The NPR Politics Podcast: "Is Trump's Economy Taking Shape?" – February 17, 2025

In this engaging episode of The NPR Politics Podcast, hosts Sarah McCammon and Danielle Kurtzleben delve into the current state of the U.S. economy under President Donald Trump. Joined by NPR's chief economics correspondent, Scott Horsley, the discussion provides a comprehensive analysis of Trump's economic policies, their implementation, and the broader economic indicators shaping the nation's financial landscape.

1. Trump's Economic Message

Danielle Kurtzleben outlines the core components of Trump's economic platform during his campaign:

• Blaming Biden for Economic Woes: Trump consistently argued that "Bidenomics has failed" and attributed high inflation directly to President Joe Biden's policies (02:38).

• Tax Cuts: He promised broad and targeted tax reductions, including eliminating taxes on tips, Social Security, and overtime, aiming to "put more money in your pocket" (02:38).

• Emphasis on Tariffs: Trump hailed tariffs as the "most beautiful word in the dictionary," advocating their use to generate revenue, bolster manufacturing, and negotiate trade deals (02:38).

Sarah McCammon probes these priorities, questioning which policies Trump is actively advancing.

2. Current Economic State Inherited by Trump

Scott Horsley provides a reality check on the economy Trump inherited:

• Inflation: While inflation soared to over 9% in mid-2022, it has since decreased to around 3% as of last January, still above the Federal Reserve's target of 2% (04:02).

• Job Market: The economy boasts robust job growth with unemployment hovering near 4%, defying recession predictions (04:02).

• GDP Growth: Sustained GDP growth indicates a healthy economic expansion (04:02).

Horsley notes the partisan lens through which economic performance is often viewed, with Democrats and Republicans each perceiving the economy more favorably when out of power.

3. Partisan Perspectives on the Economy

The discussion highlights how economic perceptions are influenced by political affiliations:

• Pre-Election Sentiments: During the campaign, Republicans viewed the economy more pessimistically than Democrats, a trend that reversed post-election (05:39).

• Current Sentiments: Democrats now express more concerns about the economy than Republicans, mirroring previous shifts when power changes hands in the White House (05:39).

4. Disconnect Between Economic Indicators and Personal Experiences

Sarah McCammon raises the issue of the gap between favorable economic metrics and the everyday struggles of Americans:

• High Consumer Prices: Despite positive indicators, consumers face persistent high prices on essentials like eggs, exacerbated by issues like bird flu (05:39).

• Consumer Sentiment vs. Economic Data: While economists highlight declining inflation rates, consumers still experience high grocery bills, leading to skepticism about the overall economic health (06:21).

5. Challenges for Trump's Economic Strategy

As the economy transitions under Trump's administration, several challenges emerge:

• Ownership of the Economy: Horsley asserts that Trump will eventually need to take responsibility for the economy's performance, despite limited presidential control over broader economic factors (06:21).

• Continued Inflation Pressures: Persistent high prices, such as a 15% increase in egg prices within a month, present ongoing obstacles to public satisfaction (07:49).

• Tariff Implications: Danielle emphasizes that tariffs, contrary to Trump's portrayal, ultimately burden American consumers by increasing the costs of imported goods (10:46).

6. Tariffs and Policy Tools

The episode examines the practical impacts of Trump's tariff policies:

• Implementation of Tariffs: Trump has imposed tariffs on China (10%) and signed orders for 25% tariffs on steel and aluminum, though some measures are pending implementation (02:46).

• Reciprocal Tariffs: The administration's approach includes "reciprocal tariffs," aiming to match tariffs imposed on the U.S. by other countries (02:46).

• Economic Consequences: Tariffs are likely to raise prices for consumers, negating their intended benefits of boosting domestic manufacturing (10:46).

7. Congressional Dynamics and Economic Policy

Sarah McCammon and Danielle Kurtzleben discuss the interplay between the White House and Congress in shaping economic policy:

• Need for Congressional Approval: Major economic policies typically require congressional support. However, Trump has leveraged existing laws and national security justifications to impose tariffs unilaterally (11:32).

• Potential for Bipartisan Cooperation: While there is a slim majority for Republicans in Congress, bipartisan efforts remain uncertain, hinging on policy specifics and political strategies (11:32).

• Upcoming Budget Deadline: The March 14th budget deadline poses a critical test for Trump and Congressional relations, with potential outcomes including government shutdowns (13:18).

8. Key Economic Indicators to Watch

Scott Horsley identifies essential metrics to monitor in assessing the economy's trajectory:

• Inflation Trends: Whether inflation continues to decline towards the 2% target or stabilizes around 3%, and the impact on consumer prices (13:29).

• Interest Rates: Particularly long-term rates like mortgage rates, which have risen due to expectations of increased federal deficits and borrowing (13:29).

• Job Market Health: Continued job creation is vital for economic stability and personal financial security (13:29).

• Consumer Spending: As the primary driver of the U.S. economy, shifts in consumer spending habits, especially post-holiday spending behaviors, are crucial indicators (13:29).

9. Conclusion

The episode concludes with a reflection on the complexities of managing the economy. While Trump's administration has inherited a relatively strong economic foundation, ongoing challenges such as inflation, consumer price pressures, and the effective implementation of tariff policies will significantly influence public perception and economic outcomes. The interplay between the White House and Congress, alongside the monitoring of key economic indicators, will shape the future trajectory of the U.S. economy under Trump's leadership.

Notable Quotes:

• Danielle Kurtzleben on Trump's tariff policy: "Tariffs, again, work differently than how Trump frames it. [...] In large part consumers, because those companies need to cover that cost somehow." (10:46)

• Scott Horsley on inflation and economic control: "Presidents have limited control over the economy. [...] There are certainly policies they can put in place that can move the needle one way or the other, but lots of things happen that are beyond the president's control." (06:21)

• Scott Horsley on economic indicators: "Consumer spending is the main driver of the economic engine in this country. [...] If people continue to spend, keep the economic gears turning or if they really keep a tight grip on their wallets and maybe slow the economy down." (13:29)

This detailed analysis provides listeners with a thorough understanding of the current economic landscape under President Trump, highlighting the interplay between policy decisions, economic indicators, and public perception.