Podcast Summary: To The Contrary with Charlie Sykes – Episode: Jessica Riedl: The Last Fiscal Conservative

Release Date: August 7, 2025
Host: Charlie Sykes
Guest: Jessica Riedel, Senior Fellow at the Manhattan Institute

Introduction to the Discussion

In this episode, Charlie Sykes engages in a profound conversation with Jessica Riedel, a prominent fiscal conservative and the last remaining voice of strict fiscal conservatism in contemporary American politics. The discussion delves into the current economic landscape, the erosion of fiscal principles across both major political parties, and the consequential policies shaping the nation’s financial future.

Fiscal Conservatism in the Current Political Climate

Challenges of Upholding Fiscal Conservatism

Jessica Riedel expresses her frustration with the shifting political tides, where fiscal conservative principles are being compromised by both Republican and Democratic administrations. She reflects on her experience being celebrated by conservative networks for critiquing deficits and regulations, only to be ostracized when subsequent administrations adopt even more expansive fiscal policies.

Jessica Riedel [02:24]: "When Reagan said the Democratic Party, I didn't leave the Democratic Party. The Democratic Party left me. I'm just applying the same free market principles across Republicans and Democrats. But suddenly I'm the villain."

Shift in Economic Power

Charlie highlights a critical shift in economic authority, noting that the contemporary economy is increasingly influenced by what he terms the "Leviathan state," centralizing power in Washington, D.C.

Charlie Sykes [03:08]: "Economists are saying that despite all of Trump's promises to free the marketplace and free businesses, right now the center of the world economy is decided by the Leviathan state, by DC Economic policy."

Government Data Manipulation and the BLS Job Report

Undermining Trust in Government Data

A significant portion of the discussion focuses on the integrity of government data, specifically the Bureau of Labor Statistics (BLS) job reports. Riedel criticizes the Trump administration for undermining the BLS by slashing staff and disbanding advisory groups, leading to compromised data reliability.

Jessica Riedel [08:45]: "This goes to the basic authoritarian thirst to control information and control data. You cannot trust any government data coming out of the Trump White House for the next four years."

Charlie adds that the undermining of the BLS not only affects public trust but also leads to misguided policy decisions due to unreliable economic indicators.

Charlie Sykes [12:46]: "This is really the authoritarian playbook of the Trump regime wanting to control all the data."

Impact on Economic Policy and Business Decisions

The erosion of credible data sources like the BLS leads to confusion among policymakers and businesses, resulting in poor investment decisions and economic dysfunction similar to scenarios observed in countries with unreliable government data.

Jessica Riedel [14:46]: "When you have bad data, the White House thinks it just means you give a rosier picture to the voters... policymakers... are operating on data that they don't know is correct."

The Impact of Tariffs on the Economy

Trump's Tariff Policies and Their Consequences

Riedel critiques President Trump's tariff policies, emphasizing that while the administration boasts about increased tariff revenues, the broader economic implications reveal a less rosy picture. She explains that the anticipated revenue is offset by a slowing economy, reduced imports, and increased compliance costs for businesses.

Jessica Riedel [15:42]: "Tariff revenue is growing $20 billion a month. However, factors in the economy are offsetting that revenue... tariffs are leading to a slower economy, less income to tax, and increased compliance costs."

Delayed and Visible Price Increases

Although initial projections underestimated the inflationary effects of tariffs, Riedel notes that price increases are becoming more apparent as inventory drawdowns cease and companies can no longer absorb the costs.

Jessica Riedel [18:54]: "Last month we had prices rise at an annualized rate of 3.6%, which is the highest rate we've had under President Trump. It has risen."

US-China Trade Relations and Tariffs

Misaligned Tariff Targets

The conversation shifts to the trade war with China, where Riedel points out the inconsistency in targeting countries like India with significant tariffs while China, the primary focus of intellectual property theft concerns, remains less affected.

Jessica Riedel [23:26]: "China is really what the trade war is about... slapping 100% tariffs on Chinese imports is cutting off your nose to spite your face."

Long-Term Consequences for US Trade

Riedel warns that aggressive tariffs could inadvertently strengthen China's position in global trade by encouraging other nations to view China as a more reliable trading partner, thereby undermining the US's economic standing.

Jessica Riedel [24:18]: "China may actually welcome less trade to the United States if the result is they get bigger access to markets around the rest of the world."

Federal Reserve Independence and Potential Political Interference

Threats to Central Bank Independence

A critical point of discussion is the potential political interference with the Federal Reserve, specifically the possibility of President Trump replacing Jerome Powell. Riedel underscores the dangers of politicizing the Fed, highlighting that such actions would erode its credibility and destabilize monetary policy.

Jessica Riedel [26:12]: "Central bank independence is the cornerstone of effective and credible monetary policy. If the President politicizes the Fed, it will raise long-term interest rates by undermining its credibility on inflation."

Market Implications of Fed Undermining

Sykes adds that undermining the Fed could lead to higher long-term interest rates as markets anticipate increased inflation, contrary to the administration's intentions to create economic stability.

Charlie Sykes [26:20]: "If the President politicizes the Fed, the Fed loses all credibility on inflation... demand higher interest rates to compensate for anticipated inflation."

The Gerrymandering Wars and Political Implications

Escalation of Gerrymandering Efforts

The episode also explores the intensifying battles over gerrymandering, with states like Texas actively redrawing congressional maps to favor specific parties. Riedel criticizes this trend, arguing that it leads to increasingly non-competitive districts and undermines democratic principles.

Jessica Riedel [32:18]: "I don't think it serves democracy well to have states that are 52% of one party getting 80 or 90% of the congressional seats."

Potential for a Self-Perpetuating Cycle

Sykes expresses concern that ongoing gerrymandering will create a vicious cycle where each party, after gaining power, entrenches its advantage by further manipulating district boundaries, leading to a dysfunctional political system.

Charlie Sykes [35:04]: "We're headed to a tremendously ugly place... if one party destroys certain Democratic norms, then the other party is going to say, well, okay, if those are the new rules, then we're going to do this as well."

Need for National Standards

Both hosts agree on the necessity for a national, uniform solution to redistricting that transcends partisan interests, though they acknowledge the difficulty in achieving bipartisan cooperation in the current political climate.

Jessica Riedel [34:06]: "Ultimately, we need some sort of national uniform solution that takes out some of the extreme partisan politics."

Conclusion and Final Thoughts

In wrapping up, Riedel and Sykes emphasize the urgent need to address the erosion of fiscal conservatism, the manipulation of economic data, and the destructive nature of partisan gerrymandering. They advocate for institutional reforms and bipartisan solutions to restore trust in government institutions and ensure a stable economic and democratic future.

Charlie Sykes [36:22]: "Jessica Riedel, thank you so much for your time and for coming back on the podcast. We always appreciate your insight."

Jessica Riedel [36:19]: "Always a fun conversation. Thanks Charlie."

Notable Quotes:

• Jessica Riedel [02:24]: "I'm just applying the same free market principles across Republicans and Democrats. But suddenly I'm the villain."

• Charlie Sykes [03:08]: "The center of the world economy is decided by the Leviathan state, by DC Economic policy."

• Jessica Riedel [08:45]: "You cannot trust any government data coming out of the Trump White House for the next four years."

• Charlie Sykes [12:46]: "This is really the authoritarian playbook of the Trump regime wanting to control all the data."

• Jessica Riedel [15:42]: "Tariff revenue is growing $20 billion a month... tariffs are leading to a slower economy, less income to tax, and increased compliance costs."

• Jessica Riedel [26:12]: "Central bank independence is the cornerstone of effective and credible monetary policy."

• Jessica Riedel [32:18]: "I don't think it serves democracy well to have states that are 52% of one party getting 80 or 90% of the congressional seats."

This episode provides a comprehensive analysis of the current economic and political challenges facing the United States, emphasizing the critical need for adherence to fiscal conservatism, integrity in government data, and the preservation of democratic processes.