Transcript of Justin Wolfers Discusses Trump’s Long-term Economic Damage

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, Saint Paul and across this country. And then J. D. Vans took part in a March for Life event where he talked about completely banning women's access to reproductive rights. It just made the country even more livid and pissed at Donald Trump and J. D. Vans than they already were. Heck, even Laura Lumer, one of Donald Trump's biggest cheerleaders, said, Why is the GOP and JD Vance pushing more abortion messaging in a midterm election here? 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.

Then Laura Lumer kept on attacking J. D. Vance, and all of these other MAGA people kept attacking J. D. 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, JD Vance said. I wonder what happened with the Titanic, JD. Jd says, You can't just turn around the Titanic overnight. So I got it, JD. The American economy is like the Titanic. That's your messaging going into the midterm. Watch JD 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. 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 JD was speaking at the March 4 Life event, as it's called, JD Vans repeated that message and said, The elephant in the room is that many of you think we're not doing things quick enough, watch JD 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, 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. 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 and the cause of advancing human life. I think these are good, honest, and natural debates. Frankly, they're not just good for all of you. They help keep people like me honest, and that's an important thing.

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? 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, 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 Walls or Jacob Fray or anybody else to come out and say that they agree with JD Vance or Donald Trump on immigration. I just don't need that. What I do need them to do is empower their local officials to 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. 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. 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, and when J. D. 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.

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. Here, play this clip.

Under the Trump economic plan, we will cut your energy prices in half within... Mark it down. You can get very angry at me if we don't I'm going to 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. 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 in half.

Then MAGA sycophant, this weirdo MAGA politician, Troy Nels, who wears Trump shirts and 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 Monrique, has caught up with Troy Nels, and we just wanted to get the perspective of all this, which is Donald Trump promised, we heard those clips right there, that he would reduce energy prices by 50%. Troy Nels, you're a MAGA 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% in his first 12 months. What was your message for Americans who are seeing their energy prices go up?

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 unstability, obviously, with Venezuela, with oil, this and that. There's a lot of fluctuations with all I think Donald Trump, just give him time, give that man time to continue to lead. 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. 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... How do I pronounce it? Micelle.

It's It just depends how I'm feeling. I prefer to go by Ben, though. But Justin, let's get into it.

So this past week, we saw yet another fake deal announced by Donald Trump.

He goes to Davos. He confuses Greenland with Iceland. 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. 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. We 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 country. Trump flies to Davos and gives a... As far as I can tell, his plane breaks down first. 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 rise.

I think it was on the Friday. It was all the way back to last week. It has 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. 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. Then he managed to cause markets to rise by just not doing that. If I sound a little exhausted now, I am. 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. Let's do it. I'm going to let 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 back 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. China. And then you had what he called Liberation Day, which was Liquidation Day, the markets tank there. Then he would just oscillate with that over and over again. You see that same pattern, and he'd pick on random countries. The biggest drop was after Liberation, Liquidation Day. And we could talk about the difference here. Sometimes people call it 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 The markets, the markets, the markets. And the people are saying, what about me?

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 I'm trying to figure which part of that to start by biting off. Let 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 Some sectors are expanding, some are contracting, and that's what a normal economy looks like. 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 down in turn caused by incompetence. It's actually rare for a US... Often, the role of economists when we talk about ongoing political traumas 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 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. You 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 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 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. You 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. There's this just a There's an immense uncertainty out there. But uncertainty is one thing we can even live with that.

But the problem is often the choice is often when we say, 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. He 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, 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.

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

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 which is way above the Fed's target. Had Donald Trump did nothing, we would be far less than that 2. 7 % inflation. But when I go to a store, everybody's own view of it is like, that towel used to cost six dollars, 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 our 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. Even 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. We would always say the facts are true, the context you might need to think about. We're now in a much trickier world. I think it's really important to distinguish between who different facts are coming from and the quality of different claims. 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. That means if something comes out of the President's mouth, it's almost certainly untrue. If 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. 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 Census Bureau. These are totally serious statisticians who are doing the best they can with the resources they can. Nothing that comes out of those organizations is a lie still. 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 I guess, using a specific methodology. 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, we'd have to talk to every American and find out how much income they've earned. We don't do 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. 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. You might have other ways of estimating what's going on, but these guys are very, very sophisticated. So they're almost always the best. But the best doesn't mean perfect. 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 are you 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 are being born and dying. So 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, 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. It turns out When there's two gas stations next to each other, they usually have pretty much the same price. 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. I am going to continue to say we should trust the statistics topics. 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.

Yeah, 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 see you posting about it, another economist 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 the Great Recession or COVID or numbers like that.

That's currently the worst on record.

And yet the government, though, reports GDP growth is up or this. How do we make sense of that?

Really Good question. The first thing is, realize what the government's measuring, things like GDP or employment is one thing. How people feel about the economy is a different thing. Of course, when you measure two different things, they don't have to be the same. One possible reconciliation is that people feel really bummed hard, 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. It later gets revised as we get better data, and it could be consumer confidence is right, and actually the economy is not humming along. Let me give you another story. 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 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 a thousand. 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. And 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 as the way that people answer surveys has changed. So it turned out For many, many years, if you called someone and ask them how the economy is doing, they'd tell you how the economy is doing. They thought of economics just as economics. What's happened is we've become increasingly partisan over time. You can basically date this to the day that Trump walked down the golden an escalator. We start to see everything through a partisan lens now. What happens now is you call someone and you ask them, How do you feel about the state of the economy? Often what they do instead is they answer the question, How do you feel about the present? Democrats say, I feel like it's in a terrible recession, and Republicans say, I think it's booming extraordinarily.

The correlation between people's feelings about the economy and their partisan views has become incredibly strong, perhaps so strong that we're not They're not learning anything about their views about the economy. Here's the other thing. During good economic times, you might expect 80% of people to be confident about the economy. But if we've got a sample, it's half Democrat and half Republican, and half the Republicans think it's terrible, and half the Democrats think it's wonderful, then we're going to end up with 50% saying that they think it's a good economy. This could actually be what's pushing consumer confidence down. The measurements are all honest, but they no longer mean the same thing that we thought that they once mean. Now, Ben, I hope I've impressed you with my capacity to bore you.

Well, let me ask you about your... You've always impressed me with that. But let me ask you more broadly, though, about your view on the economy right now, because certain factors, whether it's manufacturing, it seemed that we were the envy of the world, as it was described heading into the Trump administration. And now it seems, at least in manufacturing, I've heard manufacturing during recession, or at least manufacturing down. When it comes to unemployment, people saying, We've got a big issue with jobs right now, and I've heard the term jobs, recession being thrown around. I don't want to throw out the R-word Recession haphazardly on the show, but I hear economists using that term. But recession, I know, is also a specific term of art as it relates to overall economic GDP style growth. So what do you feel about the economy right? Where are we right now? Certainly, I've seen your post, relative to the rest of the world, actually, America is doing much worse. We're not leading the world anymore, even if there is some growth and errors. But what do you think, Professor, about where we are now?

I think right now I'm holding my breath and hoping. Let me answer a couple of the specific questions that you asked and then broaden it out to really answer your question. So on manufacturing, we're in a manufacturing recession, but equally, we've been in for roughly 40 years in a row now. The US is losing its manufacturing jobs. This is a standard part of economic development. It used to be that this was predominantly an agricultural economy, and we lost our agricultural jobs as we moved into the factories. Now we're moving from the factories into the Services. Services which often have higher value-added productivity, higher wages, better working conditions. We're continuing to lose our manufacturing. I know there are a lot of people who have a certain regard It's hard for manufacturing. It was once the pathway to the middle class for working class folks, but we're losing those jobs. If you look at the jobs that is replacing them, I don't necessarily mourn it. That's what's going on with manufacturing. We see the economy is barely creating jobs at the moment. That's the sense in which I'd say we're on the cusp of a jobs recession.

Which side of that we're on? Honestly, we're just coming out of a bit of a data blackout. If you remember, the government was just shut down for a month and a half. It's still quite hard to tell where we're at, but it could turn out actually that we're losing jobs, that we've actually lost jobs since liberation. Recession Day, which is a very, very unusual thing for an economy to do. But let me go one step deeper, Ben. I want to challenge you and literally everyone in the media to think a little harder about what economic things we should be looking at. Here's what I mean. Don't think about next quarter. Don't think about next year, and even look through a recession. Ask the much deeper question, what are the foundations of prosperity? Economic prosperity, shared prosperity, equitable growth. Look across countries and ask yourself, why is the United States rich and the country of my birth, Papua New Guinea, poor? And we have economists who ask this question, and they load all sorts They put numbers into their computers, and they run very complicated analysis, or they do case studies and historical analysis. And the answer turns out to be what we call institutions, the rules of the game, the rules of economic and political life, the fact that we respect the rule of law, that we have contestable elections, that we have contracts that we respect, that the government plays a limited and predictable role in economic life, and on and on the list goes.

The thing is, those are the things the President is undermining. He's attempting to take away the independence of the Federal Reserve. He's tried to undermine how much federal economic statistics reflect reality. He's tried to overturn an election. He's snatching people up off the streets. He is calling CEOs and telling them what to do. This is the most interventionist government of my lifetime. It's the least conservative government of my lifetime. When you are the richest country in the world, maybe you're not the ones who should be thinking about ripping down your existing institutions. It's those who are somewhat behind. But that's what the President is doing. That's not going to show up in next quarter's GDP. What that's going to show up as is in a decade's time, there'll be some companies that were never founded. There There's some entrepreneurs who couldn't afford to go to business school. There were immigrants with great ideas who ended up staying in their home countries instead. And so whatever the next generation's Google or OpenAI is, it may not end up being being invented, or it may not happen on our soil. And we will never see that absence.

But our kids will feel it. Our kids will feel it instead of lost opportunities. There'll be businesses they never started. There'll be job opportunities. There'll be new technologies. There'll be ways of creating a greener, safer, more prosperous future that simply aren't possible, but we're not going to see it straight away. And that, I think, is our current media is not well set up to talk about those issues because there's no number comes out, there's no news cycle, there's no Wall Street Journal headline. But it turns out economic research tells us that's the stuff that matters.

Well, we want to focus on that more. I hope you come back where we'll just zoom in right on that topic in specific, and that's where we'll start. But I think this was a good foundation for what I hope will be a number of other conversations we can have, because with our 6 million subscribers here and more people watching this YouTube channel more than the networks, yours is a voice I want to share, and I want to talk about those topics. I'm impressed by, as you said, the ability to bore, because that's what people like about me, and it's the ability to get into the detail. People like when we go into the footnotes.

I will share with our audience. Ben and I had never met before 15 minutes ago, but Ben, I have a feeling we're going to be mates.

Let's do it. All right, Professor Wolfers. Justin. Justin, everybody. Thanks, Justin.

Take care.

Everybody, hit subscribe. Let's get to 6 million subscribers. Want to stay plugged in? Become a subscriber for our sub stack at mitisplus. Com. You'll get daily recaps from Ron Filipkowski, add free episodes of our podcast, and more exclusive content, only available at mitisplus. Com.