Greg Sargent: This is The Daily Blast from The New Republic, produced and presented by the DSR Network. I’m your host, Greg Sargent.
New Republic staff writer Monica Potts has been doing some really good reporting on what ordinary voters are thinking and feeling about the economy. So we’re talking to her about all this today. Monica, nice to have you on.
Sargent: So let’s start with the new data. GDP grew at 2 percent during the first quarter of this year, which is better than last year, but still came in under expectations. And inflation just had its biggest spike in nearly three years by one metric, driven in part by gas prices and the war. Monica, it just seems like we’re economically stuck. Is that the right way to think about it?
The way that we thought about what we needed and what we wanted to spend our money on changed throughout that period. And of course, inflation rose really rapidly. So things were heading back to normal, and actually a report earlier this month from economists at the Federal Reserve found that inflation might have been back to normal had we not had the new tariffs from the Trump administration and some of the other shocks to the economy under his tenure.
Monica, that’s striking. Other polls have shown this as well. Trump’s 2024 victory was all about the economy and inflation, and Democrats were in just terrible shape on both due to what you talked about, the post-COVID inflation shock. How do you account for this turnaround?
So I think that he came into office with a huge advantage on the economy that he really blew—the first few things that he did as president were to kind of squander that trust that people had. People saw right away that the things he was doing weren’t what they wanted from him. And so I think that that has given an opening for people to think about the Democratic rhetoric on the economy more and to maybe start trusting the Democratic Party more on what they say the economy needs.
And what I was struck by was how deeply this cultural picture of Trump as this crack businessman who builds big things and makes things happen and is an entrepreneurial spirit, how deeply that had taken hold with a lot of low-information voters. That’s just something that I think Democrats were really unable to do anything about, and yet that’s been pissed away too.
That was his public persona that was really ingrained. And I think that it was always going to take a lot of work to try to chip away at that. I’m not even sure the Democratic Party even really tried. And I don’t know if it would have worked if they had. A lot of people had an idea that he was a businessman. They have an idea that the country needs a businessman—or at least someone who thinks like a businessman—to run it, which is really not how the country runs, but that’s a whole other story. And so it’s kind of amazing that he really has squandered that in just a little over a year, but he has. People don’t believe that about him anymore. They think he’s making the wrong decisions.
Monica, I think the Senate map is still awfully hard. Democrats have to net four seats in some really tough states for them. But if there’s anything that can get Democrats there, it’s this kind of widespread economic distress. Can you talk about that?
And so, I think that the fact that Republicans are in this position is completely attributable to Trump squandering that trust with voters. And I think it’s really kind of amazing because Democrats always probably had an advantage in the House—the party that isn’t in the White House has an advantage in the House in the midterms, it’s kind of one of the things you can take to the bank for the most part.
Sargent: So let’s just talk a little more about that point you’re making, which is that Trump created this economy and Trump is the reason that Republicans are in such bad shape on it. It really is an odd situation because for the most part, presidents don’t have that much control over economies. And yet Donald Trump managed to figure out a way to really damage it in just about every conceivable way.
He doesn’t seem to be at all aware of the fact that he doesn’t really have a lot of leverage in this situation. He’s just tweeting that he’s got all the leverage and he’s happy to wait—I don’t know, as long as it takes—until Iran finally realizes that he’s the boss and concedes. But if I’m a Republican officeholder, like a vulnerable incumbent Republican in the House, I’m like, dude, you’ve got to stop this war already, we’re just going to get wiped out. Can you talk a little bit about how Trump did this?
What Trump has done is a number of things. He enacted tariffs unilaterally, which have had a really big impact both on the price of goods in America and also the impact on our trading partners globally—which has had an effect as well, because people don’t really know what’s going to happen next with Trump.
So when you’re making big decisions or even small decisions, you kind of want to have a sense of where we are in the economy. And because Trump is so erratic—he announces policies on his social media platform, he keeps changing his mind about tariffs constantly, he just started wars in Venezuela and Iran kind of overnight without taking his justifications to the American people—all of those things have both real and kind of perceived effects that become real because it changes the way people interact with the economy.
But even if he were able to, he couldn’t do it effectively because of what we’re talking about here. And what’s just so amazing to me about this is that Republicans all know that Trump is no longer a credible voice on the economy, but they just have to pretend not to know that. You know what I mean? Like they have to say, we really want the president to talk more about the economy, even though they know it wouldn’t do them any good.
There was just an American Tax Fairness report that came out today that a lot of the industries that rely on Latino labor, that employ a lot of Latinos, are suffering because immigration enforcement and immigration policy is so draconian and up in the air. So all of the things that Republicans have concentrated on, that they wanted Trump to concentrate on, are also hurting the economy. And so at some point they have to say, we are actually doing this. Our president is doing this and we are doing this with our policies. It’s not just a side effect or it’s not just circumstances. It’s our policies.
To them, it’s worth it. Like it’s so important to have fewer immigrants in the country that they’re willing to have lower job growth as a result. Like they actually kind of almost say that openly. And so there you have the ideology of Trumpism having a directly negative impact on everybody’s material fortunes basically, right?
That sort of makes it clear to voters in a way that nothing else possibly could have. And I think that that’s going to be hard for Republicans too, because they were trying to do kind of like doublespeak for a long time—just to say, immigrants are taking your jobs, which was part of the rhetoric from the Trump campaign at least since 2015. It’s been kind of the core of his identity. I think people have to see now that that’s not true.
Of course, that tax cut represented a massive upward transfer of wealth, which is exactly what Americans for Prosperity, the authors of this memo, wants. And so what that tells us is that people are struggling under the economy that the plutocrats want. It seems like there’s a big opening for a more populist economic program from Democrats now, right? You did some reporting on this. Is there a way that Democrats could talk about a new direction entirely?
And in the meantime, people are drowning in debt, just trying to pay their energy bills and trying to pay their grocery bills. And so I think that there’s an opening to say that we need to tax corporations more, corporations are treating working people unfairly. There’s a lot of polling, even in swing states, even in states that are kind of more approving of Donald Trump’s presidency than the nation as a whole—voters in those states, voters that are gettable, voters that need to be persuaded to vote for Democrats—they’re swayed by messages like that that say, you know, we need to kind of resort our economy and refocus our economy.
We had the COVID shock and the inflationary shock of that. And that was a really profound experience for a lot of people. I think it was really disorienting and dispiriting and shook people up a lot. It allowed Trump to swoop in and do this amazing comeback or whatever.
Potts: Yeah, I think so. I think there’s a new kind of hunger from voters—and especially younger voters who don’t remember Reagan—to focus on workers, to think about worker power, to focus on government provision of expensive services like childcare. You know, a lot of millennials now—the youngest millennials, I think, are in their 30s almost, or are there already—these are people who are ready to buy homes and start a family, and they’re kind of seeing the long-term effects of the Reagan-era policies that concentrated power among a lot of big businesses, that diminished worker power, that diminished wages over time.
Sargent: Yes. And the younger voters are among the constituencies that moved to Trump, just like the non-white working class. And so to those voters, maybe the right-wing populist stuff sounded somewhat credible, right? Like it’s anti-elite, it’s about workers, it’s about power, it’s about worker power in some way, even though we know that it’s sort of a sham.
Potts: I think so. I mean, at least right now, a lot depends on what happens in the next year or the next two years. And a lot probably depends on what happens with how the Democratic candidates and the Democratic Party as a whole take up the story. Because there were a lot of things that Trump said that did sound good to people. And he’s not putting his money where his mouth was. He’s not fulfilling that.
Sargent: I think that’s really well put. Folks, if you enjoyed this, make sure to check out Monica Potts’s stuff at NewRepublic.com. It’s great—it’s on these topics very regularly. Monica, thanks so much for coming on. We really appreciate it.
Potts: Thanks so much for having me.
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