Justin Wolfers
Appearances
The Bulwark Podcast
S2 Ep1041: Justin Wolfers: Trump's Centrally Planned Economy
It's 30% Trump tariffs. Got it. Which loaded onto what we previously had. Got it. In the language of the nerds, it's stackable. Sure. And part of the problem is everything keeps stacking. So, China reduces theirs to 10%. There's a point in which I've been on half a dozen TV programs where, God bless you, Tim, you haven't done this. The host leans in and says, so who won, America or China?
The Bulwark Podcast
S2 Ep1041: Justin Wolfers: Trump's Centrally Planned Economy
Yeah. I want to rehearse the answer for your viewers so that they know how to yell when it comes up in their conversations. So, trade... The big intellectual mistake people make is they think trade is about competition. That it's a fixed pie and if I win, you lose. That's not true. The beauty of economics and of international trade is my field studies cooperation.
The Bulwark Podcast
S2 Ep1041: Justin Wolfers: Trump's Centrally Planned Economy
We study how we can make each other better off. I looked at my dinner plate last night. It had salmon that some Norwegian farmer had decided I might want to eat. It had quinoa, which proves I'm a liberal, but some Peruvian farmer... I was going to say, look at you, fancy pants with your quinoa.
The Bulwark Podcast
S2 Ep1041: Justin Wolfers: Trump's Centrally Planned Economy
Of course we had arugula. That was a religious sacrifice at the beginning of the meal. We lit it up, actually, and said three Hail Obamas. So, I had quinoa. A very nice gentleman in Peru thought I might want quinoa. There was some dill that went with my salmon, because I am fancy. Look, when it's in season, I buy it from America.
The Bulwark Podcast
S2 Ep1041: Justin Wolfers: Trump's Centrally Planned Economy
When it's not in season, rather than go without, it comes in from Israel. My dinner plate was just, it was the product of so much beautiful cooperation from people around the world who want me to eat well and healthy and balanced, and I am so grateful to them. And in return, I woke up the next day and I worked on revisions of my economics textbook, which is sold all around the world.
The Bulwark Podcast
S2 Ep1041: Justin Wolfers: Trump's Centrally Planned Economy
One of my very dearest friends is part of the Labor Party government that was just reelected. Very interesting election for Americans to hear about, partly because I suspect there's not been a lot of reporting. So you go back four months ago and the opposition conservative party was in the lead in all the polls.
The Bulwark Podcast
S2 Ep1041: Justin Wolfers: Trump's Centrally Planned Economy
Es ist teuer für mich, mit dem Peruvian-Farmer zu arbeiten. Also werden wir es nicht machen. Seine Tochter wird mein Textbuch nicht kaufen, ich werde sein Quinoa nicht kaufen. Also, wenn wir Tarifen entfernen, erzeugen wir mehr Kooperation in der Welt. Wer gewinnt? Beide Seiten. Also, wer hat aus der Deeskalation gewonnen?
The Bulwark Podcast
S2 Ep1041: Justin Wolfers: Trump's Centrally Planned Economy
Wer hat aus dem Fakt, dass die Amerikaner reduziert wurden, bis der amerikanische Regierung die amerikanischen Menschen für das Bauen von China bezahlt hat? Die Amerikaner, weil wir jetzt mehr Dinge kaufen können und einfacher kooperieren können. Und die chinesischen Leute. Wer gewinnt von dem Fakt, dass die Chinesen ihre Tarife reduzieren? Chinese and Americans. So both sides won.
The Bulwark Podcast
S2 Ep1041: Justin Wolfers: Trump's Centrally Planned Economy
It's a beautiful moment. And I hope the Trump administration understands this as being one of their great achievements.
The Bulwark Podcast
S2 Ep1041: Justin Wolfers: Trump's Centrally Planned Economy
The leader of that conservative party, bloke by the name of Peter Dutton, decided he'd sort of run as a bit of Trump-lite. He, in particular, sort of anti-woke. Und dann hat er angefangen, sich darin zu lehnen. Woke hat Australien gewählt?
The Bulwark Podcast
S2 Ep1041: Justin Wolfers: Trump's Centrally Planned Economy
What is the stock market telling us? And separately, how is this affecting people's lives? There's a lot of stuff where people are like, oh, the stock market rose, therefore Trump is good. Or the stock market's not as low as it once was, or blah, blah, blah, blah, blah. There is one fact that's absolutely true. It's unbeaten since January 20.
The Bulwark Podcast
S2 Ep1041: Justin Wolfers: Trump's Centrally Planned Economy
Every time Trump moves towards imposing more tariffs, stocks fall. Every time. Every time he backs off from tariffs, stocks rise. Also, was auch immer man sagen möchte über den gesamten Markt, es ist absolut klar, dass der Markt als Ganzes Trumps Tarifpolicy schrecklich denkt.
The Bulwark Podcast
S2 Ep1041: Justin Wolfers: Trump's Centrally Planned Economy
Nun, das ist eigentlich ein bisschen überraschend, weil die ersten Menschen, die geholfen werden sollten, wer hat im Stockmarkt getradet? Es ist nicht das Glück der arbeitenden Klasse. Das sind Betten auf die Profitabilität des amerikanischen Geschäfts.
The Bulwark Podcast
S2 Ep1041: Justin Wolfers: Trump's Centrally Planned Economy
If anyone is helped by Trump's tariffs, it's reducing the competitiveness of markets here, allowing them to jack up their prices or to continue to exist even when they're inefficient. So it can hurt moms and dads, yet help American business. But in fact, the stock market's betting, it hurts American business. So if it hurts American business...
The Bulwark Podcast
S2 Ep1041: Justin Wolfers: Trump's Centrally Planned Economy
So weit, dass es Tarifverluste gibt, sind sie alle im Hintergrund von der Hilfe des amerikanischen Geschäfts. Wenn man dem amerikanischen Geschäft hilft, könnten sie mehr Arbeiter holen, die Produktion zurückbringen, blablabla. Wenn man dem amerikanischen Geschäfts nicht hilft, bekommt man keine Vorteile und eine ganze Menge Kosten.
The Bulwark Podcast
S2 Ep1041: Justin Wolfers: Trump's Centrally Planned Economy
Und jedes Mal, wenn Trump erklärt, dass er mehr Trumpy-Stuffe macht, betet der Markt, dass das das amerikanische Geschäft schaden wird und deshalb alles im Hintergrund davon schaden wird. So that fact, I think, is absolutely undefeated. So that says no one on Wall Street and no one in the economics profession thinks that this is a constructive policy. That's how to think about financial markets.
The Bulwark Podcast
S2 Ep1041: Justin Wolfers: Trump's Centrally Planned Economy
Oh Mann, es ist überall. Die Leute haben es als elektronische Strategie gesehen. Er hat die Medien getötet, die in Amerika aus der Bühne waren und immer noch sind in den stärksten Demokratien. And Australians didn't react very well to that. He decided that he'd include a Doge-like element in his election platform. And he still was in the lead. And then Trump got elected.
The Bulwark Podcast
S2 Ep1041: Justin Wolfers: Trump's Centrally Planned Economy
Now, I've actually been talking more about financial markets than I normally do, and it's not because I care about stocks. It's because I think this is a very informed betting market where people are betting on the profitability of American business, and that tells me about the downstream effects. Ich höre viel von Vertretern, die sich für ihre 401Ks für verrückt fühlen.
The Bulwark Podcast
S2 Ep1041: Justin Wolfers: Trump's Centrally Planned Economy
Das ist auch der amerikanische Stockmarkt. Wer hilft oder schmerzt in der langen Reihenfolge? Es schmerzt die Konsumenten. Und wer sind die Konsumenten? Die Konsumenten sind alle von uns. Was wir sehen werden, und wir haben noch nicht viel davon gesehen, sind höhere Preise auf das, was wir importieren. So instead of eating gorgeous Norwegian salmon, I might end up having factory farmed salmon.
The Bulwark Podcast
S2 Ep1041: Justin Wolfers: Trump's Centrally Planned Economy
It's kind of okay, I'll live. I know you feel for me.
The Bulwark Podcast
S2 Ep1041: Justin Wolfers: Trump's Centrally Planned Economy
So, my partner does our Costco shopping, too. Okay. I guess the good thing about being in a two-bloke household is no one can call you sexist when your husband does the shopping for you.
The Bulwark Podcast
S2 Ep1041: Justin Wolfers: Trump's Centrally Planned Economy
Okay, I'm going to think about that. Okay, never too late. It's true what they say about the gay agenda, trying to convert people here too.
The Bulwark Podcast
S2 Ep1041: Justin Wolfers: Trump's Centrally Planned Economy
You know that most of my interviews don't go this way. Well, I'm a little different. I'm noticing. Okay, so how is it going to affect people? Here's a real simple thing I think your audience should try. If your grandma and grandpa are alive, call them. And if not, call your parents. And if they're not alive, I'm sorry. Ask them how many toys they had growing up.
The Bulwark Podcast
S2 Ep1041: Justin Wolfers: Trump's Centrally Planned Economy
Und dann, wenn du ein Vater bist, schau dir an, wie viele Türen deine Kinder haben. Und wenn du kein Vater bist, schau dir an, wie viele Türen deine Niesen und Brüder haben. Oder deine Gottkinder.
The Bulwark Podcast
S2 Ep1041: Justin Wolfers: Trump's Centrally Planned Economy
Sie sind. Ja. Frag deine Mutter, wie viele Türen sie hatte. Ja, ich werde das machen. Meine Großmutter hatte etwa drei. Das ist kein Witz. Das ist wirklich ernsthaft. Das waren dünne Türen. Sie sind wunderschön und lasten für immer. But that's it. Like, go play with your blocks. What changed? What changed is the price of toys. Where do our toys come from? China.
The Bulwark Podcast
S2 Ep1041: Justin Wolfers: Trump's Centrally Planned Economy
So, it's very fashionable in left-wing circles to be anti-China or to be anti-cheap plastic stuff. It's also become fashionable in right-wing circles now.
The Bulwark Podcast
S2 Ep1041: Justin Wolfers: Trump's Centrally Planned Economy
So for the purposes of this conversation, all I care about is that you're happy that your kid has more toys.
The Bulwark Podcast
S2 Ep1041: Justin Wolfers: Trump's Centrally Planned Economy
And the cause of that, there have been very few forces raising the material living standards of the working class. But actually trade with China is one of them. Und es sind nicht nur Spiele. Der Präsident nutzt Dolls als Metapher, aber eigentlich kommt fast alle unsere Baby-Equipment aus China. Aber es ist nicht nur das.
The Bulwark Podcast
S2 Ep1041: Justin Wolfers: Trump's Centrally Planned Economy
Die Furniture, ich meine, ich bin sicher, dass Sie skandinavische, mittelalterliche, moderne Furniture kaufen, weil ich assume, das ist, was Gay-Männer tun.
The Bulwark Podcast
S2 Ep1041: Justin Wolfers: Trump's Centrally Planned Economy
Not only Trump got elected, Trump started his term. And the utter chaos that MAGA... was enough the Aussies looked at it and all of a sudden said they didn't want this. So they nicknamed this bloke Timur Trump. And he really only went 10% of the way down the Trump agenda, but it was enough that the Australian electorate was like, we're not having any of this.
The Bulwark Podcast
S2 Ep1041: Justin Wolfers: Trump's Centrally Planned Economy
They did great work. Right. So people who cannot afford that, who don't have your exuberant lifestyle, Tim, they're buying furniture from Wayfair, which has great prices. All of that furniture is from China. So when you walk into a working middle class family and you can see that they can afford a material standard of living that folks a generation ago couldn't It's actually trade with China.
The Bulwark Podcast
S2 Ep1041: Justin Wolfers: Trump's Centrally Planned Economy
And so that's where all of this hits working middle class families. That's the first thing. Second, so I'm going to try and think about it the way a macroeconomist does. All that's saying tariffs are what we economists call a supply shock. They raise the cost of doing business. Stuff becomes more expensive. And as we rearrange things, that may cause unemployment to rise.
The Bulwark Podcast
S2 Ep1041: Justin Wolfers: Trump's Centrally Planned Economy
The second thing that's happened is just a massive rise in uncertainty. So high, my guess, Tim, is that you prefer not to talk to economists, if you can help it. Okay.
The Bulwark Podcast
S2 Ep1041: Justin Wolfers: Trump's Centrally Planned Economy
It's nice to hear. Many journalists prefer not to talk to economists. Right now they are. Why is that? Because they understand that all of our lives feel very much up in the air right now. Should I buy an air conditioner or not? Is my job safe? What's going to happen to prices? Should I try and buy stuff ahead of the tariffs? On and on and on it goes. That uncertainty is paralyzing.
The Bulwark Podcast
S2 Ep1041: Justin Wolfers: Trump's Centrally Planned Economy
That uncertainty means, let me take the business side of this because it's easier. If you're the CEO of any kind of company right now and your staff came to you with expansion plans or they wanted to break ground on a new factory or open a new outlet, you might say to yourself, I don't know what the future looks like. Let me wait three to six months for the air to clear.
The Bulwark Podcast
S2 Ep1041: Justin Wolfers: Trump's Centrally Planned Economy
Das ist das, was ein Unwahrscheinlichkeitsschock macht. Unwahrscheinlichkeit führt zu einer Verringerung der Anforderungen. Und deshalb denke ich, dass wir in der Mitte davon sind. Und das ist das, was die Rezession-Targeteile verursacht hat. Das könnte in der Folge zu einem steigenden Unwahrscheinlichkeitsschock führen, einem steigenden Einkommen und niedrigeren Wagen.
The Bulwark Podcast
S2 Ep1041: Justin Wolfers: Trump's Centrally Planned Economy
Also das ist, wie es die täglichen Leute schlägt.
The Bulwark Podcast
S2 Ep1041: Justin Wolfers: Trump's Centrally Planned Economy
Actually, I think checking Kelshi is a pretty good idea, because the problem with talking to one economist is, you don't know if the guy you're talking to is honest. His left wing, his right wing is in the pocket of big something or other.
The Bulwark Podcast
S2 Ep1041: Justin Wolfers: Trump's Centrally Planned Economy
Well, no, I'll give a different answer then, which is, there's a lot of research showing the average of many economists is better than any individual economist. Okay. So, it's almost never worth saying, what is your forecast, Justin? What you should say is, Justin, what is the consensus of economists? Okay. Calci is sort of like that. It's a prediction market.
The Bulwark Podcast
S2 Ep1041: Justin Wolfers: Trump's Centrally Planned Economy
So, in fact, Steve Bannon's point is an excellent one. I tweeted 15 minutes ago that Goldman Sachs has cut its recession odds to 35%. Goldman's at the bottom end, but it's absolutely true that the odds of a recession have fallen since the China deal. Now, let me come back and I want to repeat a point I made earlier. but saying it slightly differently.
The Bulwark Podcast
S2 Ep1041: Justin Wolfers: Trump's Centrally Planned Economy
Every time Trump steps into tariffs, everyone puts out new research notes saying that the odds of recession have gone up. And every time Trump retreats, they re-evaluate and they say the odds have fallen. And the bigger the retreat, the bigger the revision. So what this says is, yes, the chances of recession have retreated. They've retreated because Trump has retreated from Trumpism.
The Bulwark Podcast
S2 Ep1041: Justin Wolfers: Trump's Centrally Planned Economy
So the left-wing party, the Labour Party, ended up not only getting re-elected, which, by the way, remember, we're on a run of incumbents getting booted out of office all around the world, but also an enormous swing towards them.
The Bulwark Podcast
S2 Ep1041: Justin Wolfers: Trump's Centrally Planned Economy
If he kept doing that, we'd be in great shape. Vor etwa drei Monaten gab ich eine Vorstellung, die ich glaube, eine nützliche Regelung ist. Vielleicht war es vor zwei Monaten. Wenn Trump völlig zurückgeht. Eigentlich lassen Sie mich den puren Hintergrund geben. Am 20. Januar hätte ich gesagt, die Chancen einer Rezession mit einer normalen amerikanischen Regierung wären 10%.
The Bulwark Podcast
S2 Ep1041: Justin Wolfers: Trump's Centrally Planned Economy
Es ist eigentlich niedriger als normal. Normalerweise gibt es eine Rezession rund um sieben Jahre. I said it was a 1 in 10 chance because the global economy wasn't going haywire. There didn't look to be a pandemic coming. Oil prices weren't going crazy. Things looked good on January 20.
The Bulwark Podcast
S2 Ep1041: Justin Wolfers: Trump's Centrally Planned Economy
Then Trump did a lot of stuff and Elon did a lot of stuff and people got very upset and consumer confidence crashed. Then at that point I said, if Trump were to fully retreat from the full Trumpism, the chances of recession would be 25%. And if Trump were to fully lean in, the chances would be 75%.
The Bulwark Podcast
S2 Ep1041: Justin Wolfers: Trump's Centrally Planned Economy
Just think of that as a spectrum and then think where we are on that spectrum and it's basically going to be some average of those two numbers. If you think we're halfway between the full Trump and no Trump, then you think there's a 50-50 chance of a recession. If you think the China back down is actually even bigger than that, you might say it's a 40% chance of recession.
The Bulwark Podcast
S2 Ep1041: Justin Wolfers: Trump's Centrally Planned Economy
I think that's roughly a useful way of thinking about this.
The Bulwark Podcast
S2 Ep1041: Justin Wolfers: Trump's Centrally Planned Economy
I think the most helpful answer I can give you is it's really freaking hard to know. That's actually really important because now put yourself in the shoes of a business person whose economist tells him, I have no freaking idea. So a couple of things about the China pause. The China tariff pause is 90 days. Tim, was solltest du tun? Lass uns sagen, dass du Lohnräder produzierst.
The Bulwark Podcast
S2 Ep1041: Justin Wolfers: Trump's Centrally Planned Economy
Anrufe deinen chinesischen Anbieter heute Abend und frage ihn, wie lange es dauert, um 10.000 Lohnräder zu produzieren. Und dann, um sie auf einen Schiff in die Vereinigten Staaten zu bringen und sie in beide Enden klar zu machen. 89 Tage, hoffe ich. 89,8 Tage, ja. Und das Problem ist, dass die Pause gestern veröffentlicht wurde. Das bedeutet, dass du 0,8 von einem Tag verlieren wirst. Ja.
The Bulwark Podcast
S2 Ep1041: Justin Wolfers: Trump's Centrally Planned Economy
Auf einem Niveau kannst du denken, lass uns ihn reinbringen, bevor er seine Meinung verändert. Das bedeutet, dass du den Schiff diese Woche laden musst. So it could mean there's going to be a queue at the ports in 89 days.
The Bulwark Podcast
S2 Ep1041: Justin Wolfers: Trump's Centrally Planned Economy
The other thing is we know it from today for the next 30 days, because the ships have already started sailing or not sailing, is actually it's a really good time to be at the ports because there's nothing going on. Like you could pull out your phone and just really improve your score on your favorite ship. You know, angry birds. Sure.
The Bulwark Podcast
S2 Ep1041: Justin Wolfers: Trump's Centrally Planned Economy
The other thing is, if you believe the rhetoric coming out of the administration, they're now engaged in fruitful talks with China and they don't want to decouple our economy, in which case you might forecast that our China tariff is going to come down to 10%. China does a couple of things on fentanyl. They'll get the same tariff as the rest of the world.
The Bulwark Podcast
S2 Ep1041: Justin Wolfers: Trump's Centrally Planned Economy
If that's the case, then now I want to sit for 90 days doing nothing.
The Bulwark Podcast
S2 Ep1041: Justin Wolfers: Trump's Centrally Planned Economy
Yeah, right. So I'm genuinely unsure whether everyone's rushing to the ports right now or the 90 days means that they're going to wait and rush in 90 days. Genuinely unsure about that. And then you've got one more problem. The half life of a Trump trade policy is approximately one Scaramucci. So today we feel good that Trump is walking back from tariffs.
The Bulwark Podcast
S2 Ep1041: Justin Wolfers: Trump's Centrally Planned Economy
It was about an Australian running on a Trumpist agenda at a moment where that didn't appear well. Look, Tim, I worry about the same thing, about me seeing things poorly from over here. So I consulted experts on this, which was my family group chat. Okay. And they were quite convinced. And it is actually the standard story now in Australia is running as Timu Trump turned out to be a mistake.
The Bulwark Podcast
S2 Ep1041: Justin Wolfers: Trump's Centrally Planned Economy
But remember, it was only, I think, seven days ago when Trump woke up in the middle of the night and realized that he liked American-made movies and tweeted he was going to impose a 100% tariff on all foreign films.
The Bulwark Podcast
S2 Ep1041: Justin Wolfers: Trump's Centrally Planned Economy
I'm trying to stick to trade policy because that's something I know something about. Got it, okay. I've been to Alcatraz. But if there's just some random chance on any given day that the president just starts tweeting out the tariff button again, I mean, honestly, if I wanted to bet, what's the bet that this China thing lasts 90 days?
The Bulwark Podcast
S2 Ep1041: Justin Wolfers: Trump's Centrally Planned Economy
Right. So, given that, does that mean I'm going to rush to the ports or does that mean I'm going to wait? Yeah. And if you and I feel paralyzed as commentators or economists, imagine how businesses are feeling.
The Bulwark Podcast
S2 Ep1041: Justin Wolfers: Trump's Centrally Planned Economy
Vielleicht, aber wenn du die White House glaubst, sind wir auf dem Weg für produktive Gespräche. Und wenn du China glaubst, haben sie keinen bestimmten Interesse daran, Fentanyl hier zu senden. Ja. In dem Fall könnten wir für 10% Tarife nicht sehr lange warten.
The Bulwark Podcast
S2 Ep1041: Justin Wolfers: Trump's Centrally Planned Economy
In so einer idiosynkratischen Form haben sie einen großen Interesse daran, stetig zu sein. Wenn sie sich als der stetigste Handelspartner zeigen, werden sie die attraktivste Handelspartnerin. Und ich sehe das weltweit. Nummer drei, es wäre interessant, ich habe gestern den China Daily gelesen, oder eine englische Übersetzung davon. Okay.
The Bulwark Podcast
S2 Ep1041: Justin Wolfers: Trump's Centrally Planned Economy
Es war ein staatlicher Medien, der ihre Perspektive auf die Tarife erklärt hat. And it was amazing. If I had excerpted the right paragraph from the Chinese and the right paragraph from the White House, and I said one of these came from a pro-capitalist country and one came from a communist country, could you guess which one is which? You would have guessed wrong. They are using rhetoric that
The Bulwark Podcast
S2 Ep1041: Justin Wolfers: Trump's Centrally Planned Economy
Das sieht so aus wie mein Buch von Economics 101. Und ich weiß nicht, ob das gut oder schlecht für mich oder sie ist.
The Bulwark Podcast
S2 Ep1041: Justin Wolfers: Trump's Centrally Planned Economy
Ich meine, ich denke, das ist... Ich würde gerne, dass du mehr darüber erzählen würdest, weil ich finde es so interessant. Wenn du die Art und Weise, wie er es managt, siehst du, dass er eine bestimmte Firma einbringt. Ich erinnere mich an eine, die Carrier heißt. Ja. Und er spricht mit dieser Firma und dann gehen sie raus und machen etwas. Und es ist, als ob er noch die Trump-Organisation runnt.
The Bulwark Podcast
S2 Ep1041: Justin Wolfers: Trump's Centrally Planned Economy
Right now, Trump has determined two major international elections, Canada and Australia. Even as he moves the US to the right, he's moving the rest of the world to the left.
The Bulwark Podcast
S2 Ep1041: Justin Wolfers: Trump's Centrally Planned Economy
Ein paar Leute kommen rein und dann macht meine Organisation gut. Er denkt an die Wirtschaft als eine Gruppe von Firmen. Er nennt sie und fühlt sich sehr stolz darauf, dass er mit vielen CEOs auf einem ersten Namen ist. Während ich ein zentraler Wirtschaftsleiter bin, bin ich auch ein marktorientierter Wirtschaftsleiter. Ich bin nicht pro-Business, sondern pro-Markt.
The Bulwark Podcast
S2 Ep1041: Justin Wolfers: Trump's Centrally Planned Economy
Es sind die Märkte und die Kräfte der Kompetenz, die das erzeugen. And if that's the case, the role of government is to put in place a set of rules that help competition thrive. And if that's the case, the healthiest president is one who doesn't know the name of any CEOs. We've seen the opposite. This is a very, very centrally planned economy right now.
The Bulwark Podcast
S2 Ep1041: Justin Wolfers: Trump's Centrally Planned Economy
Okay, so I'm going to insist on my rule, Tim. Let's stop scoring this as who won and who lost.
The Bulwark Podcast
S2 Ep1041: Justin Wolfers: Trump's Centrally Planned Economy
This is the point that Trump can cut taxes on Americans from Washington. He doesn't need to go to Geneva. And the only reason that the Chinese government imposed taxes on the Chinese people was in retaliation. So it was almost obvious if he walked back... They're going to follow. They have no interest in imposing larger import taxes on the Chinese people.
The Bulwark Podcast
S2 Ep1041: Justin Wolfers: Trump's Centrally Planned Economy
Yeah, so I have, I think, two observations. One is about the budget deficit and what we used to call fiscal responsibility. Here's a basic fact. Over the last 50 years, the average revenues of the federal government have been about 16% of GDP. Over the last 50 years, outlays have never been 16% of GDP or lower. So you kind of see the problem.
The Bulwark Podcast
S2 Ep1041: Justin Wolfers: Trump's Centrally Planned Economy
Lots of people tell me that I should be worried. I happen to be dumb enough, blonde enough and humble enough to think that there's other people far more worth hassling, but they are sort of hassling everyone these days. I'm actually in a very fortunate situation. I hold two passports and I have tenure. And I'm not relying on federal government spending.
The Bulwark Podcast
S2 Ep1041: Justin Wolfers: Trump's Centrally Planned Economy
We're spending more and there's never been an appetite for raising the revenue. So I think you would think about that as a revenue problem. There has never been the political taste to get outlays down anywhere near the 16% of GDP that we take in. And now they're looking to cut that. That seems ass backwards. Let me say the whole thing in a different way.
The Bulwark Podcast
S2 Ep1041: Justin Wolfers: Trump's Centrally Planned Economy
Budget deficit is currently 6.4% of GDP, to say that in English, large. A basic rule of thumb might be, what you want to do is during good economic times, suck a bit of money away, either to pay down the debt or to make sure it stops expanding. And also so you've got a bit more money to add to the pot when things go wrong, like during the COVID era.
The Bulwark Podcast
S2 Ep1041: Justin Wolfers: Trump's Centrally Planned Economy
6,4% ist der Art von Budget-Defizit, den Sie haben, wenn etwas falsch geht. Und dann werden sie das nehmen und Taxen zahlen. Also macht nichts davon Sinn. Das ist der erste Punkt, der ist, ich bin nicht wirklich ein Budget-Hawk. Ich bin nicht der Zentrum für einen verantwortlichen föderalen Budget. Mein persönlicher Budget ist ein Mess.
The Bulwark Podcast
S2 Ep1041: Justin Wolfers: Trump's Centrally Planned Economy
Es braucht viel, um mich über den föderalen Budget zu interessieren. I'm worried about the federal budget. I just think at some point, if unemployment is 4%, but you've got a deficit this large and growing, it's absurd. Yeah, or paying huge interest on the debt too.
The Bulwark Podcast
S2 Ep1041: Justin Wolfers: Trump's Centrally Planned Economy
And we've had the so-called sell America trade happening recently, in which the rest of the world has started to understand or believe that investing money in America is no longer the safest bet in town. As a result, the interest rates, it was a big story four weeks ago, it's less of a story now, but if you have an irresponsible budget, it's going to zoom back into the headlines.
The Bulwark Podcast
S2 Ep1041: Justin Wolfers: Trump's Centrally Planned Economy
If you feel that you can no longer trust the US government, then the interest they charge us goes up. And for your listeners, if you've ever done the calculation, what would happen to your mortgage payments if the bank were to raise the interest rate by half a percentage point, do that math, but do it with trillions of dollars of debt. It's terrifying.
The Bulwark Podcast
S2 Ep1041: Justin Wolfers: Trump's Centrally Planned Economy
The second thing to say about this budget is just the extraordinary redistribution involved. Bobby Kogan, who's one of the best budget wonks I know, says this might be the largest redistribution from the poor to the rich in American history.
The Bulwark Podcast
S2 Ep1041: Justin Wolfers: Trump's Centrally Planned Economy
The gains to the top 0.1% of the income distribution, the 1 in 1,000 Americans, their gains in total add up to slightly more than the gains to the poorest 50% of Americans. Maybe you're okay with that, but I'm not. And I do think we are going to be just absolutely baffled with bullshit. These debates are complicated and there's so many acronyms, SALT and deduction this and carried interest that.
The Bulwark Podcast
S2 Ep1041: Justin Wolfers: Trump's Centrally Planned Economy
They're inaccessible, but they come down to two things. Should we be spending more money than we're taking in right now? And do we want to take from the poor and give to the rich? That's it. And if someone's not speaking in that language, it's probably because they don't want you to understand.
The Bulwark Podcast
S2 Ep1041: Justin Wolfers: Trump's Centrally Planned Economy
So I haven't spent 10 minutes thinking about it.
The Bulwark Podcast
S2 Ep1041: Justin Wolfers: Trump's Centrally Planned Economy
So when you hear the blah, blah, blah, realize, blah, blah, blah, I'm speaking in words above your head, that's actually code for fuck you.
The Bulwark Podcast
S2 Ep1041: Justin Wolfers: Trump's Centrally Planned Economy
Which, by the way, also means the working class pay for it. Right. Because tariffs are a sales tax. Who spends a bigger share of their income? The working class.
The Bulwark Podcast
S2 Ep1041: Justin Wolfers: Trump's Centrally Planned Economy
Let me try and bore your audience by turning that into economics and then come back and be pissed off with you. Okay, great. So you might be upset about high house prices. High house prices are going to make it hard for my kids to be able to afford to get into the market. They make it hard for people to move to the most lovely places on earth.
The Bulwark Podcast
S2 Ep1041: Justin Wolfers: Trump's Centrally Planned Economy
Of course, I live in Michigan and if you wanted to buy a place in Flint, they're going pretty cheap. Bring your own water.
The Bulwark Podcast
S2 Ep1041: Justin Wolfers: Trump's Centrally Planned Economy
So, house prices are a problem. Just say it. Because of that, they really take a huge chunk of your spending power. So, how do we make housing cheap? There's two classes of solutions. Politiker lieben Dinge, die die Anforderungen stimulieren. Warum geben wir nicht den ersten Wohnbuyer eine Pause? Warum bieten wir nicht Subsidien? Warum haben wir keine Betrugsausgabe?
The Bulwark Podcast
S2 Ep1041: Justin Wolfers: Trump's Centrally Planned Economy
The mortgage introduction basically means that folks who buy bigger houses spend more money on their houses, get bigger tax breaks than folks who buy smaller houses. And as a certified member of the upper middle class, thank you to the working class for paying for my house. But as someone who cares deeply about distribution, this is a horrible way of doing it.
The Bulwark Podcast
S2 Ep1041: Justin Wolfers: Trump's Centrally Planned Economy
The problem is, if you think about our housing problem, if you make it easier for some folks to buy a house, that just means that Die Art und Weise, wie wir Häuser in Australien verkaufen, ist meistens durch Verkauf. Das bedeutet, dass mehr Leute am Verkaufstag aufhören. Hilft das euren Kindern? Nein. Was ihr wollt, sind mehr Häuser, sodass weniger Leute am Verkaufstag aufhören.
The Bulwark Podcast
S2 Ep1041: Justin Wolfers: Trump's Centrally Planned Economy
Also alles, was auf Demand fokussiert ist, schaut auf die falsche Seite des Marktes. Also sind alle einfachen Lösungen, wenn wir mehr Häuser bauen, werden es mehr Häuser und sie werden günstiger. Sieht gut aus.
The Bulwark Podcast
S2 Ep1041: Justin Wolfers: Trump's Centrally Planned Economy
It became a matter of public record that he wrote to the Berkeley local government to oppose an apartment building going up on his block because there was a beautiful tree that he really liked. The result is Berkeley became more unaffordable. And so Robert Reich is part of the reason for higher housing prices. I like to use a simpler language here. Pacific Palisades is a beautiful place to live.
The Bulwark Podcast
S2 Ep1041: Justin Wolfers: Trump's Centrally Planned Economy
Berkeley is a beautiful place to live. If you don't allow people to build apartment buildings, you're just saying, it's beautiful and I'm not sharing.
The Bulwark Podcast
S2 Ep1041: Justin Wolfers: Trump's Centrally Planned Economy
Okay, aber erinnere dich, du bist ein seltsamer Arschloch. Du willst nicht, dass diese Schönheit von jungen Männern genutzt wird, von arbeitenden Familien, von mittleren Familien. Und so, you know, this is the case against NIMBYism. It's a powerful case, but we have this disease afflicting government, local government, that if one person feels it's bad, we probably shouldn't proceed.
The Bulwark Podcast
S2 Ep1041: Justin Wolfers: Trump's Centrally Planned Economy
And one does see this particularly in liberal areas.
The Bulwark Podcast
S2 Ep1041: Justin Wolfers: Trump's Centrally Planned Economy
Mate, the ones I can think of right now are so dirty, I'm not even going to say them on your podcast.
The Bulwark Podcast
S2 Ep1041: Justin Wolfers: Trump's Centrally Planned Economy
Tim, I'm just going to tell you a story just for fun and you should edit this out if you feel like it. Okay, no, absolutely not. Long time pre-Trump. So, crossing the border as a foreigner is the worst experience imaginable. Basically, you understand that this is an institution that understands itself not to be democratically accountable to you because you are not American and you do not count.
The Bulwark Podcast
S2 Ep1041: Justin Wolfers: Trump's Centrally Planned Economy
So, this is true 20 years ago. Ich bin aus Australien zurückgekehrt mit meiner Freundin. Ich habe gerade angefangen, meine langfristige Partnerin Betsy Stevenson zu verabreden. Wir sind über die Grenze gegangen und der Junge zieht mich weg. Es ist eine furchtbare Erfahrung. Er zieht mich in den kleinen Raum, zieht Betsy mit mir mit und fragt mich über mich selbst.
The Bulwark Podcast
S2 Ep1041: Justin Wolfers: Trump's Centrally Planned Economy
Und dann sagt er zu einem Punkt, hast du planen, diese Frau zu verheiraten? Nein. Ich habe sie nur seit drei Monaten verabredet. Ich glaube, er sah diese Angst vor meinem Gesicht und sagte mir, dass niemand darüber sprechen möchte, drei Monate in einer Beziehung zu sein. Und ich glaube, diese Angst war der Punkt, an dem er sich erinnerte.
The Bulwark Podcast
S2 Ep1041: Justin Wolfers: Trump's Centrally Planned Economy
Nein, ich war nur zurückgekommen, um meinen Degree zu beenden. Und wenn die Dinge mit Sheila funktionieren, dann so sei es.
The Bulwark Podcast
S2 Ep1041: Justin Wolfers: Trump's Centrally Planned Economy
Time immemorial. I have so many stories. You really do learn that you don't count.
The Bulwark Podcast
S2 Ep1041: Justin Wolfers: Trump's Centrally Planned Economy
I'm going to share one more with you. I remember once I had to go to an embassy to renew my visa. And for security reasons, they said you can't bring your cell phone in. Und natürlich hatten sie dich nicht vorgeschlagen und natürlich hatten sie keine Locker. Also bin ich da mit Hunderten von anderen Immigranten, die literally nach außen gehen und Bäume stecken, um ihre Telefone zu verstecken.
The Bulwark Podcast
S2 Ep1041: Justin Wolfers: Trump's Centrally Planned Economy
Das ist verrückt. Wo war das? Ich versuche mich zu erinnern, in welchem Land ich damals war. Ich kann es ehrlich gesagt nicht erinnern. Aber ich war da. Das ist passiert. Ich glaube dir. Ich glaube dir. And, you know, I eventually went up the road and a local newspaper seller said he'd hold onto my phone for me for 10 bucks. That's a good deal.
The Bulwark Podcast
S2 Ep1041: Justin Wolfers: Trump's Centrally Planned Economy
So this has been a, it's an administration, it's a part of the federal government, whether it's democratic or republican, which doesn't believe in customer service.
The Bulwark Podcast
S2 Ep1041: Justin Wolfers: Trump's Centrally Planned Economy
Es gibt einen Sinn für die Unabhängigkeit des politischen Ansatzes. Trump kommt in die Macht. Das erste, was er tut, ist, Having run on tariffs, having not mentioned the word Canada through the entire campaign, the first thing he does is puts tariffs on Canada and Mexico. No one had that on their bingo cards. Our two either closest enemies or closest allies, depending on your perspective.
The Bulwark Podcast
S2 Ep1041: Justin Wolfers: Trump's Centrally Planned Economy
Those tariffs were originally put on to prevent illegal immigration and then to prevent fentanyl. To and fro, they're on, they're off, so on. Then there's a lot of talk, what should we do with tariffs? Oh, we need tariffs because we need the revenue. So tariffs, we're going to have an external revenue service, raise lots of money.
The Bulwark Podcast
S2 Ep1041: Justin Wolfers: Trump's Centrally Planned Economy
Dann entscheidet die Regierung, es gibt viel Gespräch darüber, dass wir Tarife für die Aufstiegsverarbeitung und oder für nationale Sicherheitsbedürfnisse brauchen. Dann bekommen wir Liberation Day, wo es scheint, dass die Art, wie wir Aufstiegsverarbeitung machen, ist, dass wir Tarife auf absolut alles legen, insbesondere unverarbeitete Geräte.
The Bulwark Podcast
S2 Ep1041: Justin Wolfers: Trump's Centrally Planned Economy
Oder die Art, wie wir nationale Sicherheit verteidigen, ist, dass wir eine Tarife auf Leather-Satteln legen, nicht nur auf Stahl. Or we put a tariff on bananas, which is something we're never going to grow. So Liberation Day comes, there's two parts to that. It's a 10% across the board tariff on the whole world, plus an absurd formula that yields what the administration calls reciprocal tariffs.
The Bulwark Podcast
S2 Ep1041: Justin Wolfers: Trump's Centrally Planned Economy
They've been saying, if you tariff us, we're going to tariff you. So you would think what you would do is go and measure how much other countries tariff us, but that's too much work. Literally too much work. They just never did it.
The Bulwark Podcast
S2 Ep1041: Justin Wolfers: Trump's Centrally Planned Economy
They could have asked Grock. They could have asked any number of trade economists on earth. Honestly, I would have done it for free for them in an afternoon. But they didn't. What they did instead was they looked at the bilateral trade deficit, which is the most boring, inane, uninteresting thing on earth. I'm happy to return to it.
The Bulwark Podcast
S2 Ep1041: Justin Wolfers: Trump's Centrally Planned Economy
Which yields this absurd formula, where we have now a 50% tariff on Lesotho, not because Lesotho has important tariffs on the United States, but because Americans like buying diamonds, and that's what they have. We have a very high tariff on Israel, which has no tariffs on the United States, and so on. A week passes, the markets crater. Everyone starts forecasting a recession.
The Bulwark Podcast
S2 Ep1041: Justin Wolfers: Trump's Centrally Planned Economy
A week passes and the president says, just kidding. The point of the tariffs was not to reduce bilateral trade deficits. And it was not an across-the-board tariff. It was to give me leverage in negotiations. 90-day pause. I'm going to negotiate with 192 countries in the next 90 days. 30 days pass and nothing happens. It becomes a bit of a drumbeat.
The Bulwark Podcast
S2 Ep1041: Justin Wolfers: Trump's Centrally Planned Economy
You know, guys, looks like you're not getting your work done. And so they come out and announce a special trade deal with Britain. What's utterly clear about that trade deal is they'd actually been working on it before, months before.
The Bulwark Podcast
S2 Ep1041: Justin Wolfers: Trump's Centrally Planned Economy
And it's utterly clear that what happened was the president just called Starmer and said, yeah, I know we're probably about a third of the way through this negotiation, but we're announcing tomorrow you win. We know that because Starmer actually wanted to watch the Arsenal football game on a Thursday night.
The Bulwark Podcast
S2 Ep1041: Justin Wolfers: Trump's Centrally Planned Economy
On Friday, the press said to him, did you expect to be here today doing this? And he said no. So you might think, well, if we have to announce a deal that we actually haven't negotiated, what is it we're announcing? There were very different announcements in the US and the UK. In the US, Trump calls it a comprehensive, wide-ranging agreement. In the UK, Starmer is mildly more honest.
The Bulwark Podcast
S2 Ep1041: Justin Wolfers: Trump's Centrally Planned Economy
Here's what that deal was, though. The Americans walk into the room and say, we're doing a 10% across the board tariff. You've got 10%. So what I want you to do is now just think about one big sheet of paper with the word 10% written in 96-point font. Then they put an asterisk next to it. The asterisk in 6-point font. The asterisk is, now we'll do you a deal.
The Bulwark Podcast
S2 Ep1041: Justin Wolfers: Trump's Centrally Planned Economy
So this 10% that was officially going to be the leverage and the bargaining power is no longer being bargained with at all. The end of the deal actually says this is not a binding legal commitment. Classic Trump. It's a deal to make a deal, but it does have a couple of commitments in it.
The Bulwark Podcast
S2 Ep1041: Justin Wolfers: Trump's Centrally Planned Economy
The Brits are going to buy American ethanol, which serves a particular American constituency, albeit not the American worker. And the Americans are going to allow a certain amount of steel and aluminium in at a lower tariff. And 100,000 British cars are going to come in at a reduced tariff, lower than if it were coming from other countries.
The Bulwark Podcast
S2 Ep1041: Justin Wolfers: Trump's Centrally Planned Economy
Do you know what British cars we import into this country, Tim? Probably Rolls Royces, Jaguar. Land Rover, Bentley, Aston Martin, and actually the Mini. So there's something there for the upper middle class too. So...
The Bulwark Podcast
S2 Ep1041: Justin Wolfers: Trump's Centrally Planned Economy
I just want you to imagine the meeting in which someone says to the president, the voters are revolting, they don't like the distributional implications of these tariffs because they hurt the working and middle class. And Trump says, you know what I'll do? I'll carve out British cars.
The Bulwark Podcast
S2 Ep1041: Justin Wolfers: Trump's Centrally Planned Economy
There's a little bit of a carve out for plane parts as well, yeah. But for consumers, the only consumer facing good... Das Einzige, was die Verkäufer aufgehoben haben, waren britische Autos, die günstigste von denen ist eine Mini.
The Bulwark Podcast
S2 Ep1041: Justin Wolfers: Trump's Centrally Planned Economy
Du siehst viele Minis bei den SCC-Tailgates. Du siehst viele Minis bei den SCC-Tailgates. Du siehst viele Minis bei den SCC-Tailgates. Du siehst viele Minis bei den SCC-Tailgates. Du siehst viele Minis bei den SCC-Tailgates. Du siehst viele Minis bei den SCC-Tailgates. So the press reported this as if it were a walk back. But actually I think they got it wrong.
The Bulwark Podcast
S2 Ep1041: Justin Wolfers: Trump's Centrally Planned Economy
This is the administration during the 90-day pause doubling down on the 10% tariff with the rest of the world. Basically everyone's now been told and it's becoming increasingly explicit, every country is getting a 10% tariff. Full stop. Not a negotiation. So now, here's the part I want you to see going full circle. We impose this tariff, causes total chaos.
The Bulwark Podcast
S2 Ep1041: Justin Wolfers: Trump's Centrally Planned Economy
So then he says, just kidding, it's just leverage for negotiations. We go into the negotiations and he refuses to negotiate over it. Says, just kidding, it's a baseline for everyone. So within 35 days, we're full circle. The difference is, I think the PR has been somewhat better for the president this time. Then we move into China. So China...
The Bulwark Podcast
S2 Ep1041: Justin Wolfers: Trump's Centrally Planned Economy
Es ist so, dass der Präsident glaubt, dass es ein politischer Gewinner ist, China selbst zu verletzen. China sagt, fuck you. Zwei Polizisten in der Schule. Und es ist so, dass es so ist. Ich gehe höher, ich gehe höher, ich gehe höher. Und dann sagt China an einem Punkt, du bist auf 145% Tarif. Das ist verrückt. Ich brauche nicht mehr höher zu gehen. Wir sind schon nicht auf dem Markt.
The Bulwark Podcast
S2 Ep1041: Justin Wolfers: Trump's Centrally Planned Economy
Wir haben aufgehört. Ich meine, wir könnten bis zu infinitiv Prozent gehen, aber was ist der Punkt? This causes huge economic disruption in both countries. Because basically, any company that uses any input from China is being told, you're not getting it. That's what a 145% tariff is. And the Chinese have the same problem to a slightly lesser extent. So this is sort of like COVID, right?
The Bulwark Podcast
S2 Ep1041: Justin Wolfers: Trump's Centrally Planned Economy
Remember COVID, suddenly you couldn't get stuff. Right. So we have now a White House-caused COVID supply shock. It's bad for both countries. So they decide that what they'll do is negotiate. Now it turns out the most punishing thing was that the White House was imposing a 145% tax on Americans who imported from China. You don't need to go to Geneva to cut taxes on Americans.
The Bulwark Podcast
S2 Ep1041: Justin Wolfers: Trump's Centrally Planned Economy
You can do that from the comfort of your own home. Maybe you need to go there for political cover. So we all go over to Geneva. Und jetzt Tarifen auf China. Der Tarifhike von Trump auf China ist bis zu 30%. Wir hatten eigentlich 8% von Trump, Biden und der Geschichte vorher. Also jetzt ist der übrige Tarif auf China 38%, was in jeder anderen Ära, wie wir es sagen würden, unglaublich hoch ist.
The Bulwark Podcast
S2 Ep1041: Justin Wolfers: Trump's Centrally Planned Economy
But thank goodness it's a whole lot lower. And so Percent comes out and says, we have got in the room with China. And China, by the way, has cut its tariff to 10%.