The following is a lightly edited transcript of the May 1 episode of the Daily Blast podcast. Listen to it here.
Greg Sargent: This is The Daily Blast from The New Republic, produced and presented by the DSR Network. I’m your host, Greg Sargent.
Public polls are starting to show that Democrats are now more trusted on the economy than Republicans are—a milestone with major implications for the elections. Strikingly, a new memo from Republican operatives just conceded this as well, while sounding a loud warning that the GOP is in danger of losing the Senate. All this is also underscored by fresh economic data. It suggests that the struggles of ordinary Americans could be getting worse.
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.
Monica Potts: Thanks for having me.
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?
Potts: I think so. The economy was on a path to recovery at the end of the Biden administration. I think people conveniently forget that the post-COVID era was a really unusual time and we hadn’t seen anything like it in our lifetimes, and a lot of the ways that people consumed changed. Their incomes changed.
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.
Sargent: Yeah, well, this economy is largely the creation of one person, Donald Trump. And I want to get into that in a bit. Politico reports on this new Republican memo that shows striking findings. It’s from Americans for Prosperity, the Koch-backed group. And that’s its own story, which we’ll get to. But for now, I want to read this line from it: “Our internal polling in several battleground states and one-on-one conversations with voters show that for the first time, Democrats are more trusted on the economy and inflation.”
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?
Potts: Well, I think that Trump was riding a long-term advantage that Republicans had on the economy—at least since Reagan, American voters have tended to think that Republicans are better for the economy, largely because of their rhetoric on small businesses, on cutting taxes, and people tend to think that that’s good.
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.
Sargent: It’s just kind of amazing because not only did Republicans have this deep built-in advantage on the economy that you talked about, which is largely unearned but goes back many decades, Trump also had this big unearned advantage on the economy. And I was doing some reporting up in Reading, Pennsylvania about what happened with the Latino vote there in 2024, moved towards Trump.
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.
Potts: Yeah, that’s right. And I think people forget that the vast majority of voters aren’t reading the really long investigative pieces that show that Trump actually wasn’t a very good businessman. I mean, you can find all of the evidence that you want to show that Trump inherited most of his wealth. He squandered it—his early successes as a builder or as a real estate person really based on his father’s work. And he was never really the businessman he portrayed on TV, but people still had this idea, this really long-held idea of him as a businessman.
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.
Sargent: Yeah. And also the other cultural picture of him is as the guy who fires people, who just makes things happen really quickly, you know? And so—well, here’s another line I want to read from the memo: “As it stands today, our view is that the Republican Senate majority is at risk.”
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?
Potts: Yeah, absolutely. I mean, we talked about it a minute ago, but the truth is that there was a pretty substantial number of voters who thought at the end of the Biden administration, the economy is not where I want it to be, Trump’s a businessman and he can get us back. And so that was his huge advantage with a lot of voters in the middle, a lot of independents, a lot of swing voters to the extent that they exist, and a lot of people who were upset about Biden’s economy and so who just didn’t turn out to vote for Kamala Harris, Vice President Kamala Harris.
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.
The Senate map is really difficult, but if the candidates are right, if the winds are right, if we are still stuck in Iran, if we’re still stuck in a lot of conflicts globally, if tariffs are still bad, if the price of oil stays high, if inflation is up, if people don’t have faith that the economy is going to get better—you really start to see where Democrats have an opening, I think.
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.
You mentioned the tariffs, which really had an inflationary effect for a lot of people. And then there’s immigration, which I don’t think people usually connect to the economy, but that also had a negative economic effect—it’s had a negative effect on jobs by just reducing the number of immigrants in the country and so forth. And then of course there’s the war as well, which has really spiked prices and we’re really stuck.
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?
Potts: Yeah, it is one of the ironies of our time that people blamed Biden for the economy that was largely out of his control. A normal president who is doing what the job of a president is, is trying to create the conditions for a good American economy, for people to share in economic growth. And it’s kind of hoping that private industry takes us the rest of the way, because America very much believes in its free-market economy ideals.
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.
Some writers have called it the Trump chaos tax. And you could call it the chaos economy because businesses, consumers, anyone who interacts with the economy wants to have some idea of where we’re going. They want to know if it’s a good idea for them to buy a car this month, or if they should refinance their mortgage because rates are going down and they’re going to stay down.
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.
Sargent: Well, related to all this, one of the things that’s interesting in this memo is it calls on Republicans to focus much more on the economy. But everyone knows at this point that Trump isn’t mentally capable of focusing on anything really, except for maybe the ballroom. But he certainly doesn’t have much of an interest in the economy. You can just visibly see that at these events that they try to set up where Trump’s supposed to refocus everyone on the economy—and you just can’t do it.
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.
Potts: Yeah. I don’t know why they—I feel like they still are relying on Trump to be kind of this magic interlocutor with the American people, that he has some ability to kind of sway them. But you know, some of this too is the inability of the Republican Party to come to terms with the ways that their other policy priorities do clash with the economy. You mentioned before—and I didn’t comment on it before, but I should—is that a lot of the immigration policy is hurting the economy.
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.
Sargent: Right. And I think the report you just talked about on immigration is really important because it highlights how Trumpism as an ideology is getting us here as well. Because for Trump and for Stephen Miller and for the anti-immigrant nativists around him and so forth, they think that having fewer immigrants in the country is an inherently good thing—like it’s intrinsically good, even if the negative effects on the economy persist, right?
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?
Potts: Yeah, and I think the fact that they say it openly—that the effects of their policies are having such an obvious impact on people’s lives—people are seeing it in their local economies. Local business owners are having trouble because their employees are disappearing or people aren’t buying because they’re worried about what’s going to happen down the road.
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.
Sargent: Yeah, that has certainly been disproven. So just to go big picture and talk about your reporting—there’s this nugget in the memo that I want to bring up. It hails Trump’s tax cut as a landmark piece of legislation. And then like in the next sentence, admits that people’s economic concerns are really profound.
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?
Potts: Yeah, I did reporting earlier this week on a report from Way to Win. It’s a left-leaning strategic group that does polling and kind of strategy for Democrats. And one of the things that they found was that messages that concentrated on a kind of populist economic message—saying, we need to tax corporations, we need to make the economy fairer for the working class—messages like that really did sway people. And people are open to that kind of messaging because they can see now, I think they can feel and see, that there’s an economy right now where the wealthy are looking out for each other, the tax cuts are helping the wealthy, that some of Trump’s billionaire friends are benefiting the most from this economy.
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.
Sargent: And it seems like there’s really an opening in another way too, which is that like everything is really in flux to an unusual degree, I think, right? Because if you sort of think about the trajectory from Reagan to now, like all of a sudden, everything’s kind of up for grabs and up in the air.
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.
But then you have a right-wing populist—to put it in polite terms—coming in and actually doing the stuff, like doing the agenda of right-wing populism. Tariffs, immigration restrictionism, America First, pissing on our alliances and so forth. And that’s a disaster. So is there sort of a different kind of opening now to take charge of people’s understanding of these big questions that maybe wasn’t there before?
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.
And I think that there’s a new opportunity then to tell a different story about the American economy, which is one that allows for thinking about building the economy from the worker up, to think about the kinds of institutions that can be countervailing forces against big corporations, to think about refocusing political power on the working and middle classes. I think there’s a lot of people, but especially young voters, who are very hungry for that.
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.
And so has it been sufficiently discredited? Has Trumpism, has right-wing populism—have those things been discredited enough to create an opening to do something new?
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.
And the people around Trump are traditional Republicans doing traditional Republican things—tax cuts to the wealthy, concentrating power, taking away rights from women, taking away rights from minorities, immigration enforcement that’s draconian and not in accordance with American ideals. And I think that that just really does give an opening for the Democratic Party to potentially solidify those young voters as their voters for life because they’re kind of gettable, I think, in a lot of ways now still.
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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