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.
President Donald Trump just got some more terrible economic news—and boy, is he in a rage over it. On Wednesday, we learned that the economy contracted in the first quarter, and on two separate occasions Trump unloaded over this, attempting to blame Joe Biden for it. Faced with this situation, some of Trump’s aides went full North Korea, bowing down before him and offering adulation in almost shockingly sycophantic terms. Which got us thinking: How long did Trump’s advisers think they can keep him in a protective cocoon, shielding him from the realities of his disastrous reign? And why do they think that will get any easier over time, rather than harder? New Republic senior editor Alex Shephard has a good new piece arguing that Trump’s unpopularity is only going to get a lot worse due to basic structural facts about his presidency, so we’re talking to Alex today about all this. Thanks for coming back on, man.
Alex Shephard: It’s great to be here.
Sargent: We just learned that U.S. gross domestic product, or GDP, declined by a 0.3 percent annual rate during this year’s first three months. There’s some uncertainty about the precise accuracy of this data, but what’s overwhelmingly clear is that Trump’s talk about his own policies basically started wrecking the economy Trump inherited early on. Your reaction to all that, Alex?
Shephard: The whole thing is ridiculous because I think all of this top-line economic data from the Biden administration was pretty positive, even if you factor in the inflationary issue. Trump inherited this and essentially ... In some ways, it’s not that dissimilar to what he did with the 2017 tax cuts, right? He was gifted this well-oiled, big-picture economy—in which I think a lot of people were nevertheless understandably, in many cases, frustrated—and immediately just pushed it off a cliff.
And the idea that this is somehow Biden’s fault is ridiculous too. Regardless of what you think about the mechanics of the Biden economy, it was the envy of the developed and the undeveloped world. It was working. It was working in, I think, a remarkably perilous post-pandemic environment. And what we’re basically headed toward is supply shock stagflation all simultaneously—and I think that the one thing that doesn’t get hit enough about this is just how completely unnecessary and stupid it is. No one is asking for any of this. So even though the contraction is relatively small at 0.3 percent—it’s 2.7 percent down from where it was—what you’re actually seeing here, I think, is something like an economic kamikaze mission. There’s nothing analogous that I can think of in contemporary or modern global political history.
Sargent: Except maybe the beginning of Trump’s first term (laughs). So Trump unloaded about this twice. First, he erupted on Truth Social saying, “Our Country will boom, but we have to get rid of the Biden ‘Overhang.’ This will take a while, has NOTHING TO DO WITH TARIFFS, only that he left us with bad numbers, but when the boom begins, it will be like no other. BE PATIENT!!!” And there are lots of all caps lines in there. Then Alex, speaking to reporters, he said this.
Donald Trump (audio voiceover): Core GDP ... And you probably saw some numbers today, and I have to start off by saying that’s Biden. That’s not Trump, because we came in on January. These are quarterly numbers. And we came in, and I was very against everything that Biden was doing in terms of the economy, destroying our country in so many ways. Not only at the border—the border was more obvious—but we took over his mess in so many different ways.
Sargent: So as you said, the opposite of all this is true. Trump was left an economy that was the envy of the post-Covid Western world—and that wasn’t an easy thing to accomplish, right? The entire world was struggling with post-Covid shock, and we did better than pretty much any country on Earth. And then Trump immediately started sabotaging what he had been gifted with his tariff threats and the buffoonishly incompetent Elon Musk’s huge DOGE cuts to the government. Now, Trump is trying to say his policies didn’t kick in during the first quarter, but isn’t the fact clear that the economy was reacting to his erratic announcements, which created vast uncertainty? Isn’t that what happened?
Shephard: I think that’s not only true, but the actual situation is a little bit crazier than that too. What Trump is suggesting here is that the economy is bad because it was bad six months ago, which we know is not true, and that his tariffs, once they kick in, will fix all of it. They’ll usher in this—it’s weird to say because the thing he always references is the late nineteenth century, a period that was not especially prosperous for the United States—era of incredible prosperity. There’ll be no income tax, everyone will be working at an iPhone factory, and we’ll all be so happy. But the reason why the economy is hanging on by a thread right now is that he has backed down, or at least he’s stepped away, from the most extreme versions of these tariffs. And that’s allowed markets to do the thing that they do best, which is to delude. Investors are deluding themselves that maybe it won’t be that bad. The all-cap statement today is him basically doubling down, now for the umpteenth time, and saying that the thing that is actually destroying the economy right now is going to save it.
It’s in some ways an even more demented version of the response to the Great Depression in 1929 and 1930, except this time we know it doesn’t work. I found the tweet and the statements after to be funny in part because I think that the more all caps there is, the more panicked he is. But the overall message [is] if you’re an investor or you run a business that relies on any goods from overseas, which is [many of them], or if you work at one of those businesses, I think you should be very, very worried. The contraction, I think, is only causing Trump to lean further into an economic idea that seemingly only he believes will work.
Sargent: I think that’s a really crucial point you get at, which is that investors and CEOs and business owners and so forth across the country are looking to these things—to his tweets, to what he says about the GDP numbers—for some sign, any sign that this guy is capable of learning from what’s happening. And all they’re getting is an emphatic No, he isn’t.
Shephard: Yeah. And I think that the economic failure is a literal [example of] “the beatings will continue until morale improves,” like the tariffs will continue until the economy recovers. And I think that that’s really scary. This is not an economic miracle cure. Nobody believes that it is, right? As somebody who generally is supportive of tariffs and targeted [tariffs]—like the way that the Biden administration used them in issues like solar, for instance—in this instance, they just make no sense. I was talking to a guy who owns a coffee shop, and [he’s] like, The U.S. can’t produce coffee, so why are we putting huge tariffs on it? It just makes absolutely zero sense whatsoever. And again, what we’re seeing now is relatively small. There aren’t supply shortages right now. There probably will be in the next few months, few weeks even.
And once you start to see consumer confidence—which is already starting to crater—really start to go down, what you would want to see is an administration that is showing that it can be limber in some way. I think it’s also worth going back to when Trump backed down from the initial “Liberation Day” tariffs, which were massive. The initial response for most people is to say, Look how good it was. He’s learning. He is taking the tariffs away. And nothing could have been further from the truth. He left 10 percent tariffs on. These are still more than five times higher than where they were before—and it’s not evidence of somebody learning. And I think what we’re seeing now is in some ways the opposite, that he’s dug in on what is probably the single stupidest policy decision that any president, certainly in my lifetime, has ever made.
Sargent: I find that really interesting because when he reverses on the tariffs, everybody rushes in to try to provide positive reinforcement. Fox News people go out and say what a great genius he is. In fact, you may remember that some of his aides, when he reversed the tariffs the first time, went out and called it the greatest economic decision by any president or any leader in all of human history. And of course, he doesn’t actually take any real message from that. This is where I want to bring in the adulation of his other aides that happened on Wednesday at Trump’s cabinet meeting. They really went full North Korea with the subservience, with the adulation. First, here’s Attorney General Pam Bondi.
Pam Bondi (audio voiceover): President, your first 100 days has far exceeded that of any other presidency in this country. Ever. Ever. Never seen anything like it. Thank you.
Sargent: Second, here’s Secretary of the Interior Doug Burgum.
Doug Burgum (audio voiceover): ... you’ve probably assembled the greatest Cabinet ever is that this time you’re not just great, you’re actually fearless. And it’s your fearlessness to take on the issues that other presidents would not touch, whether it’s the work that we’re doing with successfully streamlining and rightsizing government, or whether it’s taking on the issues at the border, or whether it’s embracing the power we need to win the arms race. You’re fearlessly doing that, and that creates ... Just, all of us can sprint because you’re running ahead, so thank you for that.
Sargent: Alex, at first you look at this and you think each one of them is just trying to survive in the snake pit administration by staying in Trump’s good graces, but it seems like it might be darker than that. It looks to me like the adulation of Trump grows in direct proportion to the terrible news that Trump gets, along with the terrible news that Trump gets. What are they trying to accomplish here with this kind of stuff, do you think?
Shephard: Well, I think the clips that you picked out were really good because what they get at is the distinctive form of reality creation that happens around Trump—that Pam Bondi, in particular, has to create this massive crisis that they’re all facing down, and Burgum, similarly. I think [he] gives the game away a little bit by admitting at least that what they’re doing is risky, or at least that they should be afraid of doing it, but that huge decisive world-shaking action is required when certainly in the cases of the two big tentpole issues—tariffs and the authoritarian immigration response—it’s just not true at all. So what you see is Trump trying to bend the world around him to agree with him.
In a lot of ways, it’s how he uses social media as well, especially in this first term. And I think that what you’re also seeing here—and what really stands out to me about these meetings with the exception of Marco Rubio, who, once again, looks like he would rather be literally anywhere else in the world—is that he now is surrounded by people who can aid his reality-altering project. And he’s trying to use that to at least justify the crazy, fascistic things that he’s doing.
Sargent: Yeah, and that leads me to your piece, which lays out a bunch of structural reasons Trump’s unpopularity is likely to get worse, maybe much worse. One, even if the tariffs were to succeed, which they almost certainly won’t, it would take a really long time. Two, the situation in Ukraine is going to deteriorate further despite his promise to solve it literally in one day; that was his actual promise. And three, Pete Hegseth’s incompetence is going to create worse crises, even as Trump is absolutely dug in against removing him at all costs. Can you talk about that deep pattern?
Shephard: Yeah. I think that what we’ve entered is what would ordinarily be a terminal phase of any presidency. We know what the conditions are for the rest of this presidency essentially, even if he ... He’s not going to back down from the tariffs, and he, in some ways, can’t. This trade uncertainty is going to continue forever even if he were to pause “Liberation Day” temporarily. At the same time, I think the damage there is already done. We’re going to have supply shocks simply because of that announcement in and of itself.
We were already wobbly recession-wise, thanks in large part to the policies in this administration in February, so the odds of there being a recession are significantly high. They’ve been exacerbated by Trump and Musk’s policies. They are going to be further exacerbated by whatever budget Congress ends up putting together, whatever reconciliation package they end up putting together. And then [when] you look and you say, OK, well, let’s say that the GDP continues to contract, or growth continues to be anemic, there’s no actual policy that they can embrace to fix it. Trump has said that tariffs are themselves the medicine to do it. And this is an administration that has rejected the neo-Keynesianism of the Biden years; flawed though it may have been, it was a successful macroeconomic policy.
Relatedly, I don’t think I did mention in my piece but we’re heading toward a huge confrontation with the Federal Reserve if that happens—one that I think will further sap investors’ confidence in this administration. It will cause the stock market to spiral down. And even if Trump were to get what he wanted, which is someone who will aggressively cut interest rates, I’ve talked to a bunch of people in economic policy and economists who are just not convinced that it would make a huge difference. So the big picture trends economically are bad enough—and even if you were to reverse course, they wouldn’t change.
And as you mentioned before, there’s a litany of other things as well. If you’re looking at this administration from other lenses, particularly in foreign policy but also immigration policy as well, you’re seeing a succession of scandals that are just going to pry people loose. The germ of that piece came from reading an NPR poll that came out for the 100th day yesterday where they asked respondents to grade Trump. And the top-line number there was that twice as many people gave him an F as gave him an A; so 46 percent gave it a failing grade and 23 percent gave an A. But what stood out to me about that is that the 23 percent number looks increasingly like a floor to me. Those are people that are looking at the chaos of the last 100 days and saying, Two thumbs up, we want more of that. Well, you’re going to get more of that. And I think if that continues, that’s all that’s going to be left.
Sargent: I’d like to close by getting at what I think is a really deep tension that flows out of Trump’s pathologies. As we talked about earlier, when Trump actually seems to learn something from the markets and adjust accordingly, like when he dialed back some of the tariff stuff, a bunch of people that he seems to respect on Fox News rush in to provide this positive reinforcement by saying, That was a great decision, Mr. President, in hopes that he’ll learn from that. But then on the other hand, when the news gets really bad like it just did, there’s this intense internal pressure inside MAGAworld to build a wall around Trump and turn the adulation and the sycophancy and the North Korea–level subservience up to 11, which works against the goal of getting him to course correct. Can you talk a little bit about that? It seems to me like that latter force is the more powerful one within MAGA. And as a result, as the crises get worse, they will become more dug in against correcting.
Shephard: Yeah. I think that part of it is they’ve drunk the Kool-Aid on the idea that they are part of a world-historical project, that they are remaking the country, and that this actually requires constant maintenance, both in terms of messaging and action. So what you’re seeing is partly just an exercise of people who are failing and incompetent and are, in many cases, actively anti-constitutional, justifying the necessity of what they’re doing or at least of breaking with a consensus of governance that has existed for a very long time. There’s another element as well, which is that this administration does seem to be guided, for the most part, by...whoever has the most extreme idea gets to go ahead and do it.
Part of that is that Trump himself only really cares about immigration policy and tariffs, and he has empowered people that have the extremist or alarmist or most insane ideas in each of those areas. Then everywhere else—you’re seeing this particularly at Health and Human Services and other things—there’s a vacuum. No one is going to tell them no, and they have to tailor what they’re doing to be part of this larger remaking the American government. That to me is a really big part of it: this sense of these people having to say, We are the most important presidency since Lincoln or Washington—
Sargent: Ever.
Shephard: —ever.
Sargent: Yeah, I think that’s right. I think you hit a really crucial point there, which is that no matter how bad things get, they can just justify it to themselves by telling them, Well, hey, who said accomplishing a world-historical overhaul of the American nation was going to be easy? Alex Shephard, great to talk to you, man. Thanks for coming on.
Shephard: Yeah, it’s real fun. Thanks.
Sargent: You’ve been listening to The Daily Blast with me, your host, Greg Sargent. The Daily Blast is a New Republic podcast and is produced by Riley Fessler and the DSR Network.