Podcast Summary: The Jimmy Dore Show Episode: Stocks PLUMMET After Trump’s Tariffs Announced! w/ James K. Galbraith
Release Date: April 7, 2025
Host: Jimmy Dore
Guest: James K. Galbraith, Author and Professor of Economics at the University of Texas at Austin

Introduction and Context

The episode begins with humorous banter between host Aaron Maté and a prank caller impersonating J.D. Vance, humorously discussing President Trump’s declaration of “Liberation Day” and the imposition of sweeping tariffs on other nations. This light-hearted segment sets the stage for the episode’s primary focus: the severe economic implications of Trump's tariff policies announced on Liberation Day.

Impact of Trump’s Tariffs on the Economy and Stock Market

[05:35] Aaron Maté introduces the main discussion, highlighting the immediate market turmoil following Trump’s tariff announcement. The stock market experienced a significant plunge as global investors reacted negatively to the new trade barriers.

[06:26] James K. Galbraith analyzes the situation:

“We’re seeing one of the largest shocks to the stable functioning of the economy since the early 1980s when Paul Volcker raised interest rates to 20%.”
– [06:45]

Galbraith draws parallels between Trump’s tariffs and historical economic shocks, emphasizing the disruptive nature of such policies on modern financial systems.

Critique of Tariff Policies and Historical Context

[07:47] The conversation shifts to responses from Trump’s aides, notably Stephen Miller, who defends the tariffs by claiming the U.S. economy was already in a depression. Aaron Maté challenges this assertion, questioning the legitimacy of labeling the economy as such.

[09:19] Galbraith responds:

“The economy was good, huh? Well, tell that to the auto worker who got laid off in 1994...”
– [02:09]

He argues that while certain sectors face hardships, the broader economy does not qualify as being in a depression. Galbraith underscores the long-term deindustrialization of the U.S. economy and casts doubt on the feasibility of reversing this trend solely through tariffs.

Flawed Tariff Calculation Methods

[17:47] Maté brings up a Washington Post report revealing that Trump personally selected tariff formulas based on trade deficits and U.S. exports, bypassing more sophisticated methods:

“President Trump personally selected the now widely mocked formula for determining country specific tariffs from a menu of options.”
– [19:47]

Galbraith critiques this approach:

“It is not connected to the tariff rates that other countries are charging us... It's a confected number which is supposed to represent trade barriers generally, but it doesn't.”
– [22:38]

He explains that using trade deficits and export values as a basis for tariffs is fundamentally flawed and disconnected from actual trade practices and economic realities.

Consequences for Consumers and Supply Chains

[25:09] The discussion moves to the impact on consumer goods:

“Yes, I think we're going to see very substantial increases in all kinds of consumer goods.”
– [25:23]

Galbraith predicts significant price hikes for imported goods, particularly those from Asia, due to the newly imposed tariffs. This will effectively act as a sales tax on American consumers, decreasing living standards and exacerbating supply chain disruptions.

Support from Auto Workers and Broader Economic Implications

[27:45] Despite the economic downturn, certain sectors like auto workers express support for the tariffs, hoping for job restoration:

“We applaud the Trump administration for stepping up to end the free trade disaster that has devastated working class communities.”
– [28:31]

Galbraith remains skeptical:

“I don’t know that we will see some [job restoration]. I think also... European producers are going to accelerate the movement of European factories to the United States.”
– [29:03]

He questions whether the tariffs will genuinely lead to sustainable job growth or merely benefit a select few companies while burdening consumers.

Democratic Party’s Stance vs. Trump’s Policies

[30:08] The conversation transitions to the Democratic Party’s historical inaction on trade issues:

“We are a long way from that [effective trade policy].”
– [33:13]

Galbraith argues that while Democrats have long criticized free trade agreements like NAFTA, they have failed to implement effective alternatives. He suggests that Trump’s unilateral tariff approach lacks a comprehensive strategy needed to revitalize the American industrial base.

Advising Trump: The Need for a Comprehensive Industrial Strategy

[36:27] When asked what additional measures Trump should take, Galbraith emphasizes the necessity of a robust federal industrial strategy:

“An effectively functioning federal government with the expertise to give you advice over a wide range of industrial and other areas...”
– [36:39]

He draws historical parallels to the New Deal era, advocating for significant government intervention and investment to support industrial revival, something lacking in Trump’s current approach.

Discussion on Military Actions and Foreign Policy

The latter part of the episode delves into Republican Senator Tom Cotton’s nonchalant stance on potential military action against Iran. Former Congress member Dennis Kucinich critiques Cotton’s approach, highlighting the dangers of unilateral military interventions and the potential for catastrophic consequences, including nuclear proliferation and regional instability.

Democratic Party’s Declining Approval Ratings

[51:34] A report is presented showing historically low approval ratings for Democrats:

“Among all voters disapproving 68%... just 21% approve.”
– [52:13]

Dennis Kucinich attributes this decline to the Democratic Party’s departure from its New Deal principles, increased corporate influence, and failure to address working-class concerns effectively.

Conclusion and Final Thoughts

The episode concludes with reflections on the necessity for the Democratic Party to return to its foundational principles of economic reform and protection of workers’ interests. Kucinich emphasizes the need for dramatic political change to regain public trust and support.

Notable Quotes:

• James Galbraith on tariff shock:

  “We’re seeing one of the largest shocks to the stable functioning of the economy since the early 1980s...”
  – [06:45]

• James Galbraith on flawed tariff calculations:

  “It is not connected to the tariff rates that other countries are charging us... It's a confected number...”
  – [22:38]

• Dennis Kucinich on Democratic Party reform:

  “The American political system requires parties to offer something different... The Democrats need to go back to that old time religion of economic reform.”
  – [57:41]

Key Takeaways

• Economic Shock: Trump’s tariff policies represent a significant and destabilizing economic shock, reminiscent of major historical economic interventions.

• Flawed Implementation: The method of calculating tariffs based on trade deficits and U.S. exports is fundamentally flawed and disconnected from actual trade practices.

• Consumer Impact: U.S. consumers are likely to face higher prices for imported goods, exacerbating economic strain without guaranteed job restoration.

• Political Dynamics: The Democratic Party’s declining approval ratings are linked to its departure from foundational economic reforms and increased corporate influence.

• Need for Comprehensive Strategy: Successful economic revitalization requires a comprehensive federal strategy, akin to the New Deal, rather than unilateral tariff impositions.

This episode offers a critical analysis of Trump’s tariff policies, highlighting their short-term market impacts and long-term economic repercussions, while also examining the broader political landscape and the Democratic Party’s struggle to regain public trust.