Whether or not you agree with his policies, President Donald Trump has changed the way we talk about business and economic life in this country. He views the economy through a transactional lens: there are always deals to be made or renegotiated. He is CEO of America Inc. and he claims ownership of economic successes and stock market records. He places a high value on his gut instinct and his previous business experience over historical precedents and macroeconomic policy. And, of course, he communicates in a new way, often choosing Twitter or off-the-cuff pronouncements over speeches or press releases.
As we turn the corner on two years of the Trump presidency, we thought we’d take stock of where we are and what’s changed. We’ve identified key moments that illuminate how the president thinks and we’ll be rolling them out all week on the radio and on this page, below.
When he ran his business, Trump was always renegotiating debt. But balancing your personal debt is not the same as balancing a country’s. Kai Ryssdal explains.
In an interview on CNBC back in 2016, journalist Andrew Ross Sorkin asked Trump if the U.S. needs to pay 100 cents on the dollar for the money it owes, or if the country could renegotiate that debt.
“I would borrow knowing that if the economy crashed, you could make a deal. And if the economy was good it was good so therefore you can’t lose. It’s like you make a deal before you go into a poker game,” he said.
It's actually not like a poker game. American debt is literally the global standard. U.S. debt is backed by the American Treasury and the global economy depends on that trustworthiness.
And while he did kind of walk himself back, the whole episode was a pretty good early peek inside the economic mind of Donald Trump.
One metric Trump likes to use to measure his success is the stock market, and he’s not shy about taking credit for that on Twitter. He also wields the platform as a way to point out who should take the blame for something. Case in point: U.S. companies with business practices he disagrees with. Leigh Gallagher, an editor at Fortune Magazine, explains.
Stock Market could hit all-time high (again) 22,000 today. Was 18,000 only 6 months ago on Election Day. Mainstream media seldom mentions!— Donald J. Trump (@realDonaldTrump) August 1, 2017
As we all know, Trump's use of Twitter is unprecedented and he's been especially vocal in tweets about the stock market, consistent in pointing out that the strong performance — until the recent stretch of volatility, of course — is largely due to him. You know, almost from the beginning, the word “tweet” almost belies how serious these statements are and their impact. These are presidential statements.
Another very interesting thing that he started doing was targeting specific companies. Never before has a CEO of a major corporation had to worry about an attack-tweet from the president. But we saw it with Lockheed Martin, with GM. This has sort of been another kind of signature element of the Trump presidency, and really a brave new world.
Trump has used tariffs as an economic tool to push forward his trade agenda, which includes “strengthening the American economy” and negotiating deals he thinks would be fair for Americans. As a result, he’s slapped penalties on imports from countries around the world. But are they effective? Kai Ryssdal explains.
....I am a Tariff Man. When people or countries come in to raid the great wealth of our Nation, I want them to pay for the privilege of doing so. It will always be the best way to max out our economic power. We are right now taking in $billions in Tariffs. MAKE AMERICA RICH AGAIN— Donald J. Trump (@realDonaldTrump) December 4, 2018
The things the president says about this economy are often just repetitions of his previous exaggerations, or untruths.
That's part of what's going on here. He’s saying we, the government, are taking billions of dollars in tariffs. But what’s not being said is that those billions are being paid by American consumers.
The real grabber in this one, though, was the first line: “I am a tariff man.”
It's a paraphrase from William McKinley, the 25th U.S. president, over 120 years ago. During his presidential campaign in 1896, McKinley said, “I am a tariff man, standing on a tariff platform.”
McKinley wins that election, and wins again in 1900. But in Sept. 1901, during his very last speech in Buffalo, New York (the day before he's assassinated), McKinley shows he's had a change of heart.
“Commercial wars are unprofitable,” he says. “A policy of good will and friendly trade relations will prevent reprisals.”
And yes, I was a history major.
Tariffs have come from Trump’s fundamental belief that other countries and businesses are taking advantage of the U.S. Tariffs may mean that more money is flowing into the Treasury, but American companies and farmers who are being hit with retaliatory tariffs or who have to find new ways of doing business might disagree that trade wars are “good and easy to win.” Catherine Rampell, an opinion columnist at The Washington Post, explains.
When a country (USA) is losing many billions of dollars on trade with virtually every country it does business with, trade wars are good, and easy to win. Example, when we are down $100 billion with a certain country and they get cute, don’t trade anymore-we win big. It’s easy!— Donald J. Trump (@realDonaldTrump) March 2, 2018
In March 2018, Trump had this very famous tweet about how trade wars are good and easy to win, thereby revealing how little he understands about what in fact a trade war is — which is definitionally bad and everyone loses.
It’s like that famous movie from the ‘80s with Matthew Broderick, “WarGames,” that the only winning move is not to play. And we have seen that since then.
Their tariffs against us escalated. Our tariffs against them escalated. We are now in the middle of multiple trade wars, not just the one, which was basically what he was talking about at the time last March — and no one seems to be better off for it.
President Trump, always on the lookout for a good investment, has viewed tariffs not just as a negotiation tool, but a way to actually make money. He’s claimed that the tariffs he’s imposed on imports from China are raking in billions for the U.S. But that’s actually wrong. Kai Ryssdal explains why.
Billions of Dollars are pouring into the coffers of the U.S.A. because of the Tariffs being charged to China, and there is a long way to go. If companies don’t want to pay Tariffs, build in the U.S.A. Otherwise, lets just make our Country richer than ever before!— Donald J. Trump (@realDonaldTrump) November 29, 2018
It is true that billions of dollars are flowing into the coffers of the USA. About $7 billion more last fiscal year than a year earlier, according to the Treasury Department.
For some perspective, that's less than two-tenths of a percent of all the money the federal government collected last year.
But the bigger point is that the tariffs aren't being paid by China. Not the Chinese government and not Chinese companies.
President Trump's tariffs, all presidents' tariffs, are paid by American consumers.
Tariffs last year bumped consumer inflation about three-tenths of a percent higher, according to an analysis from the Federal Reserve Bank of New York.
Trump is not the first president — nor probably the last — to call out the Fed. But he has been relentless because he thinks the Fed is raising interest rates too fast, which he says makes the central bank the “biggest risk” to the U.S. economy. At one point, he even said “the Fed is going loco and there’s no reason for them to do it.” Dion Rabouin, markets editor at Axios, explains:
The moment President Trump talked about in the terms that he used — the Fed being the biggest threat — that actually had come on the back of him saying the Fed was ‘loco’ The president didn't actually pull back from these remarks. He actually doubled and tripled and quadrupled down as the year went on, and made clear that he doesn't understand how monetary policy works or how the Fed actually operates. It really just made clear that the president was really about assigning blame if things go wrong and that he would do that at all costs no matter how it made him look to sensible people.
The economy is healthy by many measures — job growth is robust and unemployment has hit record lows over the past year. But Trump wants credit for all of these economic gains. Sudeep Reddy, managing editor for Politico, explains.
The Economy is soooo good, perhaps the best in our country’s history (remember, it’s the economy stupid!), that the Democrats are flailing & lying like CRAZY! Phony books, articles and T.V. “hits” like no other pol has had to endure-and they are losing big. Very dishonest people!— Donald J. Trump (@realDonaldTrump) September 10, 2018
The moment Donald Trump tweeted that the economy is so good and he's just not getting credit for it made me think about all of what we've been discussing for the last decade in economic policy. The president had an opportunity to deliver the dream of every Republican in America: cutting taxes, slashing regulations, and boosting markets.
So he's done some of that, but with a huge degree of uncertainty along with it. Uncertainty about trade deals, uncertainty about whether the government is going to remain [open]. Uncertainty about America's place in the world from multinational corporations that are obviously trying to operate in a globalized world, and not really sure what an “America First” policy should entail.
So that's where he's falling a little bit short, not getting credit. He's not necessarily making us feel good about a soaring stock market or a super low unemployment rate or a decade-long expansion. And until he can make people feel good about the economy he's delivered, then he's not going to get the credit he wants from Democrats or anyone else.
On the campaign trail, Trump said he wanted to build a border wall with Mexico — and that Mexico would pay for it. But everybody knew it wouldn’t — Mexico actually said so. So the president, in the two years he's been in office, has been moving the who’s-gonna-pay goalpost. Kai Ryssdal explains:
I often said during rallies, with little variation, that “Mexico will pay for the Wall.” We have just signed a great new Trade Deal with Mexico. It is Billions of Dollars a year better than the very bad NAFTA deal which it replaces. The difference pays for Wall many times over!— Donald J. Trump (@realDonaldTrump) January 11, 2019
The president has said similar things in different venues, but there are just a couple of problems with the president's new payment plan for his wall. First of all, the new NAFTA, also known as the United States-Mexico-Canada Agreement (USMCA), hasn't been ratified yet, so it's not in effect, which means it's not paying for anything.
There also aren't any new tariffs in the USMCA, so there's no new tariff revenue coming in.
And finally, and one hates to belabor a point that the government shutdown is making clear every day, but Congress controls the purse strings. So even if and/or when new tariff money from the USMCA starts coming in, Congress will decide how it gets spent. That's the actual economic conversation.
A federal regulation prohibits executive branch officials from commenting on economic data within an hour of its release. But before they were supposed to go out, Trump tweeted. We asked Nela Richardson, investment strategist for Edward Jones, to explain the significance.
Looking forward to seeing the employment numbers at 8:30 this morning.— Donald J. Trump (@realDonaldTrump) June 1, 2018
When the president tweeted how great the economy was in advance of the actual numbers in the labor market being released, it was eye-opening and surprising to me to say the least.
And that's because I know that that process is very secure and it's painstakingly careful to make sure that no one gets advanced information. That information can move markets.
But I have to say it did renew my faith and trust in the civil servants who put out that data. It's the process that gives credibility to the data. And so by the time that number reached the White House or the Fed or any other spokesperson or leader, that number had been baked in. It had been rigorously analyzed and put forward. And so there was no one who's going to alter that number because of the process.
Going forward, you see that in every single agency — that independence and autonomy when it comes to data. You see it in the Congressional Budget Office (CBO) when it comes to the deficit and their projections. You see it in the Fed when they're talking about the independence from the White House or from Congress and politics in general. The credibility of our institutions is largely built on the credibility of our data. And again that's independent of whoever holds the office of the president.
Trump's always thinking as a real estate developer — even when it comes to diplomacy. Kai Ryssdal explains.
Part of what the president has done to the national economic conversation — part of why he won, arguably — is that he's framing that conversation through his background as a businessman, a deal-maker, and a guy who made his money in real estate.
You saw this at his historic June 2018 meeting with North Korean leader Kim Jong-un. At a news conference after the meeting, the president detailed their conversations. He talked about denuclearization, North Korea’s human rights record, and what he saw as a path to economic prosperity for the isolated regime.
What does that include? “Great beaches,” according to Trump.
President Trump says North Korean beaches could make a great location for condos, they could also have great hotels pic.twitter.com/cZhhhTV72x— CNBC (@CNBC) June 12, 2018
“You see that whenever they're exploding their cannons into the ocean. I said: ‘Boy, look at that view. Wouldn't that make a great condo?’ And I explained, I said, you know: ‘Instead of doing that, you could have the best hotels in the world right there.’ Think of it from a real estate perspective: You have South Korea, you have China, and they own the land in the middle. How bad is that, right? It's great,” he said.
In January 2019, the White House announced that President Trump will meet again with Kim Jong-un in late February.