November 12, 2025 • 32 mins
On this week’s Trumponomics, host Stephanie Flanders explores how Democrats are repurposing President Donald Trump’s 2024 campaign theme—affordability—as their own political cudgel, and whether it could lead to more victories in 2026. Bloomberg political correspondent Nancy Cook and The Atlantic writer Annie Lowrey join to unpack the politics and policy behind America’s enduring cost-of-living crisis.
Read more: https://www.bloomberg.com/news/articles/2025-11-07/government-shutdown-mamdani-win-show-us-politics-is-about-affordability
https://www.theatlantic.com/ideas/archive/2020/02/great-affordability-crisis-breaking-america/606046/
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Episode Transcript
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Speaker 1 (00:02):
Bloomberg Audio Studios, podcasts, radio news.
Speaker 2 (00:08):
Real disposable income is up seventeen percent since twenty eighteen.
Americans are very wealthy, but I think that they're still
living in this paradigm where everything feels really unaffordable, and
I think it's going to be really hard for any
politician to fax.
Speaker 3 (00:33):
I'm Stephanie Flanders, head of Government and Economics at Bloomberg,
and this is Trumppomics, the podcast that looks at the
economic world of Donald Trump, how he's already shaped the
global economy, and what on earth is going to happen next.
This week, we're taking a closer look at the affordability
question in the US, how Democrats flipped Donald Trump's cost
(00:55):
of living message to their advantage during the recent off
year elections, and whether anyone is closer to having a solution.
One feature that the Democrats very different winning campaigns in
New York, Virginia, and New Jersey all had in common
the other week was a focus on high prices. Recent
polling show a majority of Americans aren't feeling great about
(01:17):
what is squarely now Donald Trump's economy, and in the
wake of the longest ever shut down in the US
federal government. Many more voters are also worried about the
cost of their health insurance going up even higher. Whether
you call it affordability or the cost of living, It's
a theme that's coming to dominate politics in many industrial economies,
but it's taken on a new residence in the US
(01:40):
now that Democrats see an opportunity to play all of
last year's criticisms of President Biden against Donald Trump. The
President floated a couple of his own solutions in the
past week. Two thousand dollar checks for every American minus
the really rich ones, funded out of higher tariff revenues,
and the introduction of fifty year mortgages. The numbers on
(02:01):
the first of those don't really add up, to put
it mildly, and his own Treasury Department doesn't seem super
enthusiastic so far about the fifty year mortgage plan. We
may come back to those in a future episode, but
given that it is now the Democrats putting the issue
front and center, I wanted to focus on what policies
could really make America more affordable for ordinary families and
(02:24):
what it will take for Democrats to credibly promise to
deliver them well to help me answer some of these questions.
We've invited Annie Lowry, as staff writer at The Atlantic,
onto the podcast. Annie has done more than anyone, arguably
to put affordability on the agenda in recent years, initially
with an essay for The Atlantic in twenty twenty on
(02:47):
the Great Affordability Crisis. She's also the author of Give
People Money, which was shortlisted for the Financial Times of
McKinsey Business Book of the Year award. Thanks so much
for joining Trump and Nomics for the first time, Annie.
Speaker 4 (02:57):
Lowry, Thank you so much for having me and.
Speaker 3 (03:00):
Nancy Cook not coming on for the first time on
Trump and Onomics, a frequent participant, a senior national political
correspondent for Bloomberg who wrote an essay for US this
weekend looking at, in her words, how Democrats have turned
Donald Trump's economic playbook against him. Nancy, great to have
you on again.
Speaker 4 (03:18):
Thanks for having me.
Speaker 3 (03:26):
I'm going to just start quickly with you, Nancy, just
to kind of set the scene in terms of the
motivation for you writing that essay. You know, we had
these good results for the Democrats last week in the
off year elections, and although there's plenty of people arguing
about what lessons are for the party political lessons. There
does seem to be a sort of message lesson, which
(03:48):
was that playing the affordability agenda against Donald Trump has
been a potent PLA's call weapon for Democrats of all
kinds in those races. So just give me a sort
of quick summary of your peace and how you think
affordability is now driving politics in Washington conversations around the country.
Speaker 1 (04:08):
Well, so, Donald Trump really won power again by relentlessly
going after Joe Biden in the twenty twenty four election
over inflation, his handling of the economy, and that was
really his message. He positioned himself as the best steward
of the US economy an he won. One of my
top priorities will be to quickly defeat inflation and make
(04:29):
America affordable again.
Speaker 2 (04:31):
We will quickly defeat it.
Speaker 4 (04:32):
We have to bring down prices.
Speaker 1 (04:34):
And what has happened is that prices haven't really gone down.
Americans still feel very frustrated by their buying power, their
inability to afford a home, college prices are still very high.
Every aspect of their life still feels unaffordable. And there's
sort of new areas where we're seeing that with electricity
prices going up because of AI data centers. But basically
(04:56):
Democrats took what Trump had done against Biden on the
enemy and did it to him in several sort of
key local elections around the country in the US. This
is not a typical electioneer. It's an off cycle electioneer.
But it did give us a foreshadowing of a potentially
very potent message that they'll have for the twenty twenty
six midterms and then again for the twenty twenty eight
(05:18):
presidential cycle.
Speaker 3 (05:19):
Annie, the essay that you wrote for The Atlantic five
years ago, I thought was the first time where someone
had pulled together why people were feeling so downbeat about
the economy and priced out of things that they want
the kind of life they want to despite on the
surface it seeming like a pretty strong economy when you're
(05:40):
sort of hearing all these politicians now banging the drum
for affordability. How did you get drawn to it five
years ago? And how much do you think has actually
changed since then? Has anything got better? Has everything got worse?
Speaker 4 (05:52):
It's a good question.
Speaker 2 (05:53):
And when I was writing the piece, I had been
writing for thirteen years at that point, and I know
all of us had been covering for thirteen years. At
that point, the problem in the United States economy as
being insufficient demand right, high unemployment, low wage growth, and
(06:13):
anemic middle class. And you had the Obama administration which
was aimed really squarely at increasing demand and giving people
more money to buy the things that they need. And
I think it really snuck up on us that actually
we had supply problems, we had pricing problems, and so
in some ways I think that that piece now it
(06:33):
seemed so blatantly obvious. But at the time, I remember
I was talking to some housing economists that were talking
about housing shortages starting in like twenty twelve, twenty thirteen.
I remember being like, what are you talking about a
housing shortage? Didn't you just see what happened with the collapse?
But you know, economists, I think had been noting this
for a while, that there were price problems, that there
(06:54):
were supply problems, and they've only gotten worse. Really, what
I think brought this to the four wasn't the underlying
and really serious problem with housing costs, childcare costs, higher
ed costs, healthcare costs which were really big. It was
the big surgeon inflation and the cost of like eggs, right.
It made people notice, I think, and the fact that
(07:16):
you had this just very big jump in rents into
everything else, that all of a sudden this became really salient.
And I think that we're still in this moment where
you know, at this point, real disposable income is up
seventeen percent since twenty eighteen. Americans are very wealthy, but
I think that there's still living in this paradigm where
everything feels really unaffordable, and I think it's going to
(07:39):
be really hard for any politician to fix.
Speaker 3 (07:42):
Well, there are also things that have got cheaper over
the last sort of twenty years, and people always use
the example of you toys and all these things that
we were getting from China. But there's these very big
ticket items that are expensive in many countries, many developed economies,
but seem to be have a particular issue in the US.
I was thinking particularly childcare. You've mentioned housing, medical costs,
(08:06):
which have clearly been front and center now. So do
you think that politicians are in a position where the
governors or congress people or the White House, is there
actually a capacity to pull the leavers on this? And
he talks about underlying supply issues Traditionally, presidents like to
throw money at staff. Often governors and congress people want
(08:28):
to do that. Do you get a sense when you
talk to the people on the hill that they actually
are looking at solutions that aren't just about throwing money
at things, I mean putting increasing demand in at its
point rather than addressing supply.
Speaker 1 (08:41):
Well, I don't think that Republicans in Washington, DC right
now are really focused on the solutions to this. I
do think that governors and local politicians and people in
Congress could do some things. One of the issues that's
facing New Jersey voters that was really salient in their
gubernatorial election last week was electricity prices, and that's a
huge issue in New Jersey. I think it will become
(09:03):
an increasing issue as these AI data centers sort of
take up more and more power and electricity prices will rise.
But part of the tricky thing about that is that
President Biden had stood up a whole sort of green
economy through the Inflation Reduction Act and a lot of
policies to try to incentivize the private sector to create
more jobs there and create more solar power and incentivize
(09:25):
people to buy electric cars. And then Trump has basically
undone a lot of that those policies in the economy,
and so it just makes it means that we're sort
of back to electricity as the main source of power
for people, and that means that there's going to be
less alternatives, less competitiveness, and that will drive up prices,
and so there are things people can do sort of
(09:45):
at the margins, but it means that you know, you
can't sort of have this partisan flip flopping every four
years when or every two years when a new party
comes to power and they undo everything that the previous
party did.
Speaker 3 (09:58):
And it risks and I mean you s yourself sometimes
what's brought it to the center of people's attention is
actually not some of the really longer lasting structural issues
that you've identified in that piece. And currently what's quite
potent for Democrats is blaming all the high inflation, high
prices on tariffs, when as you know, and we've discussed
many times on trumps, the evidence on that is pretty uneven.
(10:20):
It certainly doesn't explain the kind of squeezes on living
standards and affordability that people are feeling day to day.
But obviously it's a fantastic thing to beat the administration
with if you're a Democrat, you can just blame it
all on tariffs. But fast forward a year from now,
people will still feel things are very expensive and the
(10:43):
tariffs may not be as salient. What are the practical
ways that Democrats can be talking about solutions to the
affordability crisis rather than only sort of hoping that there
will be ways that they can constantly throw this back
at the administration.
Speaker 4 (11:00):
Yeah.
Speaker 2 (11:00):
Look, I think that one thing that is going to
become very obvious next year is if the ACA special
subsidies that are due to expire remain expired, millions and
millions and millions of Americans we're going to see their
healthcare premiums rise really sharply.
Speaker 3 (11:19):
This is on the Obamacare, the health insurance that we've
heard so much about.
Speaker 2 (11:22):
Yeah, and so I think that that is one place
where they'll be able to continue to hammer the Trump
administration and allied Republicans on Oh okay, they say that
they want you to have cheap prices and everything that
you want, but hey, they're raising the price of your electricity.
Hey you're uninsured now because you can't afford your premium. Hey,
(11:43):
those tariffs, you know, that cost sixteen hundred dollars per family.
And I do think that the Trump administration is going
to be in a bit of a bind if they
try to do stimulative policies to sort of relieve some
of these pressures. Right, If Trump ends up being allowed
to and writing these two thousand dollar checks and that
leads to interest rates remaining as high as they've been,
(12:06):
you know, that's not going to be good. And I
think it points to this broader problem, which is that
politicians have a tremendous toolbox when it comes to demand
side policies. They really do. They have a ton of
stuff that they can do, both you know, in terms
of the realm of monetary policy and the FED, but
also then in terms of Congress and even things that
individual governors can do. Demand, Right, supply is hard. It's
(12:30):
often inflationary to create news supply, it's often really really slow,
and prices are hard too. One place where the government
does have some price and control that I really do
think that you've seen both parties start to exert some
interest and some power is in terms of healthcare costs. Right,
we actually have healthcare supply for the most part in
(12:50):
this country. We could probably use more doctors and nurses.
I'm not saying that that's not a problem. But the
real problem is the prices. And so you know, as
you both know, the federal govern has its hands tied
in terms of things like negotiating the price of pharmaceuticals
for almost all but a very small subset of drugs.
Congress has notably tied its own hands. It was John
Bayner who did this like twenty years ago. I think
(13:13):
that you could see a policy something like, hey, we're
going to do uniform negotiations for prescription drugs. We are
going to cap prescription drug monthly copas at thirty five
dollars a month. I don't think that there's any policy
that could be more popular among both Democrats and Republicans,
and I do think that's actually something that the government
(13:33):
could do. Whereas bringing housing costs down, that's going to
take a long time. You face this issue of not
having a lot of federal control over that. Although there
are ways to set policies up to concentivize states and
cities to tie financing to ones that sort of make
themselves code compliant, but we've seen tremendous resistance in city
(13:54):
after city after city after city, and state after state
after state to doing this, California being the priming. I
think that there's some real policy change happening now, but
you know, they've had a housing crisis for forty.
Speaker 4 (14:05):
Years, so it's going to take a really, really long time.
Speaker 2 (14:08):
And I do note that behind all of this, I
think again is the fact that obviously interest rates are
coming down, but they're really high still, right So thirty
year mortgage rate is six point two percent right now,
most people are still mortgage locked if they own their home.
So it's a really complicated set of issues, and I
think the interplay between interest rates and the amount of
demand in the economy is a really important thing to
be watching. You know, the high interest rates are part
(14:31):
of the reason, along with high construction costs, that we've
seen just a complete cratering of housing starts at a
time when we really really want to start feeling that.
I think it's a seven and a half million unit
housing gap that we have, and we'll presumably still have
ten or twenty years from now.
Speaker 3 (14:47):
So you're focusing on health, which obviously I mean that
is clearly the area where in theory everyone agrees, certainly
in the broader public. There's just a sort of general
understanding that they say are in total high costs. I
guess a couple of things I would say in sort
of caution is if you look historically, there's been wide
(15:07):
agreement in the US for having a different kind of
healthcare system. You know, famously, for years and years people
have actually said they quite like try a single payer,
though that's obviously has never been remotely conceivable in terms
of legislation. And yet there have been things that have
got in the way, and every reform has managed to
be described in a way that makes it less popular,
(15:29):
thanks to lobbying and other things, that somehow the lesson
gets taken that it's going to increase costs or put
your insurance at risk. The extraordinary thing to me and
to anyone who doesn't live in the US all the time,
is that you have Obamacare, having had considerable success in
lowering the growth of costs, People, even with what you
(15:50):
would consider to be a good employer insurance scheme, are
still paying twenty five thousand dollars a year for their insurance.
They're still paying significant copays of outlays over the course
of the year. Millions of people still don't have insurance.
So I guess even when you've had effective intervention like
Obamacare and some of the things that the Biden and
(16:11):
Obama administration did to slow the cost of drug prices,
increasing drug prices, it doesn't feel remotely like a success
to the people on the other end of it. And
I sort of one that it's a very risky thing
to try and take on because even when you succeed,
everyone still thinks that their healthcare is really expensive.
Speaker 2 (16:31):
The average American spends fifteen hundred dollars a year out
of pocket, So Americans collectively spend half a trillion dollars
a year out of pocket on health costs. It's just
an extraordinary amount of money. And that's not including insurance costs.
That's not including Medicare, Medicaid, Tricare, all of the you know.
Speaker 4 (16:52):
The public policies.
Speaker 2 (16:53):
You know, the place that has worked I think most
successfully in the ACA is the Medicaid expansion. And now
that is very very much at risk because Republicans took
a trillion dollars from the program.
Speaker 4 (17:08):
They're going to kick millions of people off.
Speaker 2 (17:10):
By basically increasing the procedural requirements requiring folks to comply
with a work requirement in Medicaid, which some states have tried,
not terribly successfully. We've not had a national work requirement
in that program. But people on Medicaid, it's been fairly
stable in cost and it's proven itself to be pretty
good insurance. I remember again, fifteen years ago in the
(17:33):
ACA debates, people would be like, oh, you know, Medicaid
isn't really worth having, and now it's like, oh no,
it's really great. The copays are essentially zero, it very
much covers care. And that's not to say, you know,
it can be sometimes hard to find a doctor, they're
wait lists, all of these other issues, not to negate that,
but yeah, you know, it's it's really really tough in
terms of health insurance. But there are a lot of
(17:55):
policy answers. What I would say is that I think
that if you we're trying to create a bipartisan bill
that would start to solve some of these problems. A
lot of the fixes are quite technical, and I think
that you're completely right to say that anything that can
be cast as socialism is sort of immediately ejected out
of hand. But I do think that for instance, covering
(18:16):
all children under Medicare right, just up to the age
of eighteen you get Medicare great, or expanding Medicaid coverage,
lowering the Medicare age so more people get onto those plans,
which tend to be much more cost controlled, are all
policy solutions, and again, I think that you just need
something that sells it to the American people. It's why
(18:38):
I think drug prices are probably a really really good
place to start. And you know, Trump is trying to
do this, right, We're going to negotiate drug costs. You're
going to get ozebic for seventy dollars a month, like
I think that people would be okay with that, Whereas
we're going to take away your private insurance and push
you onto a public option. And yeah, you know, the
ACA was a real Frankenstein bill. Well, the American health
(19:00):
system is not what anybody would design if you were
effort designing it. I do think that there's like a
set of really really good, effective policies that are not
going to win anybody in election, and then some like
treats and goodies that I think could really help help
folks win an election, regardless of whether they were a
Democrat or a Republican.
Speaker 3 (19:35):
Nancy. When you're listening to people in DC and Democrats
are lighting on this affordability agenda, how much of people
thinking of this as a positive agenda leavers that they
could say they're going to pull if they get back
a retake control of Congress, And how much is this
(19:57):
is purely negative? This is of opportunism. You know, you
did this to Biden, now we're going to do it
to you.
Speaker 1 (20:04):
Well, I think the politicians, for politicians, it's just an opportunity.
It's a political opportunity to sort of bash Trump. Democrats
have been looking for a way to counter Trump for
a long time successfully and they haven't really found a
message that sticks and that doesn't make them sound trill,
and so this is a message that they feel like
can work. I do think that there's policy people in
(20:26):
Washington who are thinking through what an affordability agenda could
look like, and you know, are sort of light like
fixating on different buckets than policy people had before. So
I do think people are thinking about how to make
housing more affordable, how to make electricity more affordable. You know,
when I've covered past elections or past presidential campaigns, a
(20:47):
lot of the economic policy has revolved around things like
what should the tax rates be or how much stimulus
should we do? And I do think that the policy
questions that policy people are focusing on now are a
little bit different and just really tied to kind of
the cost of living things. And so I think that's
a discussion going on in the Democratic Party. And you know,
(21:09):
one of the most interesting things about the Trump White
House to me is that he is trying to do
some things to bring the cost of living down and
doing things that actually are supported by Democrats. I mean,
you know, trying to negotiate drug prices is like something
that Democrats are into, or you know, the White House
taking stakes in different companies, particularly related to you know,
(21:32):
some national security areas. We saw them do it with Intel,
we saw them do it with US deal with some
critical mineral companies. Those are policies that Bernie Zanders and
Elizabeth Warren have applauded. And so I do think the
Trump administration is kind of walking this dance of like,
you know, being very Republican and sort of very huing
to their mega agenda, but also trying to dip their
(21:54):
toe into things that you know, other people would view
as definitely kind of in this socialist vein, but it's
it's all these politicians kind of trying to figure out
how to tackle these very very complicated and nuanced issues, which,
by the way, are just changing as the US economy
changes and evolves, and you know, as we're seeing more
AI in the mix, we're seeing corporate people gain laid off.
(22:16):
You know, the US economy I feel like, has really
eded this huge moment of transition, and companies are trying
to deal with it, and economists and policy people, but
more politicians.
Speaker 3 (22:28):
And ane. I mean, one point about this agenda is
that although it's a very national debate, you know, the
kinds of things that you talked about at the beginning
just sound inherently local, and in fact, some of the
sort of failings, the supply side failings, if you like,
have been bigger in some of these big Democrat controlled
(22:50):
cities San Francisco and elsewhere New York for that matter,
then they have been in Republican states and localities. So
I just want to, you know, is there a disconnect
there that although we might be talking nationally about affordability,
actually the Democrats still have a challenge to show that
they can do the local things that you're actually going
(23:11):
to need to do to fix these problems.
Speaker 2 (23:14):
Yeah, one thing that I think that we've seen since
COVID roughly and probably a little bit before that, is
that what was originally really a problem of you know,
your Seattle, your San Francisco, your Los Angeles, your DC
or Boston has really become a national problem. So we
(23:36):
have pretty severe housing shortages in rural counties in the
United States. Now we have seen our big cities squeezing
families not only to the suburbs, but to less populated areas.
Speaker 4 (23:48):
So, you know, since COVID, we've seen.
Speaker 2 (23:51):
Rural population growth for the first time in a long time,
facilitated by the shift to work from home, but also
just by this tremendous squeezing of the loon. Right, people
have to go someplace, and people are moving to these
lower cost areas, most notably in the south right Arizona, Texas,
where the cost of living is lower.
Speaker 4 (24:11):
But you know, I have talked to.
Speaker 2 (24:13):
Folks who live in the suburbs outside of San Antonio,
for instance, and prices are going up a lot there.
Speaker 4 (24:20):
Which is really pretty remarkable.
Speaker 2 (24:22):
So the crisis is everywhere, and I do think that
the cost of other things like childcare is downstream from
housing costs, right, and the fact that you have a
relatively low unemployment rate, and also the high cost of
things like materials and electricity, all of this is part
of one system. And so I do think that that
has shifted the conversation for Democrats that they can make
(24:42):
this argument, Yeah, we're not just doing this for people
who are complaining about the cost of rent in Providence,
Rhode Island. We're doing this for you because we see
that you're getting squeezed by the same forces. And so
I think that we've now seen even just a rural
eviction crisis. We're in some rural areas the eviction rate
is matching that you have in some of the big cities,
(25:03):
which is really remarkable.
Speaker 4 (25:04):
So I do think that this is nationalized as a problem.
Speaker 2 (25:07):
On top of the fact that the media environment has nationalized,
the parties have obviously nationalized in terms of their focus.
That said, I do think that a lot of the
answers are going to be local on housing, and I
think that it will be a really really big puzzle
for Democrats and Republicans to figure out the best way
to incentivize localities to harmonize their building codes, to change
(25:33):
zoning rules.
Speaker 4 (25:34):
All of those kinds of things.
Speaker 2 (25:36):
Childcare, it's a bit different because I do think that
you just need a big pump of money to create supply.
These are very low wage jobs. Childcare is still very
unaffordable for parents. No other country has ever solved this
problem except with a lot of cash. New York is
obviously trying to do this at the municipal level, but
it means a fairly large tax increase on a relatively
(25:58):
small base. So there's a lot of looking at these
kind of laboratories of democracy to figure out if states
and localities can figure it out for themselves.
Speaker 3 (26:07):
My experience, and I suspect yours too, but certainly as
a TV correspondent in the UK, and these are obviously
these cost of living issues were are now very resonant
in the UK and some other countries as well. My
experience is that no one ever recognizes that things have
got better, at least from a price standpoint. You know,
you can have like all the data can say the
(26:27):
cost of this has gone down, We've slowed the rise
in this, that and the other. You will never find
anyone who admits that anything has got easier or cheaper.
So I just wonder on you, once we've now got
everybody on this affordability train, I mean, nobody is going
to start thinking that their lives have got cheaper, and
no one's really going to notice to your point, and
(26:47):
that wages have more than kept up with some of
these increases. So I mean, how the Democrats, particularly if
they're going to really push this agenda, guard against that,
because it seems to me we're just going to get
into a cycle where one side promises to resolve the
affordability crisis and then the other side beats them up
(27:08):
for not having done it a couple of years later.
Speaker 1 (27:10):
Well, I think that that's going to be a huge
challenge for Democrats. I think that's what we've seen over
the last few years, and I'm not super optimistic that
it will change. Just to be really honest with you,
the Biden administration had a really mixed record on the economy.
They pulled the US out of the pandemic, which was
a huge feat, and unemployment was pretty low. That big
(27:31):
rescue package was probably overly inflationary, so it was a
mixed picture. But like all Americans, saw were higher prices
for you know, paper towels and eggs and milk, and
that's what they held them accountable for. And so I
just think it's very hard to, you know, in any
type of political campaign, sort of messaged the nuance there.
And you know, we're seeing Trump have that challenge now.
(27:53):
You know, immediately after the election last week or the elections,
he was talking about how Republicans needed to do a
better job of talking about the economy. You're talking about
the tax bill. He was sort of lashing out, treating
this like a messaging problem and not a policy problem.
I think the biggest problem is Republicans don't talk about it.
Speaker 2 (28:10):
They don't talk about the word affordability.
Speaker 1 (28:12):
And so I think it will be really tricky for
people at the federal level in Congress and the White
House to sort of solve these things. And you know,
Republicans control everything right now in Washington, and they're not
able to control these things.
Speaker 4 (28:26):
Now.
Speaker 3 (28:26):
He's the also to focus on a couple of visible
things at the federal level. Do they need to be
kind of ruthless about just focusing on a handful of
concrete things that people will notice rather than taking responsibility
for what happens to the price of chicken and eggs.
Speaker 2 (28:44):
Yeah, So I think that there is a real lesson
in Zurnmum Donnie's candidacy, and that a lot of things
to note about his talent as a politician, right, really
positive speaking to a lot of different groups of New Yorkers,
real focus on affordability, real tangible policy proposals that were
(29:08):
easy to understand, fast free buses, universal childcare, municipal grocery stores. Right,
these are things that New Yorkers could get right, and
we can see four years from now, did he accomplish
these things or did he not? And so I think
when you go back and you look at the Biden
reelection campaign, it was really hard to say exactly what.
Speaker 4 (29:31):
They were running on.
Speaker 2 (29:32):
They had like a million policy proposals, a lot of
which were really technical. They were running on these big
bills that even now, if you asked me what was
in the IRA, right, like, I would probably take twenty
minutes to.
Speaker 4 (29:47):
Answer that question.
Speaker 2 (29:49):
And so I think that there is this importance of gestural,
simple bumper stickery policy making. And I think that jd.
Vance is going to face this problem, right, what does
he run on?
Speaker 4 (30:00):
Trump notably.
Speaker 2 (30:01):
You know, he wasn't sort of policy forward as a
candidate either time, So there's exceptions. Trump has a very
different type of political genius, right, Yeah.
Speaker 4 (30:12):
I think that for politicians.
Speaker 2 (30:14):
On both sides, making it so that you're not responsible
for the entirety of the affordability crisis, but instead you're
promising things that you can actually deliver. I think that
that that's going to be really important.
Speaker 1 (30:27):
Just to jump in here for one second. One of
the advantages that Democrats do have, which we saw with
the elections last week, is that a very diverse roster
of candidates. One so mont Damia, New York, you know,
is a Democratic socialist, but then thedidate. The gubernatorial candidates
in Virginia and New Jersey are real moderate female candidates,
(30:49):
experienced politicians who come out of national security backgrounds with
very centrist messages. So the Democratic Party at least at
this point, is very willing to kind of have a
lot of different types of candidates, and that is helpful
I think for solving affordability or unique problems at the
local level. The Republican Party is completely run by Trump
(31:10):
at this point, and if you defy him, even at
a local level, there is sort of retribution, there are
threats that they're going to get primary like everyone in
the entire party, including governors, need to be on the
Trump agenda, and so I think Democrats have an opportunity
in that because you know, what Gavin Newsom is doing
in California, you know, can be completely different than what
(31:33):
Abigail's Banberger is going to do in Virginia, and the
party is okay with that.
Speaker 3 (31:38):
That is a very wise point to end on. Thank you, Nancy.
It's a sort of unapologetically US focused episode, even by
the standards of Trumponomics, but I think it's all right
for once. Thank you very much, Annie Lowry and.
Speaker 1 (31:51):
Lacy Coote, thanks for having me.
Speaker 3 (31:52):
Thank you, thanks for listening to trump Ponomics from Bloomberg.
It was hosted by me Stephanie Flanders, and I was
joined by Annie Lowry, star writer at The Atlantic, and
Bloomberg's senior national political correspondent, Nancy Cook. Trumponomics was produced
(32:16):
by Summer Sadi and Moses and with help from Amy
Keen and special thanks this week to Rachel Lewis Chris Key.
Sound design is by Blake Maples and Nick Johnson and
Sage Bowman is Bloomberg's head of podcasts. To help others
find the show, please rate and review it highly wherever
you listen.
Bloomberg Audio Studios, podcasts, radio news.
Speaker 2 (00:08):
Real disposable income is up seventeen percent since twenty eighteen.
Americans are very wealthy, but I think that they're still
living in this paradigm where everything feels really unaffordable, and
I think it's going to be really hard for any
politician to fax.
Speaker 3 (00:33):
I'm Stephanie Flanders, head of Government and Economics at Bloomberg,
and this is Trumppomics, the podcast that looks at the
economic world of Donald Trump, how he's already shaped the
global economy, and what on earth is going to happen next.
This week, we're taking a closer look at the affordability
question in the US, how Democrats flipped Donald Trump's cost
(00:55):
of living message to their advantage during the recent off
year elections, and whether anyone is closer to having a solution.
One feature that the Democrats very different winning campaigns in
New York, Virginia, and New Jersey all had in common
the other week was a focus on high prices. Recent
polling show a majority of Americans aren't feeling great about
(01:17):
what is squarely now Donald Trump's economy, and in the
wake of the longest ever shut down in the US
federal government. Many more voters are also worried about the
cost of their health insurance going up even higher. Whether
you call it affordability or the cost of living, It's
a theme that's coming to dominate politics in many industrial economies,
but it's taken on a new residence in the US
(01:40):
now that Democrats see an opportunity to play all of
last year's criticisms of President Biden against Donald Trump. The
President floated a couple of his own solutions in the
past week. Two thousand dollar checks for every American minus
the really rich ones, funded out of higher tariff revenues,
and the introduction of fifty year mortgages. The numbers on
(02:01):
the first of those don't really add up, to put
it mildly, and his own Treasury Department doesn't seem super
enthusiastic so far about the fifty year mortgage plan. We
may come back to those in a future episode, but
given that it is now the Democrats putting the issue
front and center, I wanted to focus on what policies
could really make America more affordable for ordinary families and
(02:24):
what it will take for Democrats to credibly promise to
deliver them well to help me answer some of these questions.
We've invited Annie Lowry, as staff writer at The Atlantic,
onto the podcast. Annie has done more than anyone, arguably
to put affordability on the agenda in recent years, initially
with an essay for The Atlantic in twenty twenty on
(02:47):
the Great Affordability Crisis. She's also the author of Give
People Money, which was shortlisted for the Financial Times of
McKinsey Business Book of the Year award. Thanks so much
for joining Trump and Nomics for the first time, Annie.
Speaker 4 (02:57):
Lowry, Thank you so much for having me and.
Speaker 3 (03:00):
Nancy Cook not coming on for the first time on
Trump and Onomics, a frequent participant, a senior national political
correspondent for Bloomberg who wrote an essay for US this
weekend looking at, in her words, how Democrats have turned
Donald Trump's economic playbook against him. Nancy, great to have
you on again.
Speaker 4 (03:18):
Thanks for having me.
Speaker 3 (03:26):
I'm going to just start quickly with you, Nancy, just
to kind of set the scene in terms of the
motivation for you writing that essay. You know, we had
these good results for the Democrats last week in the
off year elections, and although there's plenty of people arguing
about what lessons are for the party political lessons. There
does seem to be a sort of message lesson, which
(03:48):
was that playing the affordability agenda against Donald Trump has
been a potent PLA's call weapon for Democrats of all
kinds in those races. So just give me a sort
of quick summary of your peace and how you think
affordability is now driving politics in Washington conversations around the country.
Speaker 1 (04:08):
Well, so, Donald Trump really won power again by relentlessly
going after Joe Biden in the twenty twenty four election
over inflation, his handling of the economy, and that was
really his message. He positioned himself as the best steward
of the US economy an he won. One of my
top priorities will be to quickly defeat inflation and make
(04:29):
America affordable again.
Speaker 2 (04:31):
We will quickly defeat it.
Speaker 4 (04:32):
We have to bring down prices.
Speaker 1 (04:34):
And what has happened is that prices haven't really gone down.
Americans still feel very frustrated by their buying power, their
inability to afford a home, college prices are still very high.
Every aspect of their life still feels unaffordable. And there's
sort of new areas where we're seeing that with electricity
prices going up because of AI data centers. But basically
(04:56):
Democrats took what Trump had done against Biden on the
enemy and did it to him in several sort of
key local elections around the country in the US. This
is not a typical electioneer. It's an off cycle electioneer.
But it did give us a foreshadowing of a potentially
very potent message that they'll have for the twenty twenty
six midterms and then again for the twenty twenty eight
(05:18):
presidential cycle.
Speaker 3 (05:19):
Annie, the essay that you wrote for The Atlantic five
years ago, I thought was the first time where someone
had pulled together why people were feeling so downbeat about
the economy and priced out of things that they want
the kind of life they want to despite on the
surface it seeming like a pretty strong economy when you're
(05:40):
sort of hearing all these politicians now banging the drum
for affordability. How did you get drawn to it five
years ago? And how much do you think has actually
changed since then? Has anything got better? Has everything got worse?
Speaker 4 (05:52):
It's a good question.
Speaker 2 (05:53):
And when I was writing the piece, I had been
writing for thirteen years at that point, and I know
all of us had been covering for thirteen years. At
that point, the problem in the United States economy as
being insufficient demand right, high unemployment, low wage growth, and
(06:13):
anemic middle class. And you had the Obama administration which
was aimed really squarely at increasing demand and giving people
more money to buy the things that they need. And
I think it really snuck up on us that actually
we had supply problems, we had pricing problems, and so
in some ways I think that that piece now it
(06:33):
seemed so blatantly obvious. But at the time, I remember
I was talking to some housing economists that were talking
about housing shortages starting in like twenty twelve, twenty thirteen.
I remember being like, what are you talking about a
housing shortage? Didn't you just see what happened with the collapse?
But you know, economists, I think had been noting this
for a while, that there were price problems, that there
(06:54):
were supply problems, and they've only gotten worse. Really, what
I think brought this to the four wasn't the underlying
and really serious problem with housing costs, childcare costs, higher
ed costs, healthcare costs which were really big. It was
the big surgeon inflation and the cost of like eggs, right.
It made people notice, I think, and the fact that
(07:16):
you had this just very big jump in rents into
everything else, that all of a sudden this became really salient.
And I think that we're still in this moment where
you know, at this point, real disposable income is up
seventeen percent since twenty eighteen. Americans are very wealthy, but
I think that there's still living in this paradigm where
everything feels really unaffordable, and I think it's going to
(07:39):
be really hard for any politician to fix.
Speaker 3 (07:42):
Well, there are also things that have got cheaper over
the last sort of twenty years, and people always use
the example of you toys and all these things that
we were getting from China. But there's these very big
ticket items that are expensive in many countries, many developed economies,
but seem to be have a particular issue in the US.
I was thinking particularly childcare. You've mentioned housing, medical costs,
(08:06):
which have clearly been front and center now. So do
you think that politicians are in a position where the
governors or congress people or the White House, is there
actually a capacity to pull the leavers on this? And
he talks about underlying supply issues Traditionally, presidents like to
throw money at staff. Often governors and congress people want
(08:28):
to do that. Do you get a sense when you
talk to the people on the hill that they actually
are looking at solutions that aren't just about throwing money
at things, I mean putting increasing demand in at its
point rather than addressing supply.
Speaker 1 (08:41):
Well, I don't think that Republicans in Washington, DC right
now are really focused on the solutions to this. I
do think that governors and local politicians and people in
Congress could do some things. One of the issues that's
facing New Jersey voters that was really salient in their
gubernatorial election last week was electricity prices, and that's a
huge issue in New Jersey. I think it will become
(09:03):
an increasing issue as these AI data centers sort of
take up more and more power and electricity prices will rise.
But part of the tricky thing about that is that
President Biden had stood up a whole sort of green
economy through the Inflation Reduction Act and a lot of
policies to try to incentivize the private sector to create
more jobs there and create more solar power and incentivize
(09:25):
people to buy electric cars. And then Trump has basically
undone a lot of that those policies in the economy,
and so it just makes it means that we're sort
of back to electricity as the main source of power
for people, and that means that there's going to be
less alternatives, less competitiveness, and that will drive up prices,
and so there are things people can do sort of
(09:45):
at the margins, but it means that you know, you
can't sort of have this partisan flip flopping every four
years when or every two years when a new party
comes to power and they undo everything that the previous
party did.
Speaker 3 (09:58):
And it risks and I mean you s yourself sometimes
what's brought it to the center of people's attention is
actually not some of the really longer lasting structural issues
that you've identified in that piece. And currently what's quite
potent for Democrats is blaming all the high inflation, high
prices on tariffs, when as you know, and we've discussed
many times on trumps, the evidence on that is pretty uneven.
(10:20):
It certainly doesn't explain the kind of squeezes on living
standards and affordability that people are feeling day to day.
But obviously it's a fantastic thing to beat the administration
with if you're a Democrat, you can just blame it
all on tariffs. But fast forward a year from now,
people will still feel things are very expensive and the
(10:43):
tariffs may not be as salient. What are the practical
ways that Democrats can be talking about solutions to the
affordability crisis rather than only sort of hoping that there
will be ways that they can constantly throw this back
at the administration.
Speaker 4 (11:00):
Yeah.
Speaker 2 (11:00):
Look, I think that one thing that is going to
become very obvious next year is if the ACA special
subsidies that are due to expire remain expired, millions and
millions and millions of Americans we're going to see their
healthcare premiums rise really sharply.
Speaker 3 (11:19):
This is on the Obamacare, the health insurance that we've
heard so much about.
Speaker 2 (11:22):
Yeah, and so I think that that is one place
where they'll be able to continue to hammer the Trump
administration and allied Republicans on Oh okay, they say that
they want you to have cheap prices and everything that
you want, but hey, they're raising the price of your electricity.
Hey you're uninsured now because you can't afford your premium. Hey,
(11:43):
those tariffs, you know, that cost sixteen hundred dollars per family.
And I do think that the Trump administration is going
to be in a bit of a bind if they
try to do stimulative policies to sort of relieve some
of these pressures. Right, If Trump ends up being allowed
to and writing these two thousand dollar checks and that
leads to interest rates remaining as high as they've been,
(12:06):
you know, that's not going to be good. And I
think it points to this broader problem, which is that
politicians have a tremendous toolbox when it comes to demand
side policies. They really do. They have a ton of
stuff that they can do, both you know, in terms
of the realm of monetary policy and the FED, but
also then in terms of Congress and even things that
individual governors can do. Demand, Right, supply is hard. It's
(12:30):
often inflationary to create news supply, it's often really really slow,
and prices are hard too. One place where the government
does have some price and control that I really do
think that you've seen both parties start to exert some
interest and some power is in terms of healthcare costs. Right,
we actually have healthcare supply for the most part in
(12:50):
this country. We could probably use more doctors and nurses.
I'm not saying that that's not a problem. But the
real problem is the prices. And so you know, as
you both know, the federal govern has its hands tied
in terms of things like negotiating the price of pharmaceuticals
for almost all but a very small subset of drugs.
Congress has notably tied its own hands. It was John
Bayner who did this like twenty years ago. I think
(13:13):
that you could see a policy something like, hey, we're
going to do uniform negotiations for prescription drugs. We are
going to cap prescription drug monthly copas at thirty five
dollars a month. I don't think that there's any policy
that could be more popular among both Democrats and Republicans,
and I do think that's actually something that the government
(13:33):
could do. Whereas bringing housing costs down, that's going to
take a long time. You face this issue of not
having a lot of federal control over that. Although there
are ways to set policies up to concentivize states and
cities to tie financing to ones that sort of make
themselves code compliant, but we've seen tremendous resistance in city
(13:54):
after city after city after city, and state after state
after state to doing this, California being the priming. I
think that there's some real policy change happening now, but
you know, they've had a housing crisis for forty.
Speaker 4 (14:05):
Years, so it's going to take a really, really long time.
Speaker 2 (14:08):
And I do note that behind all of this, I
think again is the fact that obviously interest rates are
coming down, but they're really high still, right So thirty
year mortgage rate is six point two percent right now,
most people are still mortgage locked if they own their home.
So it's a really complicated set of issues, and I
think the interplay between interest rates and the amount of
demand in the economy is a really important thing to
be watching. You know, the high interest rates are part
(14:31):
of the reason, along with high construction costs, that we've
seen just a complete cratering of housing starts at a
time when we really really want to start feeling that.
I think it's a seven and a half million unit
housing gap that we have, and we'll presumably still have
ten or twenty years from now.
Speaker 3 (14:47):
So you're focusing on health, which obviously I mean that
is clearly the area where in theory everyone agrees, certainly
in the broader public. There's just a sort of general
understanding that they say are in total high costs. I
guess a couple of things I would say in sort
of caution is if you look historically, there's been wide
(15:07):
agreement in the US for having a different kind of
healthcare system. You know, famously, for years and years people
have actually said they quite like try a single payer,
though that's obviously has never been remotely conceivable in terms
of legislation. And yet there have been things that have
got in the way, and every reform has managed to
be described in a way that makes it less popular,
(15:29):
thanks to lobbying and other things, that somehow the lesson
gets taken that it's going to increase costs or put
your insurance at risk. The extraordinary thing to me and
to anyone who doesn't live in the US all the time,
is that you have Obamacare, having had considerable success in
lowering the growth of costs, People, even with what you
(15:50):
would consider to be a good employer insurance scheme, are
still paying twenty five thousand dollars a year for their insurance.
They're still paying significant copays of outlays over the course
of the year. Millions of people still don't have insurance.
So I guess even when you've had effective intervention like
Obamacare and some of the things that the Biden and
(16:11):
Obama administration did to slow the cost of drug prices,
increasing drug prices, it doesn't feel remotely like a success
to the people on the other end of it. And
I sort of one that it's a very risky thing
to try and take on because even when you succeed,
everyone still thinks that their healthcare is really expensive.
Speaker 2 (16:31):
The average American spends fifteen hundred dollars a year out
of pocket, So Americans collectively spend half a trillion dollars
a year out of pocket on health costs. It's just
an extraordinary amount of money. And that's not including insurance costs.
That's not including Medicare, Medicaid, Tricare, all of the you know.
Speaker 4 (16:52):
The public policies.
Speaker 2 (16:53):
You know, the place that has worked I think most
successfully in the ACA is the Medicaid expansion. And now
that is very very much at risk because Republicans took
a trillion dollars from the program.
Speaker 4 (17:08):
They're going to kick millions of people off.
Speaker 2 (17:10):
By basically increasing the procedural requirements requiring folks to comply
with a work requirement in Medicaid, which some states have tried,
not terribly successfully. We've not had a national work requirement
in that program. But people on Medicaid, it's been fairly
stable in cost and it's proven itself to be pretty
good insurance. I remember again, fifteen years ago in the
(17:33):
ACA debates, people would be like, oh, you know, Medicaid
isn't really worth having, and now it's like, oh no,
it's really great. The copays are essentially zero, it very
much covers care. And that's not to say, you know,
it can be sometimes hard to find a doctor, they're
wait lists, all of these other issues, not to negate that,
but yeah, you know, it's it's really really tough in
terms of health insurance. But there are a lot of
(17:55):
policy answers. What I would say is that I think
that if you we're trying to create a bipartisan bill
that would start to solve some of these problems. A
lot of the fixes are quite technical, and I think
that you're completely right to say that anything that can
be cast as socialism is sort of immediately ejected out
of hand. But I do think that for instance, covering
(18:16):
all children under Medicare right, just up to the age
of eighteen you get Medicare great, or expanding Medicaid coverage,
lowering the Medicare age so more people get onto those plans,
which tend to be much more cost controlled, are all
policy solutions, and again, I think that you just need
something that sells it to the American people. It's why
(18:38):
I think drug prices are probably a really really good
place to start. And you know, Trump is trying to
do this, right, We're going to negotiate drug costs. You're
going to get ozebic for seventy dollars a month, like
I think that people would be okay with that, Whereas
we're going to take away your private insurance and push
you onto a public option. And yeah, you know, the
ACA was a real Frankenstein bill. Well, the American health
(19:00):
system is not what anybody would design if you were
effort designing it. I do think that there's like a
set of really really good, effective policies that are not
going to win anybody in election, and then some like
treats and goodies that I think could really help help
folks win an election, regardless of whether they were a
Democrat or a Republican.
Speaker 3 (19:35):
Nancy. When you're listening to people in DC and Democrats
are lighting on this affordability agenda, how much of people
thinking of this as a positive agenda leavers that they
could say they're going to pull if they get back
a retake control of Congress, And how much is this
(19:57):
is purely negative? This is of opportunism. You know, you
did this to Biden, now we're going to do it
to you.
Speaker 1 (20:04):
Well, I think the politicians, for politicians, it's just an opportunity.
It's a political opportunity to sort of bash Trump. Democrats
have been looking for a way to counter Trump for
a long time successfully and they haven't really found a
message that sticks and that doesn't make them sound trill,
and so this is a message that they feel like
can work. I do think that there's policy people in
(20:26):
Washington who are thinking through what an affordability agenda could
look like, and you know, are sort of light like
fixating on different buckets than policy people had before. So
I do think people are thinking about how to make
housing more affordable, how to make electricity more affordable. You know,
when I've covered past elections or past presidential campaigns, a
(20:47):
lot of the economic policy has revolved around things like
what should the tax rates be or how much stimulus
should we do? And I do think that the policy
questions that policy people are focusing on now are a
little bit different and just really tied to kind of
the cost of living things. And so I think that's
a discussion going on in the Democratic Party. And you know,
(21:09):
one of the most interesting things about the Trump White
House to me is that he is trying to do
some things to bring the cost of living down and
doing things that actually are supported by Democrats. I mean,
you know, trying to negotiate drug prices is like something
that Democrats are into, or you know, the White House
taking stakes in different companies, particularly related to you know,
(21:32):
some national security areas. We saw them do it with Intel,
we saw them do it with US deal with some
critical mineral companies. Those are policies that Bernie Zanders and
Elizabeth Warren have applauded. And so I do think the
Trump administration is kind of walking this dance of like,
you know, being very Republican and sort of very huing
to their mega agenda, but also trying to dip their
(21:54):
toe into things that you know, other people would view
as definitely kind of in this socialist vein, but it's
it's all these politicians kind of trying to figure out
how to tackle these very very complicated and nuanced issues, which,
by the way, are just changing as the US economy
changes and evolves, and you know, as we're seeing more
AI in the mix, we're seeing corporate people gain laid off.
(22:16):
You know, the US economy I feel like, has really
eded this huge moment of transition, and companies are trying
to deal with it, and economists and policy people, but
more politicians.
Speaker 3 (22:28):
And ane. I mean, one point about this agenda is
that although it's a very national debate, you know, the
kinds of things that you talked about at the beginning
just sound inherently local, and in fact, some of the
sort of failings, the supply side failings, if you like,
have been bigger in some of these big Democrat controlled
(22:50):
cities San Francisco and elsewhere New York for that matter,
then they have been in Republican states and localities. So
I just want to, you know, is there a disconnect
there that although we might be talking nationally about affordability,
actually the Democrats still have a challenge to show that
they can do the local things that you're actually going
(23:11):
to need to do to fix these problems.
Speaker 2 (23:14):
Yeah, one thing that I think that we've seen since
COVID roughly and probably a little bit before that, is
that what was originally really a problem of you know,
your Seattle, your San Francisco, your Los Angeles, your DC
or Boston has really become a national problem. So we
(23:36):
have pretty severe housing shortages in rural counties in the
United States. Now we have seen our big cities squeezing
families not only to the suburbs, but to less populated areas.
Speaker 4 (23:48):
So, you know, since COVID, we've seen.
Speaker 2 (23:51):
Rural population growth for the first time in a long time,
facilitated by the shift to work from home, but also
just by this tremendous squeezing of the loon. Right, people
have to go someplace, and people are moving to these
lower cost areas, most notably in the south right Arizona, Texas,
where the cost of living is lower.
Speaker 4 (24:11):
But you know, I have talked to.
Speaker 2 (24:13):
Folks who live in the suburbs outside of San Antonio,
for instance, and prices are going up a lot there.
Speaker 4 (24:20):
Which is really pretty remarkable.
Speaker 2 (24:22):
So the crisis is everywhere, and I do think that
the cost of other things like childcare is downstream from
housing costs, right, and the fact that you have a
relatively low unemployment rate, and also the high cost of
things like materials and electricity, all of this is part
of one system. And so I do think that that
has shifted the conversation for Democrats that they can make
(24:42):
this argument, Yeah, we're not just doing this for people
who are complaining about the cost of rent in Providence,
Rhode Island. We're doing this for you because we see
that you're getting squeezed by the same forces. And so
I think that we've now seen even just a rural
eviction crisis. We're in some rural areas the eviction rate
is matching that you have in some of the big cities,
(25:03):
which is really remarkable.
Speaker 4 (25:04):
So I do think that this is nationalized as a problem.
Speaker 2 (25:07):
On top of the fact that the media environment has nationalized,
the parties have obviously nationalized in terms of their focus.
That said, I do think that a lot of the
answers are going to be local on housing, and I
think that it will be a really really big puzzle
for Democrats and Republicans to figure out the best way
to incentivize localities to harmonize their building codes, to change
(25:33):
zoning rules.
Speaker 4 (25:34):
All of those kinds of things.
Speaker 2 (25:36):
Childcare, it's a bit different because I do think that
you just need a big pump of money to create supply.
These are very low wage jobs. Childcare is still very
unaffordable for parents. No other country has ever solved this
problem except with a lot of cash. New York is
obviously trying to do this at the municipal level, but
it means a fairly large tax increase on a relatively
(25:58):
small base. So there's a lot of looking at these
kind of laboratories of democracy to figure out if states
and localities can figure it out for themselves.
Speaker 3 (26:07):
My experience, and I suspect yours too, but certainly as
a TV correspondent in the UK, and these are obviously
these cost of living issues were are now very resonant
in the UK and some other countries as well. My
experience is that no one ever recognizes that things have
got better, at least from a price standpoint. You know,
you can have like all the data can say the
(26:27):
cost of this has gone down, We've slowed the rise
in this, that and the other. You will never find
anyone who admits that anything has got easier or cheaper.
So I just wonder on you, once we've now got
everybody on this affordability train, I mean, nobody is going
to start thinking that their lives have got cheaper, and
no one's really going to notice to your point, and
(26:47):
that wages have more than kept up with some of
these increases. So I mean, how the Democrats, particularly if
they're going to really push this agenda, guard against that,
because it seems to me we're just going to get
into a cycle where one side promises to resolve the
affordability crisis and then the other side beats them up
(27:08):
for not having done it a couple of years later.
Speaker 1 (27:10):
Well, I think that that's going to be a huge
challenge for Democrats. I think that's what we've seen over
the last few years, and I'm not super optimistic that
it will change. Just to be really honest with you,
the Biden administration had a really mixed record on the economy.
They pulled the US out of the pandemic, which was
a huge feat, and unemployment was pretty low. That big
(27:31):
rescue package was probably overly inflationary, so it was a
mixed picture. But like all Americans, saw were higher prices
for you know, paper towels and eggs and milk, and
that's what they held them accountable for. And so I
just think it's very hard to, you know, in any
type of political campaign, sort of messaged the nuance there.
And you know, we're seeing Trump have that challenge now.
(27:53):
You know, immediately after the election last week or the elections,
he was talking about how Republicans needed to do a
better job of talking about the economy. You're talking about
the tax bill. He was sort of lashing out, treating
this like a messaging problem and not a policy problem.
I think the biggest problem is Republicans don't talk about it.
Speaker 2 (28:10):
They don't talk about the word affordability.
Speaker 1 (28:12):
And so I think it will be really tricky for
people at the federal level in Congress and the White
House to sort of solve these things. And you know,
Republicans control everything right now in Washington, and they're not
able to control these things.
Speaker 4 (28:26):
Now.
Speaker 3 (28:26):
He's the also to focus on a couple of visible
things at the federal level. Do they need to be
kind of ruthless about just focusing on a handful of
concrete things that people will notice rather than taking responsibility
for what happens to the price of chicken and eggs.
Speaker 2 (28:44):
Yeah, So I think that there is a real lesson
in Zurnmum Donnie's candidacy, and that a lot of things
to note about his talent as a politician, right, really
positive speaking to a lot of different groups of New Yorkers,
real focus on affordability, real tangible policy proposals that were
(29:08):
easy to understand, fast free buses, universal childcare, municipal grocery stores. Right,
these are things that New Yorkers could get right, and
we can see four years from now, did he accomplish
these things or did he not? And so I think
when you go back and you look at the Biden
reelection campaign, it was really hard to say exactly what.
Speaker 4 (29:31):
They were running on.
Speaker 2 (29:32):
They had like a million policy proposals, a lot of
which were really technical. They were running on these big
bills that even now, if you asked me what was
in the IRA, right, like, I would probably take twenty
minutes to.
Speaker 4 (29:47):
Answer that question.
Speaker 2 (29:49):
And so I think that there is this importance of gestural,
simple bumper stickery policy making. And I think that jd.
Vance is going to face this problem, right, what does
he run on?
Speaker 4 (30:00):
Trump notably.
Speaker 2 (30:01):
You know, he wasn't sort of policy forward as a
candidate either time, So there's exceptions. Trump has a very
different type of political genius, right, Yeah.
Speaker 4 (30:12):
I think that for politicians.
Speaker 2 (30:14):
On both sides, making it so that you're not responsible
for the entirety of the affordability crisis, but instead you're
promising things that you can actually deliver. I think that
that that's going to be really important.
Speaker 1 (30:27):
Just to jump in here for one second. One of
the advantages that Democrats do have, which we saw with
the elections last week, is that a very diverse roster
of candidates. One so mont Damia, New York, you know,
is a Democratic socialist, but then thedidate. The gubernatorial candidates
in Virginia and New Jersey are real moderate female candidates,
(30:49):
experienced politicians who come out of national security backgrounds with
very centrist messages. So the Democratic Party at least at
this point, is very willing to kind of have a
lot of different types of candidates, and that is helpful
I think for solving affordability or unique problems at the
local level. The Republican Party is completely run by Trump
(31:10):
at this point, and if you defy him, even at
a local level, there is sort of retribution, there are
threats that they're going to get primary like everyone in
the entire party, including governors, need to be on the
Trump agenda, and so I think Democrats have an opportunity
in that because you know, what Gavin Newsom is doing
in California, you know, can be completely different than what
(31:33):
Abigail's Banberger is going to do in Virginia, and the
party is okay with that.
Speaker 3 (31:38):
That is a very wise point to end on. Thank you, Nancy.
It's a sort of unapologetically US focused episode, even by
the standards of Trumponomics, but I think it's all right
for once. Thank you very much, Annie Lowry and.
Speaker 1 (31:51):
Lacy Coote, thanks for having me.
Speaker 3 (31:52):
Thank you, thanks for listening to trump Ponomics from Bloomberg.
It was hosted by me Stephanie Flanders, and I was
joined by Annie Lowry, star writer at The Atlantic, and
Bloomberg's senior national political correspondent, Nancy Cook. Trumponomics was produced
(32:16):
by Summer Sadi and Moses and with help from Amy
Keen and special thanks this week to Rachel Lewis Chris Key.
Sound design is by Blake Maples and Nick Johnson and
Sage Bowman is Bloomberg's head of podcasts. To help others
find the show, please rate and review it highly wherever
you listen.
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