Bulwark Takes - Trump’s “Economy” Speech Went off the Rails

Episode Date: January 14, 2026

Catherine Rampell and Sam Stein take on Trump’s Detroit Economic Club speech on Tuesday so you don’t have to. From tariffs and credit card caps to pitching Socialist-style ideas, they unpack what���s real, what’s bluster, and what it means for everyday Americans.

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Hey, everybody. It's me, Sam Stein, managing editor of the bulwark. I'm joined by Catherine Rampel, author of receipts, the must-read newsletter on everything related to the economy. Literally everything. Gas prices, stock markets. What else are you covering these days? You cover it all. Yeah, got it all. How do you get all that knowledge in your brain? I don't know, I don't know. I've been doing this for a while. I know a lot of people. You've been tired of writing about the economy. You don't know when they write about the economy. You do a lot of stuff. No, I mean, I did something on Norman Rockwell recently. So. Yeah, that's true. That's true. So she's not just an economics reporter. She's a feeder nerd and a Norman Rockwell enthusiast. So either way, subscribe to the feed. We're going to talk about Donald Trump's speech to Detroit Economic Club. It concluded earlier today. As is Trump's usual desire, it was maybe 30 to 40 percent about the economy, generously. That's rounding up, certainly. When he was on prompter, he was talking about the economy, and when he was off prompter, it was about anything but the economy. We had trans athletes. We had him apparently winning the popular vote three times. That happened only once. We had, I don't know, a lot of other stuff. There was something about, like, how many Americans died from mosquitoes in Panama.

The Panama Canal riff, which is a classic, obviously. The most profitable thing ever built was the Panama Canal. And brilliantly Jimmy Carter thought the country of Panama. Ma should have it, even though we lost 36,000 people to the mosquito, you know that, right? To the mosquito and a certain snake, which was not a very nice reptile. The big picture was this was supposed to be a speech in what is a larger campaign to tackle the issue of affordability. It's top of mind for voters. Apparently they're going to be sending out cabinet officials across the country, do some barnstorming, which is exactly what the Biden

people did, I should note. And yet he spent very little time talking about affordability. I mean, the things he talked about were capping credit card interest rates, some nebulous health care plan that he's going to introduce framework. Framework. Right. Right. Healthcare framework. Right.

Broadbeating pharmaceutical companies to reduce prices by 300%, so they're now paying us to take their drugs apparently. Not much new in the cupboard, but maybe I missed something and you're the expert. So what did you see from it? What did I see? I mean, I heard a lot of the same lies that we have heard before, for example, that we are the hottest country on earth, you know, that we, I forget exactly the phrasing he used. used, but it was something like, that is the phrase.

Well, no, before that, he was like, you know, basically everything sucked before. I don't remember exactly how we phrased it. But then he said, we're the hottest country on earth economically. If you look at, you know, the S&P 500, for example, it is up. Don't get me wrong. It is up since he took office. It's left like 16 or 17 percent, the last I checked, which is good. Nothing to sneeze at.

However, stock markets in the rest of the world are up by about double that, like around 32% depending on, you know, like what exact metric you use. So yeah, we're not doing terribly. However, we're definitely not the hottest economy in the world. We have a lot of problems. Many of those economic problems are rooted in Trump's own policies, which he have shown no, no learnings from at this point. It doesn't seem to understand that we would probably be doing a lot better if we didn't have tariffs, if we didn't have mass deportations. So, you know, there was a lot of that. There was a lot of this like puffery, if you will, and not really a lot of substance in terms of actually helping people with their pocketbook issues. So his basic gist, his case, I'm going to present

it to you without anything, you know, attached to it. His case is this. Stock market's up, as you say, and yeah, he's not going to compare it to the non-U.S. markets, but it's up. He's not. He's, guts up there, he says also gas prices down. And if you look at AAA data, it's pretty low. He says it's all under two. It's not, but it's low. He says that, you know, the CPI data this morning came in. It's not as dire as people thought it was going to be. The terrorists have not caused the type of mass inflation that everyone had said was going to happen from the tariffs. And that if Jerome Powell simply would just lower interest rates that the market would take off, let's play that clip. And then on the flip side, I want to get your response to sort of the pro-Trump argument,

which is, in fact, we are in a fairly good position in that the naysayers are wrong. But let's play the power clip first. You can address both. You announce unbelievable numbers and the market goes down because they know you're going to do everything possible in the Fed. We have a real stiff in the Fed, but that's for another day. But they raise rates. So everyone says, oh, they announced great numbers, it's great, great, great, and the market goes down because they immediately raise rates. No, when the market goes up, they should lower rates. You want to see 20% and 25%. You want to see what we can do? We've got to go back to an old standard. When there's good news, the market should go up. Does that make sense to you?

No. Look, a lot of this stuff is not particularly intuitive to normal people who don't have to cover this stuff professionally for a living. But to be clear, you don't want the Federal Reserve to cut rates when the markets are going up because that means it's going to probably inflate markets more. And that's how you get a bubble. That's how you get hyperinflation. This is not helpful. Now, it doesn't mean that the Fed needs to raise rates when the market's going up. You know, you have to, like the Fed needs to figure out. Why is the market going up? Is it because of, you know, sort of like irrational exuberance to use a phrase that we have heard in the past about bubbles or is it about, you know, strong fundamentals?

As for your initial question about like, is the economy doing super well? Are we in a golden era? I mean, you didn't use those terms, but like. I didn't use those terms. But yeah. Yeah, fair enough. It is the case that inflation has not like shot up. However, it was on its way down until Liberation Day and then post-Liberation Day, which is when Trump

imposed his first round of crazy high tariffs, we kind of like lost some ground and prices started going back up faster. You know, prices have been moving in the wrong direction or inflation has been moving in the wrong direction. It's not as dire as many of us feared. And I think that's partly because of, you know, taco, meaning that, that, you know, Trump always chickens out. Trump will pause tariffs, will delay tariffs, won't actually carry out the worst of his policies

because they would be so damaging. And to a large extent, that has happened. And then if the Supreme Court, in fact, strikes down most of Donald Trump's tariffs, as is currently expected to happen, companies will have raised prices and pissed off all of their consumers for no reason. So there are a lot of companies that have been banking. on the fact, quite literally, that yeah, they're paying some higher prices now, you know, for the tariffs that have been put in place, but they're not going to pass along all of those costs to their consumers because they're really counting on getting that money back. The Supreme

Court is going to like do them a solid and say this stuff is, these tariffs are unconstitutional, you know, companies that might be in the red or that have been taking, you know, much narrower margins, they will be put back on more solid footing because they'll get that money back. Now, the Supreme Court has not ruled yet. It does seem likely that the Supreme Court is going to strike down these tariffs, but that won't be the end of the story because probably the Trump administration is going to find ways to reconstitute them with other tariff authorities. But those might be harder to put in place.

They'll be slower at the very least. It's not like he can get like an itchy trigger finger with. his, you know, on Twitter and just raise tariffs. It'll be something that businesses can deal with. Also, he's kind of laid the predicate now to say he's not going to pay back the tariffs that he's collected. I mean, they put up a post or he put a post being like, it's going to be logistically impossible to unwind these things. And so that to me was a signal that they're going to either fight it legally or just say, you know, we're trying our best, but we can't do it. Yeah, I don't know. I mean, he has definitely committed that tariff money like six times over, right? Like sometimes he says

this is going to pay for the tax cuts that we had, you know, in the big beautiful bill. Sometimes he says we're going to have a tariff dividend that's going to go out. Like tariffs, tariffs have been like already earmarked for like a gazillion thing. So, yeah. We've committed that money. It's not coming back. The other thing that's happening in real time, which is kind of surreal to watch, is seeing the president kind of grab on to, you know, really progressive, if not,

not like outright Democratic socialist, socialist ideas for how to turn the economy around. We're talking about, I mean, not just the, you know, taking a ownership stake in certain companies, which you did with Intel. Some of the things in recent, that he's recently pushed include cap in these credit card fees or interest rate payments. And then what was the other one? Whereas you're going to not let people who are here. Oh, yeah, that one. Why don't you run them through? Because there is a bunch that are like coming out. They're a bunch.

So some of the, I would say they're in order of dumbness, but I don't know. That's probably a multiple way tie. We can rank them later if you want. Maybe. So there's capping credit card interest rates, which he cannot legally do. He said it's law. It's, no, it's, it's, this is not like on the office where you can't just declare a law. Michael Scott says, I declare bankruptcy.

I declare bankruptcy. I declare credit credit card interest rate caps. That's not how it works. He could try to get Congress to. pass a law and, you know, to your point, Elizabeth Warren says she would team up with him on something like this. He could try to get Congress to pass a law. I don't think they would, but let's say they do. Unfortunately, Donald Trump has also defunded and tried to destroy the agency that would enforce such a cap, the CFPB, the Consumer Financial Protection Bureau. There's a big ongoing lawsuit because he's

trying to shut down that agency. He's also trying to ban institutional investors from buying single family homes. This is again one of these like horseshoe theory boogie mans on the far left and maybe now on the far right. It's very easy to blame high house prices on, you know, big, shady corporate investors. And it is true that there are some institutional investors like Blackstone, not to be confused with Black Rock, which everybody does. Anyway, there are some that have bought up single family homes, particularly in the wake of the financial crisis. But it's still a very, very tiny share of homeownership. And they rent out those houses, right? It's not like they buy them up and then they burn them down. They rent them out. If they did that, which again is probably something

like Elizabeth Warren would want, it's not going to make any difference for house prices. You need to build more homes. And then there are a bunch of other things like Scott Bessent, the Treasury Secretary had suggested, I think, earlier today that we were going to impose capital controls. so that if you are an immigrant and you get any sort of public assistance, I think was the phrase he used, you can't send money out of the country, which would be functionally very difficult to do. And, you know, sounds like it's a way of just like keeping money from leaving the country. But like, how would you logistically do it? If there is an immigrant who has a kid that's in Head Start or something like that,

Does that mean that they like can't spend money abroad? They can't send remittances home? I don't know. So there are a bunch of different things like that. There's another. Oh, he's also trying to buy up mortgage back securities, which I don't understand the legality of that either. Somebody who understands, you know, Fannie and Freddie better than I do can can maybe

weigh in at some point on whether that's actually feasible to do. But it's also not going to make much difference. So, you know, he's like trying to throw some. bones out there. None of this is actually going to scratch that affordability itch. Americans want to be able to afford their basic necessities. At the end of the day, Trump is making those basic necessities more expensive through tariffs, through politicizing the Fed, and through mass deportations among other measures. Let me just say it was a weird speech, but it wasn't like even the top 10 weirdest Trump speeches this year. I thought it was relatively subdued, and this is grading on a scale.

it was heavy on the anti-Somali stuff, which he's prone to do. And he like went off on Jay Powell, who he clearly hates. But the Powell stuff seems to have receded a little bit with pushback. And so I don't know if he's going to follow through on that. I don't know if you saw what he said about Powell during the speech. We're a couple days removed from that Sunday report now. What is your take on like the future here with the Fed? Is he going to, do you feel differently about it than compared?

to where we were on Sunday night? Yeah, I think that there's been such an overwhelming show of support for Powell, among, you know, other central bankers around the world who understandably would stick up for their counterpart, but also the American public, it's like Jay Powell's approval ratings are pretty high. I think it's generally a bad state of the world when we're like polling people for their approval rating of Fed chairs in general. general because like usually it's it's bad news and people even know that the fed exists. But there's

also been a number of Republican lawmakers who have stood up for him. You know, not everyone. Some of them still can't find their spines, but you had flagged this when we spoke on Sunday that Tom Tillis is on the Senate Banking Committee. You know, he's also retiring. But he found the gumption to basically say he will not move forward any Trump Fed nominees. Forget just J. Powell's replacement as chair, but anyone until this is resolved. And then a few others have come forward as well. I think it was who was at Lisa Murkowski, who suggested that there should be an investigation

of the DOJ for all of this. Even John Kennedy, who's like not exactly like independent mind and senator, he seemed to be sort of disturbed by this. And so I think there are enough lawmakers who will keep this from happening, or at least keep the worst version of this from happening, you know, this being some kind of indictment of Jay Powell that maybe,

you know, there's some relief, I guess, that Trump will be restrained. But, you know, I don't know that there should be. Let's say they back off on trying to persecute and prosecute Jay Powell. Trump is still going to be able to replace Powell with someone. Now, he may have stiffened the spines of lawmakers on Capitol Hill to, like, demand that. that person be more independent and not be a total toady. But Trump also gets to appoint other members to the Fed Board as well. So, you know, I don't think that the threat to Fed independence is over per se, but does seem like a lot of the pushback we've seen and leaked stories about how Scott Bessent was very concerned or whatever by all of this. That suggests that like maybe

they're going to rein it in a little bit here. But again, this is not the end of it. Trump is going to find other ways to try to bully the Federal Reserve. And like I said, if your number one issue is affordability, then this should be pretty concerning that he's still trying to control the money supply. Catherine Rampal, who has an expert on all things, as we noted, including musical theater, and her two cats, who I assume are named Fannie and Freddie, helping us unpack mortgage-backed securities. They're not. Okay. Sorry. What are their name? You don't need to tell us.

Don't worry. We'll say that for our future telecast. Thank you so much for joining us. I appreciate it. Thank you guys for watching us. We listen to these Trump speeches precisely because we don't think you should have to. And we want to summarize them for you.

But in order to do that, we kind of need you to subscribe and like what you see. So please do that. And we'll talk to you later. Bye.