Molly Ball
Appearances
The Journal.
Trump 2.0: A Whiplash on Federal Spending
And the idea is like, well, but who's going to do anything about it?
The Journal.
Trump 2.0: A Whiplash on Federal Spending
Yeah, thanks, Bill. That's such a great question. And I think it's something that people in Washington are thinking about a lot, particularly Republicans. You know, the entire House of Representatives is going to be on the ballot in less than two years. Most of the Republicans have to worry more about a primary than a general election, which is part of why you see them being so loyal to Trump.
The Journal.
Trump 2.0: A Whiplash on Federal Spending
But there are some of them who are in swing districts now. And they remember, you know, during Trump's first administration when Republicans lost those 2018 midterms, they lost 40 seats and handed the House to the Democrats in part because of the backlash to what people saw as the chaos and dysfunction of that first Trump administration.
The Journal.
Trump 2.0: A Whiplash on Federal Spending
Trump now is a lame duck, and he's doing a lot of things that are not necessarily popular on an individual basis. His approval rating is underwater even in this so-called honeymoon period. So this stuff starts to pile up and has the potential to drag down the administration.
The Journal.
Trump 2.0: A Whiplash on Federal Spending
And I think a lot of Republicans, as they look forward to this giant mess of legislation and deadlines that they've got to take care of this year, are wondering if they really ought to be in lockstep with an administration that may be rapidly losing its political capitals.
The Journal.
Trump 2.0: A Whiplash on Federal Spending
Well, it's been a bit of a battle on Capitol Hill this week. These nomination hearings were pretty rocky. These nominees got grilled pretty hard, particularly by Democrats, of course. But there was some skepticism from Republicans as well. And you can tell that while these Republicans want to be loyal and give the president his team, some of them have misgivings.
The Journal.
Trump 2.0: A Whiplash on Federal Spending
And you heard them pressing, you know, RFK, for example. not just for his views on issues important to them, like abortion, like agriculture, but also just his basic knowledge of the way the department works that he's going to be tasked to run. And he stumbled over things like understanding what Medicaid does and how it relates to Medicare.
The Journal.
Trump 2.0: A Whiplash on Federal Spending
And that, of course, is something he would be tasked with overseeing. So I think there's a real sense on Capitol Hill that these are sort of going down to the wire and could really go either way.
The Journal.
Trump 2.0: A Whiplash on Federal Spending
So I think what we saw with Hegseth is there are Republican senators who feel relatively impervious to Trump's threats. There are at least three, Lisa Murkowski, who has survived a primary challenge before, Susan Collins, who represents a very blue state, and Mitch McConnell, who's not running for reelection again and has strong views, particularly on national defense. Mm-hmm. So that's three.
The Journal.
Trump 2.0: A Whiplash on Federal Spending
Just like the movie, which means we're also going to get a proliferation of like clones with weird appendages. Is that how this is going to go?
The Journal.
Trump 2.0: A Whiplash on Federal Spending
And if there is one more senator who feels that one of these nominees is a bridge too far, that's it. They're not going to get through.
The Journal.
Trump 2.0: A Whiplash on Federal Spending
Well, he was asked about this on Air Force One, and he said, We don't really know a lot about what was behind this, but it's a sort of part of this general housecleaning that we're going to talk more about today. This idea that the whole federal bureaucracy is sort of rotten and has to be cleaned out, sort of root and branch.
The Journal.
Trump 2.0: A Whiplash on Federal Spending
To critics, of course, it's not a way to make the government more effective or efficient or take out potential, you know, internal dissent. It's about enabling corruption and malfeasance by, you know, taking off the proverbial cop on the beat who would be overseeing things. these agencies and making sure, as you said, that they don't violate the law.
The Journal.
Trump 2.0: A Whiplash on Federal Spending
That's right. The hot dogs. Uh-huh. That must be the next executive order we should all look out for.
The Journal.
Trump 2.0: A Whiplash on Federal Spending
So I think there's still more to know about why this has happened, and there's some concern about this that is somewhat bipartisan.
The Journal.
Trump 2.0: A Whiplash on Federal Spending
I don't think we know yet. They haven't appointed new people to these positions yet. And as we said at the beginning, they're doing a lot very fast. They're still trying to confirm the cabinet. So this doesn't seem like necessarily the highest priority.
The Journal.
Trump 2.0: A Whiplash on Federal Spending
Well, it was certainly striking how political the president immediately chose to make this. I think the normal thing to do in these situations is to refrain from seeming to politicize a tragedy and to focus on the people dealing with the loss of their loved ones. just a horrible tragedy that does raise a lot of potential policy questions.
The Journal.
Trump 2.0: A Whiplash on Federal Spending
I would say mixed. I mean, Republicans and people in the administration are pretty thrilled with how it's going. They feel like he's racking up wins. Democrats are also sort of getting their moxie back because they see him as doing too much too fast. And they feel like this is going to cause a backlash that's going to bring them back to relevance.
The Journal.
Trump 2.0: A Whiplash on Federal Spending
It raises questions about the crowding of the DC airspace, about the staffing levels and the funding and the personnel in the Federal Aviation Administration. And then there also have been questions for years about the diversity initiatives undertaken by the FAA. Trump wasn't making that up. But, you know, he is not waiting for an investigation to say whose fault this actually is, right?
The Journal.
Trump 2.0: A Whiplash on Federal Spending
We don't know if it was the air traffic controller's fault at all. We don't know if it was, as Trump also said on social media, if it was the helicopter pilot's fault. We don't know if those diversity initiatives, while real, had anything to do with any of the staff who were involved in this.
The Journal.
Trump 2.0: A Whiplash on Federal Spending
So I think it was shocking to a lot of people that the president didn't hold off on sort of casting blame for this, but also deeply familiar. You know, Trump was president before for four years. He has been on the political scene for a decade. He has never hesitated to point to his enemies and point to scapegoats for whatever is happening on his watch.
The Journal.
Trump 2.0: A Whiplash on Federal Spending
And so in a lot of ways, I think this felt deeply familiar in Trump's political style. And I think those some of his allies would say this is what people like about him is that he's not politically correct. He's not pulling punches. He's not going to sort of be unifying and nice when when what you need is actually a fighter.
The Journal.
Trump 2.0: A Whiplash on Federal Spending
Well, I wonder, you know, because I can see both sides of this. On the one hand, the whole move fast and break things idea is that if you try to go at these things slowly, deliberately, incrementally, they'll just never get done, right? They'll get caught up in this bureaucratic black hole where everyone in the agency finds a reason to object to it.
The Journal.
Trump 2.0: A Whiplash on Federal Spending
And, you know, you spend 10 years writing memos about something that never actually gets implemented. So the idea is you rip off the Band-Aid, you go extreme all at once and And then you can always walk back the parts that people object to. And then whatever you do end up doing looks relatively moderate by comparison.
The Journal.
Trump 2.0: A Whiplash on Federal Spending
I don't know if we're going to get to that point with this, given that the whole thing's been undone, right? I mean, I think it's important to recognize that like this didn't, actually affect anyone, right? And even then, there's a question about whether the executive branch has the power to do this, right?
The Journal.
Trump 2.0: A Whiplash on Federal Spending
I mean, Damian, I wonder what you think about the potential for a constitutional crisis here, right? If the courts are telling the administration they can't do something, you know, the Constitution says it's up to Congress, there's a law in the books that says presidents can't just do this, but what if the administration just goes ahead and does it anyway when the courts have said that they can't?
The Journal.
Trump 2.0: A Whiplash on Federal Spending
But what I'm saying is you say they can't do it unless the court rules in their favor. But why not? Why don't they just I mean, look at what they're doing with TikTok. The Supreme Court already unanimously said that the law of the land is that TikTok cannot operate. But it still is because the administration is just ignoring that. Right. I mean, the inspectors general, same thing. Right.
The Journal.
Trump 2.0: A Whiplash on Federal Spending
Lindsey Graham was on television and was asked, wasn't this illegal? Because in the law, it says they have to give 30 days notice before they fire these people. And he said, well, yeah, technically, technically. Very quickly, the law says he's supposed to do a 30 days notice. He didn't do that. Do you think he violated the law?
The Journal.
Trump 2.0: Group Chat Fallout
It was very interesting because, as you say, there were two days of hearings, and in between the first and second day, the Atlantic released the transcripts of the full text message exchange that showed just how detailed and sensitive the information being shared in this group chat was.
The Journal.
Trump 2.0: Group Chat Fallout
And so, you know, on the first day, the administration officials had said, oh, you know, I don't remember exactly what was in there. I couldn't tell you. It's not in front of me, et cetera. But then they came back and they were sort of confronted with it.
The Journal.
Trump 2.0: Group Chat Fallout
And particularly, you know, the Democrats on the committee were really pushing them to acknowledge that they were trying to cover something up and to account for the the discrepancies in the administration's explanations for all of this. And what we saw was Tulsi Gabbard, the director of national intelligence, saying, well, the things that I shared were not classified.
The Journal.
Trump 2.0: Group Chat Fallout
And if you have concerns about these attack plans, you're going to have to ask the person who shared them, which was Pete Hegseth. And the CIA director, John Ratcliffe, also said, saying a version of this.
The Journal.
Trump 2.0: Group Chat Fallout
So it was interesting in that it really put the focus on Hegseth, who has been traveling in Asia this whole time and won't be back for a while and has made only very limited public statements, both in person and on his social media account, defending his conduct here.
The Journal.
Trump 2.0: Group Chat Fallout
But it really became clear that the other officials in the group chat felt like if anyone was responsible for sharing this sensitive information, it was Hegseth, because outside of him talking in great detail about literally when bombs were going to drop and where, you could say that everyone else was just having sort of an abstract policy debate or doing sort of logistical coordination.
The Journal.
Trump 2.0: Group Chat Fallout
It was Hegseth who, of his own accord, without being prompted— came in to share these very detailed battle plans.
The Journal.
Trump 2.0: Group Chat Fallout
It is not just Democrats who have expressed concern about this situation. Some Republicans on Capitol Hill have publicly and privately expressed concern. A lot of Republican lawmakers have military backgrounds. Congressman Don Bacon, who's a moderate Republican from Nebraska, who has a military background, has expressed concern, said when he was in the service, this would have been unacceptable.
The Journal.
Trump 2.0: Group Chat Fallout
The Senate Majority Leader, John Thune, said the administration needs to admit that this was a mistake and move on. And there is a bipartisan letter.
The Journal.
Trump 2.0: Group Chat Fallout
I cannot discuss that information. It is highly sensitive. Let's say I have from time to time received texts that were not intended for me that I could tell I was not supposed to know about.
The Journal.
Trump 2.0: Group Chat Fallout
The Republican chairman of the Senate Armed Services Committee, Roger Wicker, who shepherded Pete Hegseth through his confirmation hearings to become Secretary of Defense, co-authored a bipartisan letter with his Democratic counterpart basically demanding an internal investigation of this.
The Journal.
Trump 2.0: Group Chat Fallout
So there is a lot of concern about the potential ramifications of this scandal beyond just the particular instance of this group chat.
The Journal.
Trump 2.0: Group Chat Fallout
I should say that Jeffrey Goldberg is my former boss. I worked at The Atlantic a long time ago and have great respect for him. It's hard to say that he did anything wrong in this case. He was added to this group chat through no initiative of his own. He didn't ask to be put there. It was a surprise to him, as he detailed in his first report for The Atlantic.
The Journal.
Trump 2.0: Group Chat Fallout
He initially assumed that there was no way this could be a real conversation between between national security officials because, of course, they would never do it on signal. Of course, they would never do it with a journalist present. And so he describes this process of, you know, initially thinking this is some kind of elaborate, you know, catfishing attempt.
The Journal.
Trump 2.0: Group Chat Fallout
And then watching as the messages continue to come into his phone. And then the sort of incredible denouement of seeing the bombs fall. So that was sort of when he knew that this was all for real. He excused himself from the group chat and then proceeded to try to, you know, responsibly seek response from the officials in question and decide what was prudent to publish and how.
The Journal.
Trump 2.0: Group Chat Fallout
So the initial report included very few of the actual details of these conversations, in part because he wanted to be mindful of the security concerns in question. And it was only when the administration realized
The Journal.
Trump 2.0: Group Chat Fallout
spent 24 hours insisting that he was essentially lying that he said well all right if you're gonna say that none of this is sensitive information and and you're going to call my integrity into question we'll put it out there for the public to see and judge for themselves all right molly last question before i let you go how is your march madness bracket I don't have a bracket, Ryan. How's yours?
The Journal.
Trump 2.0: Group Chat Fallout
I have the great misfortune of being a Colorado Rockies fan, but I believe very strongly that you have a moral obligation to root for your hometown team, even if they are perpetually terrible like the Colorado Rockies.
The Journal.
Trump 2.0: Group Chat Fallout
We're in the same boat there. Every once in a while they make the playoffs, but you just can't have any hope.
The Journal.
Trump 2.0: Group Chat Fallout
It is and it isn't. As you say, there have been a lot of scandals involving the handling of classified and sensitive information over the years. This one is different in the specifics. In today's fast-paced world, you know, almost everything that we do in our jobs can be done on our phones, but you're still not supposed to do war planning that way.
The Journal.
Trump 2.0: Group Chat Fallout
And it sounds like what you're saying is this is an ongoing campaign and we don't know yet whether it will achieve its ultimate objective of unblocking these sea lanes for commercial traffic.
The Journal.
Trump 2.0: Group Chat Fallout
I'm impressed you know more than one Bjorn. Well, doesn't everybody have two Bjorns in their life? I don't know if I even have one Bjorn in my context, much less multiple Bjorns that would necessitate a disambiguation of the Bjorns.
The Journal.
Trump 2.0: Group Chat Fallout
So let's talk about Mike Waltz, Trump's national security advisor. He's the one who, according to the screenshots, created the group chat and added the journalist Jeffrey Goldberg. How has he accounted for what happened?
The Journal.
Trump 2.0: Group Chat Fallout
If it was a mistake and if it was Walt who did it, do we have any idea who he might have meant to put on there?
The Journal.
Trump 2.0: Group Chat Fallout
Wow. I think everyone in Washington's jaw sort of dropped when we saw the initial report. It was pretty mind-blowing.
The Journal.
Trump 2.0: Group Chat Fallout
That is a matter of debate. One thing we've heard from the administration is, oh, the media is making too much of this. It was a simple mistake. Let's all move on. We've all learned something, etc. But I think a lot of national security experts think this is deeply troubling because it potentially put American troops at risk.
The Journal.
Trump 2.0: A Big, Beautiful Bill
It's been kind of all over the place. We've seen, I mean, a blizzard of lawsuits. I frankly cannot keep track of them all. But, you know, they're in various courts in various places with various judges. And those judges have come to different conclusions about the extent to which the things that Trump and Elon Musk are doing are legal.
The Journal.
Trump 2.0: A Big, Beautiful Bill
So what that means in our system, right, is that those decisions get appealed and then judges at higher levels have to sort of resolve these disputes, these disagreements between judges. So I think we are still waiting for this to trickle its way up. And we mostly expect that the big questions will eventually be decided by the Supreme Court.
The Journal.
Trump 2.0: A Big, Beautiful Bill
And in fact, this week, the Supreme Court actually did weigh in for the first time, but only to put a temporary hold on a lower court's decision. And so I think we're still waiting for the Supreme Court to ultimately resolve a lot of these really pivotal questions about executive power.
The Journal.
Trump 2.0: A Big, Beautiful Bill
Well, there have been courts that have said, stop, you can't do this. There have been courts that have said either, you know, you have to pay out this money that you've frozen or put on pause or no, you may not take this action that you are trying to take. There are questions about whether the administration is actually complying. with some of these rulings, right?
The Journal.
Trump 2.0: A Big, Beautiful Bill
There are allegations that, you know, one judge has raised the possibility that the administration doesn't seem to be complying with his order to continue to fund certain programs, for example.
The Journal.
Trump 2.0: A Big, Beautiful Bill
So this is part of why some Trump critics are talking about a constitutional crisis, because it's not clear in our system what would happen if the courts told the president to do something and he just said no.
The Journal.
Trump 2.0: A Big, Beautiful Bill
It was fascinating, and mostly because of someone who is not technically in the cabinet.
The Journal.
Trump 2.0: A Big, Beautiful Bill
Who spoke first and spoke nearly as much as the president and spoke far more than any of the actual cabinet secretaries in the room. I am referring, of course, to Elon Musk.
The Journal.
Trump 2.0: A Big, Beautiful Bill
And he continues to be this figure of fascination who seems to have, you know, free reign in the executive branch, although the technicalities of his position are still very unclear. He seems to like it that way, right? Because it lets him just sort of go wherever he wants and do whatever he wants.
The Journal.
Trump 2.0: A Big, Beautiful Bill
But the lines of authority are very unclear, and this cabinet meeting certainly did nothing to resolve it because it seemed like, kind of like the Oval Office meeting a couple weeks ago, you know, Elon is kind of standing there answering all the questions almost on behalf of the president.
The Journal.
Trump 2.0: A Big, Beautiful Bill
And Trump professes to be delighted by everything that Musk is doing, but there continue to be questions about, particularly, as you point out, you know, now that the cabinet is in place, don't they want to be in charge instead of Elon Musk when it comes to the departments and the workforces that they oversee?
The Journal.
Trump 2.0: A Big, Beautiful Bill
So when Elon Musk, for example, sends an email that says, you must answer this email with the five things you did last week, and then several of the cabinet departments run by, you know, unequivocal Trump loyalists, like, say, Kash Patel at the FBI.
The Journal.
Trump 2.0: A Big, Beautiful Bill
And they tell their workforces, actually, you don't have to answer the email. It might, you know, compromise security or whatever. And it plays into the congressional discussion as well, because while people think of this as just a bunch of Washington bureaucrats, 85% of federal workers are outside of Washington. You know, these are the doctors at the VA who treat your local veterans.
The Journal.
Trump 2.0: A Big, Beautiful Bill
These are the park rangers in Montana who, you know, police the national parks. And so these are regular people in local communities who are being affected by the upheaval in the federal government. And the Trump appointees who are responsible for their well-being aren't necessarily thrilled about that.
The Journal.
Trump 2.0: A Big, Beautiful Bill
Well, it's a Republican Congress, for one thing. Republicans, as you may remember, when they won the election in November, also won slim majorities in the House and Senate. And they see themselves as very much Trump's team. And this is different from when Trump was first in office eight years ago. During Trump's first term, he also had a Republican Congress, including the House and Senate.
The Journal.
Trump 2.0: A Big, Beautiful Bill
Certainly, we are not seeing any outward signs of that at this point. And I think you hit on it exactly, that by staging a sort of show like this and having everyone voice their approval, Trump is able to
The Journal.
Trump 2.0: A Big, Beautiful Bill
create the appearance that everyone is on board with everything that is happening but i think you can see from the way that this back and forth has gone down with musk and the emails uh that there is tension there great any uh final thoughts before we let you go nothing much going on right as usual very quiet yeah well thanks so much for your time thank you ryan
The Journal.
Trump 2.0: A Big, Beautiful Bill
And in fact, there were bigger Republican majorities, but they were not as Trumpy. This time, Trump and Congress alike basically feel like they are there because of him. They got there on his electoral coattails. So they really feel like they are there to execute his agenda and get done the stuff that Trump and Republicans promised to do.
The Journal.
Trump 2.0: A Big, Beautiful Bill
Or potentially Elon Musk, yeah. But while Trump is putting on a big show, and it seems like he's doing all these things, for any of it to actually have the force of law, it has to go through Congress.
The Journal.
Trump 2.0: A Big, Beautiful Bill
Well, I want to remind people that Mike Johnson got to be Speaker of the House kind of by accident, right? A year and a half ago, Kevin McCarthy was the Republican Speaker of the House, and he was sort of assassinated from within his own ranks, Caesar style. And There was a chaotic power vacuum where we had no Speaker of the House for several weeks.
The Journal.
Trump 2.0: A Big, Beautiful Bill
And it was as a result of that process that they finally settled on Mike Johnson, who not a lot of people knew very well. And a lot of people, including some of his own colleagues, saw him as sort of a placeholder and didn't think that he would remain Speaker after the election.
The Journal.
Trump 2.0: A Big, Beautiful Bill
So I think Johnson gets a lot of credit for really doing the work. He spent that time really shoring up his relationships with other Republican members, but really with Donald Trump. Johnson correctly assessed that his ticket to power was sticking as close to Trump as possible because it is Trump who has all the power in the Republican Party.
The Journal.
Trump 2.0: A Big, Beautiful Bill
And because Republican voters want their members of Congress to do what Trump wants to do, Johnson, by sticking super close to Trump, has been able to ally himself with the most powerful figure in the party. And Trump has been helpful to him in return. But, you know, my reporting suggests that Trump is still a bit skeptical of Johnson. He is not sure that Johnson is tough enough.
The Journal.
Trump 2.0: A Big, Beautiful Bill
Frankly, there's a feeling with everyone around Trump, like they're sort of walking on eggshells and could be fired at any moment. So Johnson sort of knows that he serves at Trump's pleasure and that that relationship with Trump is going to be crucial to not only his success, but really his survival.
The Journal.
Trump 2.0: A Big, Beautiful Bill
It's basically the entire Trump agenda, this bill. They're talking about, on the one hand, funding a lot of Trump's priorities, particularly his immigration agenda, which is going to be very expensive, and a lot of things he wants to do on energy. And then they want to dramatically cut the government, make it smaller, right?
The Journal.
Trump 2.0: A Big, Beautiful Bill
It was really a big week for Congress because they actually finally passed something.
The Journal.
Trump 2.0: A Big, Beautiful Bill
And then importantly, you know, the major legislative achievement of Trump's first term was the big tax cut bill in 2017. And most of those tax cuts are going to expire this year if they don't pass them again. So a big part of this legislative package that they're trying to do is to renew those tax cuts, keep them from expiring.
The Journal.
Trump 2.0: A Big, Beautiful Bill
But there's also a disagreement between the House and Senate over how to get this done because, yes, Trump says he wants one big, beautiful bill, but there's also a plan B, which is two big, beautiful bills. The Senate has been trying to do two bills at the same time as the House. And so they're sort of working in parallel, sort of racing each other to see who can get there first.
The Journal.
Trump 2.0: A Big, Beautiful Bill
But the Senate wants to put sort of all the candy in the first bill, the spending on immigration and energy and so forth, and then spend the rest of the year doing the second bill fighting over tax cuts.
The Journal.
Trump 2.0: A Big, Beautiful Bill
So, Siobhan, the Senate has also been working in parallel. How different is what the House passed from what the Senate's done so far?
The Journal.
Trump 2.0: A Big, Beautiful Bill
And I do think it's important to give credit to Mike Johnson. This is a big win for him, right? He still has a lot of doubters who don't think he's very good at his job, but his strategy worked.
The Journal.
Trump 2.0: A Big, Beautiful Bill
And his strategy is just stick as close to Trump as possible and get Trump to do the heavy lifting when necessary because Republicans in the House and Senate want a lot of things, but they do not want to be seen as defying Trump or rebelling against him and So if Trump comes in and says, I'm going to go after you if you don't do what I want, they're going to do what he wants.
The Journal.
Trump 2.0: A Big, Beautiful Bill
The phones in Congress have also been literally ringing off the hook, right?
The Journal.
Trump 2.0: A Big, Beautiful Bill
It's a great question, and it was a major topic of my conversation with Johnson when I interviewed him for this piece. You know, Mike Johnson's background is he's a constitutional lawyer, and he will tell you he's a big Article I guy. Now, what is Article I? Literally the first thing in the Constitution is Congress, and the president comes after that.
The Journal.
Trump 2.0: A Big, Beautiful Bill
And so Congress, members of Congress will often point to this to say, actually, you know, we're more important. And the Constitution does suggest that the legislative branch is the primary locus of power when it comes to setting policy, and the president is sort of secondary.
The Journal.
Trump 2.0: A Big, Beautiful Bill
So you would think that there would be a lot of tension, right, at a time when the president is doing a lot of things that critics and some courts think go beyond the power that the Constitution gives him. Shouldn't it be up to Congress to push back against that, to rein him in, to say, no, actually, that's our job? But Johnson believes that Trump is not doing anything to take away from Congress.
The Journal.
Trump 2.0: A Big, Beautiful Bill
He believes that the stuff that Elon Musk is doing, for example, is great because it's stuff that Congress has tried and failed to do in the past. He says that, you know, they've tried to exercise oversight over agencies such as USAID, but been blocked by bureaucrats who wouldn't give them the information they needed to make the cuts they seek, for example.
The Journal.
Trump 2.0: A Big, Beautiful Bill
So he completely rejects this idea that there is a constitutional crisis or a separation of powers issue here. And he believes that Congress is doing its job and is going to do its job by legislating and sort of carrying out the things that Trump has sort of started to do by executive order.
The Journal.
Trump 2.0: Where Is The Economy Headed?
Greg, before we let you go, what is your prediction? Are we headed for a recession?
The Journal.
Trump 2.0: Where Is The Economy Headed?
All right. Well, we'll have you back on at the end of the year to see how Well, that prediction goes. And see, Molly, people can make predictions. Well, Greg's not a reporter. He's a commentator. Exactly.
The Journal.
Trump 2.0: Where Is The Economy Headed?
So, Molly, before we let you go, we wanted to talk with you about a controversy, another one around the secretary of defense, Pete Hegseth. There's another signal group chat. This one involves his wife and personal lawyers and others. In this chat, Hegseth posted sensitive military information, according to people familiar with the matter.
The Journal.
Trump 2.0: Where Is The Economy Headed?
What is this doing to Hegseth's position in the administration? And what's your sense of whether he's on thin ice?
The Journal.
Trump 2.0: Where Is The Economy Headed?
Trump has yet to fire anybody in his staff and administration, right?
The Journal.
Trump 2.0: Where Is The Economy Headed?
Speaking of which, we are coming right up on 100 Days.
The Journal.
Trump 2.0: Where Is The Economy Headed?
Yeah, so next Friday will be our final episode.
The Journal.
Trump 2.0: Where Is The Economy Headed?
Before we go, do you have any questions about what the Trump administration is doing? Email us and let us know. please send a recording to thejournalatwsj.com. That's thejournalatwsj.com. Trump 2.0 is part of The Journal, which is a co-production of Spotify and The Wall Street Journal. This episode was produced by Enrique Perez de la Rosa and edited by Katherine Whalen.
The Journal.
Trump 2.0: Where Is The Economy Headed?
Molly Ball is The Wall Street Journal's senior political correspondent. I'm Kate Leinbach. This episode was engineered by Peter Leonard. Our theme music is by So Wiley and remixed by Peter Leonard. Additional music in this episode by Griffin Tanner. Fact-checking by Kate Gallagher. Artwork by James Walton. Trump 2.0 will be back with our final episode next Friday morning. See you then.
The Journal.
Trump 2.0: Where Is The Economy Headed?
And while you were away, were you able to get away from all things Trump?
The Journal.
Trump 2.0: Where Is The Economy Headed?
We really want to take a closer look at what's driving the economy. And to help us do that, we're joined by our colleague Greg Ip, the Wall Street Journal's chief economics commentator.
The Journal.
Trump 2.0: Where Is The Economy Headed?
So, Greg, how would you describe how the economy is doing right now?
The Journal.
Trump 2.0: Where Is The Economy Headed?
So speaking of tariffs on Chinese imports, which have been set at 145 percent, the Wall Street Journal had some exclusive reporting this week that the White House is considering slashing those tariffs in half to around 50 percent. in a bid to de-escalate the trade war. What could that mean?
The Journal.
Trump 2.0: Where Is The Economy Headed?
That's like the most Molly Ball thing ever. You chose to spend your birthday on the Panama Canal. So now that we're back, what's on your mind?
The Journal.
Trump 2.0: Where Is The Economy Headed?
Another big topic in the economy has been interest rates. The Fed chair, Jerome Powell, Trump has talked about replacing him. What is going on there?
The Journal.
Trump 2.0: Where Is The Economy Headed?
And you see these headlines of sell America and of the declining dollar, of... The stock market going down like the Dow is headed to have its worst April since 1932. What role have markets played in shaping Trump's policies?
The Journal.
Trump 2.0: Where Is The Economy Headed?
All right, we're going to take a quick break. And when we're back, we'll talk more about Trump's economic strategy and the threat of a recession.
The Journal.
Trump 2.0: Where Is The Economy Headed?
From the Journal, this is Trump 2.0. I'm Kate Leinbaugh. And I'm Molly Ball. It's Friday, April 25th. Coming up on the show, we'll talk about markets, the economy, and of course, some tariffs. So, Molly, Trump won the election in large measure by promising to fix the economy, bringing down inflation, restoring manufacturing. And one of the tools he talked about a lot was tariffs.
The Journal.
Trump 2.0: Where Is The Economy Headed?
OK, we've got a listener question for you. It's about the strategic goals of Trump's tariff policy. It's from Kobe Brown in Spokane, Washington.
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Trump 2.0: Where Is The Economy Headed?
Molly, how do you think Trump or the administration would respond to that, that tariffs have some limits?
The Journal.
Trump 2.0: A Showdown With the Judiciary
I was just going to observe, you know, it's as if they took Richard Nixon's statement, if the president does it, it's not illegal, and made it into a legal theory.
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Trump 2.0: A Showdown With the Judiciary
So last question. This is really important. Do you have a March Madness favorite?
The Journal.
Trump 2.0: A Showdown With the Judiciary
So there's a couple of things happening here. First of all, because all but one House Democrat voted against this bill, they felt hung out to dry by the Senate. There was clearly a miscommunication between the House and Senate Democrats where House Democrats felt like they took a political risk here and then the Senate sold them out. So that's part of the anger.
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Trump 2.0: A Showdown With the Judiciary
But the other part of the anger is really coming from the Democratic base. Rank and file Democrats are livid and terrified and feel a sense of existential rage at what they believe is an apocalyptically terrible administration and what it is doing to the things that they hold dear. And they want Democrats to do something, do anything to try to stop it.
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Trump 2.0: A Showdown With the Judiciary
And this was a very rare moment because, remember, Democrats have very limited structural power in this moment. They're in the minority in the House and the Senate. This was a very, very rare moment where Republicans actually needed the Democrats' votes. And so Democrats felt like they should get something from that. There should have been some kind of negotiation.
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Trump 2.0: A Showdown With the Judiciary
And there was, again, not good communication from Chuck Schumer and the Senate Democrats. They seemed to threaten to withhold their votes one day, and then the next day they supplied the votes. So just a debacle.
The Journal.
Trump 2.0: A Showdown With the Judiciary
I don't think that's going to happen. Chuck Schumer retains the nearly unanimous support of his members in the Senate Democratic Caucus. He himself is not up for election again for four more years, which is a lifetime in politics. Some House Democrats have called for Alexandria Ocasio-Cortez to primary Chuck Schumer.
The Journal.
Trump 2.0: A Showdown With the Judiciary
But again, that would be way, way down the road if indeed it were to happen at all. Mm-hmm. And she notably had a chance to do that two years ago and decided not to. So the political risks for Chuck Schumer are quite remote at this time, but he's still under a lot of pressure just because there's so much anger at him.
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Trump 2.0: A Showdown With the Judiciary
Also from the grassroots, a lot of grassroots liberal groups vowing to put more pressure on Senate Democrats, bring primaries against other Senate Democrats. So Chuck Schumer has really been in the hot seat.
The Journal.
Trump 2.0: A Showdown With the Judiciary
It's hard to see where. You know, there are a few special elections coming up. The Trump administration, having tapped several House Republicans for cabinet posts, means that there's two vacancies in Florida. There will be a special election in just a couple weeks for those. Once Elise Stefanik is confirmed as U.N. ambassador, there will be another vacancy in upstate New York.
The Journal.
Trump 2.0: A Showdown With the Judiciary
My team? You know I don't take sides. No, I'm talking about March Madness. March Madness. Oh, Ryan, I'm way too much of a nerd for that. I was talking about the judicial branch. Nerds love basketball too, Molly. Not this nerd. Sorry.
The Journal.
Trump 2.0: A Showdown With the Judiciary
But all of these are deep red districts. Republican member by a big double digit margin in 2024. So it would be a really steep climb for Democrats to win any of these seats. And that would be a purely symbolic victory. It would not give even if they were to win these seats, Democrats would not have a majority in the House.
The Journal.
Trump 2.0: A Showdown With the Judiciary
So they would still be in this situation of being really sort of at a loss for what to do. You is up in arms and wants to see them do something. But structurally, there's just very, very, very little that they can do. And I've been doing some reporting on this and spending some time with grassroots Democrats.
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Trump 2.0: A Showdown With the Judiciary
And there is a real feeling of powerlessness and of fear and of anger that they are so helpless in this moment.
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Trump 2.0: A Showdown With the Judiciary
wait does that mean we won we get to move up in the bracket I hope everybody had us in their brackets because dang it we were the underdogs but we we did it we have to win more games yeah there's still several more games bring it on Ryan I'm ready for the final four let's go yeah there we go that's where we're headed all right thanks so much Molly shooting threes all day thanks Ryan thanks talk to you soon bye
The Journal.
Trump 2.0: A Showdown With the Judiciary
To really make it the highest court in the land, Supreme Court decisions have to be appealable to the basketball court, right? So if you don't like your decision from the Supreme Court, you can settle it in, like, what do you call a basketball scoring?
The Journal.
Trump 2.0: A Showdown With the Judiciary
I mean, these separation of powers questions have no easy answers, and that might be the way to settle them.
The Journal.
Trump 2.0: A Showdown With the Judiciary
And this is District Court Judge James Boasberg, who is an Obama appointee, correct? He's the one who's been the main target of Trump and other conservatives' anger here?
The Journal.
Trump 2.0: A Showdown With the Judiciary
I did see it. A pretty remarkable statement this week from the Supreme Court chief justice, John Roberts, who, you know, was nominated by a conservative president, generally votes with the conservatives on the court. But this statement essentially was calling out President Trump.
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Trump 2.0: A Showdown With the Judiciary
Jess, like reading between the lines here, what is Roberts thinking here? What is he trying to say with his statement?
The Journal.
Trump 2.0: A Showdown With the Judiciary
So several House Republicans have now introduced impeachments against different judges, actually. Generally, it doesn't seem like something that the Republicans in Congress have much of an appetite for. It is a quite high bar for impeachment. The House has to pass it, and then two-thirds of the Senate has to approve it, similar to a presidential impeachment process.
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Trump 2.0: A Showdown With the Judiciary
And I would say the Republican leadership in the House believes that the votes aren't there for this to get through the House in their narrow majority. And also that it's a distraction from the other things they're trying to do. They have their hands full with their legislative agenda and they don't view this as something they should be spending time on.
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Trump 2.0: A Showdown With the Judiciary
I think it's already here. It's happening. And it feels it's consequential and it's intentional. This is something that the administration has put into motion on purpose in order to both advance their agenda and potentially change legal precedent.
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Trump 2.0: A Showdown With the Judiciary
Hey, Ryan. Are you ready to talk about all the hot court action this week?
The Journal.
Trump 2.0: A Showdown With the Judiciary
Well, and this is the sort of ultimate confrontation that everyone seems to be sort of girding for, right? I mean, it's been really interesting to me that... You've had people high up in the administration, including Vice President J.D. Vance, you know, quoting that apocryphal Andrew Jackson statement, the chief justice has made his ruling, let him enforce it.
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Trump 2.0: A Showdown With the Judiciary
But when Trump is asked this question, he's repeatedly backed down. He'd say, oh, no, that's something you can't do. You can't just disregard something the court has said. How serious a possibility is that? And would that constitute a constitutional crisis?
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Trump 2.0: Shaking Up Europe
I think the answer is yes to both. And it's nothing new. And I think there's also a third option to which the answer is also yes. And that option is, or is this about the expansion of executive power in a way that many, particularly Republicans, have sought for many years? And the answer to that is also yes.
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Trump 2.0: Shaking Up Europe
Right. This idea that he sees himself as having sort of imperial unrestricted power. Look, There has always been this group of Republican legal scholars who believed that the president embodied the executive branch and ought to have vastly more power than he currently holds in the way the sort of customs and norms of our constitutional system.
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Trump 2.0: Shaking Up Europe
Trump just seems to want to do stuff and not think that anyone should be able to stop him.
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Trump 2.0: Shaking Up Europe
Right. And I think, you know, there's a really interesting and nuanced discussion to be had here about executive power, even if that is not necessarily the discussion that Trump himself is participating in. Right. I think a lot of Americans have been frustrated for many years with the gridlock and polarization that have happened.
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Trump 2.0: Shaking Up Europe
turned Congress into basically a non-functioning body and have made it impossible for governments to actually implement the things that candidates campaign on, right? So we have a campaign where one candidate's like, we're going to do health care, and the other candidate's like... We're going to reform entitlements.
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Trump 2.0: Shaking Up Europe
And then no matter who it is that gets into office, they just can't do anything because of what a political scientist would call all of the veto points built into our system of governance. And the way that a lot of what started out as relatively straightforward checks and balances happened.
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Trump 2.0: Shaking Up Europe
have been choked over the years with, you know, different bureaucratic requirements and institutions and personnel and so forth. So I'm not trying to whitewash the arguably authoritarian impulses that Trump is flamboyantly displaying.
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Trump 2.0: Shaking Up Europe
But that doesn't mean that he doesn't have a point about the ways in which our system has made it hard for presidents to actually do the things that they promised to do.
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Trump 2.0: Shaking Up Europe
And this is the argument of a lot of the Trump allies who say this isn't contradictory to democracy. This is democracy in action. People voted for Trump. They want him to do the things that he said he was going to do.
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Trump 2.0: Shaking Up Europe
And if the system is set up in such a way as to make it impossible for him to do those things, he is actually being small d democratic, pursuing the will of the people by seeking ways to do those things.
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Trump 2.0: Shaking Up Europe
Along those lines, Alex, I understand there's a lot of outrage about the administration's rhetoric, particularly toward Zelensky. But is there any chance that this could be an effective strategy, that it could actually be effective in changing the dynamic, potentially even making peace more possible?
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Trump 2.0: Shaking Up Europe
It's a very big shift. I think... It's too soon to say exactly what the results of this will be, but at least rhetorically, it is a massive shift in the way America talks about our position in the world and our alliances.
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Trump 2.0: Shaking Up Europe
Yeah, I think there is a possibility that this doesn't go over well politically. We have seen that majorities of Americans consistently do see the Ukrainians as the good guys in this conflict. And depending on how you ask the question, do support Ukraine. the U.S. taking the side of Ukraine.
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Trump 2.0: Shaking Up Europe
Now, that doesn't mean that people have unlimited patience for continuing to send money and aid or that people would favor sending American troops to aid the Ukrainians. But the last time I saw a poll that asked people's approval of Vladimir Putin in the United States, it was something like 8%. Not a popular guy. Putin is not a popular figure in the U.S.,
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Trump 2.0: Shaking Up Europe
There's so much buzz in Washington about this speech, and it seems like something that is likely to sort of go down in history and be remembered, which is pretty rare for anything a vice president says. Do you think the speech was that important? And what did you think of it?
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Trump 2.0: Shaking Up Europe
Yes and no. Like so many things Trump does, it is shocking but not surprising.
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Trump 2.0: Shaking Up Europe
The argument that I've been hearing is that it is de facto permanent because no matter what happens next, people's sort of faith in the U.S. has been shattered. That having now elected Trump twice, it doesn't matter if the next American presidents are staunch internationalists because they just can't trust us not to do something like elect a Trump who has... Opposite views, right?
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Trump 2.0: Shaking Up Europe
Like, as you were alluding to, there was this idea that sort of politics stops at the water's edge. But we now see sort of definitively that there's a new Republican Party that doesn't believe that and that is poised to be the either ruling or opposition party in the U.S. for the next generation.
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Trump 2.0: Shaking Up Europe
Thanks for the question, William. It's a really interesting one. I will say, I don't know if I've ever heard Trump utter the words spheres of influence, right? But I do think there's an interesting point to be made here about sort of the tension between isolationism and nationalism, right? Because you have Trump saying that America first means America looks out for its own interest.
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Trump 2.0: Shaking Up Europe
Other countries are free to do the same. But inevitably, it comes into tension, right, when America has interest in these other places, but they are pursuing single-mindedly their own self-interest. So if you retreat from the world and say, no, no, we're only about America first now, you don't get to say what Russia does in Europe. You've sort of forfeited your part of that argument.
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Trump 2.0: The Uncertainty Economy
So the first legal proceedings on this were just held this week, and I think we're still waiting for a lot of it to play out in court. A judge has partially blocked the administration's action here, but I think there's a long way to go before we fully understand what the arguments are in this case.
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Trump 2.0: The Uncertainty Economy
The administration is trying to send a message here. They're trying to make a statement. And Secretary of State Marco Rubio came out and said, you know, there's going to be more where this came from. So, you know, these protests were a big flashpoint during the campaign.
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Trump 2.0: The Uncertainty Economy
And Trump and people around him made very clear that they wanted to crack down on them much harder than the Biden administration did.
The Journal.
Trump 2.0: The Uncertainty Economy
It's essentially a states' rights argument. The Republicans have long felt, going back decades, that the Department of Education was not necessary, that education is primarily a local affair. There's over 10,000 school districts in America, and that's where most of the action takes place. And most of that funding comes from states and localities.
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Trump 2.0: The Uncertainty Economy
And when voters look back on his first term, the principal thing that they remember is that the economy was good.
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Trump 2.0: The Uncertainty Economy
What the Department of Education primarily does is twofold. It is civil rights enforcement, making sure that local school districts follow civil rights law, and it's funding for low-income students and students with disabilities. And that funding has to continue. These are functions that are not optional.
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Trump 2.0: The Uncertainty Economy
They're congressionally mandated that, you know, this money gets spent to support students with disabilities, for example.
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Trump 2.0: The Uncertainty Economy
Correct. The idea is that it might be moved into different parts of the government or sort of block granted to the states rather than having a federal department that administers it. In practice, I think we have yet to see whether they can pull that off and how disruptive it may be, how much people may notice it in their everyday lives as a disruption to services that they rely on.
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Trump 2.0: The Uncertainty Economy
For decades, Republicans have said they want to get rid of the Department of Education, and then they get elected and they get into office and they don't do it.
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Trump 2.0: The Uncertainty Economy
And the reason they don't do it is because there's a feeling that the politics of it are prohibitive, that it sounds nice as a campaign promise, but once you actually start meddling with people's education and with the education of their children— that leads to a lot of political blowback.
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Trump 2.0: The Uncertainty Economy
So Reagan, for example, tried to do this and then backed off, and other presidents have not even really wanted to touch it, despite various promises in this regard.
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Trump 2.0: The Uncertainty Economy
Doesn't seem like it. It seems like, you know, the stock market's going down, various economic indicators are wobbly, and people are nervous.
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Trump 2.0: The Uncertainty Economy
The principal thing that the Democrats demanded was some kind of structural check on Elon Musk and Doge, some kind of language that would say that, Basically, the executive branch has to do what Congress tells them to do, that if they're going to pass this funding, you know, the president has to abide by that. And the Republicans didn't agree to that.
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Trump 2.0: The Uncertainty Economy
So Democrats have had a series of anguished closed-door meetings. We reported on Wednesday that you could hear yelling coming out of the Senate Democratic lunch. On the one hand— The Democratic base is absolutely on fire with anger. They are outraged. They want to see their leaders fighting back against what they see the Trump administration doing.
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Trump 2.0: The Uncertainty Economy
On the other hand, Senate Democrats don't want to be blamed for shutting down the government. They don't want to be blamed for federal workers being furloughed and services being cut off. They see that as, you know, politically unfair. dicey for them, and many of them believe that they have a responsibility to keep the government open.
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Trump 2.0: The Uncertainty Economy
So at the last minute, the Democrats found a way to get themselves to a point where they would agree to this deal to keep the government open. I think it raises a lot of questions going forward about what, if any, leverage they may have in the future, given that this was the main thing where Republicans needed their votes.
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Trump 2.0: The Uncertainty Economy
Look, Democrats were in a difficult, if not impossible, spot politically, and they made the best of what they saw as two bad choices.
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Trump 2.0: The Uncertainty Economy
So, Nick, what is happening in the economy right now?
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Trump 2.0: The Uncertainty Economy
Look, there's no question that this has been an action-packed and eventful first 50 days of the Trump presidency. He has signed a record number of executive orders. At the same time, he has not passed a lot of legislation. And especially considering that he does have, you know, majorities in the House and Senate, the legislative agenda is strikingly modest.
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Trump 2.0: The Uncertainty Economy
But one of the things he's very good at is creating the impression of action, creating the impression of So that people feel like he's doing stuff. And that's a big, I think, part of the Trump political profile is just this idea that he's a strong leader. He's a man of action.
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Trump 2.0: The Uncertainty Economy
It's pretty remarkable. I mean, especially coming from Trump, right, who is usually someone who is sort of full of optimistic bluster, for lack of a better word, who is very good at messaging the idea that everything's going great. I think, you know, the president and the people around him feel that he was elected on a platform of change and he was elected as a disruptive figure.
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Trump 2.0: The Uncertainty Economy
And so he has a sort of unique opportunity. And also because he is just such a dominant messenger, he has this unique ability to convince people that, yes, you're going to have to suffer a little bit, but it's for the greater good. And once we get through this period of dislocation, everyone's going to be better off and the in a way that is better for the country long term.
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Trump 2.0: The Uncertainty Economy
I think there's a lot of jitters about whether that's actually true, but it is a pretty unusual thing to be seeing in politics, a president who's basically admitting, like, yes, I am causing you to have some unpleasantness in your day-to-day life, and I'm doing that on purpose because I'm trying to achieve something bigger.
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Trump 2.0: The Uncertainty Economy
Well, I'd love to hear what Nick thinks about this as well. You know, the Business Roundtable, which is a group of top executives, was in D.C. this week and Trump spoke to them. And I also spoke to many of the executives and people around them who were in town for this meeting today. And in the public session, the on-camera part that Trump spoke at, it was very friendly.
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Trump 2.0: The Uncertainty Economy
There was no criticism, really. But privately, that was not what you heard. Privately, I was struck by the level of pessimism. A lot of these CEOs and people in the business community are feeling very concerned and alarmed by where this is headed. The thing that really alarms a lot of people in the business community is they always thought that Trump would be responsive to the market going down.
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Trump 2.0: The Uncertainty Economy
They always thought that that was a really important metric to him. And if something he did started to make the stock market slip, he would change course. And the fact that he's looking at the stock market slipping and saying, we're going to brazen through it, that has really set a lot of people on edge. But Nick, what do you think?
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Trump 2.0: The Uncertainty Economy
In exit polls, voters said that the number one issue for the plurality of voters was the economy, specifically prices. And they rated Trump much better on that issue than his opponent, Kamala Harris. And I think in a bigger sense, the economy has always been central to Trump's political brand. He's seen as a businessman. He's seen as someone who has a command of the economy.
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Trump 2.0: The Uncertainty Economy
Just like I will never tell you who's going to win an election.
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Trump 2.0: The Uncertainty Economy
That's right. We hit a big milestone this week. In the first 100 days, we have passed day 50.
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Trump 2.0: The Uncertainty Economy
They have said that they are revoking his green card. Interestingly, it appears that they may not have originally understood that that was what they were doing. His lawyer said that when they first went to detain him, they said they were revoking his student visa. And he said, no, I have a green card. And they said, well, we're revoking that too.
The Journal.
Trump 2.0: The Uncertainty Economy
But they have said that they are revoking his green card because he led these protests, essentially. And he hasn't been accused of a crime, but instead the administration has invoked this sort of obscure statute that says that someone's permission to be in the country can be revoked or suspended if they interfere with American foreign policy.
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Trump 2.0: The Musk-Trump Bromance
So the Foreign Corrupt Practices Act essentially says if you are an American company and you're doing business overseas, you're not allowed to pay bribes to, you know, corrupt governments or officials in other countries. Of course, this is a very common way of doing business in all sorts of countries all over the world. But the idea is that it is not legal for American businesses.
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Trump 2.0: The Musk-Trump Bromance
to be engaging in this. And so Trump, in taking this action, said that basically it cast this as a regulation that was inhibiting American business practices, which of course it does. It's much harder to do business in a lot of places if you're not allowed to pay bribes.
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Trump 2.0: The Musk-Trump Bromance
But it is a significant tension or irony in the whole sort of drain the swamp mantra that Trump has taken up that he is undoing a lot of the mechanisms that are aimed at precisely that, preventing corruption.
The Journal.
Trump 2.0: The Musk-Trump Bromance
Well, I think, you know, most of the reaction to Trump breaks down on partisan lines. And so Democrats and critics of the administration say this proves that, you know, he's a liar and a hypocrite. He's corrupt. He just wants the corruption that favors him. But, you know, Trump's fans and supporters and most Republicans say, look, this is about the deregulatory agenda.
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Trump 2.0: The Musk-Trump Bromance
This is about making it easier for companies to do business and getting rid of regulations that are not actually useful but just get in the way of business and progress and prosperity.
The Journal.
Trump 2.0: The Musk-Trump Bromance
It was very interesting, particularly the Eric Adams case. Now, Rod Blagojevich has been a Trump ally for a while now. His sentence was actually commuted during Trump's first term. Eric Adams has also been indicted on corruption charges in New York City and since then has been making sort of Trump-friendly noises about things like immigration enforcement.
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Trump 2.0: The Musk-Trump Bromance
And in fact, in instructing these charges to be dropped, there was nothing about the charges being unfair or ill-conceived. It was all about needing the mayor of New York City to help deliver on Trump's agenda, particularly when it came to immigration.
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Trump 2.0: The Musk-Trump Bromance
That's right. And we also had this week the newly confirmed Attorney General Pam Bondi announcing that the Justice Department is actually suing multiple states, accusing them of not having properly enforced immigration law.
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Trump 2.0: The Musk-Trump Bromance
Hey, Noah, thank you so much for your question. I think this is something that has a lot of people in Washington puzzled because it has been a consistent theme of Trump's remarks starting after the election. But it was not something that he talked about at all during the campaign. So it sort of came out of left field in terms of delivering on campaign promises, right?
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Trump 2.0: The Musk-Trump Bromance
Here he campaigned on primarily, you know, immigration and inflation. But as soon as he wins the election, he's talking about, well, I want to get Greenland. I want to turn— It's very ambitious. And so I think conceptually that is where it is coming from, is this idea of American ambition.
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Trump 2.0: The Musk-Trump Bromance
You know, at some of Trump's rallies, particularly towards the end of the campaign, he had these signs that said, dream big again. And he does have this idea that America has become too sort of cramped and pessimistic, that we don't think about possibilities in a big way.
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Trump 2.0: The Musk-Trump Bromance
We don't think about a country that could, you know, reach for the moon and stars, plant the flag on Mars, as he said in his inaugural speech. In some ways, he is very serious about all of these things, right? Not only has the former Gulf of Mexico been officially renamed on all the government maps
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Trump 2.0: The Musk-Trump Bromance
Google Maps and Apple Maps. But this week, reporters for the Associated Press were repeatedly kicked out of events at the White House because that news service has not gone along with this change and has not started using Gulf of America in its news reports.
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Trump 2.0: The Musk-Trump Bromance
Yeah, and we've all been learning a lot about how these changes get made and who's in charge of them and who gets to say what the name is. On the other hand, with something like saying that we're going to take over Gaza and turn it into the Riviera of the Middle East, no one is quite sure what Trump means by this and how serious he is. And there was a quite uncomfortable moment.
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Trump 2.0: The Musk-Trump Bromance
in the Oval Office with the King of Jordan this week. You know, Trump saying these things and saying that Jordan is going to accept large numbers of Palestinians, it puts him in a very uncomfortable spot. Jordan has already accepted huge amounts of Palestinian refugees. And Trump proposing something like this has the potential to destabilize the entire Middle East.
The Journal.
Trump 2.0: The Musk-Trump Bromance
But we now see, you know, Arab governments coming to the table proposing different solutions. And so some of the intent of seemingly crazy ideas like this may be simply to shake things up and get people talking in a way they haven't been talking in the past about ways to solve, you know, an intractable problem.
The Journal.
Trump 2.0: The Musk-Trump Bromance
That has been, as Trump said, you know, leaving a lot of people in dire misery for generations now. And no one seems to be proposing any solutions that could actually sort of break that stalemate and solve the problem on behalf of the Israeli and Palestinian peoples.
The Journal.
Trump 2.0: The Musk-Trump Bromance
It was such an incredible visual, wasn't it? I mean, to have Elon Musk sort of towering over the president and answering questions almost on his behalf, it really sort of visually summarized the way in which he does seem to have become, in a lot of people's minds, a sort of co-president, someone with... you know, the power befitting a world leader.
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Trump 2.0: The Musk-Trump Bromance
And to have, you know, his cute little son sort of rampaging around the room as if he owned the place, it's sort of as if both of them owned the place.
The Journal.
Trump 2.0: The Musk-Trump Bromance
Can I ask you something about the Twitter example, though? Because, yes, he did a lot of the same things that we now see him doing with the government. But was it successful? I mean, isn't Twitter now a smaller, less profitable company than it was when he bought it?
The Journal.
Trump 2.0: The Musk-Trump Bromance
Yeah, I mean, he seems to be everywhere. And Washington is still sort of stunned by how ubiquitous he is and how much wide-ranging personal latitude he seems to have been given to just roam around the White House doing stuff. On the other hand, we don't really know what power he has because his role is so poorly defined and may be reined in by some of these court decisions. So...
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Trump 2.0: The Musk-Trump Bromance
What do you think Elon Musk wants out of this? Like, what do you view as his motivation here?
The Journal.
Trump 2.0: The Musk-Trump Bromance
I think, you know, in Washington, there's a bit of cynicism and skepticism about it. You know, every few years we get people come here saying, I have this dramatically better idea for how the whole thing can be run, and then they take a look at the actual system and realize... Like, yeah, you can find a thing here or there that maybe you wouldn't have authorized.
The Journal.
Trump 2.0: The Musk-Trump Bromance
But these government efficiency, you know, blue ribbon panels and congressional committees and so on have been looking to root out waste, fraud and abuse for decades now. And they generally do not find that you can dramatically reduce the size of the federal government if you want it to keep doing the same things.
The Journal.
Trump 2.0: The Musk-Trump Bromance
We've seen already some Republicans quietly trying to refund some of the programs that they've seen getting destroyed because their constituents' interests are at stake. For example, there's a food program that buys American farm products and uses them for food aid overseas. Some Republicans in the Senate are trying to resurrect that because it was killed in the elimination of USAID.
The Journal.
Trump 2.0: The Musk-Trump Bromance
So I think the idea that Musk is going to have a radical and lasting effect on the structure or the competence of the federal government, I would say people in D.C. are a bit skeptical about that just because many have tried. And it doesn't tend to be quite as easy as they think it's going to be.
The Journal.
Trump 2.0: The Musk-Trump Bromance
Yeah, you know, I think everybody sort of understands the idea of, you know, taking a whack at some of these entrenched bureaucracies. I think where you get a lot of concern is in the parts of the government that see themselves as sort of zero fail, so to speak, right? I mean, where you can't afford a mistake.
The Journal.
Trump 2.0: The Musk-Trump Bromance
In something like national security, you can't just take down all of our defenses, wait for a terrorist attack to happen, and then say, oops, that's where we should have put a patch. So I think there is a lot of concern in various... Areas of the federal government that feel like they can't afford to have a mistake that puts people's lives and livelihoods at risk.
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Trump 2.0: The Musk-Trump Bromance
And that's how you find out that actually we did need that function of the government to be operating and fully staffed.
The Journal.
Trump 2.0: The Musk-Trump Bromance
You know, there's been a lot of talk and commentary about the potential for a constitutional crisis if the administration does not respect judicial decisions, if they decide to simply ignore something that a court has told them to do. Vance has tweeted this. He has previously made comments to this effect. And you have Musk saying, you know, questioning the legitimacy of these courts to rule.
The Journal.
Trump 2.0: The Musk-Trump Bromance
So what I found the most striking was that when Trump was asked this question, he repeatedly said, we will respect the judge's decisions, we'll appeal, and we think we'll win eventually.
The Journal.
Trump 2.0: The Musk-Trump Bromance
And I think a lot of sort of constitutional scholars breathe a sigh of relief at that just because the potential consequences are quite serious for our democracy.
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Trump 2.0: The Musk-Trump Bromance
I think a lot of people come to Trump and they're completely dependent on him, you know, for power or the appearance of power and so on. And so Trump can just fire those people and then they're left with nothing. Elon, you know, as Tim has been saying, not only did Elon provide hundreds of millions of dollars to help Trump get elected, but he's bringing his own staff to this effort to, you
The Journal.
Trump 2.0: The Musk-Trump Bromance
he has his own platform in X and his ability to control the narrative in a way that I think Trump finds familiar and impressive as well. So it is hard to imagine, you know, an amicable divorce just because their interests are so bound up together at this point.
The Journal.
Trump 2.0: Tariff Turnaround
And I think we just don't know where the economic picture is going to end up.
The Journal.
Trump 2.0: Tariff Turnaround
Something we still don't know is sort of what is the end game here. Because the administration keeps kicking the can down the road, we still don't know... They still haven't told us where they want to end up, what would constitute a satisfactory deal that would allow them to remove some of the tariffs on a permanent basis, what the 90-day pause means, right?
The Journal.
Trump 2.0: Tariff Turnaround
It obviously means they've created space for this kind of deal-making, but at the end of 90 days... Does the door come slamming back down or is there another pause? Is there some kind of is it country by country? They really have not made clear just sort of where it's all going.
The Journal.
Trump 2.0: Tariff Turnaround
Well, we only have a couple more episodes, so maybe. You know, it's possible that there will be so much else going on that we just won't even be able to get to them. But the tariffs have been a pretty big storyline of Trump 2.0 so far, so I'd be surprised if they don't come up again.
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Trump 2.0: Tariff Turnaround
That's right. I'm going to spend my kids' spring break hopefully not thinking about tariffs at all. Have fun.
The Journal.
Trump 2.0: Tariff Turnaround
Yeah, I was hoping you'd do like a Ryan impression, you know, like maybe you can like talk about basketball and I could be confused. And the Ducks. Yes, definitely some Oregon references. Got to get that in here.
The Journal.
Trump 2.0: Tariff Turnaround
I mean, you know me. I try never to be surprised by anything Trump does. He had repeatedly said that he, like you said, was going to ride this out, was going to stick to his guns, didn't mind the pain, didn't care what was happening in the economy and the markets. But we were hearing this rising tide of angst from people around him and people in the Republican Party.
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Trump 2.0: Tariff Turnaround
So it wasn't too surprising that he did decide to change course. But if there's anything that's predictable about Trump, it's unpredictability.
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Trump 2.0: Tariff Turnaround
Well, you know, there's always been this divide in the Republican Party between the sort of new right protectionists who have actually been cheering what Trump has been doing. And I talked to some of them, as well as the more traditional Republicans. most of whom have been pretty horrified by Trump's moves in this direction.
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Trump 2.0: Tariff Turnaround
So, you know, there were some in, like, the sort of new right think tank world who were saying, yes, he's finally doing it. This is the promise that we believe he was elected on. And, you know, this is a very influential faction in today's White House, not only in the sort of Peter Navarros of the world. But J.D.
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Trump 2.0: Tariff Turnaround
Vance is really one of the intellectual architects of this movement that wants to move the Republican Party in what they see as a pro-worker direction. And they're true believers in this philosophy Trump has been espousing about sort of gutting it out in the name of long-term reindustrialization.
The Journal.
Trump 2.0: Tariff Turnaround
So some people were absolutely thrilled to see that Trump was not cowed by the markets, and they were relatively dismayed to see him then cave.
The Journal.
Trump 2.0: Tariff Turnaround
Josh, one thing I've been interested about in this whole episode is that I felt like sort of infighting between different White House officials was a big theme of the first Trump term. But there hasn't necessarily been as much of it this time around. But now with these conflicts over economic policy, we're really seeing a return to that.
The Journal.
Trump 2.0: Tariff Turnaround
I mean, how much are they sort of at each other's throats in the White House these days?
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Trump 2.0: Tariff Turnaround
Not great. We've now had several polls come out since Liberation Day. All of these polls are showing that his approval rating on the economy specifically has tanked. It's underwater. The tariffs are not popular by big double digit margins, 20, 30 points with all kinds of voters. So, yeah, it's not going great. And is that why the pause button was hit? Well, we're going to talk about that.
The Journal.
Trump 2.0: Tariff Turnaround
I think that's really the big question is sort of where do we go from here? Because we saw the market spike up on Wednesday with the announcement of the pause, but then it sort of fell back to earth on Thursday, in part because I think Wall Street collectively realized like, oh, this isn't over. We still don't know where this is all gonna land, number one.
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Trump 2.0: Tariff Turnaround
Number two, with the extremely high tariff on China, which of course used to be a major American trading partner, And that across-the-board 10% tariff that remains in place, this is still a very large hike in tariffs, even if it's less than what was originally proposed. And we've talked about this on the show before. It's the uncertainty, stupid, right? I'm not calling you stupid.
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Trump 2.0: Tariff Turnaround
I'm just referring back to the cliche about the economy. Because what I think a lot of people on Wall Street have taken from this whole episode is just that so much is riding on the president's whims and he has such vast unilateral authority, unless the courts or Congress rein him in, that we're likely to be on this roller coaster for a while longer. I don't know. What do you think, Josh?
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Trump 2.0: Tariff Turnaround
I am not familiar with all the legalities involved, but certainly this is something that Democrats are on fire about. You know, on Wednesday morning, before he announced the rollback of the tariffs, Trump posted that it was a great time to buy. And there's some evidence that at least some people did take that advice. And so the question is, did they have foreknowledge?
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Trump 2.0: Tariff Turnaround
And, you know, the president himself had people in the White House, and he's pointing at them saying, like, look how much money they made off of taking my advice. And Democrats are saying that this is something that they're going to investigate.
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Trump 2.0: Tariff Turnaround
It seems to have had less to do with the politics than with the markets. That seems to have been what finally scared him straight.
The Journal.
Trump 2.0: Tariff Turnaround
Yeah, I mean, look, the trade war with China is well underway. And with the caveat that Trump is nothing if not unpredictable and could reverse himself in any way at any moment, the reality is this is now a major trade war. much bigger than anything Trump did against China in his first term. And we are still at the very beginning of these tariffs actually being implemented.
The Journal.
Trump 2.0: Tariff Turnaround
So the market gyrations may calm down a bit, but the real impact on the economy, which most economists believe we're going to see in the form of rising prices on a lot of imported products, that is, we are only at the beginning of that potentially starting to happen. And most forecasters are still saying we're likely going to be in for a recession.
The Journal.
Trump 2.0: ‘Just Getting Started’
It told me that he is determined to see through these incredibly disruptive changes that he's unleashed, no matter what the cost to his party, to his own political prospects. And he is convinced that we are going to come out better on the other side once we get through it.
The Journal.
Trump 2.0: ‘Just Getting Started’
Thanks so much, Nolan, for your question. It's a great observation, and it's certainly one that I've heard from a lot of what you might call traditional or Reaganite Republicans over the last several years. They look at what Trump is doing as a takeover of the party by the isolationists. And Trump has really articulated that. We see, you know, J.D.
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Trump 2.0: ‘Just Getting Started’
Vance, when he was in the Senate, sort of led a rising generation of younger conservatives who had a very different view of America's role on the world stage.
The Journal.
Trump 2.0: ‘Just Getting Started’
So, you know, I think certainly many people in Europe and other places looked at that Trump meeting with Zelensky a week ago and said, this is it. The transatlantic alliance is over. The America that was a trustworthy partner for European allies and North American allies and NATO is no more. And it's just never coming back. Now, I would say to the China point,
The Journal.
Trump 2.0: ‘Just Getting Started’
part of the justification that you hear for all of this from some Trump allies is that the point of cozying up to Russia is to rebalance against China. That if America is going to effectively counter China in this new world order, We have to split Russia off from them, and that's part of the point of some of the more pro-Putin expressions coming from Trump.
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Trump 2.0: ‘Just Getting Started’
But it is absolutely a massive reorganization of the world order as it was previously conceived. Andrew, what do you think about this?
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Trump 2.0: ‘Just Getting Started’
Oh my gosh, Kate, I can't even tell you how excited I am about this. We might get a government shutdown. I don't actually, obviously, I'm not for or against a government shutdown. But it's always exciting times on Capitol Hill when they're trying to keep the government open, which is perpetually difficult. And the deadline for government funding is one week from today on Friday, March 14th.
The Journal.
Trump 2.0: ‘Just Getting Started’
So if they don't pass a new government funding bill by then, the government will shut down, at least in part. And where we stand right now is nobody has any idea how they're going to do this. There's kind of some negotiations going on with Democrats. There's a potential short-term bill. There's a potential long-term bill.
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Trump 2.0: ‘Just Getting Started’
And there's the potential that they even do this on a party line basis, which would be relatively unusual. But it's all very up in the air.
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Trump 2.0: ‘Just Getting Started’
The goal was really to explain why all of this is good and necessary, right? Why he is winning. Why all of the things he's done add up to a better future, a new golden age, as he likes to put it. Why all of this disruption has a purpose and is going to lead to better things and is already putting victories on the board.
The Journal.
Trump 2.0: ‘Just Getting Started’
Yes and no. I mean, certainly presidents are always trying to justify their actions. I would say that there's a few things that are different about Trump than a quote-unquote normal president at this stage, right? I think a normal president has much more of a bipartisan honeymoon and spends much more time trying to extend olive branches to the other side to explain why the things that he is doing—
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Trump 2.0: ‘Just Getting Started’
should be broadly acceptable to Republicans and Democrats. Trump actually began the speech by saying, Democrats hate me and they're not going to clap for anything I do. So it was almost like a, first of all, screw you. And so that's one difference. I think also just the level of disruption and that being a feature, not a bug, right? Trump is very proud of how disruptive his agenda is.
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Trump 2.0: ‘Just Getting Started’
And, you know, as he put it, there's going to be an adjustment period to some of the ways he's trying to reorder the economy with his tariffs, that there will be some short-term pain. Sort of a refreshing honesty there, honestly, because presidents don't usually like to admit that.
The Journal.
Trump 2.0: ‘Just Getting Started’
Hey, Andrew. So, Andrew, what is the White House's takeaway from this speech? What did they want going into it and how do they think it went?
The Journal.
Trump 2.0: ‘Just Getting Started’
The tariffs themselves are not necessarily popular, but it was certainly very clear that this was going to be a part of his economic prescription. And there's a lot of evidence in the polls that the American public is very much in this wait-and-see moment. They are...
The Journal.
Trump 2.0: ‘Just Getting Started’
giving the president the benefit of the doubt to implement his agenda and see where things land, you know, markets render verdicts much more quickly. And we do see the market expressing a lot of doubt about where this is all headed. But you certainly cannot say that Trump is not doing exactly what he said he would do. He, if anything, promised more tariffs than he has done so far.
The Journal.
Trump 2.0: ‘Just Getting Started’
And he promised, I think, on an even more macro level to bring major change to the way everything works, right? To change the way the federal government functions, to change the way the American economy functions, to change— the entire world order and rearrange our alliances. And he has set all of that in motion, and it is very destabilizing, and a lot of people don't like it.
The Journal.
Trump 2.0: ‘Just Getting Started’
But you cannot say that he didn't promise to do all of those things. And part of what I think he was communicating in the speech was, this is all working, just give it a little bit of time to play out, and we're going to get to a better place.
The Journal.
Trump 2.0: ‘Just Getting Started’
You know, it was a defiant speech, an unapologetic speech, a long speech, and a speech that I think gave us a real window into how Trump is seeing his very disruptive first several weeks in the White House in his second term.
The Journal.
Trump 2.0: ‘Just Getting Started’
Yeah, I think the unstated sort of tension in the tariff policy that Andrew's talking about is we can't tell if the point of the tariffs is to have the tariffs or to not have the tariffs, right? Because if what you're trying to do is extract concessions, that means that after threatening the tariffs, you have to not do the tariffs, right?
The Journal.
Trump 2.0: ‘Just Getting Started’
Once they've given you what you want, they don't get tariffed as a reward for that. On the other hand, if what you're trying to do is rebalance the entire world economy and reshore American manufacturing, First of all, you have to actually do the tariffs and keep them on, right, in order to create that incentive. And second of all, that does drive prices up. That does make things more expensive.
The Journal.
Trump 2.0: ‘Just Getting Started’
The reason companies have outsourced all this manufacturing is because it is cheaper to make the things in other places. Now, I think the administration would say they are doing various other things to make that more cost effective for these companies, right?
The Journal.
Trump 2.0: ‘Just Getting Started’
That by, say, deregulation, relaxing labor laws, making energy inputs less expensive, for example, they can bring down the cost at the same time as they're incentivizing that reshoring. But it's all very complicated. And as Andrew said, it takes a long time. And especially when you have this unstable business environment, right?
The Journal.
Trump 2.0: ‘Just Getting Started’
It's hard to convince companies that this is something they can make long-term investments in. So a lot of turbulence right now and a lot of uncertainty about sort of what the end goal is. And I don't think that Trump's speech really demystified any of that. Would you agree with that, Andrew?
The Journal.
Trump 2.0: ‘Just Getting Started’
You know, being in the room for the speech, it was fascinating to observe. The Democratic reaction really, I think, epitomized how sort of lost and in disarray the party is at this point because you could see the different approaches being taken by different members, and they just have not figured out a sort of cohesive, coordinated, much less effective way to express their opposition to Trump.
The Journal.
Trump 2.0: Less Foreign Aid, More Tariffs
It's already been pretty well walked back in the sense of the administration has already done a little bit of cleanup. And Trump himself has also posted on social media to clarify that he would not propose to put U.S. troops on the ground. And the administration says, you know, the U.S. would not be paying for this move.
The Journal.
Trump 2.0: Less Foreign Aid, More Tariffs
So the idea seems to have been to just reframe the discussion, to throw in this massive curveball that wasn't really on anyone's radar to sort of jolt everyone into waking up and looking at their actual options. Mm-hmm.
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Trump 2.0: Less Foreign Aid, More Tariffs
Trump wants everyone to, including, you know, a lot of the surrounding Arab governments, to really get involved here, put their heads together and figure out a way forward because he sees the status quo as untenable. But I will say this. The actual idea he proposed is not something that got a very good reception, even from some corners of his own political base.
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Trump 2.0: Less Foreign Aid, More Tariffs
They didn't like the idea of sending, you know, American troops to Gaza. So whatever the point of this idea was, it does not seem to have been a fleshed-out proposal to actually take action by the U.S. military.
The Journal.
Trump 2.0: Less Foreign Aid, More Tariffs
Well, Democrats are in a tough spot. You know, they are shut out of power at the federal level. They're in the minority in the House and Senate and obviously don't have the White House. And they've really been sort of... behind the curve, I think it's fair to say.
The Journal.
Trump 2.0: Less Foreign Aid, More Tariffs
Trump is moving so quickly that the normal rhythms of congressional action and the things that people do in Washington is not really adequate to keep up with that. So you have had You know, congressional Democrats will plan a press conference for a day or two after Trump does something, and by the time they get around to it, it's too late, right?
The Journal.
Trump 2.0: Less Foreign Aid, More Tariffs
Again, there's only so much that Democrats in Congress can do, but we've seen them do things like start to try to jam up the process in the Senate for confirming nominees and getting more of the administration's agenda through the process.
The Journal.
Trump 2.0: Less Foreign Aid, More Tariffs
The Democrats in the Senate actually held an all-night sit-in to protest the nomination of Russ Vogt at the Office of Management and Budget, who they blame for a lot of the destruction of the federal government that is currently taking place. But they're powerless to actually stop it. All they can do is sort of yell a lot and maybe slow it down a little.
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Trump 2.0: Less Foreign Aid, More Tariffs
Another busy week. And I think we're going to get another one next week as well.
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Trump 2.0: Less Foreign Aid, More Tariffs
Well, that's the question a lot of people are asking. Yes, on paper, this is an independent agency that was created by Congress and therefore would require an act of Congress to eliminate. On the other hand, the attitude this administration has taken, as Joel has been describing, is sort of like try and stop us. And who's going to stop us? So, yes, there have been lawsuits filed.
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Trump 2.0: Less Foreign Aid, More Tariffs
Well, it's very busy. A lot of people liken it to trying to drink from a fire hose. There's so much happening that it's difficult for any one person to keep track of it all.
The Journal.
Trump 2.0: Less Foreign Aid, More Tariffs
We haven't heard much from the Republicans in Congress. Some of them have sort of tentatively suggested that maybe this is all going a little bit too far too fast. But there hasn't been action taken by Congress. And these lawsuits could take a while to get through the courts.
The Journal.
Trump 2.0: Less Foreign Aid, More Tariffs
You know, we're going to see the administration, I think, put forward some of its more aggressive legal theories about executive power. The sort of big picture theory is this is the executive branch. The president's the head of the executive branch. It's ultimately up to the president to do what he wants to with the branch of government that he sort of embodies.
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Trump 2.0: Less Foreign Aid, More Tariffs
And so it might still exist as a matter of statute, but it doesn't functionally exist.
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Trump 2.0: Less Foreign Aid, More Tariffs
Yeah. And we're hearing about the potential for these kind of large-scale firings at the EPA, the Environmental Protection Agency as well, other agencies are clearly in their sights. I think the other question that Joel sort of alluded to was, is there actually a constituency for these agencies, both among the public and
The Journal.
Trump 2.0: Less Foreign Aid, More Tariffs
and among Congress that would lead to the administration getting pressure to put the brakes on, right? I mean, the government does stuff, right? It serves people all across the country. And we are already hearing from members of Congress that their phone lines are being flooded with constituents expressing some level of outrage, many of whom are directly affected by this. So that's it.
The Journal.
Trump 2.0: Less Foreign Aid, More Tariffs
Another question is, is there going to be so much political blowback? But part of the reason that, you know, Elon Musk likes to go in, move fast and break things, is that if you just do this so quickly that that reaction doesn't have time to percolate, either the, you know, popular backlash or the response in the courts, that it's just effectively over before anyone can do anything about it.
The Journal.
Trump 2.0: Less Foreign Aid, More Tariffs
There's a lot of speculation about that, and we don't know. On the one hand, they clearly want to make an early splash that they can then either dial back or modulate in some ways. On the other hand, they do want to take this approach to vast swaths of the government, so it could continue in this way for quite some time.
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Trump 2.0: Less Foreign Aid, More Tariffs
And as someone who covered the first Trump administration, that was pretty intense pretty much throughout.
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Trump 2.0: Less Foreign Aid, More Tariffs
Well, it's interesting because, you know, we talked before about how there's this school of thought that says that Trump doesn't really want to put on the tariffs. He just wants to use it as a negotiating tactic to get leverage for other parts of his agenda, some economic, some not. That seems to have pretty much played out with these Canada and Mexico tariffs specifically.
The Journal.
Trump 2.0: Less Foreign Aid, More Tariffs
They were never imposed. The leaders of Canada and Mexico came rushing to the proverbial negotiating table to offer up various concessions, mostly related to border security. It's not clear how much they were even real concessions versus just announcements of things they were already doing, right? Like troop deployments to the border that
The Journal.
Trump 2.0: Less Foreign Aid, More Tariffs
the Mexican and Canadian governments had already planned to do, spending for drug interdiction that they may have already been in the process of doing, things like that. So the main thing that Trump got out of this may have been a sort of PR win. But it is a 30-day extension. It's not a permanent suspension of the tariff threat. So this cycle is going to repeat itself.
The Journal.
Trump 2.0: Less Foreign Aid, More Tariffs
We don't know how it's going to go in the next phase. And the tariff against China did go into effect. It's 10%. It's not as high as the other two countries. But that is going into effect, and there is some possibility that that could escalate as well.
The Journal.
Trump 2.0: Less Foreign Aid, More Tariffs
Well, we could be headed for a trade war. The Chinese government has announced retaliatory measures. They're adding more tariffs on American goods, investigations into American businesses. So this is going to keep going back and forth in a tit for tat, and I don't think we know yet. where it's headed.
The Journal.
Trump 2.0: Less Foreign Aid, More Tariffs
And we should say that that is another sort of consequence of these tariff wars is even if tariffs don't end up getting imposed or end up getting rolled back, it takes a toll on the business climate because of the certainty that businesses need in order to plan their operations. There's a lot of uncertainty in the forecast.
The Journal.
Trump 2.0: Less Foreign Aid, More Tariffs
And we didn't settle the underlying question of, right, does Trump want to do the tariffs and use that as a way of raising money for the federal budget? Or is he more about threatening tariffs to get other things? The evidence so far is kind of mixed.
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Trump 2.0: Trade Wars and Deportation Battles
Oh, my gosh. So, you know, we all put on our fancy hats. We went to the ticker tape parade and we blew things up. For example, the global economy.
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Trump 2.0: Trade Wars and Deportation Battles
So people do seem to like that he seems to be taking control of a border that they felt was out of control. I do think there is a chance that it becomes less popular as these incidents pile up.
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Trump 2.0: Trade Wars and Deportation Battles
I do wonder if it does start to go into politically dangerous territory as more of these sort of sympathetic victims come out, as more and more people who appear not to have done anything to deserve it are being singled out and deported.
The Journal.
Trump 2.0: Trade Wars and Deportation Battles
I want to ask about that long-term question. What do we see as the administration's endgame on immigration, given that it has, as you point out, only been a few weeks and they are sort of picking their spots to send a strong signal? Presumably this is all building up to something. Where is it going?
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Trump 2.0: Trade Wars and Deportation Battles
I would say it's very unlikely. And I've been, like Michelle, covering this issue for many years. I was here when they came close back in 2013 to passing comprehensive immigration reform. And it was torpedoed essentially by a revolt among the Republican base, among conservative Republican voters involved.
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Trump 2.0: Trade Wars and Deportation Battles
You know, Republican elites, the business community, the Chamber of Commerce, the agricultural lobby, they would all love to see a big comprehensive immigration reform deal get done that would legalize millions of people and allow them to work in all of these industries and so on.
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Trump 2.0: Trade Wars and Deportation Battles
But when you drill down on the specifics and try to get Republicans to vote for it, particularly Republicans in safe districts who are much more concerned about a primary threat, who are much more concerned about someone to their right coming in and accusing them of not being loyal enough to Trump or not being conservative enough, they see that as more of a threat to them politically than the general election.
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Trump 2.0: Trade Wars and Deportation Battles
So I think even though it remains politically popular, it is not something you're going to see this president or this version of the Republican Party taking up anytime soon.
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Trump 2.0: Trade Wars and Deportation Battles
Thank you, Michelle. That was great. Of course.
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Trump 2.0: Trade Wars and Deportation Battles
You only made it three quarters of the way. We almost got you to 100, but you didn't quite hack it. It's okay. I forgive you.
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Trump 2.0: Trade Wars and Deportation Battles
You could submit a question. Do you know how to do that?
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Trump 2.0: Trade Wars and Deportation Battles
Just another listener out there. A fan of the pod.
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Trump 2.0: Trade Wars and Deportation Battles
So, Ryan, this is the penetrating political insight that you pay me the big bucks for. If the economy goes into a recession or depression, that would not be good politically for Trump or the Republicans.
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Trump 2.0: Trade Wars and Deportation Battles
and leaves him with his perpetual sub-50% approval rating. Now, Trump, as far as we know, can't run for re-election, despite some noises he's made in that direction. So the follow-up for this is really on Republicans.
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Trump 2.0: Trade Wars and Deportation Battles
Senator Rand Paul, Republican senator from Kentucky who is not a fan of tariffs, pointed out on Thursday that when the Smoot-Hawley tariffs went into effect in the 1930s, Republicans lost the House and Senate for 60 years. So... You do have Republicans pointing out that they think this would not be good for them politically. What the administration says is this is temporary.
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Trump 2.0: Trade Wars and Deportation Battles
These are essentially growing pains for the restructuring of the American economy. You had the Commerce Secretary Howard Lutnick on television on Thursday saying, give it six months and we're going to come out the other side and everything's going to be better. And we're going to have an America where we're We make things where people have better jobs, where things are less expensive.
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Trump 2.0: Trade Wars and Deportation Battles
So they're saying this is a little bit of an adjustment period and maybe the markets just don't get it. But in the end, everybody's going to be better off.
The Journal.
Trump 2.0: Trade Wars and Deportation Battles
The signals that we are seeing is that people are already losing patience with this approach to the economy. Generally, when the economy goes south, the voters inflict a very swift and decisive verdict on whoever is in power, and they are not very interested in explanations about why it's somebody else's fault or why this is better for everyone in the long run.
The Journal.
Trump 2.0: Trade Wars and Deportation Battles
Well, you know, I try never to predict what Trump is going to do. And I do think we should point out that even today, most of the tariffs still have not gone into effect. So there's always a chance they take it back at the last second. Obviously, there's a very intensive lobbying effort on the part of multiple governments and multiple industries to try to create carve-outs and get exceptions.
The Journal.
Trump 2.0: Trade Wars and Deportation Battles
And that is one endpoint for this, is that it just becomes a sort of massive lobbying spree where people are able to get individual or country-based exemptions, and it actually ends up being far less than meets the eye at the end of the day. That being said, this reminds me very much of our discussion previously about the Transatlantic Alliance and the global security picture of
The Journal.
Trump 2.0: Trade Wars and Deportation Battles
where once you have blown it up, because it is based on trust, because it is based on long-term stability, it's very difficult to reconstruct because the trust is gone. Even if you could go back and recreate all the same agreements, You would not have that feeling that this is a lasting structure, this is an institution that has the durable backing of parties across the political spectrum.
The Journal.
Trump 2.0: Trade Wars and Deportation Battles
So I would say it's very hard to recreate an institution like that once you've destroyed it.
The Journal.
Trump 2.0: Trade Wars and Deportation Battles
So these are all very red seats. They both went for the Republican candidate by 30 or more points last November. The Republicans won both of these seats. It would have been shocking if they didn't. But they won them by much smaller margins, basically cut those margins in half. Both of these new candidates who've both already been sworn in won by about 15 points instead of 30.
The Journal.
Trump 2.0: Trade Wars and Deportation Battles
So in the near term, the result is Republicans are happy. They have two more seats in Congress. We know how narrow their majority is. They really needed those two seats to be filled. On the other hand, it's a shot in the arm for the Democrats because their candidates overperformed by such a large margin. But the really big game was in Wisconsin.
The Journal.
Trump 2.0: Trade Wars and Deportation Battles
That's right. It was really, I mean, I feel like we've used the phrase shock and awe a lot on this show. But they really did decide to go big. And it's interesting because he really went as far as he has ever threatened to go. And, you know, there was this idea that he could do something across the board. He could do something, quote unquote, reciprocal. He decided not. D, all of the above.
The Journal.
Trump 2.0: Trade Wars and Deportation Battles
These Supreme Court races in Wisconsin are quite consequential. There's currently a four to three majority for the liberals on that high court. This is a court that's deciding everything from congressional redistricting to abortion rights. So it makes a big difference, the ideology of which judge gets put in that seat.
The Journal.
Trump 2.0: Trade Wars and Deportation Battles
And both parties really went all in on this race, spending tens of millions of dollars to try to get their candidate elected.
The Journal.
Trump 2.0: Trade Wars and Deportation Battles
That's right. The other really significant point to make about this Wisconsin judicial election is that both sides really turned it into a referendum, not only on Trump, but on Elon Musk. Elon Musk spent about $25 million trying to get the conservative justice elected. The Democrats made him the centerpiece of their messaging campaign.
The Journal.
Trump 2.0: Trade Wars and Deportation Battles
in all of the ads that they were running, in all of the things that the justice in question was talking about. They were talking about Musk trying to buy the election. They were pointing at the things that Elon is doing with Doge in Washington, really tapping into voter anger specifically at Musk.
The Journal.
Trump 2.0: Trade Wars and Deportation Battles
And of course, Musk helped them by hyping his role in all of this, by going to Wisconsin on the eve of the election and putting on a cheese head and jumping around on stage and giving a big speech about the things that he believes in. And while Democrats were believed to have a slight edge, they overperformed. The liberal candidate won by a 10-point margin.
The Journal.
Trump 2.0: Trade Wars and Deportation Battles
And that really shows you that as much as we knew that there was a backlash to Trump and Musk brewing out there in America, as much as we knew that Democrats were energized and more likely to turn out... They exceeded expectations in this case, and that, I think, does tell you that there is some political juice behind the Democrats right now.
The Journal.
Trump 2.0: Trade Wars and Deportation Battles
He did a version of an across-the-board tariff combined with what he called a reciprocal tariff, but one that was not based on tariff rates, but on trade imbalances. And so, yeah, they really went for it.
The Journal.
Trump 2.0: Trade Wars and Deportation Battles
It seems like there's a sort of odd dichotomy here where on the one hand, the sort of very straightforward, what you would think would be the sort of low hanging fruit of deportations, right? People, a lot of people are already in custody or people who like they we know where they are and we know how they got here. Right. And those people are just nothing's happening with them.
The Journal.
Trump 2.0: Trade Wars and Deportation Battles
But then on the other hand, these people who would seem to have legal status or who came to the country, you wrote about a group of people who were literally given guarantees of safety to come to this country and now that's being taken away. Or these, you know, students that are being targeted. Is that strategic or does that have to do with a lack of resources? What's the reason for that?
The Journal.
Trump 2.0: Trade Wars and Deportation Battles
The politics of this are very interesting. So far, Trump's approach to immigration is more popular than his approach to most other issues. It is a slight majority in most polls I've seen prove of the way that Trump is handling immigration so far. It was, as you mentioned, a very central premise of his campaign, more important, he believes, than the economy in motivating people to
The Journal.
Trump 2.0: The First 100 Days
At a high level, what is the interpretation from these polls about what America thinks about his presidencies?
The Journal.
Trump 2.0: The First 100 Days
Yeah. So on the topic of approval ratings, we have a question from a listener, Jackson Oldham Navarro.
The Journal.
Trump 2.0: The First 100 Days
And one thing that Trump was talking a lot about coming into office was mass deportations. How many people has Trump deported?
The Journal.
Trump 2.0: The First 100 Days
Thanks, Jackson. I'm going to miss it too. Molly, what are your thoughts?
The Journal.
Trump 2.0: The First 100 Days
Yeah, and maybe we'll see you on August 10th for, you know, the next 100 days. There we go. Day 200. It's coming.
The Journal.
Trump 2.0: The First 100 Days
All right, Molly. Here we are. We've hit 100 days. What are you looking for in the next 100 days?
The Journal.
Trump 2.0: The First 100 Days
In the first 100 days, nearly 66,000 people were deported. That's the number. Okay, so now that we've passed 100 days, where do you think the Trump administration is taking the country?
The Journal.
Trump 2.0: The First 100 Days
So we've talked about a lot of ways that Trump has amassed power. Are there any cracks?
The Journal.
Trump 2.0: The First 100 Days
Yeah, thanks to everyone for sending in their questions. We appreciate you so much. Yes. Awesome. Thank you, Molly. Thanks, Kate. Trump 2.0 is part of The Journal, which is a co-production of Spotify and The Wall Street Journal. This episode was produced by Enrique Perez de la Rosa and edited by Catherine Whalen. Molly Ball is The Wall Street Journal's senior political correspondent.
The Journal.
Trump 2.0: The First 100 Days
I'm Kate Leinbaugh. This episode was engineered by Nathan Singapak. Our theme music is by So Wiley and remixed by Peter Leonard. Additional music in this episode by Griffin Tanner. Fact-checking by Kate Gallagher. Artwork by James Walton. This is the final episode of Trump 2.0. We'll keep covering the Trump administration on our daily show. Thanks for all your questions and thanks for listening.
The Journal.
Trump 2.0: The First 100 Days
From the Journal, this is Trump 2.0. I'm Kate Leinbaugh. And I'm Molly Ball. It's Friday, May 2nd. Coming up, a look back at Trump's first 100 days in office and a look ahead to what's next. So, Molly, this week, Trump's been talking about all the things he's achieved in these 100 days. And one place he did it was at that rally in Michigan, where he celebrated with his base.
The Journal.
Trump 2.0: The First 100 Days
Yeah. Well, it's been 100 days. Wow. Even more, actually, a couple more. It has been like 103 days. So to mark the occasion, I've come up with a small pop quiz for you, something to test you on a few key points from Trump's first 100 days. Oh, boy. Okay. Let's see how we do. How many executive orders has Trump signed in these first 100 days?
The Journal.
Trump 2.0: The First 100 Days
And to help us dig into this period, this first 100 days of the Trump administration, we're joined by our colleague Aaron Zittner. Hi, Aaron.
The Journal.
Trump 2.0: The First 100 Days
It's great to have you. So on Inauguration Day, January 20th, Trump laid out a vision for the country, the golden age of America. How would you say he's executed on that?
The Journal.
Trump 2.0: The First 100 Days
You talk about this gamble, Aaron. How is Trump executing on that gamble? Like, how is he exercising his power?
The Journal.
Trump 2.0: The First 100 Days
Are we approaching this constitutional crisis that some people talk about?
The Journal.
Trump 2.0: The First 100 Days
And Molly, you've reported on Trump rolling out big policy changes and then walking them back.
The Journal.
Trump 2.0: The First 100 Days
After this quick break, we're going to hear what the American public thinks about how Trump has been running the government.
The Journal.
Trump 2.0: The First 100 Days
So now we want to talk about how Trump's policy priorities are landing with the American public. Erin, you run polls for The Wall Street Journal, so you've got your fingers on the pulse. How are voters feeling?