Podcast Summary: The Rundown

Episode: Why Tariffs Haven't Tanked the Economy (ft. Justin Wolfers)
Date: December 21, 2025
Host: Zaid Admani (A)
Co-host: Kyla Scanlon (C)
Guest: Justin Wolfers, Economics Professor, University of Michigan (B)

Episode Overview

This episode digs into the current economic landscape, focusing on the impact of tariffs, the Federal Reserve's recent actions, and the reliability of official economic data. Zaid and Kyla engage in a lively, sometimes fiery conversation with economist Justin Wolfers, who cuts through media narratives and political spins to clarify what's really happening with tariffs, inflation, the Fed, and policy's effect on affordability.

Key Discussion Points & Insights

1. Fed Dissent and Uncertainty ([00:00]–[03:04])

• Fractured Fed: The latest Federal Reserve meeting included dissent, with some officials wanting larger or no rate cuts.
• Significance: Justin emphasizes that genuine disagreement in the Fed, a body historically driven by consensus, is unusual and important.
  • "This is what's regarded as Wrestlemania. This is like throwing chairs and this is leaping off the top turnbuckle." (B, [02:20])
• Powell's Stance: Fed Chair Jerome Powell is signaling to markets that control isn’t as complete as assumed; division means the future path is unclear and "tremendously exciting" for observers.

2. Manipulation and Reliability of Economic Data ([03:04]–[10:53])

• Media Narratives: Kyla and Justin discuss Powell’s comments on potential overestimation of jobs numbers and stress the integrity of the Bureau of Labor Statistics (BLS).
  • "The statistics are not being manipulated. This is an honest process..." (B, [04:32])
  • There are technical limitations but not political interference; any survey or data system has flaws.
• Data Process: The BLS uses coded algorithms planned long in advance, and all systems can lag or need revision, but this is standard, not suspicious.
  • "This is not a misinformation campaign. This is not a broken BLS." (B, [05:25])
• Public Trust: Growing political attacks on institutional independence make it harder for non-experts to know what to believe.

3. Political Interference and Institutional Independence ([06:08]–[10:08])

• Historical Perspective: Justin notes a shift post-2016: official numbers from the White House are no longer presumed reliable as truth has become contested, with public institutions under threat.
  • "When the President says a number out loud, he no longer deserves the benefit of the doubt. Historically they did. He's lied more often than he's told the truth." (B, [08:46])
• Institutional Integrity: While the BLS and similar agencies retain credibility, there is increasing political pressure that could undermine them.

4. Trump, Rate Cuts, and Economic Theory ([10:53]–[14:34])

• Why the Push for Rate Cuts?
  • Justin refuses to speculate on Trump's motivations as an economist but offers frameworks:
    • Trump’s background as a property developer favors low interest rates.
    • Suggests a possibly idiosyncratic or "strong man" disregard for expert consensus, drawing analogies to Erdogan in Turkey.
  • "I'm going to recommend it to you. I don't answer questions that are of the form, why does Trump think ... These are questions for his therapist. I'm an economist." (B, [11:25])
• Trumpian Economics: Posits that if Trump has a theory, it’s to always run the economy hot, focusing less on conventional constraints.

5. Tariffs—Theory vs. Reality ([14:34]–[22:46])

• Why Haven’t Tariffs Hurt More?
  • U.S. tariffs have not been implemented consistently; policy reversals and delays mean businesses don’t treat them as fully permanent.
  • "We haven't had the Trump tariff regime implemented for any significant period of time." (B, [17:11])
• Tariff Impact:
  • Justin explains tariff-driven inflation:
    • Demand-side inflation (e.g., from stimulus) eventually raises wages, offsetting price jumps.
    • Cost-push inflation from tariffs doesn't—so wage-earners suffer persistent losses.
    • "With tariffs, it's a cost driven inflation. ... The boss has no extra cash to pay you, so your wage will not catch up." (B, [19:21])
    • Even modest tariff-driven inflation multiplies into significant, lasting real income loss over time (example: "The cost of a tariff-driven inflation ... is 33 times larger" [20:34]).
  • Trade enables affordability, especially for working-class families: cheaper toys, food, and goods are a direct result of trade, not domestic production.
    • "For anyone who's listening, if your grandparents are still alive, ask your grandmother or grandfather how many toys they had when they grew up. For my grandmother it was four... My kids... it's probably 400." (B, [21:34])

6. The Affordability Agenda ([23:09]–[27:03])

• Current Affordability Issues:
  • Tariffs, mass deportations (raising construction/ag prices), redistribution from working class to wealthy, expiring Obamacare subsidies, fiscal deficits, SNAP/food stamp cuts, and energy policy are all contributing to cost pressures.
  • "I have a radical affordability agenda for the Trump administration. Stop doing dumb shit. That's it." (B, [26:11])
• Lasting Policy Challenges:
  • Issues like housing require local/state-level solutions; broad awareness exists, but action is politically challenging ("Not in my backyard" syndrome).

Notable Quotes & Moments

• On Fed Dissent:
  "In the staid and boring world that Kyla and I inhabit, this is what's regarded as Wrestlemania."
  — Justin Wolfers (B), [02:20]

• Integrity of Bureau Stats:
  "The statistics are not being manipulated. This is an honest process ..."
  — Justin Wolfers (B), [04:32]

• On Presidential Data Reliability:
  "When the President says a number out loud, he no longer deserves the benefit of the doubt."
  — Justin Wolfers (B), [08:46]

• On Tariffs and Their Real Cost:
  "With tariffs, it's a cost driven inflation ... your wage will not catch up. So ... the cost is persistent, it lasts forever."
  — Justin Wolfers (B), [19:21]

• Summary of Trump’s Affordability Agenda:
  "I have a radical affordability agenda for the Trump administration. Stop doing dumb shit. That's it."
  — Justin Wolfers (B), [26:11]

Timestamps for Important Segments

• Fed Dissent & Impact: [00:00]–[03:04]
• Official Stats & Media Narratives: [03:04]–[10:53]
• Political Interference & Trust: [06:08]–[10:08]
• Trump, Rate Cuts, and ‘Trumpian Economics’: [10:53]–[14:34]
• Tariffs—Theory, Implementation, and Impact: [14:34]–[22:46]
• Affordability Crisis & Policy Solutions: [23:09]–[27:03]

Tone & Style

Justin Wolfers combines passion, wit, and detailed economic explanation, often infusing humor and directness. Kyla acts as a thoughtful co-host, prompting clarifications and broader reflections, while Zaid moves the discussion with targeted, investor-focused queries.

Summary

This episode offers a no-nonsense look at why tariffs haven't (yet) tanked the U.S. economy, highlighting how the lack of permanent implementation and the nature of cost-driven inflation limit immediate impacts—though the long-term costs are significant and persistent. Through Wolfers’ candid, sometimes scathing analysis, listeners get clarity on how policy, data integrity, and institutional trust shape today's economic story—amid a climate where headlines and political motives often muddy the waters.