Transcript of Andrew Ross Sorkin Discusses Trump’s Economic Debacle

So as the White House gets more terrible economic news, I guess their economic plan is just to say everything's great and to say it's A plus, plus, plus. Jd Vann speaking in Allentown, where a lot of the Trump policies have been harming that community, and he was asked, So 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 plus, plus, plus, plus. What grade would you give the economy today?

A plus, plus, plus.

But then they also blame former President Biden for the A plus, plus, plus economy. I'm just trying to figure it out. Then you had Caroline Levet, 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. Just first, very quickly, clarifying Kaitlyn's question. You acknowledged that CPI in January when you took office was 3%, and in September, September, the last month for which we have data, it was also 3%, so inflation- No, it's 2. 5%. Not in September, it was 3%. It's 2.

5%, 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. 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 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 Bessant. He was on recently at the Deal Book 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 the blue state issue. It's not really all that bad in the red states, or it's so much worse than blue states. And then Andrew Ross-Sorkin came with the facts. Let's play.

People in her district are having an affordability problem. 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 50 basis points higher, inflation, the The 10 highest the inflation rates, they are in blue cities. Just so you know, because I went to look at this, this is the Joint Economic Committee since 2021. The highest 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 trend line to look at. Today.

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 Squatbox, which we cover here sometimes on the Midas Touch Network, an 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.

Thanks very much for having me. I appreciate it.

It's great to read your book. Let's just start there with these Trump regime officials who you've interviewed who go on Squackbox, 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?

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. 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 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, here I am trying to prove him wrong. I really wanted to understand He has a perspective and thinks that 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 have an administration administration that oftentimes is trying to jawbone their way towards a specific goal, irrespective of the facts. And by the way, that's almost apolitical 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 that the economy was better than it really was. And you go on TikTok, go on X, go. 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 sitting right now, which is the President saying, A plus, plus, plus, plus economy, and everybody else is saying, But that's not the economy I see.

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 plus, plus, plus, plus? 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, can you just give me the real numbers? When they go, they brought in $23 trillion, and they'll have someone like Lutnik, Commerce Secretary or Bessert. They know that that money doesn't exist. And they'll say with a straight face that we brought in, and then you'll get them to say, Ah, commitment, commitment. It's at this end That's what they're doing.

I'm not going to do that. All the big numbers that they've bandied about, about investments in the US, sovereign investments from Saudi Arabia, from all these other countries. I think Bloomberg did a really good look at this recently. I think of the $3 billion figure that the administration has 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 extraordinary? And I said to him, It is extraordinary, but just go with that number. Go with the $7 billion. 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 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 it's literally...

Right now, by the way, it's sunny here in New York. It's literally like telling somebody, it's raining right now, even though I can see that it's sunny.

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 the United States, Mexico, Canada Agreement, or that's big. It's a 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. 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. 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 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. Earlier this year, the President came out and said that China was going to buy what, 12 million or whatever the number was, billion Yeah, 12 million metric tons of soy beans. Metric tons of soy beans by the end of the year. I repeatedly asked members of the cabinet administration over the last couple of weeks. I said, The end of the year is here. It's 15 It's 10 days away at this point. It's coming. And I think we've sold 300 some odd thousand metric tons. So 300,000, how are you going to get to 12 million? It's just the math doesn't add. And you can never get a straight answer. And then, of course, just in the past week or so, they've said, Well, it's not actually the end of the year, it's the growing season. 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, whenever you think the end of the growing season is, and you tell me whether we have 12 million pounds.

The average of years multiplied by the cosine, divided by 12 times 5.

Maybe we'll get there. By the way, maybe we get to $23 trillion worth of investments in 30 years from now.

They'll go on the shows in the morning with a straight face, and Brooklyn Willings will say, Look, under Biden, no one's ever bought this many metric tons of And I'm sitting there, you're pushing back, Quintania pushes back. But then occasionally, other people are 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's it. But that brings me to the broader point about your book, though, which is Can I 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, but putting aside the sovereign, the big investments from countries. Think about all of the business 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, double counting that, because it's all an audience of done. And I do think that the investors, in particular, I think, look through all of this. 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.

And to your point, 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 $1 trillion in AI infrastructure projects together. And it's like the Soy beans. 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? It's a strange crew to work together, but 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? 800 billion? 800 billion. I mean, he literally said that. And so your point, though, 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. The only thing there, when the investor class is looking at Metta 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, on the record in those statements, in those press releases, on those analyst calls, because it's those numbers that they're going to ultimately be held responsible for. It'd actually be very interesting to see if, in fact, some of these numbers that are said publicly Basically, in these other environments, whether shareholders or others sue at some point trying to claim that they were misled. It'd be very interesting to see what 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. 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 That's your representation on the market. You're the CEO of a publicly traded company. You said it in the-This SEC is not doing that. Exactly. That's the issue. Part of the open season is that the SEC said, go for it, basically, which brings us to the thesis of your book and framework that I wanted to establish there is this seductive illusion. You talk about these big personalities in 1929, and 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, and it just feels like with this deluge of This information, we are treading water, and people are still treading water, but there's so much disinfo out there.

And we're looking at the numbers, 54 % job losses year over year. 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?

Look, I think there's some parallels. There's some things that, in truth, are different. 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 the '20s were a great era of invention around new technologies like radio, very much like NVIDIA or AI. So there was a lot of excitement around that. There were no rules back then. Manipulation, insider trading, all of that, that was allowed. There were no rules against it. 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 think one of the great lessons of every financial crisis is 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. So I think there's a whole bunch of things to look at. That doesn't mean we have to have a Great Depression style crash that ends up with 25 % unemployment in America. But it does mean that if we're not careful, we could, at some point, have a real and meaningful pullback, and that would not surprise me at all.

You talk about the over leverage leading up to the depression. Right now, what seems to be happening with all of these over levered AI companies, what they're doing, it seems, and maybe you can describe it better than me, is a company like a Meta is creating these hold code to rent back deals with these shadowy lenders, and they're basically treating CapEx expenditures as loan payments. And And so they're hiding the actual leverage because that would harm their EBITDA or reflect as a lack of profits. And so that's going on at a very high level, and people are minting. We're seeing stuff like that. How much should I be concerned about? I don't want to scare-I think these are all red flags.

I think the second you see Metta, instead of investing its own money in a data center, decide to partner up with what's called a private credit firm and effectively have a leaseback deal with them so that they don't have to actually claim that they're making the investment themselves and effectively guarantee money back to this other firm. I think there's some questions just about how those transactions ultimately settle out. I think all those are supposed to be red flags. The problem for investors is figuring out what a red flag is and when it becomes a red line. That is always the question. Back in 1928, Charles Merrill, who was the co founder of Merrill Lynch, told everybody to get out of the stock market. So you'd say, oh, he looks so smart, except for the fact that the stock market between 1928 and September of 1929 went up by 90 %. So you can be a Cassandra, and I can say here, Look, these are things that I'm nervous about or warning, and we should be anxious about. And I do think you got to watch them, but that doesn't mean that we have to go off the cliff tomorrow.

And we talked about investors, And we've talked about corporations. Let's talk about the people, a lot of them who aren't investors. Sure, there are people who have 401(k)s, but what we're seeing increasingly is people who, if they're fortunate to live paycheck to paycheck, what they describe to me is feeling psychologically tortured by this economy where there are the corporations that are too big to fail, but there is the failure by design of people in this economy who are working sometimes two jobs and can't afford.

Yes, the working class in America. The word affordability, it's unaffordable.

What are you seeing there? Is there something now, though, in all of your decades of coverage that feels different, specifically in this moment?

Look, I think the inequality issue is real, and I think it's getting worse. And I think the inflation is outpacing wages. And that's what inspires people to say this feels unaffordable. Look, I took a taxi across town the other day. I looked at the bill, I couldn't even believe it was happening. And I think that that is happening all over the place. You walk into a supermarket, you go get the gas, you go to a restaurant, whatever it is, everything, the prices have risen so fast. And look, life is relative, too. So We all remember what the price was two or three years ago, and that's why it feels this way. But beyond that feeling, the wages haven't kept up. And of course, so many of our other costs, the costs that matter most to us, education, health care, have obviously skyrocketed. And so I think it's a confluence of all of those things. Plus, of course, housing. You layer student loans on that, and you can understand why people feel the way they feel. And so the question is, how do we get out of that? And I think there's a whole bunch of structural things we got to think hard about.

But I do think it's raising questions, frankly, about capitalism and whether capitalism works. I'm a believer it does work, but I'm a believer it works only when the rules the right rules are in place. And I fear that we're getting to a place where they're not.

And do you feel, though, that the system under Trump is even... I know this sounds odd, capitalism, where at this stage, he's out there building- This is like a state...

Now we're into state-sponsored capitalism. I mean, this is not really capitalism. Everything runs through 1600 Pennsylvania Avenue now. This is new. This is completely and utterly new. We have never had a time where CEOs, business leaders are making their decisions daily. Their strategy is based on whether their strategy is going to be in line with the strategy of this President and whether he's going to agree or disagree or come out in favor or not or decide to sue or not over whatever you're doing. That is a fundamental reshift, and that is something that's more akin to a place like China, frankly.

Did it surprise you with your relationships in the business community? Of course, you don't have to name who, but just the idea that these business leaders right after the election seemed so... Gavin Newsom talks about this a lot. Supine, they just go right away, what can we do for you Or did you expect that based on them thinking that they had to do that for their shareholders?

I think that I have a level of sympathy and empathy for this situation insofar as I think that they think They're justifying and rationalizing in their head that they're doing this for their shareholders. And they think to themselves, if I stand up and raise my hand and say, I don't like what's happening here, or I'm doing it differently, can they still fight another day? Or do they lose in your job? Or does something terrible happen in the company? I think there's almost an existential nature to this this time around. And that's different for a business leader who feels responsible, not just for the shareholders. By the way, And this is where maybe you'd have some more empathy or maybe folks watching us would. If you're a CEO and your job, you got, I don't know, a couple of hundred thousand employees, let's say, part of it is you're trying to keep the company. It's not just shareholders. You actually do have people that you hopefully feel some responsibility for. And then the question is, pick your poison. Some of these people are swallowing their pride. There's no question that they disagree with this President, and yet they're going to the oval office and they're giving gifts and they're doing things and you're They're saying to themselves, how is this even possible?

But they're thinking to themselves, the alternative is worse than that. Now, the bigger question in my mind is, if this administration does something that crosses some red And does the business community or do these individuals who do disagree with the administration raise their hand and say, you know what, this red line, I'm out. And I just don't know whether that happens. And I think some of them think, if I can just hold on long enough, I still want to be there so that if that moment happens, I can raise my hand. But I don't know if the goalpost will have moved so much that the red line will have moved, too.

And I'll say that perhaps some pushback that my audience would give as well, do these corporate leaders even want employees anymore at all, or is their end game to use AI to push out as many employees as they can? Right now, employees are.

I wouldn't disagree with that. I think there's a true I hate to say it, a true capitalistic CEO would say, yeah, if we could get to a point where we can lower our costs, they would try to do that. They would want to do that. I think that there is a level of I don't want to be cynical about it. I think that's true. I think that's true.

Andrew, these are the conversations that I love. And the books that you write, people sometimes know, what books do I read? It's books by Andrew Ross-Sork. And so I want everyone in my audience to go out And by 1929, inside the greatest crash in Wall Street history and how it shattered a nation. I know that most of my staff here at Midas Touch have told me they're reading the book, and I told them all to read the book, and they love it, and they've been sharing with me some of their observations. Before we go, Andrew, anything else you want to say to our 6 million subscribers or audience, just about these times or whatever?

The one thing I would just say is I think we get into these moments, and I do have some Optimism. I'll just leave you with this, and it's not a blind optimism. Sometimes people say America is exceptional and this and that. I don't believe that. I believe that we have to earn that exceptionalism every day. I do think there's a lot of smart people, including yourself and a lot of people who are watching this broadcast, who have a lot of ideas about what needs to happen in this country, and they're using their voice. And I do think that over time, if you feel dispirited, we will get to a better place.

Andrew Ross-Sorkin, we appreciate you joining us. We hope you come back, and everybody get the book 1929. Thank you. This is fine.

Thanks, Andrew. I appreciate it.

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