Justin Wolfers Discusses Trump’s Long-term Economic Damage

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2:14Ben Meiselas:Donald Trump was thrown under the bus by his own vice president, J.D. Vance, who shined a massive spotlight on just how disastrous Donald Trump's presidency is. So J.D. Vance took a tour across the country this past week purportedly to defend Donald Trump's economic policies that are an utter disaster, to defend Donald Trump sending ICE and Border Patrol Gestapo to terrorize people in Minneapolis, St. Paul, and across this country. And then J.D. Vance took part in a March for Life event where he talked about completely banning women's access to reproductive rights. And it just made the country even more livid and pissed at Donald Trump and J.D.

3:01Ben Meiselas:Vance than they already were. Heck, even Laura Loomer, one of Donald Trump's biggest cheerleaders, said, why is the GOP and J.D. Vance pushing more abortion messaging in a midterm election year. Didn't they learn their lesson from 2018? Trump doesn't like when the GOP focuses on abortion. How many times does he have to say this? Trump gets it. The GOP will blow the midterms, to which J.D. Vance responds. The president literally sent a video to the March for Life today and encouraged me to accept their invitation, which I was happy to do. And then Laura Loomer kept on attacking J.D. Vance and all of these other MAGA people kept attacking J.D.

3:41Ben Meiselas:Vance. But earlier in the week, J.D. Vance visited Toledo, Ohio, and then Minneapolis. When he was in Toledo, his message on the economy is, the economy is just like the Titanic, J.D. Vance said. Hmm, I wonder what happened with the Titanic, J.D. J.D. says you can't just turn around the Titanic overnight. So I got it, J.D. The American economy is like the Titanic. That's your messaging going into the midterm. Watch J.D. throw Donald Trump under the bus right here. Let's play this clip. This is something I want you to hear. The Democrats talk a lot about the affordability crisis in the United States of America.

4:23Ben Meiselas:And yes, there is an affordability crisis, one created by Joe Biden's policies. You don't turn the Titanic around overnight. It takes time to fix what was broken. I said earlier that the - And then when J.D. was speaking at the March for Life event, as it's called, J.D. Vance kind of repeated that message and said the elephant in the room is that many of you think we're not doing things quick enough. Watch J.D. say that here as well. Play this clip. Now I must address an elephant in the room and I've heard the guy over here talking about it. A fear, a fear that some of you have that not enough progress has been made, that not enough has happened in the political arena, that we're not going fast enough, that our politics have failed to answer the clarion call to life that this march represents and that all of us, I believe, hold in our hearts.

5:21Ben Meiselas:and I want you to know that I hear you and that I understand. There will inevitably be debates within this movement. We love each other but we're going to have open conversations about how best to use our political system to advance life, how prudential we must be in the cause of advancing human life. I think these are good, honest, and natural debates and frankly they're not just good for all of you. They help keep people like me honest. And that's an important thing. And then when JD Vance was in Minnesota, he said, if we're trying to find sex offenders here with ICE and Border Patrol, why don't you just help us?

6:03Ben Meiselas:JD Vance says, can you just tell us where the guy lives, where the pedo is, where the sex offender is, where the person covering up child sex trafficking is, to which everybody responded to JD and said, you may want to check in, you know, 1600 Pennsylvania Avenue. You may want to check out that area. You may just want to try JD, just an opinion and see what's up. Watch JD say that. And again, this was just so utterly disastrous for Donald. Here, play this clip. Types of cooperation that we need. Look, I don't need Tim Walz or Jacob Frey or anybody else to come out and say that they agree with JD Vance or Donald Trump on immigration.

6:39Ben Meiselas:I just don't need What I do need them to do is empower their local officials to help our local or help our federal officials out in a way where this can be a little bit less chaotic and it can be a little bit more targeted. Like if we're trying to find a sex offender, tell us where the guy lives. Now, as J.D. Vance was saying all of that, many people were reminded that J.D. Vance, during one of his previous iterations of his personality, hated Donald Trump. And when J.D. Vance tried to pretend that he's the man of Appalachia who hates Donald Trump, and he compared Donald Trump to Hitler back in the day, when J.D.

7:19Ben Meiselas:Vance was an anti-Trump guy, J.D. Vance said that Donald Trump is a bad candidate and frankly, a really bad person. Play this clip. And so one of the takeaways is not just that the Republican Party base is somehow fundamentally flawed in a way that's unique in American political history. It's that Trump is a really bad candidate. And frankly, I think a really bad person. But about the Titanic reference, JD, when you said that it's like a ship, the economy, and it's very hard to turn things around, lots of people, including our editorial team here at the Midas Touch Network, were surfacing clips of Donald Trump, where in the past 12 months, Donald Trump promised that energy bills, that our home energy prices would go down by 50 % within a year.

8:07Ben Meiselas:Here play this clip. Under the Trump economic plan, we will cut your energy prices in half within market down with. And you can get very angry at me if we don't do it. Within 12 months, your energy prices will be cut in half. My plan will cut energy prices in half or more than that within 12 months of taking office. Number one, your energy bill within 12 months will be cut in half. And that's my pledge all over the country. Beyond farmers, that's my pledge all over the country. If you vote for me, I will cut your energy and electricity prices in half within 12 months. We're going to cut them down.

8:45Ben Meiselas:And then MAGA sycophant, this weirdo MAGA politician, Troy Nels, who wears like Trump shirts and like weird Trump American flag bow ties when he's on Capitol Hill. Just take a look at this guy, by the way. our reporter on the hill Pablo Manriquez caught up with Troy Nelson we just wanted to get the perspective you know of of all this and which is you know Donald Trump promised we heard those clips right there that he would reduce energy prices by 50 percent Troy Nelson you're a mega sycophant what do you make of it Troy watch Troy's response it's so utterly embarrassing play this clip Donald Trump said that he would lower the cost of energy by 50 percent in his first 12 months What was your message for Americans for seeing their energy prices go up?

9:31Ben Meiselas:Well, energy, I mean, there are several things of energy. You got energy, you got gas and everything. Gas prices are down. Other things are down, but we have a very unstable, the entire globe, there's a lot of instability, obviously with Venezuela, with oil, this and that. There's a lot of fluctuations with all that. So I think Donald Trump, just give him time, give that man time to continue to lead. And if Congress will follow that lead, you will see energy prices reduced by 50%. There's no question about it, because Donald Trump is right all the time. But on the topic of the disastrous Trump economy, and not just the short-term damage, but the long-term damage it is causing, I want to bring in someone that I admire and someone who I'm sure you admire as well, Justin Wolfers, professor over at University of Michigan, professor of economics.

10:26Ben Meiselas:Let's bring in Professor Wolfers. I want to have a conversation with him about Donald Trump's disastrous economy and how we should be thinking about this right now as well. Let's bring in Professor Wolfers. Professor Wolfers, great to see you. Mate, I'll go by Justin. Good to see you then. Justin, great to see you. Unless you want to go by Professor Micellis. How do I pronounce it? Micellis. Just depends how I'm feeling. I I prefer to go by Ben, though. But, Justin, let's get into it. So this past week, we saw yet another kind of fake deal announced by Donald Trump. He goes to Davos. He confuses Greenland with Iceland.

11:03Ben Meiselas:He says we need to acquire it. Later on in the day, he announces, we've done this great deal, and we did it with NATO. Apparently, Denmark, Greenland, or Mark Rudd of NATO don't know anything about it. Trump says it's infinite. It's amazing. It's so great. You learn that nobody knows any details of this thing. There's no deal at all. He made it all up. The market tanks, the market rises. We've seen this pattern before. You've documented. Let's just start this week and then we'll pan out a little bit. What an amazing 11 years the last week has been. So I think we might have begun the week with some of the fallout from Trump threatening to jail the chairman of the Federal Reserve Board.

11:48We went to the Supreme Court and we saw Trump's attempt to fire Lisa Cook from the Federal Reserve Board. We are still waiting for the Supreme Court to come down on deciding whether the tariffs are constitutional or not. And so in the final couple of minutes, while they're waiting to find out if they're constitutional, Trump threatens eight European nations with tariffs of 10 % rising to 25 % if they don't hand over an independent territory. um trump flies to davos and gives a what i can as far as i can tell is a well his plane breaks down first uh he gives a campaign rally speech which is rather odd because i don't think he's meant to run for election again he's certainly not running for anything in switzerland it was a long rambling incoherent speech which if anything just shows disrespect to our allies to the businesses there to the leaders that are there he arrives and says i'm not going to bomb greenland not bombing greenland is enough to cause markets to rise and sentiment to uh to to rise i think it was on the friday it was all the way back to last right it's been seven days friday or maybe saturday it was saturday when he said that he was going to impose the brand new tariffs on Greenland and so it took all of four days for him then to decide well actually I'm not going to do anything with the tariffs.

13:17So what he managed to do was cause a stock market sell-off as the world reacted to the possibility that the next round of the trade war was starting and then he managed to cause markets to rise by just not doing that and if I sound a little exhausted now, I am. And if your audience is feeling sick and tired of this carnival show, you ought to be. Sometimes though, I think we're going to learn the most if we press pause, stand back and try and put everything that we just talked about in a deeper perspective.

13:54Ben Meiselas:Let's do that. You guide me on that, Ben. Let's do that because the cycle that we've seen now for over a year. I think the first threat was against Colombia, and then he backed down. People forget it. I think it was actually Colombia over a year ago. Then it was Canada and Mexico. Then he did it with China. And then you had what he called Liberation Day, which was Liquidation Day, the markets tank there. Then he would just kind of oscillate with that over and over again. and you see that same pattern and he'd pick on kind of random countries. The biggest drop was after Liberation Liquidation Day.

14:38Ben Meiselas:And while the, and we could talk about the difference here, sometimes people call it like a K-shaped economy because the rich get richer, everybody else gets screwed. And while the markets have gone frantic, but have trended at least to help wealthier people, the impacts have been felt. The tariffs have been felt by consumers. There's some people are saying it's either a jobless recession, but unemployment is up and people are struggling to find jobs. Things are far more expensive. People struggle to pay their rent. And you have this, Trump points to the markets, the markets, the markets. And the people are saying, what about me?

15:21Ben Meiselas:I'm left behind in all of this and there is that K-shaped element. Can you talk us through that? So much there. Let me try to figure which part of that to start by biting off.

15:39Let me tell you the distinguishing feature of this business cycle. Normally, the economy churns along and some good things are happening and some bad things are happening. Some sectors are expanding, some are contracting, and that's what a normal economy looks like. And sometimes we have recessions and that's usually because something bad and unexpected happens. There's a financial crisis, there's a global pandemic, there's a war, there's big movements in global oil markets. What's so annoying, frustrating, disappointing and different about this is this might be the first ever economic downturn caused by incompetence.

16:20it's actually rare for a US you know often the role of economists when we talk about ongoing political dramas is to remind people that the White House doesn't control everything in their lives the president's not accountable for everything sometimes economies have lives of their own that's not a story that any economist is telling right now so there's the immense uncertainty that people feel now we we all feel in very different ways if you're running a business right now, you don't know what the rules are going to be tomorrow. You don't know whether you'll be able to import the goods that you need as inputs.

16:56You don't know whether you'll be able to find foreign markets for the goods that you're producing. You don't know whether the workers you've been relying on are going to be there tomorrow. You don't know, for instance, I teach you at a university, whether we'll be able to get our students in across the border. And if they can't get across the border, we can't take their tuition. You don't know whether your company is going to get called out in the late night Truth Social post for being too woke, not woke enough. You don't know whether you're going to end up the way the CEO of Intel did, of walking into the White House for a meeting and walking out having accidentally left 10 % of his company down the back of the White House couch.

17:38You don't know what the rules and regulations are going to be tomorrow. You don't know who's even going to be staffing the government departments that you have to work with. And so there's this just immense uncertainty out there. But uncertainty is one thing. We can even live with that. But the problem is often the choices, often when we see, well, here's something that's happening, I can think to myself, well, a rational government would do this. And this will give me a way of thinking about the future. But that's not what's happening. There is no way it serves America's interests for the president to rip up a trade agreement on a Friday, which is what he did last Friday.

18:15He told the Europeans we have a trade agreement, but I'm just going to add 10 % to 25 % tariffs on top because I'm upset about Greenland. There's no way it's in America's best interest to rip it up on a Friday and then restore it on a Thursday. That cannot possibly serve America's interests. It makes it harder for us to do business with anyone else. It makes it harder for future promises to be believed. It actually reduces the leverage of the United States. Because if you can't credibly commit to something, then no one will want to commit to anything with you. Look, if I were to be glib about this, I'd say that if you had had many, many, many failed marriages because each of them involved cheating on your marriage vows, it's going to be hard for you to find the next wife because she's not going to believe you.

19:03And in some sense, that's where we are with trading partners right now.

19:06Ben Meiselas:And how do we even get accurate data that's out there? Because you have Trump posting all of these different things that are inaccurate. We know he fired the Bureau of Labor Statistics, former chief for accurately reporting on data. I believe that it's like 40 % of the consumer price index is now based on estimates. It's not staffed enough to actually ingest the right amount of data of even making these determinations. And I say this because I don't like veering down conspiratorial lanes, even when we hear 2.7 % inflation, which is way above the Fed's target. And had Donald Trump done nothing, we would be far less than that 2.7 % inflation.

19:55Ben Meiselas:But when I go to a store, everybody's own view of it is like, that towel used to cost$6 and now it's$15. And now it doesn't feel like it's only 2 % year over year. But again, I don't like veering down into those areas, but how do we know we're getting accurate info right now? Ben, I appreciate the question. I think it's actually a particularly important question for us to look the viewers in the eye and tell our audience exactly what's going on out there. And it's really hard because it used to be a very simple question to ask, which it used to be that anything that comes out of the federal government has been fact-checked and is true.

20:32Even if it was spin, say for instance, in a former president's State of the Union address, it would be spin, but it would still be true. And so we would always say the facts are true, the context you might need to think about. We're now in a much trickier world. And so So I think it's really important to distinguish between who different facts are coming from and the quality of different claims. So the first thing that's completely obvious is almost everything that comes out of the White House is a lie. If it's true, it's a mere accident. So that means if something comes out of the president's mouth, it's almost certainly untrue.

21:08If it comes out of the Treasury Secretary's mouth, it may well be untrue. If it comes out of the Commerce Secretary's mouth, just go and run away and stop listening to him. If it comes out of the press secretary's mouth, she's a relentless liar. So anyone inside the White House, just forget it. Separately, there's our economic statistics. Our economic statistics are compiled by independent or independent-ish agencies, the Bureau of Labor Statistics, the Bureau of Economic Analysis, and the Census Bureau. These are totally serious statisticians who are doing the best they can with the resources they can.

21:41Nothing that comes out of those organizations is a lie, still. And I think it's really important. As much as we might worry about the statistics, none of it's a political lie. Having said that, that doesn't mean they're always the truth, which is to say any statistic is an estimate. It's a best guess using a specific methodology. And at different times and places, those methodologies can be stronger or weaker. We never know the truth because in order to know, for instance, the truth of total income earned in America, would have to talk to every American and find out how much income they've earned.

22:16We don't do that, right? We have to ask people. Did we ask the right subset? Did they tell the truth? Were they thinking about pre-tax or post-tax? All sorts of things go on. Statistical sausage is really quite complex. So even though these numbers are the truth, they are open to critique. Now, here's where I really want to be careful. They're almost always, because we're blessed by extraordinarily good statisticians in the United States, they're almost always the best possible guess. So you might have other ways of guessing, estimating what's going on, but these guys are very, very sophisticated.

22:48So they're almost always the best, but the best doesn't mean perfect. And to give you an example, we estimate non-farm payrolls. It makes big headlines once a month. It's one of the most important economic indicators. The way they do that is they call a bunch of companies and they say, how many people you're hiring right now. Now you might think well that's pretty easy how could that go wrong? Well the question is when they call say a thousand companies did they just call one one thousandth of all companies in the United States or one two thousandth? In order to know that you'd have to know how many companies there were and the problem with that is every day there are new companies being born and there's old companies dying and they never report to the government exactly what it is they're doing and so the statistics it turns out have been overstating the extent of job growth because of the difficulties in trying to figure out how many companies have been born and dying.

23:39So the numbers are honest but contestable. Let me come back to the one that you just raised there, Ben, which is the CPI, which is how we measure the cost of living, what's going on with prices. I'm not very worried about the fact. It is true they've cut funding for that, which will make it less accurate, right? But it won't tell you that it will always understate or always overstate. It just might be a little bit noisy around the truth. Now, the fact that they've cut back on the number of prices that they collect actually isn't that worrying. Let me explain why. It turns out, you must have been through one of those intersections where there's a gas station on every corner.

24:16Turns out, when there's two gas stations next to each other, they usually have pretty much the same price. So therefore, if we only surveyed one of those gas stations, we'd have a pretty good guess about what's going on with gas prices. That analogy holds more broadly. Often a chocolate bar that's sold in one store is sold at the same price as another store. Could be in the old days we were surveying both stores. Today we just survey one store, but realize as long as that correlation remains high, that we still have pretty accurate measurements. So I'm going to continue to say we should trust the statistics, but if you want to go deeper, we can talk about exactly what it is they mean, and I think that's the harder question.

24:53Ben Meiselas:Yeah, because, well, and let's use that talking about University of Michigan for a second, because they put out a consumer sentiment report. And when you see month over month, they're like the worst ever. I mean, you know, and I see you posting about it and other economists post about those reports. And a lot of the stats that we get around how consumers are feeling, it's like this is the worst since. And it's either like the Great Recession or COVID or numbers like that. Actually, it's currently the worst on record. Right. And yet the government, though, reports GDP growth is up or this. So how do we make sense of that?

25:32Really good question. So the first thing is realize these what the government's measuring, things like GDP or employment is one thing. How people feel about the economy is a different thing. So, of course, when you measure two different things, they don't have to be the same. So one possible reconciliation is that people feel really bummed out even as they continue to spend and produce and so on. Another possibility is when you look inside how do we actually measure GDP, it's very complicated and there's lots of ways in which it could be wrong. And it later gets revised as we get better data and it could be consumer confidence is right.

26:06And actually the economy is not humming along. Let me give you another story. And I think this really gets to how I'm going to bore all of your audience. And I'm not going to apologize for it, but I think it's a deep, It's a great example that you raised here, Ben. The University of Michigan is doing the most, and I don't work on this survey, but they're doing the most honest job they can calling, I think it's 500 Americans every month, might be 1 ,000. I think it's 500. And they ask them about how they feel about the future and so on. And as I mentioned, that's currently just about at its lowest level ever.

26:40And there's a question, does it really make sense to think that people are more depressed today than they were during the COVID lockdowns or just after Lehman Brothers collapsed on the cusp of the Great Recession. And maybe it doesn't make much sense. So one possibility is actually what we've seen is the way that people answer surveys has changed. So it turned out for many, many years, if you called someone and asked them how the economy's doing, they'd tell you how the economy's doing. They thought of economics just as economics. And what's happened is we've become increasingly partisan over time, and you can basically date this to the day that Trump walked down the golden escalator.