The Journal. - Live from Seattle: A Weird Economy + Election = ??

Episode Date: May 15, 2024

If the upcoming presidential election could be summed up by a song, what would it be? And will voters cast their ballots based on a bright future or a gloomy one? In a live-taping before an audience at the Cascade PBS Ideas Festival, Kate Linebaugh and Ryan Knutson sat down with WSJ political reporter Molly Ball to discuss these topics and more. To watch the video, check out the episode on Spotify. Further Reading: -Biden and Trump, In Two Speeches, Speak to Two Visions of America  -Arizona is Booming, But Restless Voters Feel Downbeat About Economy Further Listening: -Trump Allies Draft Plans to Rein in the Fed -Why the Fed Is Steering Away From Rate Cuts Learn more about your ad choices. Visit megaphone.fm/adchoices

Hey, it's Kate. And Ryan. And we're excited to bring you a conversation we had live in front of an actual audience. And if you listen on Spotify, you'll be able to see a video of the event. Enjoy. All right. Hello, everyone. Welcome to the Cascade PBS Ideas Festival.

I'm Ryan Knutson, co-host of the Journal podcast. We're a co-production of Spotify and the Wall Street Journal. And today I'm joined by my co-host, Kate Leinbaugh, and Wall Street Journal political reporter Molly Ball for a discussion about this weird economy that we're living in right now. Is it good? Is it bad? And what might this all mean for the presidential election? Okay, so today we have a great topic and no one better to talk about it than Molly Ball. It is what we are calling the rematch, Trump and Biden. And Molly Ball, welcome. Hi, thanks so much for having me. I'm excited to talk about this.

So does the economy matter? The answer is yes. Next question. Okay, the next question was inspired by, we went out actually with some of the speakers here at this event and did karaoke last night. So the first question I want to put to you is, if the 2024 election were a song, what song would it be? Wow, okay.

Well, really testing my musical knowledge here. You know that 70s anthem, The Final Countdown? Because Trump keeps calling this the final battle, right? He's using this really apocalyptic rhetoric. And I think a lot of people, even on the other side, are concerned that this could be the election that ends our democracy. So let's call it The Final Countdown. Not thriller? election that ends our democracy. So let's call it the final countdown. Not Thriller? Well, as a political

reporter, I always want politics to be thrilling. However, I have literally covered this campaign once before. So it is not necessarily the most thrilling, maybe the most scary to some people. Thriller is a horror song, right? Zombies. Right. I don't know.

For our podcast listeners, I am doing the zombie dance from Thriller. Yeah. I don't know. For our podcast listeners, I am doing the zombie dance from Thriller. Yeah. I was thinking it's the Bee Gees staying alive. Okay. Is that an old person joke?

Is that aimed at any one particular candidate, perhaps? No. One who is maybe on the far end of the actuarial table? There is actually, I think, a correct answer

to this question, which is Beyoncé's Deja Vu. Ah, there you go. Oh, okay. Getting to the topic at hand. Yes. How important is this weird economy to this election? People's perceptions of the economy are extremely negative. At the same time, majorities of people in most polls say that their personal economic situation is good. So this isn't necessarily people feeling like they themselves are struggling,

are crunched. Certainly some people are. But it's a much more pervasive sense of like doom and gloom that's sort of atmospheric and goes with the fact that people broadly see the country being on the wrong track. So this would be the point in a podcast where like the music would start to swell and you'd be like, yeah, I didn't want to keep listening to this. So we should do the show set. All right. So here we go. Welcome to this special live taping of The Journal, our show about money, business, and power. I'm Kate Linebaugh. And I'm Ryan Knudsen. Coming up on the show, how our weird economy is going to play into this year's presidential election. Do-do-do-do-do.

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down, but obviously it's not gone away completely. Yet voters say they feel very pessimistic about the economy. So why do you think that there's such a disconnect? Well, I think, you know, Ronald Reagan classically posed to voters this very simple question, are you better off today than you were four years ago? Well, four years ago today, we were at the height of the sort of early phase of the COVID pandemic. And I think we can't lose sight of what a disruption that was to the economy and to people's lives. And it continues to have sort of long tail effects. And I think it plays a big role in the way people perceive the economy as well. I often hear, you know, from Democrats or the Biden campaign that, you know, Biden created millions of jobs and Trump provided over a loss

of millions of jobs. But I think people broadly attribute that to the pandemic, right? The pandemic wiped out millions of jobs at a rapid clip. And then there were some very unusual, you know, trillions of dollars in government spending that were authorized by both presidents in order to address that, potentially leading to some of the inflation that we've seen. And so I think, you know, in the same way that voters broadly don't seem to blame Trump for that loss of jobs that was attributed to the pandemic, they don't give Biden that much credit for the jobs having bounced back because it's seen as almost like a naturally occurring phenomenon, right? It was sort of like a natural disaster that no human was sort of responsible for. So I think that's one big factor. And the other thing about the sort of COVID hangover is I think it really contributed to people's sense of instability. And I think that's a lot of what's

behind these pessimistic perceptions about the economy and about the fate of the country generally, is people just don't feel like they can trust the way things are. One of the things I sort of wonder about, I mean, as a millennial is like, are we judging the economy by the right metrics? Like there's these historical measures that we always look at for like, is the economy doing well or doing poorly, unemployment data, things like that. But even if you have a job today, there's a lot of people who feel like, so what, I have a job, I can barely survive. There's no hope for me to ever own a home.

I can't afford to have kids. It just feels like the economy as it's sort of structured doesn't really work. So even if the data is good, it doesn't necessarily mean that people feel good about what it means to be an American living in the U.S. these days. Well, we have to talk about how, you know, what it means to be an American living in the U.S. these days? Well, we have to talk about inflation, right? Because I'm old enough to remember the

financial crisis in 2008, and that took a very long time for the American economy to recover from. So for a long time, the principal economic problem that we had was a lack of jobs. Unemployment was relatively high and people didn't have, you know, stable employment. And so for months at the beginning of this sort of election cycle, I think out of habit as much as anything else, you had President Biden going out there saying, jobs, jobs, jobs. And that was always sort of what every politician said. Jobs aren't the problem right now. Unemployment's been under 4%, which is crazy. And it's been that way for a long time. And, you know, you drive past the McDonald's and they're offering a starting wage of, you know, $25, $30 an hour. What we have is a labor shortage,

which contributes to inflation. And what we had, you know, a couple of years ago was very high inflation of the sort that most of us have not experienced in our lifetimes. And, well, sort that most of us have not experienced in our lifetimes. And, well, President Biden has. But I haven't. I haven't. And, again, this is disconcerting for people. This is something that we haven't, that many people have not grappled with before. And I think as a worldwide phenomenon, people hate inflation, right? You see populist revolts going on all over the world in places where there's high inflation and, you know, protests, riots, that kind of thing. It's just an economic phenomenon that people really do not like. And the cure then is almost as bad as the disease, right? Because the way you bring down inflation is to hike interest rates. And that means people's cost of housing goes up. People's mortgage costs

go up. People find it harder to move or to find new housing. And so I think people sort of feel like they're being hit on both ends here. And how is that factoring into the presidential election? Well, when people are unhappy, they throw out incumbents. Let's talk about Biden's economy right now. What is Bidenomics? How would you describe how the economy is doing under Biden right now? So I think Biden is a really interesting president on economic policy, very different than the Obama agenda really on economics, right? Where Obama, I think it's fair to say, was sort of a neoliberal Democrat. And part of the reason that the recovery from the financial crisis

was so slow was because there was a reluctance to spend too much money, to apply really massive stimulus to the economy. And I think there's a view that Biden's team may have overlearned that lesson and overstimulated the economy at a time when a different balance was warranted. How do voters feel about those policies in particular? Well, they don't seem to like them very much. Trump gets better ratings on, you know, which candidate do you think would do a better job managing the economy, usually by, you know, 10, 20 points.

It's not close. Well, and also, I mean, I think the biggest issue, I think, in the economy right now is inflation, which is something that presidents don't really have that much control over. Yeah, it's a real problem, I think, for any president. And it's why political leaders tend to get punished so harshly for inflation is that there isn't very much they can do about it. You know, Biden did reappoint the Federal Reserve Chair, Jerome Powell, who has been given a lot of credit for helping to steer the economy toward potentially a so-called soft landing.

This is one of our favorite phrases at The Wall Street Journal, is it not? A lot on our podcast. Which means that, you know, able to bring down inflation without causing a recession, which is very tricky. And if he pulls it off, I think it is a pretty commendable achievement. But it's not something that voters are in the mood to give much credit for. And it's not something that Biden would get credit for. Or do voters give the president credit for the policy of the Federal Reserve? You know, it's interesting. I think people are just in a bad mood. They really are. They hate everything. Oh, yeah, my life's great, but I'm an out-of-touch elite, right? People are in a really bad mood. You know, they feel negatively about the country. They feel negatively about politics and politicians.

And I think we've been in this sort of change-oriented, you know, anti-establishment, anti-incumbent mood for a while as a country. But certainly the, you know, the Trump era and the divisiveness that he introduced in a lot of ways, people feel just really bad about everything. So how would you rank for Biden what the top issues are for him? Economy, age, climate change.

Like, what are the things you, how would you rank them for him in terms of the baggage, I guess you could say, that they carry? Ah, the negative issues. Well, I was thinking about, like, what are the issues he wants to talk about? So I'll start there, right? When you talk to the Biden campaign, to Democrats, they've got a sort of two-word heuristic for how they want to steer the conversation in this election, and it's democracy and Dobbs. went better for Democrats than most people were anticipating. That was sort of the key. Democrats have been overperforming in a lot of local special elections since Trump left office. And these are the issues that Democrats would like to focus on and call voters' attention to. Democracy, the threat to democracy that Trump arguably represents, January 6th, all of that.

that Trump arguably represents, January 6th, all of that. And the Dobbs decision, which has inspired a massive sort of popular revolt against this taking away of people's rights and freedoms, and which we have seen be a political winner. You know, every time abortion has been on the ballot since Roe was overturned, it has won, even in Montana, in Ohio, in Kentucky. So we see a lot of voters motivated to come to the polls by that issue. And it's potentially going to be on the ballot as a single issue in some very crucial potential swing states, Arizona, Florida, potentially Nevada and others. So those are the issues that Democrats view as strong for Biden that they would like to keep the focus on. When voters are asked, you know, what are the main sort of negatives against Biden, it is usually his age. And the impression of sort of frailty and lack of command that that implies,

you know, when pollsters or when I've listened to focus groups and they sort of dig in on, you know, why does it concern you? Why does Biden's age concern you? It's not so much about his numerical age or even the sort of gaffes that we see him commit in public. Because he did gaffes before he was as old as he is now. He did, although they were different gaffes, right? It wasn't like forgetting stuff gaffes before he was as old as he is now. He did, although they were different gaffes, right? It wasn't like forgetting stuff gaffes. It was like saying weird stuff gaffes. I've covered this guy for a long time. But it's less that and it's more a sense that voters don't trust that he's in control, that he's in command,

Voters don't trust that he's in control, that he's in command, that he's a strong leader who is, you know, in charge of things and aware of everything going on around him and can really, you know, be a decisive strong hand. You know, Trump talks a lot about these sort of arguably authoritarian impulses that he has, right, and the ways he wants to really break a lot of the systems of government and consolidate control in the presidency. And when he's asked, well, you know, don't people find this scary? He says, I think people like it because he has cultivated this sort of strongman image. And so I think going back to Biden, it's an image of weakness that people have about him. I think there's concern about

the foreign entanglements. They are not our wars, but they are wars that America is involved in, in Ukraine and in the Middle East. There's a sense that sort of the world's on fire. You know, Trump's out there saying, none of this would have happened if I were still president, which, of course, we can't know that. But it adds to this perception that, you know, people voted for normalcy and what they got was chaos. Should we talk about Trump? Let's talk about Trump. That's after this quick break. Seth and Riley's Garage Hard Lemonade.

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Contact a licensed T-insurance advisor to learn more. Now we're going to talk about Trump. What is there to talk about, really? What is his message? That he's going to bring the economy back to the boom times that he had? That's basically it. That's basically it. And it doesn't get a lot more complicated.

And in fact, a lot of the things that Trump is proposing would probably lead to more inflation, right? He's saying he's going to massively increase tariffs, particularly on China. He's talking about doing a lot of other sort of protectionist measures in the economy. Now, he's also talking about a lot of deregulatory initiatives that might have an anti-inflationary effect. But but most of it is vibes. Most of it is him saying when I was president, the economy is good. I'm going to make it great again, to coin a phrase. How central is the economy to his campaign right now? Well, it's interesting because, as you may have noticed, he's kind of easily distracted. And he really loves to talk

about immigration. He loves to talk about, you know, his personal grievances. So I remember, you know, when he was president and had just passed this big tax cut that was sort of his major congressional achievement, the Republican Party kept wanting him to go out and sell it. And he would go out to campaign and talk about immigration instead, because he just thinks it's sexier, for lack of a better word. So he, and you know, I see him campaign quite a bit and he tends to focus much more on, you know, personal grievances, the globalists, the deep state, the enemies. It's a very sort of, you know, oppositional politics that he practices.

So it's much more about his enemies and people who have wronged him and by extension, the American public. What are his main criticisms of Biden's economic policies? Well, again, they're not very specific, but the, but the criticism is, is just basically that Biden has not been a good steward of the economy. And that, and you know, one thing that Trump did a lot when he was president was yell at the Federal Reserve to keep interest rates low, which was a violation of the Fed's traditional independence. And we have done some reporting that he might seek to actually tear down that wall completely. That his advisors are drafting a plan. They are drafting a plan that would eliminate the traditional independence of the Federal Reserve. And so he's always seen it as a political winner to keep rates low,

which again would potentially lead to more inflation, but which he thinks would be popular. I want to talk a bit more about this draft proposal from Trump's advisors about trying to break, sort of breaking down some of the independence of the Federal Reserve. In that proposal, which the Trump campaign says is unofficial, only if it comes out of the independence of the Federal Reserve. In that proposal, which the Trump campaign says is unofficial, only if it comes out of the president's mouth, I think is what they said, then it's an unofficial policy. But in the proposal, they talk about how giving the president a relationship with the Federal Reserve president

to which the president of the Federal Reserve, the chair, in this case, Jerome Powell, would go to the president regularly, consult about interests, what do you think we should do, and have the president of the Federal Reserve, the chair, in this case, Jerome Powell, would be, you know, go to the president regularly, consult about interest rates, what do you think we should do, and have the president have a voice there. How big of a departure would that be from the historical relationship between the Fed chairman and the president? It's a big departure. It has not been the way that we've done business, at least for several generations, although I think there may be some historical precedents. It hasn't always been the way it is now. What would be the first things that he might

do then if he wins the presidency? What would be on the economic side or any side really, what do you think would be the first things that he might do if he were to win? I think he would, he says he would shut the border and start rounding people up to deport. And what we've seen is those policies are broadly popular. Now, I don't know if they would be popular when they were actually carried out, when you actually have, you know, the National Guard fanning out into communities to yank people out of their homes who have been in this country for decades. are very unhappy with the situation on the border to the point where, you know, in a recent poll, the idea of, you know, massive deportations of people who came to this country illegally gets the support of not only a majority of all voters, but 40 percent of Democrats. Could I turn to abortion? How is Trump handling abortion as an issue in this election?

handling abortion as an issue in this election? So this is a fascinating issue for Trump because he clearly sees that it's a political loser for him and his party. And I think, you know, people broadly don't see him as personally pro-life, right? Even though he is the reason that Roe v. Wade was overturned, He appointed the Supreme Court justices who got it done and did a lot of other anti-abortion policies when he was in office. But people correctly perceive that it's not because he personally is passionately religious and opposed to abortion.

And so he's been able to sort of, or he's trying, we'll see if it's successful, but he is trying to triangulate on this issue. So we have time, I think I want to just squeeze in one last quick question, which is that earlier this year, you wrote in one of your columns that the candidates are painting two pictures of the economy, a resurgent America that's making steady progress toward a future of shared prosperity. This is Biden's message. And Trump's is a dystopian backwater on a path to ruin. Which of those economic messages do you think is going to win out? Well, I think that's a pretty fair characterization, if I do say so myself, of how, and I was basing

that on, you know, sort of the State of the Union juxtaposed with Trump's Super Tuesday victory speech. And frankly, again, you know, the mood of the electorate seems to be much more dystopian backwater than morning in America right now. People are looking out and seeing a future that feels like doom and gloom to them. And so I think, you know, I'm not saying, I'm certainly not saying Trump's going to win. I think this election is going to be very close, and we have no idea how it's going to turn out. But in terms of just channeling the economic mood of the majority of Americans right now,

I think they're seeing things broadly the way Trump wants them to. Great. Well, Molly, thanks so much for joining us. Thank you. Thanks, everyone. That's all for today. The Journal is a co-production of Spotify and The Wall Street Journal. Thanks for listening. Thanks to our great audience here in Seattle at the Cascade PBS Ideas Festival.