Greg Sargent: This is The Daily Blast from The New Republic, produced and presented by the DSR network. I’m your host, Greg Sargent.
Jared Bernstein: Thanks for inviting me, Greg.
Bernstein: Yeah. There have been lots of calculations trying to assess the damage here. There’s never been a budget bill that redistributes income more aggressively from the bottom to the top. This is Robin Hood in reverse on massive doses of steroids. They’re literally taking money from poor people and giving it to rich people. And anyone who knows anything about what it’s like to try to get by.… And [when] we talk about an affordability crisis—trust me—that’s a crisis for the bottom 20 percent, not for the top 0.1 percent. If you just combine the negative impact on the incomes of low-income people from this bill with the tariffs—which also disproportionately fall on middle- and low-income people because more of their consumption basket, more of what they buy falls under that import tax—this tax and service cut regime is incredibly punishing to low-income people.
Sargent: OK, so let’s talk about Trump’s eruption at Canada. On Truth Social, he suddenly ranted that Canada is putting a digital tax on American technology. He then said, “[W]e are hereby terminating ALL discussions on Trade with Canada, effective immediately. We will let Canada know the Tariff that they will be paying to do business with the United States of America within the next seven day period.” Now, when Trump starts using the word “hereby,” you know you’re in trouble. Trump is going to hit Canada with new tariffs. Jared, what does this mean? What does a ramped-up trade war with Canada look like?
Sargent: Right. And we’re talking about a lot of Trump voters here in the auto industry and agriculture and so forth, right?
Sargent: Just to pull back a little bit as well, one of the paradoxes of the trade debate is that tariffs code as pro-worker because they constitute a president seeming to act and use his power to protect Americans, right? But of course, in a globalized world, working people are hurt by lot of different types of trade barriers. Can you talk about the communication challenge here? This stuff codes in a very pro-worker way—tariffs do—but the paradox is that that’s not how it actually works. How do we get our point across here?
Canada is a good example of that, by the way. A lot of housing materials come here from Canada. And you have builders already telling that the existing tariffs with Canada is making building more expensive. So that’s not making housing less expensive. That makes building housing more expensive.
Bernstein: Well, let me say a couple of things about that. You’re exactly right and the polling supports what you just said. If you go back and poll tariffs before this latest trade war, they actually polled very well for precisely the reason you said. Run that same poll now and you get a completely different result. And I think the reason is not just that maybe people have more economic sense that we give them credit for, but it’s really the media. The media has done a uniquely … to me, having been on the other side of that, almost a weirdly good job of explaining these price effects.
Sargent: Fascinating. Well, just to go into some of the communications challenges here a little bit more, to go back to Trump’s big budget bill, these types of spending cuts are another thing that Republicans are trying to code as pro-worker, just as they’re trying to do on tariffs. And sometimes they have success at fooling people on that because, in the popular imagination, the safety net is associated with helping people who aren’t working. Republicans have spent a half century trying to code things that way: Ronald Reagan with “welfare queen,” Paul Ryan calling the safety net a hammock that lulls people into dependency. But the changes in the economy in recent years have meant that these programs are deeply woven into the lives of the working poor.
Sargent: Sure is. And speaking of upside down, Trump recently had this tweet in which he openly admitted that mass deportations are hurting the economy and farmers—again, one of his core constituencies. He admitted straight-out that migrant workers in the agriculture and hospitality sectors are good workers and admitted that when those people are removed, American workers don’t flow in to replace them. This directly undermines Trump and MAGA’s core argument, which is zero-sum: Any migrant workers gain is an American workers loss. Trump admitted that that’s not the case, yet the efforts to deport migrant workers are ramping up. Stephen Miller is ordering ICE to scour Home Depot parking lots to find someone, anyone, as many people as possible to deport. What do you make of all that?
And in fact, if you ask people what they think about deporting those folks, many of whom they know because they handle their dry cleaning, they’re against it. So one theme that’s constant throughout our conversation, I don’t think we’ve used this word yet, is unpopular. It is. You can’t underestimate how unpopular almost everything we’ve talked about so far is with people who don’t work in the White House or are paid to think otherwise. This budget bill is massively unpopular. It’s unpopular with investors who are worried about its deficit impact. I’m not saying that.… Obviously rich people long for those tax cuts, so I don’t want to overstate my case. But it’s highly unpopular with obviously middle- and low-income people who see themselves as getting hit.
Sargent: It certainly is. Well, just to tie this all together, we’ve got these three big policies which are really going to screw working people in a major way: tariffs, potentially ramped-up trade war with Canada; mass deportations, which Trump himself admitted is screwing over farm country; and this big budget bill, which is destroying the safety net for the working poor. So overall, putting it all together, is the class known as the working class going to be worse off at the end of this? And what does it look like? How do you sum up what’s going to happen to that mass of people in this country?
So that’s an exercise in exactly what you just asked for. The cumulative effect of the tariffs and the budget bill is to make 80 percent of households less well-off. As someone who’s been observing politics and budgets and international trade for many decades, I’ve never seen anything like this where a budget bill combined with tariffs [and] deportation is taking a strong economy that this administration inherited and cutting it off at the knees. [It’s] lowering incomes for at least 80 percent of households, making life more expensive—exactly the opposite of what people thought they were voting—for tens of millions of people. And that’s why all of these actions are so fundamentally unpopular. Yet the administration just continues to push ahead.
Bernstein: My pleasure, Greg.
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