Voters and Trump See a Very Different Economic Reality

0:02Meridith McGraw:President Trump uses his State of the Union to celebrate an economic turnaround many voters aren't seeing.

0:09Daniel Bach:Members of Congress and my fellow Americans, our nation is back. Bigger, better, richer and stronger than ever before.

0:20Meridith McGraw:Plus, Warner says Paramount's sweetened offer could well best Netflix. And Anthropics says competition could lead it to relax the AI safety rules it's known for. It's Wednesday, February 25th. I'm Daniel Bach for The Wall Street Journal, filling in for Luke Vargas. And here's the AM edition of What's News, the top headlines and business stories moving your world today.

0:49Meridith McGraw:We begin in Washington, where President Trump has given the longest State of the Union address in U.S. history. referring to his first year in office as a turnaround for the ages. In a speech full of showmanship and patriotism, Trump celebrated his immigration enforcement operations and heralded his economic agenda at a time when polls show him struggling to connect with the public on the economy and Republicans bracing for a challenging midterm election. Our White House reporter, Meredith McGraw, has been covering the speech from Washington throughout the night and joins me now. Meredith, what did you make of the address?

1:24Donald Trump:The goal of President Trump's speech really was to promote his record during his first year back in office and try to make the case to the American people that he's working to make their lives safer and more affordable.

1:37Daniel Bach:After just one year, I can say with dignity and pride that we have achieved a transformation like no one has ever seen before and a turnaround for the ages.

1:49Donald Trump:So a lot of the speech was a defense of his policies, whether it was a crackdown at the border on illegal immigration or his big, beautiful bill and no tax on tips or the Trump accounts for children. But he really didn't roll out too many new policy announcements and really stuck to trying to sell the American people on what he's done so far.

2:12Meridith McGraw:At the top of the speech, you seem to focus on the economic agenda because that is where Trump has staked his claim. And it's a big deal for Republicans in the next year ahead of the midterms, right? Yeah.

2:24Donald Trump:And, you know, polling shows Trump really lagging when it comes to the economy. Voters have a lot of concerns about the cost of living. And in Trump's speech, he tried to blame affordability issues on Democratic policies and claimed he's working to try to turn things around by lowering the cost of energy of health care and housing. Which will be better health care at a much lower cost. And, you know, he did lay out a couple new policies, like a plan to offer Americans access to retirement accounts that federal workers have and another plan to have top tech companies promise to pay more for electricity in areas where they're building new AI data centers.

3:07Donald Trump:So he was really trying to target areas that he has real vulnerabilities with and the Republican Party has real vulnerabilities with going into the midterm elections.

3:16Meridith McGraw:A key economic plank for the president, of course, is his tariffs. He doubled down on those, despite some of the Supreme Court justices being in the chamber.

3:25Daniel Bach:But the good news is that almost all countries and corporations want to keep the deal that they already made. Right, Scott? Knowing that the legal power that I as president have to make a new deal could be far worse for them. And therefore, they will continue to work along the same successful path that we had negotiated before the Supreme Court's unfortunate involvement.

3:53Donald Trump:That was one thing I was really watching for was how he was going to talk about his tariff policies after the Supreme Court struck down his use of emergency powers just last week. And, you know, sitting front row there in front of him were four justices, some of whom ruled against Trump's tariffs. and Trump didn't go off on them too much. He just said the ruling was unfortunate, but he really tried to defend his tariff policy and say that they're still forging ahead with using tariffs as an economic tool.

4:25Meridith McGraw:We mentioned immigration off the top. That sparked some of the more heated moments on the evening, including an exchange of words with Democratic lawmaker Ilhan Omar.

4:35Donald Trump:Well, one of the things that minority leader Jeffries warned Democrats were not to protest too much during Trump's State of the Union and give the president any sort of fuel during his speech. But his call for that was pretty quickly ignored. And there were some testy exchanges between progressive Democrats Ilhan Omar and Rashida Tlaib. I'm asking you to end deadly sanctuary cities that protect the criminals. And they heckled Trump several times, especially when Trump was talking about his immigration policies and when he pointed to allegations of fraud in Minnesota.

5:17Daniel Bach:They're blocking the removal of these people out of our country. And you should be ashamed of yourself.

5:25Donald Trump:One point, Omar yelled out liar and Trump called them crazy.

5:31Meridith McGraw:And what of the wider Democratic response, what did you make of what the Democrats had to say about Trump's first year in office?

5:38Donald Trump:Well, the person delivering the Democrats' official response was Virginia Governor Abigail Spanberger. And she's a moderate. She won last year's Virginia election really focusing on affordability and a cost-focused message. And she really went hard on Trump for failing, she said, to address affordability. Americans deserve to know that their leaders are focused on addressing the problems that keep them up at night. Problems that dictate where you live, whether you can afford to start a business or whether you have to skip a prescription in order to buy groceries. So I'll ask again, is the president working to make life more affordable for you and your family?

6:27Donald Trump:We all know the answer is no. And I think it's sort of a preview of the kind of messaging that we're going to see from Democrats towards Trump and Republicans going into the midterms.

6:38Meridith McGraw:There was also some moments of bipartisan support for the president, right, Meredith, including when he handed out a number of medals on the night.

6:46Donald Trump:Well, you know, President Trump really is a showman and there were surprise guests and awards that were given out throughout the speech. He had also some pretty heartwarming moments. There was the men's U.S. hockey team who just won the gold medal, who flew in for the State of the Union. And at one point, the chamber was chanting USA. The president gave the Presidential Medal of Freedom to the hockey goalie. There was some bipartisan applause for a line he had about stopping insider trading by members of Congress. But I thought a really nice moment was when he gave the Medal of Honor to the helicopter pilot who was wounded during Maduro's capture, but also a 100-year-old Navy pilot who flew a secret mission during the Korean War.

7:45Donald Trump:and he was given the Medal of Honor and First Lady Melania Trump placed the medal around his neck and the entire chamber, it seemed, stood up to applause him for a good amount of time in what was a very nice bipartisan moment in the chamber.

8:01Meridith McGraw:Journal-White House reporter Meredith McGraw in Washington. Meredith, thank you for this.

8:06Donald Trump:Thanks for having me.

8:07Meridith McGraw:Coming up, the rest of the day's news, including what Paramount's new offer for Warner means for Netflix, Plus, tensions rise in Iran as Trump says Tehran wants to strike a nuclear deal. Those stories and more after the break.

8:28Meridith McGraw:One late feature of Trump's State of the Union address was his focus on Iran and its nuclear program. Referring to the ongoing negotiations with Tehran, the president said they had not yet come to an agreement.

8:39Daniel Bach:We are in negotiations with them. They want to make a deal, but we haven't heard those secret words. We will never have a nuclear weapon.

8:49Meridith McGraw:The comments come as tensions are growing between anti-regime activists and pro-government militias on campuses, which started in several major Iranian cities last weekend. And in a display of strength ahead of further talks with the U.S. on Thursday, Iranian state TV has been showing military drills, including missile rocket launchers and firing guns at targets. Microsoft co-founder Bill Gates has apologized to Gates Foundation staff for his ties to Jeffrey Epstein, admitting his mistakes cast a cloud over the organization while maintaining he never participated in any crimes. Gates acknowledged past affairs with two Russian women that Epstein later discovered, but clarified they were not among Epstein's victims.

9:35Meridith McGraw:Now to the latest twist in a Hollywood saga, and Warner Brothers Discovery says yesterday's takeover bid from Paramount could well beat the best offer from Netflix. That said, Journal Media and Entertainment reporter Joe Flint says the streaming giant will have a chance to match Paramount's offer for the historic Hollywood studios.

9:54Daniel Bach:Paramount increased its share price offer for Warner Discovery to$31 from$30. It also threw in other new incentives that it hopes will make Warner choose its offer over Netflix. Warner's now reviewing that offer and in the near future will decide whether to go to Netflix and say they need to match. For Netflix, this puts them in a little bit of limbo. They have to see how the Warner Board reacts, and if the Warner Board feels that the Paramount offer is superior, then Netflix will have an opportunity to match that offer or increase on it. That would be a window of about four days. This is the latest chapter in a saga that's been going on since late last year, and we still have lengthy DOJ approvals and regulatory processes around the world before all this gets done.

10:42Daniel Bach:So we're going to be here for a while, folks.

10:45Meridith McGraw:Paramount is scheduled to release its latest earnings results later today and Warner tomorrow. Anthropix says it will relax its core safety policy if a comparable or superior AI model is released by a competing AI lab. The company is in a fierce battle with the likes of OpenAI, XAI and Google, but has in the past paused development work on its model if the changes could be classified as dangerous. As we mentioned on last night's podcast, the Pentagon has also given Anthropic a Friday deadline to relax its usage policies at risk of losing its defense contract. Anthropic previously told the Defense Department its clawed tools couldn't be used for domestic surveillance or to run autonomous weapons.

11:30Meridith McGraw:And the fallout from Blue Owl's liquidation of$1.4 billion in assets last week has got some retail investors panicking about how safe private credit investments are. The journal's pandemic covers private credit for us and says advisors are urging everyday investors to keep faith.

11:46Daniel Bach:Everyone in the industry essentially has a lot riding on this. The financial advisors and the asset managers both generate big fees from the assets they accumulate from the retail investors. So to the extent that they can't assure retail investors that this is a relatively safe type of investment, then they stand to lose a big source of revenue. that's way more difficult because it's not easy to get out of these private credit funds. And in some cases, the managers of these funds, like the Blue Elves and the Blackstones of the world, can actually halt redemptions, which is another reason to get very nervous.

12:23Daniel Bach:Obviously, people want to know that if they need the money, they can get when they want it.

12:28Meridith McGraw:And that's it for What's News for this Wednesday morning. Today's show was produced by Hattie Moyer. Our supervising producer is Sondra Kilhoff. And I'm Daniel Bach for The Wall Street Journal. We'll be back tonight with a new show. Until then, thanks for listening.

13:07Daniel Bach:It's very easy to do with Visa Steuer. And when she works, it's called Kaching!

13:11Meridith McGraw:That's it?

13:12Daniel Bach:Safe! Visa Steuer!