David Pakman (32:21)
By the way, this would make medical bills more expensive because one of the things that Medicare does is negotiate prices down. And so when you kneecap Medicare, they are restricted in their ability. You think prices are going to go up or down. But this is the MAGA bait and switch in action. First, they insist no benefits are going to be cut. When you press them, they say, we're going to cut waste and fraud. Of course, they've still not demonstrated a single dollar that we can say meets the definition of fraud. But you give it a little time and suddenly the argument becomes, you know, it's going to be necessary and fiscally responsible. You know, if you're a fiscally responsible patriot, you should want us to go in and start looking around and making adjustments. And you don't need to wonder might they use this playbook? Because we've seen the playbook before. Remember how Donald Trump's criminal cases went from this is a witch hunt. There's just nothing factual behind this. Then it went to ok, he did it, but it shouldn't matter because these really shouldn't even be crimes. Oh, all these other people have, have been charged under these same statutes and laws. Okay, fine, it is a crime and he did do it. But it's good that he did it because it was how he was pushing back against the fake news media and the deep state or whatever. The shift is denial, minimization. And then you go to the full embrace. Right now on Social Security, Medicare, Medicaid, they are between minimization and full embrace. We're only cutting this stuff that you won't notice and employees that don't really need to be there, we're minimizing to. No, no, no. These are programs that are really problematic. We're going to have to dig in. We're going to have to start cutting. This is the Republican Party's long game. You move the goalposts so slowly that the base doesn't notice that they have been manipulated into cheering for policies that will devastate them. They did it with Trump's crimes, they did it with the Trump Russia stuff. They're doing it with abortion bans and now they are doing it with your retirement. The worst part is that it always ends the same way. The last. You know, the epilogue to the story is the same one. Billionaires end up with tax breaks, an opportunity to swoop in and buy up assets cheaply. If they're lucky, they get to privatize some stuff and make more money. And the Fox News hosts who sold you this scam will be sitting pretty with their investments and their real estate and all of it while millions of Americans struggle while accepting what the wealthy Fox News hosts tell them. That's what it is. And now I want to talk a little bit about this 35 day sort of boom to bust that we have seen. Did you notice that Donald Trump has taken the American economy from boom to the dangerous precipice of a bust in just 35 days? Now, I am not here to tell you we are in a recession. I don't play politics with this stuff. Once. If and when we meet the guidelines for a recession, I will tell you we're not there yet. But if you blinked, you might have missed that. One minute Trump was taking a victory lap, pointing to the great stock market as if it was his personal approval rating. And then the next moment, Jim Cramer on CNBC sounds like he's about to have a full blown aneurysm. Shouting they're crushing us. While foreign markets surge and the American stock market craters. So what happened? How did we go from economic boom to full scale recession panic in just 35 days? Just a few weeks ago, the markets were at all time highs. The economy seemed fine. We weren't yet in a trade war. Now, as a caveat of course, we always have structural problems beneath the surface. We have income inequality in the US we have unsustainable debt. We have wage stagnation over long periods of time, poverty. On paper, most major economic indicators looked ok. And then Trump did what Trump does. He throws a grenade into the system and then everybody acts surprised when it explodes. First he announces the tariffs on steel and aluminum imports from Canada because nothing screams stable economy like a trade war with one of our closest allies. Then they do reciprocal tariffs. Then Trump doubles or cuts or we don't know when it ends or is it suspended, we just don't know. Then Trump starts making these vague, ominous comments about how he's not ruling out a recession. He's just sort of, you know, we're going to have a period of transition which is basically like a pilot getting on the intercom mid flight and saying, listen, I'm not here to say we're crashing. Like I don't, I don't like to use that word. We are going to have a period during which the plane is going to be doing things that are not the normal things you want a plane doing. We would all be worried, we would be saying, what on earth are we being told? Markets rely on confidence, predictability and stability. They went into a freefall thousand point drop in a single day for the Dow. 700 point drop, 600 point drops. And then you see what Wall street analysts, analysts are saying and they're saying we, we may be in the direction of a recession. Now, I proposed that maybe Donald Trump is manufacturing a recession on purpose to allow his robber baron friends to come in and buy everything up cheap, make money on it, privatize. CNBC's Jim Cramer, whose predictions are rarely accurate, is wondering the same thing. He said Trump may indeed be manufacturing a recession and playing with fire, committing economic arson and even fund strat. Analysts asked, is Trump deliberately letting Germany and China's stock markets surge while tanking our own? If Trump had a strategy here it's the economic equivalent of setting your house on fire, bragging about how much money you're going to save on heating bills, and then saying we're doing a great job creating firefighter jobs in this administration. Or a different analogy, the arsonist that set the fire puts it out and says I'm a hero. I've put out a fire. Yes, a fire that you set by choice. So we see consumer confidence getting rattled, people delaying purchases, companies slashing profit, forecasts and economic forecasts revised downward. We saw the GDP now forecast saying we're going to be down 2.8% GDP. Let me check where it is now. Actually, just to be accurate, the GDP now model for real GDP growth now says -2.4. OK, so a little bit less bad. It was all the way down to we're going to lose 2.8% GDP in Q1. Now it says we're going to lose 2.4. Delta Airlines cut profit Outlook says deteriorate. Deteriorating consumer confidence is the reason. And even Goldman Sachs, which is no bastion of progressive alarmism that just wants to make Republicans look bad, even Goldman Sachs said we are also raising the odds of a recession to one in five. At some point this administration is going to have to face reality. Trump will either do a 180 on policy, maybe he'll announce an abrupt policy change on truth social, maybe he'll start blaming Biden for an economy that actually Trump controls. The best case scenario right now is Trump does back off on the tariffs. He finds some face saving way to back off of the tariffs, there will be sort of a sigh of relief from the standpoint of business and we narrowly avoid a completely self inflicted economic catastrophe. Now the worst case scenario, and we may be going in this direction too, is that Trump doubles down and consumer confidence collapses even more. The job losses spike and very quickly we're back to 2008 levels of economic despair. Except this time it would be because Trump chose to slap tariffs on other countries to really show him who's boss and who's the big boy. And if that happens, I assure you I'm not a betting man, but if I were to bet on anything, it's no matter what happens. If it's bad, Trump finds a scapegoat and never takes the blame. The question is whether the voters will buy it. I hope not. But I fear that the answer is yes, they will. Data brokers are continually collecting extensive details about your online behavior. Address, phone number, email, financial information, even political views. This sensitive information about you can easily be found on public data search sites by anybody. Could be an ex, could be an employer, and these brokers sell the data to other businesses and even government agencies like the FBI and nsa, who can buy it in bulk to surveil Americans without a search warrant. Scammers and spammers also get your details from these lists, and that's why you get the text messages and the calls and the emails. But you can stop it. Our sponsor, Incogni, will send removal requests to data brokers who are legally obligated to comply. If any of your information remains online, Incogni will follow up and ensure that it's taken down. Incogni keeps you informed every step of the way, and it just saves you countless hours of work that would be nearly impossible to do on your own. I use Incogni, and what they've managed to do is remarkable. Go to incogni.com pacman and use the code PACMAN for 60% off. That's incogni.com/pacman for a huge 60% discount. The link is in the podcast notes. Well, they are trying to change the meaning of inflation. You know the people who say everything has a fixed meaning. Woman has a simple, singular definition. Things just are what they are. Facts don't care about your feelings, let's live in reality, that sort of thing. They are now completely rewriting the definition of inflation, now that they are worried that Donald Trump's economic program is going to be an inflation bomb in the United States. Now, I'm going to play an example here for you, and then we will discuss it. Here is Joseph Lavornia saying, tariffs are not inflationary by definition. Take a listen. Tariffs are not inflationary. I don't understand why everybody thinks that's the case if the money stock is unchanged and tariffs by definition cannot be inflationary. Inflation is always and everywhere a monetary phenomenon. And a caveat if we add the word credit. Tariffs. So what is he talking about? What is Joseph talking about? Joseph Lavornia is arguing that tariffs can't be inflationary because they don't change the money supply. So his reasoning is based on this extraordinarily narrow definition of inflation, which ties inflation strictly to an increase in the money supply. This has a name. This is called the monetarist view. And this is a framework where inflation only happens when there's more money circulating without a corresponding increase in goods or services. Imagine that you have an economy with $1 trillion of goods and services and you quote, print more money, which we don't print anymore. These it's really like computers doing stuff that only Barron Trump understands. You increase the money supply, but you still have only a trillion dollars in goods and services. Therefore, in absolute numbers, those things become more expensive because there's more money circulating, circulating in the economy. That's the monetarist view of inflation. Since tariffs don't print more money, it's just an import tax. Livornia says you can't get inflation from tariffs. This is completely wrong. It's outdated. And have you ever heard Maga bring this up until all of a sudden they need some way to say the tariffs aren't going to inflationary. Of course not. This is born out of the necessity now of saying, and by the way, inflation ticked down the tiniest bit in February. They expect it will become an issue. An increase in the money supply can contribute to inflation, but by a long shot, it's not the only cause. Inflation happens whenever prices rise broadly across the economy. And there's a lot of different ways that that can happen. Tariffs do cause inflation by raising the cost of goods, especially imported ones. Here's how. It's not particularly complex. If an American company imports steel and there's a 25% percent tariff on steel, they now have to pay more for steel. They still are paying the company. They import the steel from the steel and then they pay the American government the tariff, the import tax. Now that their costs have gone up, they will say, well, the steel costs us more, so we are going to increase the cost of what we're making out of the steel. Maybe it's a car, maybe it's a building, okay? That raises the price level for consumers. It is a form of inflation. Now, even if a company buys American made goods, they will often raise their prices to match the new higher price of imports. Why? Because they can. Even the companies that are not directly affected by that import tax tariff, they will still say, hey, well, our competitors who do import are now charging more. We will also charge more. Why not? And domestic producers no longer have to compete with a cheaper price. They go, listen, those who are who are importing are going to charge more. We are now free to charge more as well. Remember that no matter how many times Trump tells you that it is the Chinese paying the tariffs or whatever the case may be, that the reality is that it is the American buyers, businesses and consumers that pay the tariffs. It is textbook inflation. Now to the people who say we are too loosey goosey with our definitions, they are very happy to just change the definition of inflation. Let's go to Another example of this here is Howard Lutnick trying to make a sort of similar argument.
