Bulwark Takes - Trump Created America’s First Man-Made Stagflation Crisis

Episode Date: August 14, 2025

JVL and Andrew Egger take on Trump’s economic mess, from stagflation and skyrocketing inflation to targeted economic pain for political enemies.

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Please play responsibly. If you have questions or concerns about your gambling or someone close to you, please contact Connix Ontario at 1866-531-2600 to speak to an advisor free of charge. But MGM operates pursuant to an operating agreement with Eye Gaming Ontario. Hello, everyone. This is JVL here with my bulwark colleague, Andrew Eger. Before we get started with all the great news about our incoming stagflation, which we can have until the Bureau of Labor Statistics is fully taken into the Borg and stops publishing such data. Before we get started, hit like, hit subscribe, follow the feed because where else are you going to get cheery news about America's decision for, national decline. Andrew, we had last week some inflation numbers in the consumer price index,

which were not great. We'll get to them in a minute. But just an hour ago or so, we got the producer price index, the PPI numbers, and they were very bad, jumped 3.3%. And this is the largest jump in prices since, wait, wait, oh, 2022. I feel like prices were bad in 22. I feel like this is a thing that people are very angry about. So what are we going to do, Andrew? Can we fire somebody else over at the BLS to stop these sorts of numbers from coming out? Yeah, I mean, this is, these are really actually quite bad numbers. I mean, I, I, I, we were, we were kind expecting to see a certain amount of inflation just in general because of the tariff regime kind of wreaking havoc on supply chains, as well as just the actual cost of the tariffs.

But these were kind of a slobber knocker. It's not just 3.3% increase year over year in the producer price index. It's almost a whole percentage point up just from a month ago. And, you know, these are like, like as far as a single month jump, that's like a shocking increase, where, you know, we've known all along that post-liberation Day was going to start taking some time to see exactly how these prices were going to shake out. And we were going to really start feeling the effects beginning last month and now kind of coming into this one. And it's bad news. It's really, I mean, it's hard to know what to say about it because,

again, it's what everyone expected, right? It's like you're, it's, it's what happened after the pandemic in terms of rattled supply chains and rattled consumer confidence and just like an unusual aberrations in the economy, except that instead of a global pandemic doing that to the economy, now it's just Trump's fun economic decisions, just like his decision, his unilateral decision to reshape global markets according to whatever his daily whims were from April to June. And this is, you know, what we're seeing now as a result of that in the hard data for as long as we have it, as you say. Services increase as well, 1.1% a 1.1% jump in a single month. That's month on month, not year on year. And this is something we saw with the CPI. We saw the consumer

price index last week. We also saw prices and services jumping. And one of the things I want to to point out here, and we'll put some of these graphics up on the screen, I think. This is all happening at the same time that demand is softening. So, pricers are going up while people are starting to buy less in responses to prices going up. What is that? That is what we call stagnation. This is something, by the way, we didn't have under Biden.

Under Biden, we just had inflation. That was not great. But, you know, we also were coming off of a once-in-a-century pandemic, which caused all sorts of supply chain dislocations and problems with injecting capital to the system from the central bank. And here we go. And we're doing none of this for any reason. And there is no, it's a man-made crisis.

And we're getting not everything. So we saw bad jobs numbers last week, which is why we had to fire the head of the Bureau Labor Statistics. And so this is, again, this is stagflation. This is literally stagflation. You have unemployment creeping up, job growth, starting to flatten out, demand softening, and prices going up. Yeah, yeah. And the contrast, I think, that you bring up with what we just went through under Joe Biden is really apropos.

Because, I mean, that was, people talked a lot about, like, the vibe session, right? Like, where the underlying numbers were bad, but there were all kinds of. of psychological reasons why people felt like like numbers were good than they were. Yeah, yeah. I mean, not in 2022, right? Like, like, during, during the moment of like peak inflation, things were actually, like, real wages were actually underwater for a period in there, right? But by the time, you know, by the time we were kind of out of that, by the last two years of

the Biden presidency, the fundamentals were strong. I mean, wages were outpacing inflation, you know, real. And by the time, and, you know, we were out. far outpacing everybody else around the world in terms of how these problems were going economically. And so by the end of it, it was like, well, our wages are all up, but prices are up too. And, you know, for psychological reasons, when your wages go up, you're like, I did that. But when prices go up, you're like, Joe Biden did that.

And so it was a real problem for him. But I think what we are kind of on the cusp of feeling now is that a real, real genuine an economic bad situation is going to hurt worse than the vibes one did. And I will it? Because this is my question for you, Andrew. If it is possible that the American people are so stupid that they were able to look at the Biden economy and say, this is terrible. And again, I want to underline for people who have not been listening to me beat this drum for three years, that when you looked at the polling data, about people's attitudes toward the economy during the Biden years, especially years

three four, two, three, four of Biden. People believe that the economy was as bad as it was in early 2009, which is to say the start of the Great Recession, where we have this global financial crisis, you know, like 2% of all houses were in foreclosure, like everybody was freaking out, right? People thought it was that bad. They didn't think like, oh, we're going through a tough moment. They thought, this is as bad as it has ever been in my lifetime, which was an insane thing to think. So if people could be insane in that direction, why couldn't they be insane in the other direction and just decide, well, Daddy Trump says that everything is great?

And everybody else is going to say that everything is great. Like, Tim Cook is never going to come out and say, facing some tough economic headwinds because he knows that would anger. the president and then he might have bad things happen to his company, right? And so everybody who is, everybody who is subject to leverage from the president of the United States, which is basically everybody, is going to pretend that things are good. And maybe the capital markets, which are sort of diffuse and can't be blackmailed, will move. But I don't know.

Like, is our Cletus and Lurlin going to be able to understand bond market yields? I don't think so. Isn't it possible, Andrew, that with Donald Trump, in our faces, six hours a day, every day, and the entire business community sort of like in a hostage video pretending that everything is great, everything is great, that people look around and say, well, so long as I personally still have my job, everything must be fine. I would say it's possible, but it is by no means guaranteed because there's no question that a big part of the kind of perception of pain under Biden was just a result of relentless Republican messaging on the question. But that wasn't all of it, right? I mean, there's a reason why inflation is so politically toxic. Yeah, and there's there's a reason why inflation is politically toxic for whoever happens to be in power anywhere. And we saw this around the world, right? I mean, there was a global inflation shock. And basically all the democracy. that had elections in 2023 and 2024 kicked out the bums who were in charge because they were mad about inflation. And that's one of the things that we saw happen here. Just because, I mean, like I mentioned before, inflation is so psychologically kind of infuriating for an electorate.

And I think that there are a lot of reasons to believe that even though Trump and his people are going to put a brave face on this, just like, you know, Biden tried to do last time around, it's a lot harder to do that when it is hitting people where they are every day at the super market at the gas pump, you know, whenever they go out and try to buy anything, it's another shock. And that's the reason why it's, why it's difficult. And by the way, we have seen a certain amount of this already in the data, right? I mean, Donald Trump was, I was just, I saw on CNN yesterday, Harry Entom was talking about this, nine points up on Kamala Harris going into the election as far as who the public trusted to handle inflation, because Harris was the incumbent, who was the

vice president. Now Trump is 25 points underwater on that question. And now obviously, like, in a sane world, He would be a lot more than 25 points underwater, but you don't want to be 25 points underwater on any issue, especially the most pressing issues when you're the president of the United States. So I think, like, yeah, we're going to still see an enormous amount of, like, totally ludicrous spin from the White House and even, you know, as far down as the actual economic numbers. Like, who knows whether we're going to get good ones from now on. but and and probably a tooth grinding amount of like deliberate credulity on the part of at least some of these mega people some of whom might even might even be willing I mean this is something we saw in the first term I covered this when I covered the first trade war is the farmers who were just getting totally annihilated by by Trump's initial tariff regimes trade war with China but who

were essentially saying well you know this is sort of like our way of showing economic patriotism is we're taking one on the chin down well eventually yeah eventually he did get get around to bailing out them specifically, which he can't do, you know, at scale for the whole economy. That's just not how that works. Well, well, I mean, and this is. What would it look like? So this is, frankly, this is my, what I have sort of thought when I'm in my dark place about this is maybe Trump thinks that he can localize all of the pain for this stuff with the people who don't vote for him. Now, I think that's hard. Like, I mean, The economy is a big thing, and it's really hard to micro-target economic pain.

But I'm not sure it's impossible, right? In the same way that they're clearly trying to target the economic pain that results from immigration crackdowns in democratic areas, right? They're not running around construction sites in Texas rounding up illegal immigrants, which would drive up construction costs and hurt the Texas economy. That's not happening. You know, they're doing raids in Washington, in New York, and California, in Chicago. They're really trying to target the pain against the people who they view as their enemies.

I think they might try to do that with the economic stuff. Again, harder, heavier lift, but I'm not sure it's impossible. Yeah, it is an interesting thought, and it is very possible that they will try to do that. I think the problem that you're going to run into is that even if you could, to somehow be successful at concentrating certain economic harms where you want to see them targeted. The overall problem here that they're trying to get around is this system-wide inflation that accompanies just the more monkeying you're doing in these supply chains and the more

inefficiencies you're introducing and the more you're making businesses scramble to accommodate and re-accommodate and re-accommodate the changes that you're making to these sorts of things where they already have, you know, path of least resistance, efficient supply chains build up. These are all inflationary pressures. And so like the idea that you could somehow solve for that particular problem this way, like it'd be one thing if it were like a small like sectoral shock in the in the economy that you could maybe like, oh, this is hurting you know, our great American steel manufacturers are having a hard time. And so we're going to like target them with industrial policy and let everybody else sort of soak up the, uh, the down

downsides of that systemically. You can make that sort of thing happen. But when the entire system is the thing that you've been monkeying with and that's now creaking under the strain, like, where do you go to put the extra? You know what I'm saying? Like, that's the problem. I do. It's very hard. It's very hard. And the complicating all this is that, of course, what Trump wants more than anything right now are rate cuts from the Fed. Most people expect to get a rate cut in September when the Fed meets, and that's what you would do in response to the jobs numbers, right? The jobs numbers that Trump insists are fake are the reason the Fed would cut rates because they see the economy starting to slow down and they want to ease things a little bit

and try to jumpstart and get into a softer landing. But of course, Trump A says that the job growth is fantastic, which then would make no sense why he would want rate cuts. But if you are seeing inflationary pressures, you would not want to cut rates. And so the Fed can wind up in a little bit of a bind where, like, what do you do? You see the job market softening in alarming ways, and you see economic slowdown, but you also see inflation starting to rise. And, I mean, I think they're likely to cut like 25 basis points maybe and see what happens.

But I don't know. Again, it's just it's a bad situation where the two bad things that are happening. are cross-pressuring and the remedy for one actually exacerbates the other problem. Yeah. No, it's an enormous problem. It's huge. And again, like to just contrast now with sort of like the vibes issue we were having before, I mean, at a time when like the underlying economy is quite strong, the Fed can like make mistakes. You know, it can it can lean too far one way or the other such that, such that, you know, it actually kind of tamps down, down good growth that you otherwise would have had by keeping rates too high or it lets inflation get too high when

it otherwise could have stayed low by by by by by cutting rates too fast what we are rapidly approaching now as you mentioned is the exact opposite thing it's like a no-win situation you know it's not it's not like we're like moving down the the interstate at at a good speed and yet and just having to worry about not like careening off of one side or the other I mean the engine's falling out car, right? So it's rapidly becoming a problem that the Fed, that's not really in the Fed's ambit to address or solve, even though I think you are absolutely right to bring them up as one of the scapegoats that Trump will point to if and when this continues. And right now, there's no reason why it shouldn't. Although, you know, it will be interesting to see a couple

months from now. Again, if we continue to get the numbers, that will be kind of like the secondary settling in from like the latest tariff rates that we've been getting just in the last few weeks, which do seem to be kind of like the status quo going forward. But again, it's not like it's not like there's like a pressure valve to release any of this, right? Like anytime the, the supply chains are forced to get re-snarled and resettled and businesses are forced to scramble, that's cumulative damage. Like it's it's just an increased inefficiency in the system that leads to these exact problems that we're seeing now. Yeah, I, again, I guess one of the things I have taken from the last decade of American life is that we should never bet on the cognitive ability or logical thinking of American voters.

And I'm just drawn to this, there was a CNN segment, which Ellie Reeve went to a boat parade, like a big Trump MAGA boat gathering. I don't know if you remember this and talk to all these people with these gigantic expensive. boats who were telling her how horrible the economy was. And, you know, she was asked this one guy about his boat and he says, this big, like, big fat fuck. And she's like, so you're doing fine though? And he's like, yeah, I'm doing great. But the economy's terrible.

And she's like, so you're worried about your children. He's like, no, my kids are great. Because I raised them, right. My kids, they've got bigger boats than I have even. They're doing so well. But it's because they're smart. You know, it's just like, so you're doing great. your kids are doing great.

The economy's terrible. And he's like, yeah, Biden, socialist. And like, I don't know, man. That feels like it's 44% of America. You can win a lot of elections with that. Yeah, my favorite example of that from the last cycle was a guy the New York Times interviewed, who was a real estate agent. I think in Virginia, I can't remember exactly where.

North Carolina, it was a real estate agent in North Carolina. And he had been doing great, you know, coming out of the, like, insane housing price boom. of the post-pandemic, you know, he'd been sitting pretty. And his big complaint is, you know, under, and Joe Biden's America, I've never paid as many taxes as I'm paying right now. Really, really, really good stuff. But, no, and this is in kind of like a broader way, this has always been sort of my, my hesitation with like the touch the hot stove way of thinking is like putting people

under more real actual economic pressure and pain is not necessarily a recipe. to make them less paranoid and less kind of like insular and online and gullible and hoodwinkable by this is the COVID lesson. Right. I mean, there was a school of thought pre-COVID that was the problem in America is we're too soft. We don't have anything since 9-11. We haven't had any real problems.

If only we had some big, real serious problem, that would bring us all together. And we got the big, real serious problem in a global pandemic. And instead, it made people go even stupider. Yeah. Well, and it just made them live on their phones more, which is, which doesn't help either in terms of all this like internet poisoning stuff. It's a real moment. Like, like this is when it's getting real, right? I mean, like we've all been talking about this stuff forever. It's all been horrible economic policy for months ever since Liberation Day. It was obvious that this was going to be bad stuff. And even though he's backed off a lot of it, he hasn't backed off it, you know, that much. These are still massive tariffs that we have everywhere now. And, and, and it's getting real, right? It's, it's getting real. He, there is very little indication that he will learn from these lessons. So we should not really expect these to change. We should not expect Donald Trump to turn into a free trader overnight. That's not going to happen. And so this is going to be a new, I mean, you hesitate to make predictions, but there's

every reason to believe this is going to be kind of a new lived reality and a new kind of seismic shock. And those things shake out in political, in new political ways that are hard to predict and hard to expect. So I don't know, I don't know how you map it on to, onto like what happened in COVID, but it's not going to look good for anybody here. And that's kind of the bottom line, I guess. Guys, follow the channel. We'll be back with more. Good luck, America.