The Majority Report with Sam Seder

Episode: Best of 2025: Mark Blyth (May 12) – Trump's Tariffs and Inflation

Date: January 2, 2026
Guest: Mark Blyth, Professor of International Economics (Brown), co-author, Inflation: A Guide for Users and Losers

EPISODE THEME OVERVIEW

The episode features a replay of Sam Seder’s in-depth interview (originally aired May 12, 2025) with economist Mark Blyth, focused on understanding the real drivers of inflation, why public perceptions often differ from economists’ narratives, and how Trump’s new tariff regime and broader trends are affecting the U.S. and global economies. In studio, Sam and co-hosts frame the discussion within the context of ongoing economic pain, political volatility, and shifting party coalitions as they head into the 2026 midterms.
Tone: Wry, analytical, irreverent, but clear-headed.

KEY TOPICS & SEGMENTS

1. Current Economic Backdrop and Predictions (00:36–07:47)

• Sam opens with darkly comic reflections on the dire state of the economy headed into 2026: “the economy is in the shitter right now… the Fed has dropped rates… concern of a stagnant economy. However, we do have inflation. That… can lead to something called stagflation, which is bad, bad, bad.” (01:42)
• The hosts joke about political predictions: midterms will happen, Trump won’t be president in 2027, and whether he’ll have a health crisis.
• Banter about U.S. foreign policy getting more reckless ("maybe we'll have bombed Venezuela by the time this airs... like Jamaica or something, just to show...").
• Sarcastic takes on the aura of Trump’s “invincibility” fading and the “exhale” on the left (03:09–03:19).

2. Intro – Guest Mark Blyth and Framing the Issue (07:50–09:00)

• Sam welcomes Mark Blyth, introduces his credentials: Brown University professor, director of Rhodes Center for International Economics, co-author of Inflation: A Guide for Users and Losers.
• Framing Question: Why do economists and the public so often talk past each other about inflation?

3. What Is Inflation? Who Really Feels It?

(09:00–13:39)

• Levels vs. Rates: Blyth distinguishes between economists’ focus on the rate of change (delta) and ordinary people’s concern with the price level.
  • “When my people say, ‘yeah, but the rate of inflation’s slowing,’ and they say, ‘yeah, but eggs still cost 12 bucks, what are you talking about?’—they’re actually more correct…” (09:43)
• Inequality’s Role: The working class spends a far higher share on essentials—so for bottom 60%, inflation is a “squeeze on levels,” while the top 10% barely notices or profit via equities.
• Measurement Disconnect: Blyth explains how official statistics (core CPI, adjustments, etc.) strip out categories that matter most (like food & rent), leading to skepticism among average Americans.

4. Lessons of the 1970s: How We Got the Wrong Inflation 'Cure'

(13:39–21:51)

• Blyth traces the “monetary narrative” on inflation to a misreading of the 1970s: policymakers saw inflation as mainly driven by “too much money chasing too few goods,” when in reality it was discrete supply shocks (oil, Vietnam, demographic changes, etc.).
  • “There’s two basic narratives… government spends too much money… or the labor market’s too tight. None of that seemed to describe what was going on in 2021–23, pretty much anywhere.” (14:24)
• Central Banks Adapt (Slowly): Only by 2023 did central banks begin acknowledging factors like price gouging (ECB: “40% of inflation… was price gouging from companies”).

5. Expectations vs. Supply Shocks: Where Policy Goes Wrong

(21:51–26:35)

• Traditional logic: Raise rates → people poorer → break expectations of price increases → curb inflation.
• Blyth: But what if “it’s just a bunch of supply shocks”? Then making people poorer is unnecessary and counterproductive.
  • “You got to break these expectations… but… all those forces were on the way out by the early 1980s...So you just created a huge destruction of American capital and jobs for no apparent reason.” (21:51–22:29)
• COVID compared: Supply chain chaos, not moral failings or excessive demand, was key.

6. COVID-era Inflation Deconstructed: Profits, Supply, Stimulus

(26:35–34:06)

• Blyth discusses research on inflation’s causes post-2020:
  • Supply shocks: Shipping/logistics blockages, energy price spikes (e.g. Germany’s inflation was all about gas).
  • Demand: Stimulus absolutely played a role (in U.S.), but “was it the majority cause? No.”
  • Price Gouging: Evidence suggests firms maintained or increased profit margins; some industries made massive windfall profits—"America's big oil companies made $220 billion in excess profits in 2022… half of that went to the top 1%." (28:28)
• Raising rates sometimes backfired—higher mortgage costs locked people in, reduced housing turnover, and didn’t bring down inflation as expected.

7. Why Interest Rate Hikes Didn’t Work This Time

(34:06–38:46)

• Inflation began to fade more due to fading shocks (e.g., logistics, energy) than Fed policy.
• Central banks realized they “didn’t have the room” for Volcker-style shock therapy: “If you did what Volcker did… the place would be on fire.”
• Central banks took a “more nuanced view,” looking beyond labor markets and excessive government spending.

8. Trump’s Tariffs: Economic Logic, Political Incentives, and Supply Shocks

(34:27–44:05)

• Sam: “Does anybody have an idea as to why [Trump] is imposing these tariffs?” Multiple contradictory rationales:
  • National conservatives want to “reindustrialize.”
  • China hawks want to punish China.
  • Tech lords want tax cuts and supply chain stability.
• Blyth: “The rationale is going to change according to which agenda is emergent within the White House that week.”
• Tariffs are themselves “policy-induced supply shocks” and are designed (in Trumpist vision) to promote carbon-based, 1950s-style U.S. manufacturing at the expense of green tech.
  • “When you protect business models like this, they just get shittier over time.” (39:30–39:46)

9. The Bond Market as Discipline and the Treasuries’ Global Role

(40:05–44:05)

• Blyth explains why Trump’s policy shifts spooked markets: U.S. Treasury bonds are normally “information invariant” (always stable), but Trump’s tariffs triggered global selling, breaking confidence.
  • “Treasuries are information invariant assets. …What did Trump do? He made it an information sensitive asset because people suddenly went, 'oh shit, this guy’s real.' ...And that’s what disciplined Trump, basically. He broke the bond market.” (40:05–41:30)
• If confidence never fully recovers, there could be long-term shifts in the international order (dollar demand, global imbalances, etc.).

10. Trump/Bannon Economics: Fortress America Redux?

(44:05–47:53)

• Bannonite vision: Stop immigration, ban visas, tighten labor market so wages rise “naturally,” restore a 1950s world of male breadwinners, and reindustrialize through massive tariffs.
  • “You missed the boat because ultimately it’s demographics. He just didn’t have enough kids… But that’s clearly the way they’re thinking about it. …If you expel 12 million people who are currently working, you will create a shortage of labor and wages will go up.” (45:54)
• Blyth: It’s “not possible”—modern factories are largely automated; the image is backwards-facing.
• Corporations and industries will “wait out Trump” rather than reinvest or radically re-shore production.

11. Short- and Mid-term Economic Outlook: Paralyzed by Uncertainty

(49:22–51:06)

• Immediate effect: Supply shock from disrupted shipping, leading to shortages and higher prices.
• Greater risk is persistent uncertainty—firms freeze investments, leading to economic paralysis: “And the definition of a recession is basically everybody’s frozen, nobody invests.”
• Policy volatility (30% tariffs, then 10% tariffs, etc.) makes planning impossible.

12. Democratic Response: Populism or Stasis?

(51:06–54:51)

• Discussion of Democratic Party crossroads: Will it embrace a left populist, pro-labor, pro-housing, anti-monopoly agenda?
• Party has “lost the working class vote completely”; must rediscover substantive economic populism. “The Democrats have become, inadvertently, the party of the status quo. Everything’s fine for the top 20%… The Whole Foods crowd, if you want to put it that way, and they’ve got nothing to offer dollar shoppers.” (52:07)
• Only the progressive wing (AOC, Bernie) is pushing a transformative economic agenda; establishment resists.

13. Inequality, Housing, and Deregulation

(54:51–62:40)

• Blyth: Extreme inequality distorts everything, including inflation and housing. The asset-hungry wealthy drive up prices and block new construction.
• Housing: Promote vocational training, left-wing deregulation (undoing NIMBY/conservation-easement abuses), direct public building to expand supply and lower prices.
  • “Just build houses… you create not just new skills… you’re upskilling the whole working class and you’re giving them places to live, which means you create labor mobility.”
• Obstacles: Incumbent homeowners (often Democratic donors) don’t want prices to fall—major political challenge.

14. Notable Quotes and Moments

On public understanding of inflation:

“When my people say, ‘but the rate of inflation’s slowing,’ and they say, ‘yeah, but eggs still cost 12 bucks, what are you talking about?’—they’re actually more correct… what they’re looking at is the total level of prices.” — Mark Blyth (09:43)

On misreading the 1970s:

“We learned the wrong lessons: the lessons of the 70s were that it’s always and everywhere a monetary phenomena… But this time around, none of that seemed to actually describe what was going on.” — Mark Blyth (16:11)

On price gouging:

“Profits as a percentage of GDP are now about 12 and a half percent, the highest they’ve been in history. So the Biden economy was really terrible, right?” — Mark Blyth (27:14)

On Trump’s policy logic:

“So, the rationales are going to change according to which agenda is emergent within the White House that week.” — Mark Blyth (36:19)

On Bannon’s economic vision:

“It’s not that we’re creating an underclass. We’re basically bringing what is currently the underclass up. Because what we’re going to do is ban every visa… create a massive constriction on the labor supply… put these tariffs up and bring manufacturing back home… this imaginary of the prosperous '50s, when men go to work in manufacturing and we solve our demographic problem not through immigration but because women have more kids…” — Mark Blyth (44:54)

On the risk of inaction on housing:

“You can’t spend in sort of a non-hub coastal city… you spend 50% of your income on rent. It’s an utter madness. It can’t continue. But unless you’re willing to expand the supply side… it will continue until it becomes completely unsustainable.” — Mark Blyth (60:12)

15. Bonus (Later Segments): Political Satire and Media Criticism

(62:42–94:00, brief selection, non-economic content)

• The hosts satirize Chris Cuomo’s segment on “Mega”: “He calls it mega, but nobody knows really what it means… It’s ‘make the economy great again,’ but he doesn’t explicitly say it in this.” (65:10)
• They discuss class politics underlying Democratic malaise and recall Cuomo family rivalries, with pointed references to both policy and personal legacies.
• Segment lampoons Elon Musk and Joe Rogan’s misunderstanding of economics—Musk’s long-standing GDP/“eating shit” joke illustrates a critique of GDP going back decades: “This is a long standing critique. And this genius who can’t deliver a freaking joke...” (91:49)

TIMESTAMPS FOR IMPORTANT SEGMENTS

• Current state of economy / predictions: 01:09–07:47
• Blyth on the public’s experience vs. official inflation stats: 09:00–12:09
• ’70s inflation vs. present: monetary vs. supply shock: 13:39–16:28
• Interest rate hikes, fading COVID inflation: 21:51–26:35
• Breakdown of post-COVID inflation causes: 28:08–31:49
• Trump’s tariff logic and economic coalitions: 34:27–38:46
• Bond market discipline post-tariffs: 40:05–43:06
• Bannonist economic fantasy / labor market tightness: 44:54–47:53
• U.S. housing crisis and inequality: 54:51–62:40

SUMMARY–TAKEAWAYS

• Inflation is felt as a “level problem” by the majority, while politicians and economists too often focus on “rate” or abstract models.
• Traditional monetary policy responses to inflation (jack up interest rates) are frequently misapplied; COVID and 2020s inflation mostly about supply and profit-taking, not excessive demand.
• Tariffs are risky supply shocks—Trump’s chaos erodes market confidence and spooks the world, threatening America’s economic primacy.
• The Democrats' economic stance is at a crossroads: either double down on centrist status quo, or embrace a genuine left-populist agenda that could address inequality and housing.
• Housing & inequality: Expanding supply and dismantling regulatory barriers is essential, but incumbent interests (even among Democrats) present a major barrier.
• The episode mixes sharp economic insight with a humorous, skeptical look at both political parties, the pundit class, and billionaire pseudo-geniuses.

For a listener seeking an accessible but detailed understanding of inflation, Trump’s tariffs, and the intersection of economics, policy, and politics in 2026, this episode—especially the Mark Blyth interview—is incisive, irreverent, and deeply relevant.