was owned by E.F. Hutton, who owned the brokerages because the brokerages were the biggest thing rolling back in 1929. But no, the similarity is that, you know, the 20s were a great era of invention around new technologies like radio, very much like, you know, NVIDIA or AI. So there was a lot of excitement around that. There were no rules back then.

18:29Andrew Ross Sorkin:I mean, manipulation, insider trading, all of that, that was allowed. There were no rules against it. And right now you do have some of the guardrails coming off of what the SEC is doing. There was no SEC back then. But also you have crypto and leverage. I mean, I think one of the great lessons of every financial crisis is you have a lot you have too much debt in the system. And I think right now there's a lot of people taking on a lot of loans to make all of this happen. And what's different is we don't know where all those loans are, meaning it's not coming from the banks right now. It's actually private credit, shadow banking.