Speaker 1: Bloomberg Audio Studios, podcasts, radio news. On Tuesday night, President
Speaker 1: Donald Trump appeared before a joint session of Congress for
Speaker 1: the first time since the start of his second term.
Speaker 1: He used the speech to deliver a message, we.
Speaker 2: Have accomplished more in forty three days, and most administrations
Speaker 2: accomplished in four years or eight years, and we are
Speaker 2: just getting started.
Speaker 3: It felt like an indoor Maga rally, with tons of
Speaker 3: cheering and pandering and boasting from Donald Trump and a
Speaker 3: lot of angry protesting from Democrats.
Speaker 1: Josh Green is a senior correspondent for Bloomberg BusinessWeek.
Speaker 3: No music and no dancing, but plenty of fireworks, you know,
Speaker 3: security scuffle, Democrats getting dragged out. Mister Green, take your seat,
Speaker 3: Take your seat, sir, take your seat, Remove this gentleman
Speaker 3: from the chamber. I mean, it really did remind me
Speaker 3: of a Trump rally, but it was a partisan speech,
Speaker 3: sneering and making fun of his opponents and basically dancing
Speaker 3: on their electoral grave as he boasted about all the
Speaker 3: things that he's done in his first few weeks in office.
Speaker 1: We just talked about the spectacle was their substance last night.
Speaker 3: I didn't feel like there's a whole lot of new substance.
Speaker 3: Trump definitely ticked through the things that he's done in
Speaker 3: the early days, whether it's closing down the borders or
Speaker 3: blowing up a lot of DEI programs, shutting agencies like USAID.
Speaker 3: But I didn't hear a lot that was new, and
Speaker 3: that surprised me a little bit. I also didn't hear
Speaker 3: a lot about the economy, which I expected would be
Speaker 3: more of a focal point of the speech.
Speaker 1: And it was not from Bloomberg's Washington bureau. This is
Speaker 1: the Big Take DC podcast. I'm Salia Molsen today on
Speaker 1: the show Trump's fifth Joint Address to Congress, Josh Green
Speaker 1: and I explore what the president's speech reveals about how
Speaker 1: he's approaching his second from his vision for trade in
Speaker 1: the US economy to America's role in geopolitics. So you
Speaker 1: and I covered the first term really closely, so we
Speaker 1: know that in an instant Trump can undo something that
Speaker 1: he's planned. Based on what we heard last night, what
Speaker 1: do you think were some of the top foreign policy
Speaker 1: points that he is trying to focus on for his
Speaker 1: second term.
Speaker 3: Well, it didn't sound to me like he was wavering
Speaker 3: or about to change his mind on ending the war
Speaker 3: in Ukraine. I mean, he campaigned on bringing what he
Speaker 3: called peace to Ukraine. Had a big blow up with
Speaker 3: Zelenski in the Oval office.
Speaker 2: Earlier today, I received an important letter from President Zelenski
Speaker 2: of Ukraine. The letter raids Ukraine is ready to come
Speaker 2: to the negotiating table as soon as possible to bring
Speaker 2: lasting peace Closer.
Speaker 3: To me, he just sort of continued the themes that
Speaker 3: he talked about in the campaign. If I'm going to
Speaker 3: bring peace quickly, We're not going to waste American treasure abroad.
Speaker 3: European allies are going to have to step up.
Speaker 2: It's hard to believe that they wouldn't have stopped it
Speaker 2: and said at some point, come on, let's equalize. You
Speaker 2: got to be equal to us.
Speaker 3: That's pretty much par for the course, I think, with
Speaker 3: what people were expecting. So no curveballs there.
Speaker 1: So let's move on to something that Trump does tout
Speaker 1: as a unique policy in as administration, tariffs. Josh, should
Speaker 1: we get any substance or did we hear more? Just
Speaker 1: managing a narrative.
Speaker 3: The whole speech to me felt like a public messaging campaign,
Speaker 3: but definitely the lines about tariffs, like I'm hearing competing
Speaker 3: messages from the Trump administration about what it is they
Speaker 3: intend to do. I mean, Trump has been very straightforward about,
Speaker 3: you know, he's imposing these new tariffs he did yesterday,
Speaker 3: but other figures in administration like Howard Lutnik are making
Speaker 3: noises about, well, you know, maybe we're going to roll
Speaker 3: those back, maybe we're going to reduce them. And I
Speaker 3: think trying to quell some of the market panic that
Speaker 3: we've seen over the last week, it's mixed messages, is
Speaker 3: not clear who is setting the tone here or who
Speaker 3: investors should listen to, And I think that element of
Speaker 3: chaos is going to help defeed a lot of the
Speaker 3: market swings that we've seen literally day to day s
Speaker 3: and p is up one and a half percent one day,
Speaker 3: down one and a half percent the next, up on.
Speaker 3: You know, it's just sort of a roller coaster ride
Speaker 3: that doesn't show any signs to me off slowing down
Speaker 3: anytime soon. What stood out the most to me, though,
Speaker 3: was that Trump did concede just a tiny bit that
Speaker 3: there's gonna be economic.
Speaker 2: Pain, there'll be a little disturbance, But.
Speaker 3: Then he followed up with the very Trumpian line, Oh
Speaker 3: but we're not bothered by that, or we don't care
Speaker 3: about that.
Speaker 2: But we're okay with that. It won't be much well.
Speaker 3: I think that remains to be seen whether Americans care
Speaker 3: or not, because there's a lot of indications in the
Speaker 3: polls already the consumers are unhappy with inflation. They don't
Speaker 3: think Trump is focused on the economy and a new
Speaker 3: regiment of tariffs that royals the economy and increase his prices.
Speaker 3: I think is not going to go down politically as
Speaker 3: well as Trump and some of his allies seed to
Speaker 3: assume it will. I mean thematically. Trump has always been
Speaker 3: consistent in telling the story about tariffs the most economists
Speaker 3: would say is wrong. Trump believes they're a way to
Speaker 3: generate ex geral revenue for the US government, that they
Speaker 3: might replace income taxes, that they're a way that he
Speaker 3: can kind of exert strength and power over global markets,
Speaker 3: whereas most economists would say, well, all that's going to
Speaker 3: do is create cost increases that are going to be
Speaker 3: passed on the US consumers, which is the opposite of
Speaker 3: what voters, especially voters who voted for Trump in November,
Speaker 3: are looking for him to achieve. So I think one
Speaker 3: of the reasons that markets have been royal too much,
Speaker 3: that the entire Trump rally that we saw in the
Speaker 3: weeks and months after his victory in November has all
Speaker 3: been disappeared, is that there isn't any kind of clarity
Speaker 3: on these issues, and Trump didn't provide a lot of
Speaker 3: it last night.
Speaker 1: So was there anything that surprised you about Trump's speech?
Speaker 3: Yeah, that really was. I think the thing that jumped
Speaker 3: out to me most of all was how much he
Speaker 3: focused right from the get go on culture war issues
Speaker 3: and not the economic issues that, to me are the
Speaker 3: biggest questions of the creatoring stock market. The new tariff
Speaker 3: regimes he instituted just hours before the speech or sure
Speaker 3: on the back burner for Trump, And as I thought
Speaker 3: about it, it seems to me that's because the stuff that
Speaker 3: Trump is able to do unilaterally and successfully, things like saying,
Speaker 3: according to government, there are only two genders. You know,
Speaker 3: we're going to wipe out DEI, We're going to win
Speaker 3: this war on woke. There are fights that he can
Speaker 3: draw and fight and win on his own terms that
Speaker 3: Democrats can't stop, and that the public, at least accordion polls,
Speaker 3: is largely supportive of, whereas if the discussion were about
Speaker 3: inflation or grocery prices or the price of eggs, which
Speaker 3: have doubled since last year. Trump doesn't really have that
Speaker 3: much good news to point to, and instead what he
Speaker 3: did was for fallback on blaming Biden and the Biden
Speaker 3: administration over and over and over again for a lot
Speaker 3: of the economic problems that he and his administration have
Speaker 3: not yet been able to solve.
Speaker 1: We'll dig into economic issues, and what we learned about
Speaker 1: is proposed solutions. After the break, I've been talking to
Speaker 1: Bloomberg Senior correspondent Josh Green about the policy substance that
Speaker 1: came through and Trump's joint address to Congress on Tuesday night.
Speaker 1: I asked Josh about the issues facing the US economy, inflation,
Speaker 1: the expiration of Trump's twenty seventeen tax cuts, and the deficit.
Speaker 1: We heard a lot yesterday where Trump was blaming former
Speaker 1: President Joe Biden for inflation problems and any other cracks
Speaker 1: in the current state of the economy.
Speaker 2: Joe Biden especially let the price of eggs get out
Speaker 2: of control.
Speaker 1: Which is interesting because it was actually pretty strong. Yes,
Speaker 1: there were problems, but we're not in a recession. Growth
Speaker 1: has been strong inflation is the biggest problem. At what
Speaker 1: point is it no longer Biden's economy. It is Trump's
Speaker 1: economy and he can't really blame the last guy.
Speaker 3: Yeah, it's a good question. I mean my kind of
Speaker 3: like got sense just having been a creature of Washington
Speaker 3: for so many years and lived through so many presidential
Speaker 3: administrations that you get about six months and after that,
Speaker 3: memories fade. People aren't thinking about the last guy, and
Speaker 3: they start to get grumpy and unhappy, and talking to
Speaker 3: some Trump advisors and people around him, that's the rough
Speaker 3: timeline I think that they're looking at. I had these
Speaker 3: discussions less in terms of like tariffs and economic policy
Speaker 3: and more in terms of foreign policy. A number of
Speaker 3: Trump's advisors were pushing him to move forward on a
Speaker 3: peace deal over Ukraine sooner rather than later. Originally, I
Speaker 3: think the timeline had been to do something in Saudi
Speaker 3: Arabia and May, and a lot of Trump advisors I
Speaker 3: spoke to at the Times that that's too late. By
Speaker 3: that point, Ukraine will be Trump's problem, not Biden's problem,
Speaker 3: and we want to do something sooner, and we saw
Speaker 3: that begin to happen. I think the same timeline basically
Speaker 3: holds in economic issues too, that if we don't see
Speaker 3: inflation and grocery prices come down, and certainly if we
Speaker 3: see them begin to rise as a reaction to tariffs,
Speaker 3: then I think Trump is going to have a really
Speaker 3: difficult political problem because at the end of the day,
Speaker 3: he's a powerful president with a Republican Congress, but his
Speaker 3: margin in the House is three seats, and midterm elections
Speaker 3: are looming, and it's one.
Speaker 1: Of those rare moments where Americans are paying attention to
Speaker 1: what the government's doing because it's directly hitting their wallets.
Speaker 1: The other one is it is tax filing season. The
Speaker 1: minute there is any kind of snapfoo in Americans getting
Speaker 1: their tax refunds, that could cost some problems and unhappiness
Speaker 1: too that could emerge in polls and in economic data.
Speaker 1: So let's talk about DOGE, which Trump talked about a lot.
Speaker 1: All the so called waste that DOGE has apparently found.
Speaker 1: We don't know how much of what Trump said of
Speaker 1: how many millions or maybe billions have been cut is accurate.
Speaker 1: That's what DOGE is saying. Bloomberg's reported that, for example,
Speaker 1: dough sometimes double or triple accounts contracts that it cuts.
Speaker 1: They're claiming to cut fifty five billion dollars in governments spending.
Speaker 1: Our reporting found that their cuts actually total less than
Speaker 1: nine billion dollars. What is all this cutting supposed to
Speaker 1: add up to.
Speaker 3: If you looked at the speech last night, especially it's
Speaker 3: on Doge, I think a lot of it is performative.
Speaker 3: The bottom line budgetary numbers, the size of the cuts
Speaker 3: are quite small in comparison both to the size of
Speaker 3: this federal budget and to the two trillion dollars that
Speaker 3: Elon Musk originally said he would be able to cut
Speaker 3: from the budget. If we're talking about nine billion dollars
Speaker 3: or even fifty five billion dollars, which seems to have
Speaker 3: been an inflated Doze figure, this is a drop in
Speaker 3: the ocean when it comes to the federal budget. And
Speaker 3: yet doge in Elon's actions and his cuts and his
Speaker 3: assaults on various agencies have really been the main story
Speaker 3: of the second Trump administration over the last six or
Speaker 3: eight weeks. From a kind of public messaging the standpoint,
Speaker 3: it's interesting because again, if you look at polls, people
Speaker 3: are generally pretty happy with the idea that there's a
Speaker 3: doze out there, that's attacking government waste. But if it
Speaker 3: begins to cut things like the IRS and it slows
Speaker 3: down Taxtra funds, or his Democrats have been suggesting, it
Speaker 3: breaks the Social Security payment system and suddenly old ladies
Speaker 3: don't get their Social Security checks, then I think there's
Speaker 3: going to be a backlash, a serious political packlash. But
Speaker 3: that hasn't happened yet, and so in the meantime, I
Speaker 3: think those serves for Trump as a kind of illustration
Speaker 3: of all the things that he is doing and cutting.
Speaker 3: And I thought one of the most effective passages in
Speaker 3: his speech was when he ticked through descriptions of some
Speaker 3: of the programs that Elon Musk had zeroed out.
Speaker 2: Just listen to some of the appalling waste. We have
Speaker 2: already identified twenty two billion dollars from HHS to provide
Speaker 2: free housing and cars for illegal aliens.
Speaker 3: DEI initiatives, and obscure African countries that Trump claimed he'd
Speaker 3: never heard.
Speaker 2: Of, eight million dollars to promote LGBTQI plus in the
Speaker 2: African nation of Lesuto, which nobody has ever heard of.
Speaker 3: It was an effective bit of theater, I think, to
Speaker 3: sort of illustrate to an ordinary viewer who isn't following
Speaker 3: this stuff at any kind of a clinical level, that
Speaker 3: the government is full of expensive, wasteful programs and that
Speaker 3: Donald Trump and on Musk are going in there and
Speaker 3: slashing them in a way that will ultimately benefit the
Speaker 3: US economy and help with their pocketbook issues. I think
Speaker 3: connecting those actual dots and seeing an effect on the economy,
Speaker 3: on unemployment, on inflation, on people's kind of day to
Speaker 3: day earning power isn't going to be easy to do
Speaker 3: because I'm not sure there is going to be much
Speaker 3: of one.
Speaker 1: When he was taking through the list of cuts, it
Speaker 1: was millions. The national deficit is thirty six trillion dollars, so,
Speaker 1: like you're saying, it is a drop in the ocean.
Speaker 1: He's talked about extending some of the twenty seventeen tax cuts,
Speaker 1: but he's also said I want to bring down the deficit.
Speaker 1: Is that math going to add up? Can Doge fine
Speaker 1: enough save inches to make up for all of the
Speaker 1: budget ads, you know, taxes and other programs that he
Speaker 1: wants to bring in.
Speaker 3: Yeah, I really don't see how it can, especially given
Speaker 3: what we've seen from Doge in these early weeks and months,
Speaker 3: where we're talking about, you know, ten billion dollars or
Speaker 3: twenty billion dollars, that's not enough to kind of create
Speaker 3: budgetary savings that would pay for any kind of a
Speaker 3: tax cut. Trump is an administration have a lot of
Speaker 3: balls in the air in terms of claims. They've made,
Speaker 3: promises they made about what they're going to deliver, including
Speaker 3: last night, But they haven't passed a budget deal. They
Speaker 3: haven't ironed out what's going to be in the tax cut,
Speaker 3: they haven't ironed out how they're going to pay for
Speaker 3: the tax cut, and at the end of the day,
Speaker 3: those numbers have to pencil out.
Speaker 1: So let's wrap up what we learned from last night.
Speaker 1: What's your biggest takeaway of what the next almost four
Speaker 1: years will look like.
Speaker 3: The biggest takeaway from me is that Trump isn't backing
Speaker 3: down at all from any of his campaign promises. That
Speaker 3: he is charging ahead, even as there are clear signs
Speaker 3: in the economy, in the stock market, and public polls
Speaker 3: that people are beginning to have a lot of trepidation
Speaker 3: about how he's proceeding in what it is that he's doing.
Speaker 3: So the big question for me, I would say, over
Speaker 3: the next six months to a year is is something
Speaker 3: important going to break our Social Security payments suddenly going
Speaker 3: to disappear? Is you know the a BULLA team that
Speaker 3: Elon Musk cuts a doge suddenly going to have a
Speaker 3: catastrophic effect if there's some kind of new pandemic. Does
Speaker 3: a government shutdown, if one were to occur two weeks
Speaker 3: from now, cause a kind of blowback that changes the
Speaker 3: political standing that Trump and Republicans have right now. To me,
Speaker 3: it sort of feels like that moment when Wiley Coyote
Speaker 3: shoots off the cliff and you can see that he's
Speaker 3: about the fall, but it hasn't happened yet, and maybe
Speaker 3: it won't. Maybe Trump can pull it off and do
Speaker 3: something magical. But the takeaway I had from last night
Speaker 3: really was that he hasn't changed his views, his plans,
Speaker 3: or his intentions at all over the first two months
Speaker 3: of his presidency and wants to kind of keep plowing
Speaker 3: ahead and exactly the direction that he said he would.
Speaker 1: All right, thanks so much for joining all's pleasure. This
Speaker 1: is the big take DC from Bloomberg News. I'm sale Emosion.
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