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Chapter 1: What parallels are drawn between Trump's policies and the Great Depression?
Mr. Prime Minister, shall we start now? Let's start, and let's start properly. What do you mean? Let's start everything. Can you be more specific? Let's start clothes, let's start equipment, let's start equipment. I mean, all outdoor sports and free time. Now I understand. Maybe you understand numbers better. Putkesport is now even below 60%. So... Exactly. Putkesport.fi.
Mitäs D-vitamiineja minun pitikää osta? Joku muistisääntö siinä oli. R niinku ravintolisä. H niinku hyvä. M niinku... Mikä se nyt oli? D niinkuin Devisol. No justiisa se.
Devisol D-vitamiinit löydät apteekeista. Orion Pharma. Hyvinvointia rakentamassa.
So as the White House gets more terrible economic news, I guess their economic plan is just to say everything's great and to say it's A+++. J.D. Vance speaking in Allentown, where a lot of the Trump policies have been harming that community. And he was asked, so what grade do you give Donald Trump's economy? Here's what he says. Play this clip.
President Trump last week gave his economy a grade of A++++. What grade would you give the economy today? A+++.
But then they also blame former President Biden for the A++++ economy. I'm just trying to figure it out. Then you had Caroline Leavitt, Donald Trump's chief propagandist, just lying about the inflation numbers and just saying they are what they aren't. Here, just play this clip. First, very quickly, clarifying Caitlin's question.
You acknowledged that CPI in January when you took office was 3%, and in September, the last month for which we have data, it was also 3%, so inflation... No, it's 2.5%. Not in September, it was 3%.
2.5%, the average CPI right now, I have it in front of me, in President Trump's first eight months in office, inflation as measured by the overall consumer price index has slowed to a 2.5 average pace. This is down from the 2.9% inherited in January. January is one month.
what they do to manipulate the data is notice the word average so they talk about what trump did before his liberation day which i call liquidation day and then they blend it as what they call an average so i'm 40 years old it would be saying like my average age
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Chapter 2: How does Andrew Ross Sorkin view the current economic climate?
This is the Joint Economic Committee since 2021. The highest inflation over the past four years has been in red states, especially Florida. I'm talking about current. Current. Current. Not over the past four years. Right. Today. Okay. I would think four years would be a reasonable trend line to look at. Today, more data would be better to look at.
Let's bring in New York Times bestselling author, Andrew Ross Sorkin, also co-host of Squawk Box. we cover here sometimes on the Midas Touch Network and author of the new book, 1929, Inside the Greatest Crash in Wall Street History and How It Shattered a Nation. It's not just a great look back there. It's also a look present and look forward.
You talk about the seductive illusions that were taking place back then and the warning signs that it gives us for the present. So it's great to have you here. It's great. Thanks so much for having me. I appreciate it.
it's great to read your book let's just start there with these trump regime officials who you've interviewed who go on squawk box and they're giving you these data points that you know are not accurate how do you how do you as a reporter deal with that we saw you there deal with it how do you process what they're spewing
look, I think the role that I'm supposed to play is to the extent that you can fact check in real time, which unto itself is a complicated and oftentimes challenging thing to do. You know, in that instance, he had made a comment like that earlier, about a week earlier. And I had actually, after hearing it, had gone and looked up some of the math and was,
I'm not confused by it, but I saw the math and it didn't seem to translate. So I thought, well, if he brings that up, then we can actually talk about the numbers. And by the way, it comes from a place of curiosity more than anything else. It's not coming from a place of, here I am trying to prove him wrong. It was, I really wanted to understand
He has a perspective and thinks that these are the numbers to focus on. Clearly, there are these other numbers that contradict those numbers. How is the public supposed to think about that? But I think the larger point that underlies this is you have an administration that oftentimes is trying to jawbone their way towards a specific goal, irrespective of the facts. And by the way,
That's almost a political thing to say about this administration, but you could say the same thing about the previous administration. There was a period of time where the Biden administration was telling people, you know, that the economy was better than it really was. And you go on TikTok, go on X, go, you know, back then people would say, but I'm feeling something very different.
And I think that's the same thing that's actually in some ways happening right now, which is, you know, the president saying A++++ economy and everybody else is saying, but that's not the economy I see. You know, you take a look at, I think, some of the mistakes that you mention in the Biden administration. They're just telling people they were feeling good when they weren't feeling good.
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Chapter 3: What insights does Sorkin provide about the manipulation of economic data?
And I said to him, it is extraordinary, but just go with that number. Go with the $7 billion. You don't need to go with the $23 billion if that's the case. But I think that we've seen this over and over again. It's the same story with the inflation story, which is, you know, they've said repeatedly tariffs do not create inflation.
And yet it is very hard to find a real economist in this country or elsewhere that will tell you that. tariffs don't cause inflation. Invariably, they cause inflation. Invariably, they are a tax to some degree on the American public. That's just what they are.
And so when you tell everybody that there's something that they're not, when, you know, it's literally right now, by the way, it's sunny here in New York. It's literally like telling somebody it's raining right now, even though I can see that it's sunny. You know, and one of the things that
I love dissecting as a law professor or just as someone who's hungry for information is that when a big trade deal is announced that is said to be on the scale of like the United States, Mexico, Canada agreement, or that's big, it's a big seismic types of shift.
And when the Trump regime says, hey, we've got this deal that we just made with China, or we made a deal with Japan, or we made a deal with the European Union, I go, okay, well, where's the, let me read it. Like, let me look at it. Where are the terms? And then you sometimes get a press release or you get maybe a statement and then you don't get a statement from China.
How do you process that though? Because these things are, and I always wonder this from a financial reporter's perspective, when they're out there saying these are deals that are happening, but there's the most basic. I think I'm doing what I imagine I'm doing, what I think the investor class is doing, which is that at some level you have to discount what's being said.
So we are living in a policy by press release environment right now. And you have to look at that press release and you have to almost put a haircut on it. You know, Earlier this year, the president came out and said that China was gonna buy 12 million or whatever the number was, billion. Yeah, 12 million metric tons of soybeans. Metric tons of soybeans by the end of the year.
I repeatedly asked members of the cabinet administration over the last couple of weeks, I said, you know, the end of the year is like here, like we're, it's 15 days away right at this point, it's coming. And I think it's, I think we've sold 300 some odd thousand metric tons. So 300,000, how are you going to get to 12,000? 12 million. It's just the math doesn't add.
And you can never get a straight answer. And then, of course, just in the past week or so, they've said, well, it's not actually the end of the year. It's the growing season. And so you tell me what the growing season is, and everybody has a different view about that. So this could get extended out several months.
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Chapter 4: What are the implications of over-leveraging in today's economy?
Right now it's 300,000. But that's it. But that brings me to the broader point about your book, though, which is- Well, I'll tell you one thing, the other crazy part The crazy part, it's not just the administration saying these things, it's that business leaders make these commitments publicly.
These are publicly traded, but putting aside the sovereign, the big investments from countries, think about all of the business leaders who announced these gigantic investment plans that when you actually read through them, They've either already made half of the commitments before or they're doubling, double counting this and double counting that because it's all an audience of one.
And I do think that the investors in particular, I think, look through all of this. And I hope the journalists are trying to point these things out because that's our job. Having said that, there are clearly supporters of this president and this administration who don't want you to do that. And I hear from them. Trust me.
And to your point, I mean, just look at the first week of this administration. You had SoftBank, OpenAI, the whole tech crew right there. And what did they, I forget the number that they did, that we've committed immediately like $1 trillion in AI infrastructure projects together. And it's like the soybeans. I don't think they, as that group,
first off looking at that group you're like these people are going to work together aren't they that's a strange crew to work together but you know they all wanted to be there in the oval they've done nothing you look at zuckerberg he was there at one of those meetings and he's like what number do you want me to use 800 billion 800 billion i mean he literally said that and so your point though is is that when you speak to a lot of business leaders in wall street
they know they have that audience, number one, but two, smart money is actually putting a lie discount into what the guy said. So he's out there and the street's like, don't even listen to this guy. He's a freaking liar. The only thing there, when they're looking,
When the investor class is looking at meta and what Mark Zuckerberg is saying, they're looking at the quarterly reports, they're looking at what he is saying and what the company is saying, genuinely, quote, quote, on the record, in those statements, in those press releases, on those analyst calls, because it is those numbers that they're going to ultimately be held responsible for.
It would actually be very interesting to see if, in fact, some of these numbers that are said publicly in these other environments are
know whether shareholders or others you know sue at some point trying to claim that they were misled it'd be very interesting to see what kind of case could be brought because they could make these arguments that you know that their intention over a much longer period of time is to in fact make these investments but you know i think it's it's it's a little bit hard to measure
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Chapter 5: How does the current economic situation affect the working class?
You talk about the over-leverage. leading up to the depression. And right now, what seems to be happening with all of these over levered AI companies, what they're doing, it seems, and maybe you can describe it better than me, is a company like Amedda is creating these hold co rent back deals with these shady, not shady, shadowy lenders. And they're basically treating CapEx expenditures
as loan payments. And so they're hiding they're hiding the actual leverage because that would harm their EBITDA or reflect as as as a lack of profits. And so there's there's that's going on at a very high level and people are minted. We're seeing stuff like that. How much should I be concerned? I don't want to scare you. I think these are all red flags.
I think the second you see Meta, instead of investing its own money in a data center, decide to partner up with what's called a private credit firm and effectively have a leaseback deal with them so that they don't have to actually claim that they're making the investment themselves and effectively guarantee money back to this other firm and
I think there's some questions just about how those transactions ultimately settle out. I think all of those are supposed to be red flags. The problem for investors is figuring out what a red flag is and when it becomes a red line. That is always the question. Back in 1928, Charles Merrill, who was the co-founder of Merrill Lynch, told everybody to get out of the stock market.
So you'd say, oh, he looks so smart. Except for the fact that the stock market between 1928 and September of 1929 went up by 90%. So you can be a Cassandra and I can say here, look, these are things that I'm nervous about or warning and we should be anxious about. And I do think you gotta watch them, but that doesn't mean that we have to go off the cliff tomorrow.
we talked about investors and we've talked about corporations let's talk about the people a lot of them who aren't investors sure there are people who have 401ks but what we're i think seeing increasingly is people who if they're fortunate to live paycheck to paycheck what they describe to me is feeling psychologically tortured by this economy where
There are the corporations that are too big to fail, but there is the failure by design of people in this economy who are working sometimes two jobs. Yes, the working class in America. The word affordability, it's unaffordable. What are you seeing there? Is there something now, though, in all of your decades of coverage that feels different specifically in this moment?
Look, I think the inequality issue is real, and I think it's getting worse. And I think the inflation is outpacing wages, and that's what inspires people to say, this feels unaffordable. Look, I took a taxi across town the other day. I looked at the bill. I couldn't even believe it was happening. And I think that that is happening all over the place.
You walk into a supermarket, you go get the gas, you go to a restaurant, whatever it is, everything, the prices have risen so fast. And look, life is relative too. So we all remember what the price was two or three years ago, and that's why it feels this way. But the other, beyond that feeling, the wages haven't kept up.
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Chapter 6: What role does capitalism play in the current economic challenges?
everything runs through 1600 Pennsylvania Avenue now. This is new. This is completely and utterly new. We have never had a time where CEOs, business leaders are making their decisions daily. Their strategy is based on whether
their strategy is going to be in line with the strategy of this president, and whether he's going to agree or disagree or come out in favor or not, or decide to sue or not over whatever you're doing. That is a fundamental reshift, and that is something that's more akin to, you know, places like China, frankly. Did it surprise you with your relationships in the business community?
Of course, you don't have to name who, but just the idea that these business leaders right after the election seemed so, Gavin Newsom talks about this a lot, you know, supine, they just go right away. What can we do for you? Or is that, you know, or did you expect that based on them thinking that they had to do that for their shareholders?
I mean, I think that I have a level of sympathy and empathy for this situation insofar as I think that they're they think they're justifying and rationalizing in their head that they're doing this for their shareholders. And they think to themselves, if I stand up and raise up, raise my hand and say, I don't like what's happening here or I'm doing it differently.
can they still fight another day? Or do they lose their job? Or does something terrible happen to the company? I mean, I think that is, I mean, I think there's sort of like almost an existential nature to this, this time around. And that's different for a business leader who feels responsible, not just for the shareholders.
By the way, and this is where maybe you'd have some more empathy or maybe folks watching this would, you know, if you're a CEO and your job, you got, I don't know, a couple hundred thousand employees, let's say, Part of it is you're trying to keep the company. It's not just shareholders. You actually do have people that you hopefully feel some responsibility for.
And then the question is, pick your poison. Some of these people are swallowing their pride. There's no question that they disagree with this president and yet they're going to the Oval Office and they're giving gifts and they're doing things and you're saying to yourself, how is this even possible? But they're thinking to themselves, the alternative The alternative is worse than that.
Now, the bigger question in my mind is if this administration does something that crosses some kind of red line, does the business community or do these individuals who do disagree with the administration raise their hand and say, you know what, this red line, I'm out. And I just don't know whether whether that happens.
And I think some of them think if I can just hold on long enough, I still want to be there so that if that moment happens, I can raise my hand. But I don't know if the goalposts will have moved so much that the red line will have moved to. And I'll say that, you know, perhaps some pushback that my audience would give as well. Do these corporate leaders even want employees anymore at all?
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Chapter 7: How do business leaders navigate their relationship with the Trump administration?
And I told them all to read the book. And they love it. And they've been sharing with me. some of their observations. Before we go, Andrew, anything else you want to say to our 6 million subscribers or our audience just about these times or whatever? You know, the one thing I would just say is I think we get into these moments, and I do have some optimism. I'll just leave you with this.
And it's not a blind optimism. You know, sometimes people say, you know, America's exceptional and this and that. I don't believe that. I believe that we have to earn that exceptionalism every day.
I do think there's a lot of smart people, including yourself and a lot of the people who are watching this broadcast, who have a lot of ideas about, you know, what needs to happen to this country and they're using their voice. And I do think that over time, you know, if you feel dispirited, we will get to a better place. Andrew Ross Sorkin, we appreciate you joining us.
We hope you come back and everybody get the book 1929. Thanks, Andrew. Appreciate it. Everybody hit subscribe. Let's get to 6 million subscribers this month. Want to stay plugged in? Become a subscriber to our sub stack at MidasPlus.com. You'll get daily recaps from Ron Filipkowski, add free episodes of our podcast and more exclusive content only available at MidasPlus.com. Hey, who's driving?
I've only driven four. Where are we going now? What do you think we're doing here? Bus, taxi or a clear ride? Well, of course. Obviously. Difficult situation. Easy solution. Only clear to the wheel. Transport safety.
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