1
00:00:02,440 --> 00:00:09,520
Speaker 1: Bloomberg Audio Studios, Podcasts, radio News. I'm Stephen Carol and

2
00:00:09,640 --> 00:00:12,120
Speaker 1: this is Here's Why, where we take one new story

3
00:00:12,200 --> 00:00:14,080
Speaker 1: and to explain it in just a few minutes with

4
00:00:14,120 --> 00:00:20,560
Speaker 1: our experts here at Bloomberg. Starting the third quarter, you

5
00:00:20,600 --> 00:00:23,400
Speaker 1: start to feel some Donald Trump. In the fourth quarter,

6
00:00:23,520 --> 00:00:27,080
Speaker 1: you will feel the power of Donald Trump's economy. We

7
00:00:27,200 --> 00:00:31,160
Speaker 1: have the worst consumer sentiment about current economic conditions.

8
00:00:31,640 --> 00:00:34,559
Speaker 2: Basically ever, We've got to do everything we can to

9
00:00:34,640 --> 00:00:38,680
Speaker 2: address this cost of living affordability nightmare for the American people.

10
00:00:39,000 --> 00:00:40,680
Speaker 1: There hasn't been a big drop off at all.

11
00:00:40,760 --> 00:00:43,879
Speaker 3: There's been a lower, more slowing growth of labor, but

12
00:00:44,040 --> 00:00:47,600
Speaker 3: you know, unemployment is still pretty good. Fifteen year car loans,

13
00:00:47,640 --> 00:00:51,080
Speaker 3: fifty year mortgages, two thousand dollars dividend tariff checks coming out.

14
00:00:51,159 --> 00:00:53,040
Speaker 3: So I think there is this feeling and I'm trying

15
00:00:53,040 --> 00:00:55,520
Speaker 3: to adapt, whether it's to or not, that this government

16
00:00:55,560 --> 00:00:58,240
Speaker 3: is just going to flood the market and the consumer

17
00:00:58,560 --> 00:01:00,960
Speaker 3: with money and liquidity, and that's all that matter is

18
00:01:00,960 --> 00:01:03,959
Speaker 3: coming into the midterms, it was a conjob affordability, they

19
00:01:04,000 --> 00:01:06,839
Speaker 3: call it was a conjob by the Democrats.

20
00:01:07,600 --> 00:01:11,280
Speaker 1: The US economy is growing, but Americans are feeling gloomy

21
00:01:11,319 --> 00:01:14,479
Speaker 1: about it. The stock market surge has boosted the wealth

22
00:01:14,520 --> 00:01:17,600
Speaker 1: of the richest households, but with the jobs market cooling,

23
00:01:17,880 --> 00:01:22,119
Speaker 1: lower income families are pulling back spending. This gap between

24
00:01:22,160 --> 00:01:25,399
Speaker 1: the haves and have nots isn't new, but the economic

25
00:01:25,440 --> 00:01:28,240
Speaker 1: strain is now bleeding from the lowest earners to the

26
00:01:28,280 --> 00:01:33,080
Speaker 1: middle class. Here's why affordability is the biggest issue in

27
00:01:33,240 --> 00:01:39,319
Speaker 1: US politics. Our managing editor for US Economy and Government,

28
00:01:39,360 --> 00:01:43,080
Speaker 1: Mario Parker, joins me now for more. Mario, Firstly, we

29
00:01:43,160 --> 00:01:45,840
Speaker 1: had a gap in data during the government shutdown, But

30
00:01:45,920 --> 00:01:48,320
Speaker 1: what can we say about what the big picture is

31
00:01:48,360 --> 00:01:50,240
Speaker 1: facing the US economy right now?

32
00:01:50,760 --> 00:01:54,240
Speaker 2: Well, some of the private data show a continued tip

33
00:01:54,280 --> 00:01:58,400
Speaker 2: it job market in the final weeks of October, for example,

34
00:01:58,760 --> 00:02:01,880
Speaker 2: they kind of bolster this feeling. For the better part

35
00:02:01,920 --> 00:02:05,440
Speaker 2: of the year, we've seen just this odd situation with

36
00:02:05,520 --> 00:02:09,919
Speaker 2: the job market where companies aren't necessarily doing a lot

37
00:02:09,960 --> 00:02:12,840
Speaker 2: of layoffs, they aren't doing a lot of hiring either,

38
00:02:13,200 --> 00:02:15,200
Speaker 2: so kind of more or less stagnant.

39
00:02:15,480 --> 00:02:17,800
Speaker 1: So how do we relate that, then to how Americans

40
00:02:17,800 --> 00:02:21,359
Speaker 1: are feeling about the US economy. Things aren't going badly,

41
00:02:21,800 --> 00:02:23,720
Speaker 1: even if they aren't going amazingly.

42
00:02:24,160 --> 00:02:27,080
Speaker 2: I think that's a great point there, because the fact

43
00:02:27,120 --> 00:02:32,720
Speaker 2: that it isn't going terribly, it just doesn't feel quite good,

44
00:02:33,320 --> 00:02:36,520
Speaker 2: and that in and of itself is enough to put

45
00:02:36,720 --> 00:02:40,960
Speaker 2: American voters in a rather dour mood. One of the

46
00:02:40,960 --> 00:02:44,440
Speaker 2: things that you've seen, it's put President Trump back on

47
00:02:44,639 --> 00:02:48,680
Speaker 2: his back foot following the elections, and this message of affordability.

48
00:02:48,880 --> 00:02:52,639
Speaker 2: Obviously a persistent theme in the global economy, but also

49
00:02:52,880 --> 00:02:55,480
Speaker 2: the US economy over the last few years, is just

50
00:02:55,560 --> 00:03:00,240
Speaker 2: the economic disparities and inequality between some of the different

51
00:03:00,440 --> 00:03:03,680
Speaker 2: tiers of income levels, right, So you're kind of seeing

52
00:03:03,720 --> 00:03:06,560
Speaker 2: that play out as well in the US. Obviously a

53
00:03:06,600 --> 00:03:11,639
Speaker 2: crucial building block of Trump's electorate going back to when

54
00:03:11,680 --> 00:03:14,880
Speaker 2: he first ran back in twenty fifteen twenty sixteen is

55
00:03:15,040 --> 00:03:18,680
Speaker 2: just this working class voter. Those are the voters that

56
00:03:18,720 --> 00:03:21,880
Speaker 2: are feeling the most pain. I saw something on the

57
00:03:21,880 --> 00:03:25,800
Speaker 2: Bloomberg terminal as well in terms of carlong delinquencies for

58
00:03:26,120 --> 00:03:30,320
Speaker 2: those with the more risky credit profiles as well. So

59
00:03:30,480 --> 00:03:33,520
Speaker 2: all of those things kind of point to and bolster

60
00:03:34,120 --> 00:03:37,680
Speaker 2: this feeling that Americans have that the economy isn't as

61
00:03:37,680 --> 00:03:40,640
Speaker 2: strong as what they signed up for when they bought

62
00:03:40,680 --> 00:03:43,720
Speaker 2: into President Trump's a message to return him back to

63
00:03:43,800 --> 00:03:44,920
Speaker 2: the White House a year ago.

64
00:03:45,400 --> 00:03:48,640
Speaker 1: So what do we know about how those voters have changed.

65
00:03:48,760 --> 00:03:52,240
Speaker 1: Are they just not voting or are they actually switching

66
00:03:52,240 --> 00:03:55,600
Speaker 1: to the Democrats. Are the Democrats managing to put forward

67
00:03:55,600 --> 00:03:58,920
Speaker 1: the view that they are better stewards of the economy

68
00:03:59,120 --> 00:04:00,880
Speaker 1: than the Republican than Donald Trump.

69
00:04:01,080 --> 00:04:03,200
Speaker 2: One of the things something I've been saying over the

70
00:04:03,320 --> 00:04:06,320
Speaker 2: last week and a half or so is q Alanis

71
00:04:06,400 --> 00:04:09,760
Speaker 2: Morris said, it's very ironic this time a year ago,

72
00:04:10,200 --> 00:04:12,440
Speaker 2: you had a president that was ushered in, a president

73
00:04:12,440 --> 00:04:17,239
Speaker 2: that was ushered out because frustrations that the Americans message

74
00:04:17,240 --> 00:04:21,479
Speaker 2: about the economy wasn't hitting home. President Joe Biden's administration

75
00:04:21,680 --> 00:04:24,680
Speaker 2: largely said nothing to see here. These feelings that you

76
00:04:24,920 --> 00:04:30,240
Speaker 2: have about the economy, they're misplaced. And now you're saying

77
00:04:30,360 --> 00:04:35,960
Speaker 2: President Trump employ a very similar message. And so what

78
00:04:36,000 --> 00:04:39,400
Speaker 2: you're saying from the voters at the very least last

79
00:04:39,400 --> 00:04:43,119
Speaker 2: week showed that voters are willing to give Democrats maybe

80
00:04:43,160 --> 00:04:47,279
Speaker 2: another look here after they feel as though President Trump

81
00:04:47,279 --> 00:04:51,320
Speaker 2: hasn't delivered on the economic promises that he campaigned on.

82
00:04:51,320 --> 00:04:53,720
Speaker 1: One of the key issues that was talked about a

83
00:04:53,760 --> 00:04:57,920
Speaker 1: lot during the shutdown was the issue of healthcare. There

84
00:04:57,920 --> 00:05:00,800
Speaker 1: are subsidies for Obamacare expiring in the coming weeks, so

85
00:05:00,839 --> 00:05:03,440
Speaker 1: insurance premiums are going to be going up for millions

86
00:05:03,480 --> 00:05:06,040
Speaker 1: of Americans as well. How do we tie in the

87
00:05:06,040 --> 00:05:09,600
Speaker 1: healthcare issue into how affordability is being discussed?

88
00:05:10,120 --> 00:05:12,479
Speaker 2: Well, I think it's part and parcel one of the

89
00:05:12,520 --> 00:05:16,040
Speaker 2: things that Democrats they didn't have this message of affordability

90
00:05:16,440 --> 00:05:20,120
Speaker 2: this time a year ago. It took them nearly twelve

91
00:05:20,160 --> 00:05:25,280
Speaker 2: months to finally land on that, and the shutdown put

92
00:05:25,839 --> 00:05:31,840
Speaker 2: these Obamacare ACA extensions front and centered. Democrats didn't get

93
00:05:31,920 --> 00:05:35,039
Speaker 2: what they wanted in the form of a tangible extension

94
00:05:35,040 --> 00:05:38,800
Speaker 2: that would be included in any legislation to open back

95
00:05:38,880 --> 00:05:42,600
Speaker 2: up the government, But what they did do was have

96
00:05:42,720 --> 00:05:46,840
Speaker 2: this part of this affordability message. Twenty million Americans are

97
00:05:46,839 --> 00:05:50,720
Speaker 2: going to see their healthcare prices increase on top of

98
00:05:50,839 --> 00:05:54,080
Speaker 2: all of the other burdensome day to day expenses that

99
00:05:54,120 --> 00:05:55,159
Speaker 2: they've already had.

100
00:05:55,560 --> 00:05:58,880
Speaker 1: Marios. We're looking ahead to the midterms next year, how

101
00:05:58,920 --> 00:06:02,120
Speaker 1: should we expect the political debate around this issue to

102
00:06:02,200 --> 00:06:05,080
Speaker 1: play out. I assume the Democrats will double down on

103
00:06:05,160 --> 00:06:08,279
Speaker 1: their success, but should we expect the Republicans to respond

104
00:06:08,279 --> 00:06:08,799
Speaker 1: on this front.

105
00:06:08,800 --> 00:06:12,160
Speaker 2: Two, Well, you'll see the Democrats double down on this

106
00:06:12,480 --> 00:06:16,960
Speaker 2: for sure. The frustration among Democrats after several of their

107
00:06:17,080 --> 00:06:20,760
Speaker 2: party broke ranks to end the government shut down was

108
00:06:20,800 --> 00:06:24,799
Speaker 2: the polls largely showed that they were winning this debate.

109
00:06:25,640 --> 00:06:29,600
Speaker 2: Even President Trump conceded after the off year elections that

110
00:06:29,640 --> 00:06:34,360
Speaker 2: the shutdown was having a negative effect on Republicans. Now,

111
00:06:34,400 --> 00:06:38,880
Speaker 2: when we were talking about the affordability Republicans just have

112
00:06:39,120 --> 00:06:42,920
Speaker 2: to figure out they can avoid the missteps that Democrats

113
00:06:43,160 --> 00:06:46,159
Speaker 2: themselves had a year ago, where you had a party

114
00:06:46,240 --> 00:06:49,800
Speaker 2: leader who didn't want to acknowledge the room for improvement

115
00:06:49,880 --> 00:06:53,240
Speaker 2: that the economy had left, and the rank and file

116
00:06:53,720 --> 00:06:56,920
Speaker 2: stayed mostly in line. Do Republicans figure out a way

117
00:06:57,000 --> 00:07:00,799
Speaker 2: to break with Donald Trump on this issue, knowing how

118
00:07:01,080 --> 00:07:04,800
Speaker 2: vengeful he can be, or does the President figure out

119
00:07:04,800 --> 00:07:07,200
Speaker 2: a new way to kind of message on the economy.

120
00:07:07,279 --> 00:07:10,240
Speaker 2: Does he change course in some way? Obviously one of

121
00:07:10,280 --> 00:07:14,920
Speaker 2: the banners on this affordability issue, Democrats have been able

122
00:07:14,920 --> 00:07:18,200
Speaker 2: to point to his tearff and trade wars, which are

123
00:07:18,360 --> 00:07:22,680
Speaker 2: largely unpopular as well. So Republicans have about a year

124
00:07:22,760 --> 00:07:25,880
Speaker 2: or so to figure this out. Democrats will have to

125
00:07:25,920 --> 00:07:29,400
Speaker 2: figure out how to continue to wield this cudgel that

126
00:07:29,520 --> 00:07:33,000
Speaker 2: they've successfully been able to over the past week or two.

127
00:07:33,600 --> 00:07:37,120
Speaker 1: Okay, Mario Parker, our managing editor for US Economy and Government.

128
00:07:37,320 --> 00:07:40,520
Speaker 1: Thank you. For more explanations like this from our team

129
00:07:40,560 --> 00:07:43,440
Speaker 1: of three thousand journalists and analysts around the world, go

130
00:07:43,480 --> 00:07:48,600
Speaker 1: to Bloomberg dot com slash explainers. I'm Stephen Carroll. This

131
00:07:48,680 --> 00:07:51,120
Speaker 1: is here's why. I'll be back next week with more.

132
00:07:51,520 --> 00:07:52,320
Speaker 1: Thanks for listening.