Trump’s Bold Vision for America: Higher Prices!
Digest
Ezra Klein and Matt Yglesias discuss the political landscape of the 2024 election, focusing on the economic message that Donald Trump is likely to campaign on. They argue that Trump's economic policies, while potentially harmful, are perceived as strong by many voters. They believe that Biden needs to effectively counter this message by highlighting the potential negative consequences of Trump's policies, such as increased inflation and higher prices for everyday goods. They also discuss the need for Democrats to better communicate the potential risks of Trump's policies to voters, particularly those in swing states. They suggest that Democrats need to focus on the practical issues that matter to voters, such as managing the economy and providing essential services, rather than grand ambitions and agendas. They also discuss the importance of engaging with business leaders and corporations to highlight the potential negative impact of Trump's policies on their businesses. The conversation concludes with a discussion of the current political climate and the need for Democrats to effectively communicate their message to voters.
Outlines
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Introduction
This Chapter introduces the Ezra Klein Show and the topic of discussion: Donald Trump's economic policies.
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Trump's Economic Strategy
This Chapter explores Trump's economic strategy, focusing on his use of inflation as a political tool and his promises to lower prices. It highlights the irony of Trump's campaign rhetoric, which focuses on lowering prices while his proposed policies would actually raise them.
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Trump's Tariff Plan
This Chapter delves into Trump's proposed tariff plan, analyzing its potential impact on consumer prices, American producers, and the global economy. It discusses the economic consequences of tariffs, including higher prices for consumers and reduced competitiveness for American exporters.
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Economic Estimates of Trump's Tariff Plan
This Chapter examines economic estimates of the impact of Trump's tariff plan, highlighting the potential for increased inflation and job losses. It also discusses Trump's dismissal of these estimates and his reliance on his past economic record as justification for his current proposals.
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The Politics of Inflation
This Chapter explores the political context of Trump's economic policies, focusing on the public's anger over high prices and Trump's exploitation of this sentiment. It contrasts Trump's rhetoric on inflation with his actual policy proposals, which would likely exacerbate the problem.
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Trump's Economic Record
This Chapter examines Trump's economic record, highlighting the fact that inflation and interest rates did rise during his presidency. It argues that Trump's current proposals, which are similar to his past policies, would likely lead to further increases in inflation and interest rates.
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Biden's Economic Policies
This Chapter compares Biden's economic policies to Trump's, highlighting Biden's more targeted approach to tariffs and subsidies. It discusses Biden's efforts to protect American industries and strengthen supply chains, particularly in the semiconductor and renewable energy sectors.
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The Legacy of Trump's Economic Policies
This Chapter examines the legacy of Trump's economic policies, arguing that Biden has absorbed many of Trump's policies, particularly on China. It discusses the shift in the political consensus on trade, with many Democrats now acknowledging the need for a tougher stance on China.
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Trump's Fiscal Policy
This Chapter analyzes Trump's proposed fiscal policy, focusing on his plans for tax cuts and spending increases. It discusses the potential impact of these policies on the budget deficit, interest rates, and inflation.
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The Trump Economy and the Budget Deficit
This Chapter examines the Trump economy and the budget deficit, arguing that Trump's policies exacerbated the deficit problem. It discusses the irony of Trump's economic policies, which were similar to what Democrats had been advocating for but without the responsible part of long-term deficit reduction.
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Trump's Immigration Policies
This Chapter explores Trump's proposed immigration policies, focusing on his plans for mass deportation and cuts to legal immigration. It discusses the potential economic consequences of these policies, including a shrinking workforce, higher prices for goods and services, and a decline in economic growth.
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The Impact of Trump's Policies on Services
This Chapter examines the impact of Trump's policies on the service sector, arguing that his proposed tariffs and mass deportation plan would lead to higher prices for services. It discusses the importance of immigrant labor in the service sector, particularly in childcare, and the potential consequences of a mass deportation operation for American families.
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The Myth of Native-Born Workers
This Chapter debunks the myth that native-born workers are ready and willing to fill the jobs currently held by undocumented immigrants. It argues that the source of additional labor would have to come from retired Americans, who are already consuming goods and services without producing anything.
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The Importance of High-Skill Immigration
This Chapter highlights the importance of high-skill immigration to the American economy, arguing that it is a key driver of growth and innovation. It discusses the lack of political support for high-skill immigration, despite its significant benefits.
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The Politics of Immigration Reform
This Chapter explores the political obstacles to immigration reform, highlighting the partisan divide on the issue. It discusses the Democrats' insistence on comprehensive immigration reform and the Republicans' opposition to any form of immigration reform.
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This Chapter is an advertisement for the New York Times Games, specifically the Whartle Archive.
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Trump's Fed Chair
This Chapter discusses Trump's appointment of Jay Powell to the Federal Reserve and his subsequent criticism of Powell. It explores the potential consequences of Trump replacing Powell with a more compliant Fed chair, particularly in the context of his other proposed policies.
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The Uncertainty of Trump's Policies
This Chapter discusses the difficulty of covering Trump's economic policies, highlighting the lack of detail and consistency in his proposals. It also explores the potential for Trump to appoint more extreme figures to key positions in a second term.
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Trump's Economic Intuitions
This Chapter examines Trump's economic intuitions, arguing that his policies were somewhat successful in the context of the Obama economy. It argues that Trump's current policies are ill-suited to the current economic situation, which is characterized by high inflation and a tight labor market.
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Trump as a Unique Threat
This Chapter discusses the challenge of framing Trump as a unique threat to democracy and the economy. It argues that Trump's policies are not only bad for the economy, but also dangerous for the long-term stability of the country.
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Biden's Challenge: Countering Trump's Economic Message
This Chapter discusses the challenge Biden faces in countering Trump's economic message, which is perceived as strong despite being harmful. Klein and Yglesias argue that Biden needs to effectively communicate the potential negative consequences of Trump's policies to voters.
Keywords
Donald Trump
Donald John Trump (born June 14, 1946) is an American politician, media personality, and businessman who served as the 45th president of the United States from 2017 to 2021. He was born and raised in the New York City borough of Queens and received an economics degree from the Wharton School of the University of Pennsylvania. Trump took charge of his family's real-estate business in 1971, renamed it The Trump Organization, and expanded its operations from Queens and Brooklyn into Manhattan. The company built or renovated skyscrapers, hotels, casinos, and golf courses. Trump later started various side ventures, mostly by licensing his name. Trump and his businesses have been involved in more than 4,000 state and federal legal actions, including six bankruptcies. Trump entered the 2016 presidential race as a Republican and defeated 16 other candidates in the primaries. His political positions have been described as populist, protectionist, isolationist, and nationalist. He won the general election against Democratic nominee Hillary Clinton, despite losing the popular vote. Trump's presidency was marked by controversy, including his policies on immigration, trade, and foreign policy. He was impeached by the House of Representatives in 2019 for abuse of power and obstruction of Congress, but was acquitted by the Senate. He was impeached again in 2021 for inciting the January 6th attack on the U.S. Capitol, but was again acquitted by the Senate. Trump lost the 2020 presidential election to Democratic nominee Joe Biden. He has continued to make false claims about the election being stolen from him and has hinted at a possible run for president in 2024.
Inflation
Inflation is a general increase in prices and fall in the purchasing value of money. It is a sustained increase in the general price level of goods and services in an economy over a period of time. When the price level rises, each unit of currency buys fewer goods and services. Consequently, inflation reflects a reduction in the purchasing power per unit of money – a loss of real value in the medium of exchange and unit of account within the economy. A common measure of inflation is the inflation rate, which is the percentage change in a price index over time. Inflation can be caused by a variety of factors, including increases in the money supply, increases in demand, and supply shocks. It can have a number of negative consequences for the economy, including reduced economic growth, increased unemployment, and a decline in the standard of living. However, a low and stable rate of inflation is generally considered to be beneficial for the economy, as it encourages investment and spending.
Tariffs
A tariff is a tax imposed by a government on goods imported from other countries. Tariffs are a form of protectionism, which is the practice of protecting domestic industries from foreign competition. Tariffs can be used to raise revenue for the government, to protect domestic industries from foreign competition, or to retaliate against other countries that have imposed tariffs on their own goods. Tariffs can have a number of negative consequences for the economy, including higher prices for consumers, reduced economic growth, and job losses. However, tariffs can also have some positive consequences, such as protecting domestic industries from foreign competition and generating revenue for the government. The effectiveness of tariffs in achieving their intended goals is a matter of debate among economists.
Mass Deportation
Mass deportation refers to the large-scale expulsion of individuals from a country, typically those who are considered to be undocumented immigrants or illegal aliens. It is a controversial policy that has been implemented by various governments throughout history, often with significant social and economic consequences. Mass deportation can have a devastating impact on individuals and families, forcing them to leave their homes, jobs, and communities. It can also disrupt labor markets, lead to economic instability, and exacerbate social tensions. The ethical and legal implications of mass deportation are also widely debated, with critics arguing that it is inhumane, ineffective, and counterproductive. Supporters of mass deportation often argue that it is necessary to enforce immigration laws, deter illegal immigration, and protect national security. However, the evidence suggests that mass deportation is rarely effective in achieving these goals and often has unintended negative consequences.
Federal Reserve
The Federal Reserve, also known as the Fed, is the central bank of the United States. It was created by Congress in 1913 to provide a more stable monetary and financial system. The Fed has a number of responsibilities, including: setting interest rates, controlling the money supply, supervising banks, and providing financial services to the government. The Fed's actions have a significant impact on the economy, as they influence the cost of borrowing, the availability of credit, and the overall level of economic activity. The Fed's decisions are made by a seven-member Board of Governors, which is appointed by the President and confirmed by the Senate. The Fed also has 12 regional Federal Reserve Banks, which are located in major cities across the country. The Fed's independence from the government is a key feature of its design, as it allows the Fed to make decisions based on economic considerations rather than political pressure. However, the Fed's independence is not absolute, as Congress can pass laws that affect the Fed's operations.
Fiscal Policy
Fiscal policy refers to the use of government spending and taxation to influence the economy. It is one of the two main tools of macroeconomic policy, the other being monetary policy. Fiscal policy can be used to stimulate the economy during a recession or to slow down the economy during a period of inflation. Expansionary fiscal policy involves increasing government spending or reducing taxes, while contractionary fiscal policy involves decreasing government spending or increasing taxes. The effectiveness of fiscal policy in achieving its intended goals is a matter of debate among economists. Some economists argue that fiscal policy is a powerful tool that can be used to stabilize the economy, while others argue that it is less effective and can have unintended consequences. The choice of fiscal policy tools and the timing of their implementation are important considerations for policymakers.
Monetary Policy
Monetary policy refers to actions undertaken by a central bank to manipulate the money supply and credit conditions to stimulate or restrain economic activity. It is one of the two main tools of macroeconomic policy, the other being fiscal policy. Monetary policy is typically implemented by adjusting interest rates, buying or selling government bonds, or setting reserve requirements for banks. Expansionary monetary policy involves lowering interest rates, buying government bonds, or reducing reserve requirements, which makes it easier for businesses and consumers to borrow money and spend. Contractionary monetary policy involves raising interest rates, selling government bonds, or increasing reserve requirements, which makes it more expensive to borrow money and spend. The effectiveness of monetary policy in achieving its intended goals is a matter of debate among economists. Some economists argue that monetary policy is a powerful tool that can be used to stabilize the economy, while others argue that it is less effective and can have unintended consequences. The choice of monetary policy tools and the timing of their implementation are important considerations for policymakers.
Stagflation
Stagflation is a situation in which an economy experiences both high inflation and high unemployment. It is a paradoxical situation, as inflation is typically associated with economic growth and low unemployment, while high unemployment is typically associated with low inflation. Stagflation can be caused by a variety of factors, including supply shocks, such as an oil crisis, or a decline in aggregate demand, such as a recession. It can have a number of negative consequences for the economy, including reduced economic growth, increased poverty, and social unrest. Stagflation is a difficult economic problem to solve, as traditional macroeconomic policies, such as increasing government spending or lowering interest rates, can exacerbate one of the problems while making the other worse. Policymakers must carefully consider the trade-offs involved in addressing stagflation.
Joe Biden
Joseph Robinette Biden Jr. (born November 20, 1942) is an American politician who served as the 46th president of the United States from 2021 to 2025. A member of the Democratic Party, he previously served as the 47th vice president from 2009 to 2017 under President Barack Obama, and represented Delaware in the United States Senate from 1973 to 2009. Biden was born and raised in Scranton, Pennsylvania, and moved to Claymont, Delaware, with his family when he was 10. He earned a bachelor's degree in history and political science from the University of Delaware and a law degree from Syracuse University. After graduating from law school, Biden began his political career in Delaware, serving on the New Castle County Council from 1972 to 1973. He was elected to the U.S. Senate in 1972 at the age of 29, becoming one of the youngest senators in history. Biden served in the Senate for 36 years, during which time he chaired the Senate Judiciary Committee and the Senate Foreign Relations Committee. He was a vocal advocate for civil rights, gun control, and environmental protection. Biden was elected vice president in 2008, becoming the first Roman Catholic and the first person from Delaware to hold the office. As vice president, Biden was a key advisor to President Obama on a range of issues, including the Affordable Care Act, the American Recovery and Reinvestment Act, and the Iran nuclear deal. Biden was elected president in 2020, defeating incumbent President Donald Trump. He took office on January 20, 2021. Biden's presidency has been marked by the COVID-19 pandemic, the withdrawal of U.S. troops from Afghanistan, and the ongoing conflict in Ukraine. He has also focused on addressing climate change, promoting economic growth, and expanding access to healthcare.
Boeing
The Boeing Company is an American multinational corporation that designs, manufactures, and sells airplanes, rotorcraft, rockets, satellites, telecommunications equipment, and missiles worldwide. It is one of the largest aerospace manufacturers in the world, and its products are used by commercial airlines, military forces, and government agencies. Boeing was founded in 1916 by William Boeing in Seattle, Washington. The company's first product was a seaplane, which was used by the U.S. Navy during World War I. Boeing's business grew rapidly in the 1920s and 1930s, and the company became a major supplier of aircraft to the U.S. military during World War II. After the war, Boeing continued to grow, and it became a leading manufacturer of commercial jetliners. In the 1990s, Boeing merged with McDonnell Douglas, another major aerospace manufacturer. Today, Boeing is one of the most important companies in the global aerospace industry. Its products are used by airlines, military forces, and government agencies around the world. Boeing is also a major player in the space industry, and it is developing new technologies for space exploration and commercial space travel. Boeing is a publicly traded company, and its stock is listed on the New York Stock Exchange.
Airbus
Airbus SE is a European multinational aerospace corporation that designs, manufactures, and sells commercial aircraft, military aircraft, helicopters, and space launch vehicles. It is one of the largest aerospace manufacturers in the world, and its products are used by commercial airlines, military forces, and government agencies. Airbus was founded in 1970 as a consortium of European aerospace companies. The company's first product was the A300, a wide-body jetliner that was designed to compete with Boeing's 747. Airbus's business grew rapidly in the 1980s and 1990s, and the company became a major competitor to Boeing in the commercial aircraft market. Today, Airbus is one of the most important companies in the global aerospace industry. Its products are used by airlines, military forces, and government agencies around the world. Airbus is also a major player in the space industry, and it is developing new technologies for space exploration and commercial space travel. Airbus is a publicly traded company, and its stock is listed on the Euronext stock exchange.
Comac
Commercial Aircraft Corporation of China, Ltd. (Comac) is a Chinese state-owned aerospace manufacturer that designs, manufactures, and sells commercial aircraft. It is one of the largest aerospace manufacturers in the world, and its products are used by commercial airlines, military forces, and government agencies. Comac was founded in 2008 as a joint venture between the Aviation Industry Corporation of China (AVIC) and the China Investment Corporation (CIC). The company's first product was the ARJ21, a regional jetliner that was designed to compete with Bombardier's CRJ and Embraer's E-Jets. Comac's business has grown rapidly in recent years, and the company is now developing the C919, a narrow-body jetliner that is designed to compete with Boeing's 737 and Airbus's A320. Comac is also developing the C929, a wide-body jetliner that is designed to compete with Boeing's 787 and Airbus's A330. Comac is a major player in the global aerospace industry, and it is expected to play an increasingly important role in the future. The company's success will depend on its ability to develop and manufacture high-quality aircraft that meet the needs of airlines around the world.
Q&A
What are the potential economic consequences of Trump's proposed tariffs?
Trump's proposed tariffs would likely lead to higher consumer prices, make it more expensive for American producers to assemble goods, and reduce competitiveness for American exporters in the global market.
How would Trump's proposed mass deportation operation impact the US economy?
A mass deportation operation would shrink the workforce, leading to higher wages for remaining workers but also higher prices for goods and services. It would also likely exacerbate the debt burden and inflation situation.
What are the potential consequences of Trump replacing Jay Powell with a more compliant Fed chair?
Replacing Powell with a more compliant Fed chair would likely damage the credibility of the central bank and lead to higher inflation, particularly in the context of Trump's other proposed policies.
What is the main argument against Trump's economic policies?
The main argument against Trump's economic policies is that they are not only bad for the economy, but also dangerous for the long-term stability of the country. His policies would likely lead to higher prices, lower growth, and a loss of credibility in the central bank.
How does Trump's economic agenda differ from traditional Republican economic policies?
Trump's economic agenda is more extreme than traditional Republican economic policies. He is proposing policies that would lead to a higher budget deficit, higher interest rates, and higher inflation. He is also proposing policies that would shrink the workforce and make it more difficult for American businesses to compete in the global market.
What is the significance of Trump's economic policies in the context of the current economic situation?
Trump's economic policies are particularly problematic in the context of the current economic situation, which is characterized by high inflation and a tight labor market. His policies would likely exacerbate these problems and make it more difficult for the economy to recover.
What is the main takeaway from the discussion between Ezra Klein and Matt Yglesias?
The main takeaway from the discussion is that Trump's economic policies are not only bad for the economy, but also dangerous for the long-term stability of the country. His policies are based on a flawed understanding of the economy and would likely lead to a number of negative consequences.
What is the role of the Federal Reserve in the US economy?
The Federal Reserve is the central bank of the United States. It is responsible for setting interest rates, controlling the money supply, supervising banks, and providing financial services to the government. The Fed's actions have a significant impact on the economy, as they influence the cost of borrowing, the availability of credit, and the overall level of economic activity.
What is the difference between fiscal policy and monetary policy?
Fiscal policy refers to the use of government spending and taxation to influence the economy, while monetary policy refers to actions undertaken by a central bank to manipulate the money supply and credit conditions to stimulate or restrain economic activity.
What is stagflation, and why is it a difficult economic problem to solve?
Stagflation is a situation in which an economy experiences both high inflation and high unemployment. It is a difficult economic problem to solve because traditional macroeconomic policies, such as increasing government spending or lowering interest rates, can exacerbate one of the problems while making the other worse.
Show Notes
Donald Trump has made inflation a central part of his campaign message. At his rallies, he rails against “the Biden inflation tax” and “crooked Joe’s inflation nightmare,” and promises that in a second Trump term, “inflation will be in full retreat.”
But if you look at Trump’s actual policies, that wouldn’t be the case at all. Trump has a bold, ambitious agenda to make prices much, much higher. He’s proposing a 10 percent tariff on imported goods, and a 60 percent tariff on products from China. He wants to deport huge numbers of immigrants. And he’s made it clear that he’d like to replace the Federal Reserve chair with someone more willing to take orders from him. It’s almost unimaginable to me that you would run on this agenda at a time when Americans are so mad about high prices. But I don’t think people really know that’s what Trump is vowing to do.
So to drill into the weeds of Trump’s plans, I decided to call up an old friend. Matt Yglesias is a Bloomberg Opinion columnist and the author of the Slow Boring newsletter, where he’s been writing a lot about Trump’s proposals. We also used to host a policy podcast together, “The Weeds.”
In this conversation, we discuss what would happen to the economy, especially in terms of inflation, if Trump actually did what he says he wants to do; what we can learn from how Trump managed the economy in his first term; and why more people aren’t sounding the alarm.
Mentioned:
“Trump’s new economic plan is terrible” by Matthew Yglesias
“Never mind: Wall Street titans shake off qualms and embrace Trump” by Sam Sutton
“How Far Trump Would Go” by Eric Cortellessa
Book Recommendations:
Take Back the Game by Linda Flanagan
1177 B.C. by Eric H. Cline
The Rise of the G.I. Army, 1940-1941 by Paul Dickson
Thoughts? Guest suggestions? Email us at ezrakleinshow@nytimes.com.
You can find transcripts (posted midday) and more episodes of “The Ezra Klein Show” at nytimes.com/ezra-klein-podcast. Book recommendations from all our guests are listed at https://www.nytimes.com/article/ezra-klein-show-book-recs.
This episode of “The Ezra Klein Show” was produced by Rollin Hu. Fact-checking by Kate Sinclair and Mary Marge Locker. Mixing by Isaac Jones, with Aman Sahota. Our senior editor is Claire Gordon. The show’s production team also includes Annie Galvin, Elias Isquith and Kristin Lin. Original music by Isaac Jones. Audience strategy by Kristina Samulewski and Shannon Busta. The executive producer of New York Times Opinion Audio is Annie-Rose Strasser. Special thanks to Sonia Herrero, Adam Posen and Michael Strain.