"But He'll Be Great for the Economy!"

Transcript

This transcript was generated automatically and may contain errors — the audio is the record.

0:00:00 Clip: You must never, ever give up or give in. You must keep the faith and keep your eyes on the prize. That is your calling. That is you mission. That is moral obligation. That is mandate. Get out there and do it. Get in the way. Change happens because people care. The people have the power to make this life free and beautiful. To make this live a wonderful adventure.

0:00:38 Clip: I still believe with all my heart, America can be a place where no child is left hungry, no community is left behind, and no one gets told they don't belong. Country is always worth it.

0:00:58 Thomas: And welcome to Opening Arguments. This is episode 1135. I'm your host, Thomas Smith, and we've got a great interview for you today. Addition to all the other hell going on, there's also great concern right now about the economy and can it bear all this nonsense going on? What is the nonsense going on? And how should we talk about it? How should we think about it. Happens when you just get rid of, I don't know, the federal government, what happens when you do a bunch of tariffs? Happens, when you lose the consumer financial protection Bureau, very important questions that Matt and I are certainly not qualified to talk about. So we brought in an expert who is it's Dr. Lindsay OwENS from the Groundwork Collaborative. Nonprofit that does not just research on the economy and all that, but also they work on messaging a lot. And that's something that Democrats need to do better. Mean, always, but Also just not just Democrats. I think everyone needs better framing around the economy because it was absolutely crazy to think that Trump and or Republicans were better for the economy than, don't know, any Democrat would be. It's absolutely, objectively speaking, a silly thing to think. Yet it seems like everyone thinks that. It seems like a vast majority of people in this country still seem to associate Republicans with like financial responsibility or something, and they associate that with a good economy, which is another step that I'm not sure is exactly right with needless to say, we have a lot to talk about with Dr. Lindsay Owens. Know that with how fast the news cycle moves, this interview was a little bit ago. And in Trump era, that means like 50 news cycles ago. So if we we didn't ask about the pressing thing of, today you or yesterday, or even like week ago. It's probably because of that, but how it always is so much to talk about and impossible to keep up, but we'll do our best. So we'll take our usual break during which if you're not a patron, you'll have to hear some annoying ad. Most likely if you'd like to avoid that, go to patreon .com slash law pledge as little as a dollar and you get rid of the ads, pledge $2 and you And you get a lot of awful movies and other great stuff. If you pleasure that Hall of Fame level, you get that weekly shout out. That's always so much fun. Lots of great stuff to do. Lots of really good reasons. Lots of reason to support and of all making the show happen. Thank our patrons so much without you. We wouldn't be here right, we'll take that break and then we'll be on with Dr. Lindsay Owens.

0:03:17 Matt: We're joined today by Lindsay Owens, the executive director of the Groundwork Collaborative, which fights to change economic policy and narratives to build public power, which is something we really want to talk about today because we don't know very much about the economy. This

0:03:28 Thomas: Because gestures broadly at the whole state of the country.

0:03:30 Matt: Economy. Yeah, right. There's a lot of weird narratives out there, and we want to talk to you to try to set some of this straight. And you seem like the right person for it. So So can you just tell us a little bit first about yourself and about groundwork?

0:03:42 Owens: So I've been running the Groundwork Collaborative for about four years. We're an economic policy think tank in Washington, D .C. But we also spend a disproportionate amount of our time relative to think tanks thinking about how to communicate about the economy. Is really important that the economy is not seen as something like the weather that just affects us without any of our influence, but rather the economy is all of us. Are the labor that the economy going. We are the consumers whose spending keeps the economy going we are in many cases the unpaid caregivers whose care keeps the labor force afloat and so we really try to center the role of people in a healthy economy relative to maybe sort of business organizations who might center the roll of companies in the economy or folks who may think about the stock market as the most useful measure of the health of the economy?

0:04:37 Thomas: Wow. So much to talk about right there already, because hasn't it seemed like the polling on the economy just tracks with partisanship now where it's like the day Trump's in office. Well, now it's all great, you know, or vice versa. Do And you navigate that? That.

0:04:49 Owens: There absolutely is a piece of consumer sentiment or economic outlooks on the economy that tracks with partisanship. We've also seen actually already some deterioration in Americans' outlook on the academy since Trump took office. So So this month already, we saw the index of consumer sentiment deteriorate quite significantly relative to last month. And we also saw Americans' inflation expectations, the measure that tells us what Americans think is going to happen to prices in the future, rise. And so the early indicators that we're actually getting from Americans is that they're not super optimistic about what the future holds in the Trump economy. Um they're uh on trump's economic uh prowess yeah that's

0:05:39 Matt: I saw just today it's 53 % now think the economy is on the wrong track, which was something like 43 % just a few weeks ago. Is that right? Something

0:05:45 Owens: Right and um top concern um the economy is still uh prices high cost of living and increasingly americans don't think that president trump is prioritizing that in his first few weeks in office

0:05:58 Matt: Why would they think that? How could they possibly have come to that conclusion?

0:06:02 Owens: Right. Yeah. I mean, I don't, yeah. Have we, I mean we've barely heard the word or costs in the first, you know, 30 plus days of the Trump administration.

0:06:11 Thomas: Well, we did hear it when he said they're going to stay up because it's impossible to change them right away, right?

0:06:15 Owens: That's right. That's great. And, and, and what was it? Rome wasn't built in a day. I mean, my God, that's

0:06:22 Matt: He's been firing people, as far as we can tell. That seems to be his main job right now.

0:06:26 Owens: I mean that's going to show up eventually in the unemployment statistics and the jobless claims and the labor turnover numbers, all of it.

0:06:34 Thomas: But I'm really interested in this. We had this conundrum, I feel like, under Biden, and I'd love to get your thoughts, where we wanted to say the economy is doing better. Actually, under Obama, too, under recovery from the financial crisis, where it's like, we want to say in real terms, in actual terms, things are getting better. These metrics Metrics are better, you know, and especially relative to under Republicans. But then we face the problem of, yeah, but people aren't feeling it. They aren't seeing it. And it's felt like it felt really frustrating because I like a lot of people when Trump was in office would just go by those metrics or what, you know, or whatever and measure it that way. But then the minute Biden was in Office, it's like, well, those don't mean anything because they're not feeling it in their wallets. And I just don't. How do you know? Like, how do we communicate that? What's the proper way to look at all that?

0:07:16 Owens: Look, I personally am not a big adherent to the vibe session theory of the economy. I don't think that Americans' frustration with high prices was a narrative or driven entirely by, you know, the media's lens on inflation. I think when Americans tell us that there is room for improvement in the economy, we should listen. And it's our job in Washington as policymakers, particularly when we have the keys to government, to improve their lives, to bring down the cost of the things that matter most, whether that's health care, whether whether that's housing, whether that is the cost of child care, which has grown disproportionately. So I who thinks that the information that Americans are giving us about the economy suggests that we A pluses. There is still room for improvement. I think that is okay. There IS room for improve ment. Look, the Biden administration did a lot of really good work to get us out of the pandemic recession, to bring us into what we sometimes call a full employment economy, unemployment at that 4 % level for months and months and months, historic records there, GDP growth way outpacing what we saw in peer countries, way out pacing what even the scorekeepers in Washington who analyzed these things, the Congressional Budget Office, expected. And still, all of that is true, and there's room to do more. I am not too worried about the disconnect there, and I think the people People who were worried about the high cost of rent under Biden are similarly worried about the high costs of rent, under Trump. And the question will be, will he address it? Or frankly, will he exacerbate it? And right now, it's looking like it could be indeed the latter.

0:09:00 Matt: Look that way. You're talking about the previous narrative and where we're at now, you know, there is this kind of narrative that Trump was elected because people are worried about the economy and think that Trump's the guy for the economy. Did we get to that point that Donald Trump is considered to be a boon to the economy, and Joe Biden isn't? Like, what can we do about this?

0:09:17 Owens: Yeah. So I mean, look, I do think some of this is some partisan overlays on the economy, to get to your earlier point. So in general, we do find that of sort Republicans are more trusted on question that literally says, who do you trust more on, quote, the economy? We also find sometimes that Republicans are more trusted on things like tax policy. You frame the question a little differently, which party do you trust to help people like you? Which party do you trust to make things more secure for your family? Which party to you trust make health care more affordable? The typically win those battles. And so there are some framing differences here that mean I think these beliefs are not super entrenched and there's really room for Democrats to do better on a lot of these measures.

0:10:08 Matt: Well, right. That's what I was thinking, because when people say the economy, I think they just mean everything around them, right? And that's fair. I mean, that's how we all feel, right, about eggs and gas and health care. Your polling and your research, are there other things that people are thinking about, or is that really what it is?

0:10:21 Owens: I think they're thinking about their own job often when they think about the economy. Is their place in the labor market secure or not? Also thinking about their community. Are there jobs in their community? Are their neighbors doing well? They are thinking about things like the housing market when they evaluate the economy, you is it possible to get a house right now? Know, for example, that one of the big drivers of how Americans interpret inflation is actually interest rates. So we like to sometimes think of interest rates and inflation as separate, but for many Americans, when the price of a mortgage gets more expensive, when when the price of revolving debt on your credit card gets more expensive to hold, when the price of an auto loan gets more extensive to hold. Of those things are interpreted as sort of negative outlook on the economy as well.

0:11:09 Thomas: We talk about Doge? Is that going to fix it all up?

0:11:11 Matt: We should.

0:11:11 Owens: Let's do it. I mean,

0:11:12 Thomas: How's that? What's your...

0:11:12 Owens: Is there any other topic?

0:11:16 Matt: Yeah, I guess, can you try to, because I think it's just very hard for those of us who don't study these things or look at them closely to understand the mechanics of what Elon Musk has actually been doing. We read that he gets access to the treasury system, that it's allegedly read -only at this point, but it was at some point write -only. Does all this mean, and what kind of damage could he actually do?

0:11:33 Owens: So we aren't fully yet clear on exactly what Elon Musk is up to in the government. We have a few ideas, and I think most of the ideas and hypotheses we have are concerning. You good. First thing to say is that it seems very clear that Musk is after data. Look, if you're in Silicon Valley, you know data is the new oil. Are trying to get as much of it as they can and hoover it up. And what better place to get a lot of data on everyone in the United States, every business that's contracting with the federal government, every individual who has a social security number at the Social Security Administration, than to go in and maraud around the IT systems of the entire federal government. That is clearly something Musk is focused on. He has gone to places where there are large repositories of data. He accessed the Treasury payment system, which pushes out $6 trillion in Treasury payments annually, including things like your tax refund, including things like you're Social Security check. So sensitive financial information, personal information on tens of millions of Americans. Know he has now accessed? The Social Security Administration. Is the motherlode of sensitive data. Socialsecurity Administration knows that I worked at the limited in high school because that's what I started paying in to Social Security because that's when I started paying payroll taxes. I means, they have encyclopedic detail on your employment and financial history. They know who your kids are. They know who you're spouse is. If you've ever filed for disability insurance, they know a little bit about your history of health or illness. Highly, highly sensitive data. We also know that Musk has accessed the Internal Revenue Service now, in the middle of tax filing season. What a dream for all of us. Again, sensitive information there related to your tax returns. I think it is a relatively safe bet, although we don't know for sure, that Musk is interested in data. He's accessing a lot of it. We know at some point he was using a private server to access data. It is reasonable to assume, given what we've heard about his Doge team's interest in AI and use of AI, that he is pushing of this data through AI algorithms as well. The second thing that I think we know about Doge is Musk is going to places that regulate his business interests. And he has many. He owns and is partial owner of things like Tesla, of SpaceX, of Twitter X, as well as Neuralink, his medical device company. And many of his business interests are in some of the most heavily regulated spaces. So there's not a lot more heavily regulated than medical devices, than the banking sector, than the aviation and space travel sectors. For good reason, these are areas that the government has a relatively heavy regulatory hand in. And we know that he has now accessed all of the federal agencies that regulate his top business interests. And so we have to be, I about the fact that some of what he's doing is clearing any roadblocks, any regulatory roadbloacks to his current business interests. Some of what He may be doing is cleaning any foreseeable potential roadblocs to his business interests, for example, we know he's been at the Consumer Financial Protection Bureau, which would regulate his new venture. X, his cash app effectively, which he has partnered with Visa to launch. We also know that he may be accessing at these different entities sensitive information, including trade secrets potentially about some of his competitors. So to go back to his cash app that he's launching with Visa, you know, the Consumer Financial Protection Bureau regulates the competitors in the space. So Meta's X, for example, would be regulated by the Consumer Financial Protection Bureau has been, you and sort of looked into by the Consumer Financial Protection Büro. And he may very well have access now to those very confidential secrets.

0:16:03 Matt: This, again, I feel so naive for bringing this up, but I mean, as a lawyer, it's my understanding the Privacy Act of 1974 does not allow a special government employee or anybody to just go in to these kinds of sensitive records and just access and then potentially copy, if we're talking about a private server, which I'd heard about too. I know that there are multiple suits and potential criminal penalties, but he doesn't seem to care about any of that.

0:16:24 Owens: He really does it. I mean, I would love to hear your thoughts on this, Because have seen that, you know, one of the first suits that was brought in the wake of the Treasury payment system seizure was a looking for a temporary restraining order to try to get Musk away from the from personal financial information. And the judge did rule that Musk had to stop accessing that information and destroy anything he had collected thus far. But it does seem that since that ruling, he has only ventured even further into government data sources, and he has accessed potentially even data in the ensuing weeks. I

0:17:03 Thomas: That's more of a legal question. I guess economics question. How will Elon Musk stealing all our data affect the price of eggs?

0:17:11 Matt: The only thing that matters.

0:17:13 Owens: Mean, look, I think that we have to zoom out a little bit and ask ourselves what Musk's interest in government really are. My intuition is that at its core, Musk, you his own admission, is interested in becoming the world's first trillionaire. Is only so much private sector money to hoover up. You can only sell so many Teslas. You can only sell some ads on Twitter. So many people are going to use his brain chips with Neuralink. Public sector is a quarter of US GDP. Could think of it as the world's largest checkbook. I think he's making a play for a larger and larger share of those outlays. You really have to worry about the power and the financial resources he is potentially amassing through this process. And so I think the kind of dystopian version of this is like, sort of like coming up to the end of some of the private sector money and now he's coming for the public sector money too.

0:18:18 Matt: What does that look like? He gets a lot of contracts for, more contracts rather. He's already got 20 billion or something.

0:18:23 Owens: Yeah, I would imagine. I mean, look, contracts surely is a piece of it. Rooting out some of the competition may be a piece of it, but I also think this data play is certainly a piece of it and think probably this has something to do with his long -term AI goals and the financial benefit he sees of having the best data to train his AI models.

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0:20:18 Thomas: We know the status of the CFPB now? I'm so confused as just a member of the public as to what's going on. It seems like they've gutted these places. They've ripped out signage, and it's like, do they just not exist this now what's the status of some of these you agencies like cfpb is it is it operating at all for

0:20:38 Owens: The CFPB, I think, is unique in that they have been effectively under a work stop order for almost three full weeks now. It And is being enforced pretty aggressively. So, the current acting director of the CFPP is Russ Vogt, who also directs the Office of Management and Budget. And he ordered all CFPP employees to cease work tasks. And he closed the CFPB's physical offices in Washington, right right outside the White House. Fact, he is so serious about this work stoppage that he set up a tip line for workers to report other workers who are working.

0:21:14 Thomas: Working oh my gosh that

0:21:17 Matt: Didn't know that. Wow.

0:21:18 Owens: I mean, it's kind of the like, you know, it is the opposite of what you might imagine a sort of like annoying manager doing, which is setting up a tip line for people who are working from home and actually at the gym or whatever. And he's like, no, no, if you leave the gym and come to the office, you are going to be reported, right?

0:21:33 Thomas: Would have been my dream job out of college hey nobody better be working I'm just just everybody I'm watching you no work someone

0:21:40 Owens: And he's also, you fired a number of CFPB workers, forced CFPb workers to resign. The But issue here is not that nobody can get into the offices next to the White House or that a of bureau employees have been fired, the real issue is what this means for American families and consumers, which is there is no one protecting them from predatory mortgages. There's no one projecting them when a hospital calls saying you owe a medical debt and you certainly weren't at that hospital and that's certainly not your medical debt, right? All of those types of things that come up in the course of a life and dealing with various financial entities in the country, there isn't anyone making sure they're protected. Did. When we look at what the Consumer Financial Protection Bureau was able to do just in the last week before Trump took office, ordered Equifax to pay $15 million, major auto lenders to return $10 million to customers relating to auto loan issues. They ordered Cash App to refund refund $120 million to customers. They sued Capital One for cheating people out of their interest payments in their savings accounts. Is That just one week in the life of the Consumer Financial Protection Bureau. When the Consumer Financial Protection Büro is closed for a matter of weeks, all of those things stop too.

0:23:07 Matt: Well, and I wanted to ask you because you were Elizabeth Warren's economic policy advisor for some period of time. So, and of course, the person responsible for CFPB as we know it. What does this mean to you and to this project? Did you have some work on CFPb and getting started or guiding it along?

0:23:12 Thomas: My gash boy

0:23:22 Owens: I got to the senator's office after she had already developed and built the The CFPb was signed into law in 2011 with the Dodd -Frank Act as Congress's attempt to, A, ensure consumers were protected so that what happened in the housing crash never happened again. So many American families, 10 million, lost their homes due to foreclosure, many because of predatory financial products, others because of the recession that resulted from the buildup of so many predatory financially financial products. I got to the office later. However, you know, I was there in office during President Trump's first run at dismantling the CFPB under Mick Mulvaney, then of the Office of Management and Budget and also acting director of the CFPB, we're noticing a pattern here.

0:24:13 Thomas: That's several marvel villains ago. I can't remember.

0:24:15 Owens: Several. Yeah. And the cartoon villains have gotten bigger and badder and more graphic. Yes. Been really interesting to watch the Consumer Financial Protection Bureau survive an onslaught of attacks, whether they were administrative attacks under Trump or attacks in the courts. As recently as last year. Attempt to gut the CFPB by declaring its funding structure unconstitutional against by the Supreme Court, and the CFPP's funding structure was upheld. And so the CFPb has survived a number of partisan attacks, a numberof administrative attacks, and a number of legal challenges, and has held up. Andso I know. I guess if I was a betting person, I would bet on the CFPB. I think the agency is wildly popular. One of the most, I think, enthusiastic constituencies of the CFBB is actually veterans who are frequently targeted by financial scams for things like VA loans. So I think there is a partisan -wide, cross -partisan appeal, and the Bureau is indeed popular. It really, as the Senator always says, one the things that Republicans, particularly Republicans whose ideological agenda is to shrink government to the size that you can drown it in a bathtub, one of their problems with the CFPB is it works too well. They don't like an agency that really demonstrates on a daily basis that it can work well for consumers. Since its founding, the Bureau has returned over $20 billion in relief to consumers, which is pretty extraordinary in such a short period of time.

0:25:51 Matt: It's not even funded by Congress, which I think people didn't understand. And actually, could you just, cause you mentioned the unusual funding structure just to lay that out.

0:25:53 Owens: That's right. So when the senator developed the Consumer Financial Protection Bureau, one of the things that she was really concerned about is ensuring that the bureau was not subject to an onslaught of lobbying of congressional appropriators. So the banking industry coming in and convincing Congress to stop giving the bureau as much funding or cutting its funding every year. So instead, the Consumer Financial Protection Bureau is sort of funded by a draw that they take from the Federal Reserve, which is outside of the congressional appropriations process and therefore outside of The Lobbying and annual appropriations and shutdowns and things like that.

0:26:39 Matt: That should put it outside of Doge. I mean, I shouldn't say should, because whatever, I guess at this point, right? It's just an executive order. They're doing whatever they want with, but I just was wondering how that fits into the Doge alleged structure.

0:26:50 Owens: I mean, this is exactly why the CFPB is such a clear example of like, it ain't about government efficiency and it ain' about savings, right? Like nothing.

0:26:57 Thomas: Obviously, yeah.

0:26:57 Matt: Sure, sure.

0:26:59 Owens: Yeah. I mean they've already said that the CFBB is not going to take their draw from the Federal Reserve this year. That was something that Russ Vogt declared. Mulvaney did the same thing in the first year of the first Trump administration. Administration, this is not going to count towards Elon Musk's little Doge calculator on Twitter ticking up with all the savings he's finding. Only thing that is going to result from this is fewer Americans are going to be protected from financial scams, and quite possibly Musk is going to sort of grease the skids for his financial play with X.

0:27:30 Thomas: What a sad indictment of, I don't know, the entire system that we've got this one agency that is a brilliant idea. All it does, it makes us money as just the voters, right? I mean, it's like there's no way our taxes to pay for it. Haven't done the math, but like it's not much, right. And it just generates money by preventing banks from ripping us off and various things. It couldn't be better. It's an amazing agency. And it sounds like we've had to put it behind bulletproof glass and like maximum security to keep it alive. And it's like, what does that say that we had to even do that? Like that's, why stepping back? You would think that would be the safest thing in the world would be this one very successful government agency that only only does good things.

0:28:11 Owens: Mean, it's just a stunning indictment of money in politics. Politics. Illogical and perplexing to why we can't have gun control when the majority of Americans support it, right? Are the places where the political scientists will tell you the translation between what Americans want their representatives to do and what they want government to do, and what government does, the link is broken. And the thing that explains the The broken link is interest groups, and in this case, moneyed interest groups. The banking lobby, the tech companies who want to be able to start cash apps and the legacy banking industry.

0:28:34 Thomas: What?

0:28:47 Matt: And that to me is why the Groundwork Collaborative is so important when you're talking about this narrative, because you're talking about gun control. I think everybody can see the number of school shootings and what happens when you let high -capacity rounds out into the world. Certainly there are plenty of people that have their own views about guns, but at least we can understand that there are a lot of school shootings happening and that we have more of this happening than any other country. But I think it's so much harder to explain something like price gouging, which you've written quite a a lot about are price fixing. To finish up the CFPB bit of this, how do you think they're going to spin it when all of this predatory stuff comes out? Do you think they're even going to try? What is their narrative going to be?

0:29:21 Owens: That's a good question. I mean, it seems like right now we're in the flood the zone, shock and awe strategy that Steve Bannon has advocated for the start of a Trump presidency. We're seeing it again, maybe with even more force than the first Trump administration, although it just looked different, right? There was the Muslim ban. There were all sorts of things in the first trump administration right out of the gate that were pretty destabilizing and unexpected. Don't think be they able to spend the CFPB. Not going to be ableto find savings. They'renot going tobe able to deliver better for taxpayers or more efficiently for consumers without the bureau. I think they'll sort move on to the next topic. At its core, you have to assume that the Doge efforts to find savings mirror Congress's effort to cut programs. At the end of the day, this is all about paying for their top priority, which is tax cuts for the wealthy. That was true in 2017 as well. They got nothing done legislatively in 2017, the Trump's first year in office, other than a of tax cuts for the wealthy and corporations. Corporations got a 40 % tax cut after the first year of the Trump administration. Yeah.

0:30:32 Matt: We know what they're looking for after dust settles here with Doge for

0:30:36 Owens: So we know that Republicans in Congress have already, House Republicans have already said that setting a ceiling on the amount of money they're willing to spend on tax cuts this year at $4 .7 trillion, right? Right. So Elon Musk is running around telling people that he's going to shave two trillion dollars from the government. And that was the initial promise he made when Doge was announced in November. Since that day, he's tamed expectations and said maybe he's only going to find a trillion dollars in savings.

0:31:06 Thomas: Turns out there aren't a trillion employees that I can fire. So I'm not gonna be able to do that. Like, what are you talking about, dude?

0:31:12 Owens: Right. But on the one hand, but, you know, quite a sleight of hand here. On the other hand, right now, congressional Republicans, the House Republicans are working to pass a budget resolution that would accommodate $4 .7 trillion in tax cuts for the wealthy. And oh, by the way, there are many in the party who are upset because $4 ,7 trillion in tax costs for the healthy doesn't include a lot of the tax cuts they want to see Congress pass.

0:31:27 Thomas: What? How much taxes are left to cut? I don't even after that. The numbers we're talking about.

0:31:42 Owens: It's pretty incredible. You know, $4 .5 trillion is just the 10 -year cost of extending the tax cuts that are expected to expire in December of 2025. And the Trump administration has proposed and Congress is interested in a whole suite of additional tax cuts. So $4 just a cost of maintaining the status quo. And they want to go further.

0:32:07 Matt: Of course, those will never actually expire because that would be raising taxes at that point, right? That's the strategy with all these things, like with the Bush tax cuts, to put them in that position.

0:32:15 Owens: Yeah, I think that's right. I think they want to see if they can the use clock to their advantage once is the real threat of individual tax rates increasing in sort of 2026. I mean, it probably wouldn't show up till 2027 when you file your 2026 taxes. But once there's the real threatof a tax increase, they're hopeful that that will be the action -forcing event to extend tax cuts for longer. The reason that these tax cuts sunset is because the Trump administration and Republicans, remember in 2017, the Tax Cuts and Jobs Act was passed on a straight party line vote. Wanted a permanent corporate rate tax cut. So the corporate rate went from 35 % to 21%. They wanted that to be permanent. They sunset the individual tax rates and a few other tax rates over a shorter period to make the math work over the 10 year budget window because they passed the bill with budget reconciliation.

0:33:07 Matt: You seem like the right person to ask because I actually don't think I've heard a straight answer about this. There's generally been a right -wing talking point that the bill actually did help what's left of the middle class and working class. Is there any truth to that at all?

0:33:20 Owens: I mean, there is there is truth to it in the sense that there were tax cuts across the income distribution. I is relative to what? So what we know is the wealthiest individuals got a benefit that was over 250 times greater what an average family got. And so sure, they kicked some shillings to a of families throughout the income distribution, but the big, big money, the big benefit went to the wealthiest Americans, went to corporations who got a 40 % tax cut right before they started overcharging us during this last inflationary period, and went to other wealthy individuals. There was a big shift in the inheritance tax, for example. There were shifts in how LLCs were taxed, things like that, that mostly benefit the wealthy as well.

0:34:11 Matt: That number, 250, that's such a simple thing. I don't Think I've Heard That Before. In terms of the narrative that your organization works with and the things that you study, what's, I guess, right now the one thing that you wish regular voters knew, just people who are just basically following the news about the economy, the American economy.

0:34:30 Owens: That's a tough question. Is the one thing?

0:34:33 Thomas: We'll allow two things. Have they

0:34:36 Owens: Right, I'll go with one sentence. Musk is trying to pay for his tax cut with your health care. Oh,

0:34:43 Matt: It's That's a good one. Is nice and punchy.

0:34:46 Thomas: Gotten into healthcare yet? Yet

0:34:47 Owens: Yeah. The budget resolution that the House released and may vote on as early as next week dips deep, deep, deeply into Medicaid. Yeah.

0:34:57 Thomas: I'm curious how worried you are or we might be about something catastrophic happening economically I mean how much can you just mess around like this and not risk something you know the tariffs the you know there's so many places that it seems like he's doing things that I I I don't know that he knows what he's doing are you worried about something big a big uh you of some kind how worried she would be I

0:35:18 Owens: I am hugely worried. I think the the of really low probability bad events has been increasing rapidly in the last month for a few reasons. First The is the Musk, you hard, work fast, and break things approach could well break things that really matter. We're not talking about a Tesla factory shutting down for a few days and, therefore, when we get to the end of the delivery timeline, a few fewer Teslas. We're talking about X going down for several days. Going down a couple of days and not being able to fire off a tweet that you regret firing off, right? We're talking about the potential to disrupt the Treasury payment system and the $6 trillion of spending online every year. The Treasury payment systems, by the way, is also how we pay bondholders. Have gotten to the debt ceiling and we are already pursuing what's called extraordinary measures, which just sort of buys Congress time before they have to lift the debt ceiling again. But could imagine a whole host of errors related to the Treasury payment system that could put us in default, for example, which to a crash. Heard yesterday that Trump is talking about firing or has planned to fire many individuals from the FHA. They secure a huge percentage of multifamily loans. Loans. Multifamily loans stop being secured and originated, that is enough to cause a housing crash or recession. So I just think the number of places, you know, the sort of bull in a china shop, the bull is in a number of different places. And yeah, absolutely something could break that that will have impacts on our economic security, fiscal impacts stability, that could have national or even global macroeconomic implications.

0:37:09 Matt: Musk did say pretty directly that it was going to hurt. He used language that effect. This thought out there that Trump and Musk actually want to crash the economy, and it certainly seems like they're driving it into a wall between everything that we've been talking about and tariffs and everything else. Is there even a thought on that?

0:37:25 Thomas: don'T THINK TRUMP wants to crash the economy.

0:37:28 Owens: I exploring, you know, he's effectively a lame duck, right? This is his second term. You only get two. My instinct is Trump is going to spend as much of this four years getting getting as much personal benefit as he can out of the presidency. Much of that will be personal financial benefit. And I also think Trump is looking and exploring golden parachutes for himself. How can he set him up for a really sizable exit package? Is that selling contracts? Is that about foreign exchanges that could be lucrative to him on the way out? I that's maybe what he means to do with the Sovereign Wealth Fund. How can he set up some sort of investment portfolio that be beneficial to him, that could invest in things of his choosing, that Could be lucrative to him when he finishes his term? Yeah,

0:38:20 Matt: You explain that? I don't really understand the sovereign wealth fund, to be honest.

0:38:24 Owens: So what we know is that Trump recently issued an executive order, really a preliminary order, that directs the secretaries of the Treasury and the Commerce Department to develop a plan for a sovereign wealth fund within 90 days. And Trump has said nominally that he could use it to buy TikTok, for example. It pretty hard to imagine a world leader less trustworthy to run a sovereign wealth fund than Donald Trump. His history running as an investor is scattered and not good. Good. And it would sort of give him a perfect tool to use U .S. assets, whether that's commodities or instruments, to enrich himself and his friends. Know that he is currently working hard to freeze and cut appropriated spending by Congress while simultaneously saying that, you know, there's too much money in the government, but he has enough money to start and off the books fund to make unaccountable investments as he sees fit. So this is a sort of highly concerning development. Again, it's early stages. We just know that the executive order asks for a plan to develop the wealth fund within 90 days. They haven't started such a fund yet. But I think you have to assume that is potentially about Trump's golden parachute, putting money in a place so that when his presidency is over, he has investments ready ready for his future.

0:39:51 Matt: It's literally just a federal investment account, basically, that we can play with as a government? Okay.

0:39:54 Owens: Potentially a slush fund for Donald Trump. I mean, can you imagine anyone less well -suited to...

0:39:59 Thomas: Is there any precedent for something like that?

0:40:02 Matt: Yeah.

0:40:02 Owens: Look, there are other countries that have sovereign wealth funds, including countries that are really commodities -rich, countries with oil, for example, who try right? They're over -indexed on a commodity. They put some of of the benefits into a sovereign wealth fund, invest that in other places. Sure, we see them in other countries, I think. Very skeptical that the right time to start one is under Donald Trump.

0:40:26 Thomas: And that the thing we should be doing with it is buying TikTok. I feel like that's not the best use of it.

0:40:32 Matt: Those countries that have them, who controls it generally?

0:40:35 Owens: Mean, it really varies, but you could set up a very accountable system of transparency, fiduciaries, investment advisors, things like that.

0:40:36 Matt: I would hope.

0:40:43 Thomas: Couldn't it invest in, I don't know, housing, building something? I could imagine a lot better uses for it if we're going to do something like this.

0:40:50 Owens: Could You'd absolutely use it to invest if you will.

0:40:54 Thomas: Yeah, what a concept.

0:40:56 Owens: Not likely that would be Trump's plan.

0:40:59 Thomas: How many of these things I wonder, I mean, I Don't know if this is a question, but like I wonder how many of these things we democrats get back in power they can use but for good things it seems like there could be some number of that oh

0:41:11 Owens: I mean, it's so interesting to think about the types of executive power that Republicans muster when they're in charge and then look back at the kind of rule following that you see from the Democrats. And, you know, some of this is just temperamental, right? I think Democrats tend to believe in the rule of law, tend to care a little bit about the Constitution, things like Congress's role in the power of the purse, checks and balances, all the rest. Sure, I suppose there is something to learn in a naked and aggressive use of power to ends. And you do sometimes wonder, you know, why Democrats aren't more forceful in using the tools of government to make people's lives better, right? Right? Sorts of things that we can do with the government that we don't do. We could set up a manufacturing for all sorts of drugs and compete with the private sector to bring prices down.

0:42:02 Owens: There are a lot of things like that that we should consider doing that we haven't yet done.

0:42:02 Thomas: That would be great well it's just we never have the ability that's just congress you know I mean is that something you could do with executive power well

0:42:12 Owens: There's a number of ways to think about it. I'll get a little bit over my skis on the legal pieces here, but, you march in rights. Getting for drugs and starting to manufacture them domestically.

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0:43:58 Matt: Of prices, I really want to be sure we talked about this. Groundwork has done some great work on really clearly stating the causes of inflation and the causes of our current prices. And I'd like to give you a chance to just really explain this, because it confirmed what I believe, more or less, but it really confirmed it in a very helpful way.

0:44:16 Owens: Inflation started ticking up, it took a little while for administrative data sources to provide us useful information about inflation. Where was it coming from? How much of it was coming from supply chain issues? How much if it was coming from additional consumer demand, which is just an economics word for you having more money in your pocket. We didn't really want to wait for the official data sources. And so we started looking at a very different data source, which is a very illuminating one, which is we started listening in on earnings calls from CEOs who were talking to their investors about inflation. And what we learned was revelatory. Story. Companies were actually kind of pumped about inflation because it was giving them a little bit of cover to raise prices to not only cover for their own rising costs, but go for more and to blame it on inflation. So what we saw over and over again is companies really gilding the lily. So their costs were rising. They were passing along their rising costs. But they were also going for more. And you didn't worry about it so much because you expected prices to rise because they were rising everywhere. Started cataloging it for several years and started analyzing it as well. And we started to be able to see in administrative data sources that some reasonably large percentage of inflation was actually being caused by the markup, the piece of the price increase that was just going to straight profit. And sort of depending on the year and the time period you look at, anywhere from 20 to 50 percent of some of the inflation that we're seeing is coming from that profit side of

0:45:53 Owens: The equation.

0:45:53 Thomas: Do you quantify that that That seems really challenging.

0:45:57 Owens: You look at some pretty basic administrative data. So you look at how much labor costs are going up, how much non-labor input costs are going up, and then how much prices are going up. So the price of something really lily is the cost of the labor, the cost of the other things, the material, the transportation, the marketing, all of that. And then the piece on top of it that's not explained by all of those rising costs is the piece where companies are just gilding the lily. So that's really what we looked at. It was a pretty straightforward calculation. You know, a couple of other ways to do it, a number of Federal Reserve banks tried different approaches, and even Peter Orszag, not exactly a beacon of of progressive economics demonstrated that markups were out of pace with where they needed to be.

0:46:43 Matt: Again, up to 50% of inflation that you said up to, right?

0:46:45 Thomas: 50?

0:46:48 Matt: That's the number I saw. Yeah.

0:46:48 Owens: Yeah, depending on the time period, yeah, we had a paper that showed that a couple-year period, there was 53% of inflation being driven by the profit side.

0:46:59 Matt: So how do we get that story out there? Because that's what people need to know. This is profiteering. It's just pure, it's post -COVID, right. These are taking advantage of perceptions.

0:47:07 Owens: That's exactly right. I mean, I think we see in the data that this story has has penetrated the public considerably. Know, something like 80 to 90% of Democrats think that companies overcharging you is a big driver of inflation. The majority of independents do too. Majority, the majority of Republicans think that Biden is responsible for high prices or did think that Bidens was responsible for prices. That's something that'll be interesting to take a look at as we get further into the Trump administration to see kind of how that shifts. But, you know, overall, over the course of the time period we were doing this work, there was a good 15 to 20 point shift in public opinion around the people who worry that corporations overcharging was a big driver of the inflation that we saw. Yeah.

0:47:54 Matt: You've done a lot of work on price fixing, price gouging. I understand you're working on a book right now. Is that right?

0:47:58 Owens: I'm writing a book called Gouged, looking at all of the new technologies that companies are using to eke ever more high prices out of consumers.

0:48:08 Matt: You give an example of some of the most egregious?

0:48:10 Owens: Sure. Are so many. But one of the things that we're interested in and I'm looking at for the book in particular is the use of what we call algorithmic price fixing. So this is the idea that companies like RealPage, which is a data company in the real estate sector, are helping landlords to coordinate rent prices and encouraging landlords to keep rent prices high even when there are vacancies so as not to dilute the price level of rent in a city. And we know that cities where RealPage operates, we've seen market increases in average rent prices. So that is one really good example. I mean, it would have been very hard for landlords to price fix on rent in a city. Think about how many landlords would have to get together. There. An organization, an entity like RealPage, which can collect troves of data from landlords, can really help with something like that. Thing that we're looking at is technologies.

0:49:10 Thomas: Sorry, that's horrifying. I don't want to let that go. Like, we almost need some sort of government to maybe help solve that problem in some form.

0:49:19 Owens: So the Biden administration was on the case. The Department of Justice sued RealPage. I really encourage folks to read the 100 -page complaint. It is eye -popping. We And will have to see where that lawsuit heads now that the Department of Justice is under different hands. There are also a of attorneys general who have brought cases against RealPage in states and localities. So there may be some hope there. And there are are increasingly cities who are looking at legislative fixes, including banning the use of software like RealPage in rental markets. So I do think there are still some promising avenues at the state and local level. But in some ways, this technology is not all that new. I was reading the complaint for the book, Garland, who was the attorney general at the time talked about how, look, price fixing is price fixing. It doesn't matter if you're in a smoke -filled hotel room hatching a deal to fix prices, or if you'RE using a computer program, it's still price fixing, and read up little bit on one of the first algorithmic price fixing cases that the Department of Justice brought under Bill Clinton when the airline tariff publishing company was being used by the large airlines to set fare prices. The press release for the big settlement that the Department of Justice got with the big airline carriers at the time had a similar sentence in it, which said, look, just because they didn't get a smoke -filled room and they negotiated price fixing through two giant mainframe computers near the Dulles airport doesn't mean it wasn't price fixing, right? The technologies have gotten more more sophisticated, more sinister, harder to trace, more capable, but of nonetheless still there. The other thing that we've been looking into and that I'm really interested in is this idea of quote -unquote surveillance pricing. And this is the idea as we shop more and more online, as companies collect more and more data, not only about our purchase history, but about other features of our lives. They know a little bit about how much we get paid because because they're integrated with our banking or Apple Pay, they know a little bit about our they even maybe are monitoring our mouse keystrokes, how long we hover over a picture of a swimsuit before we finally click to buy it, that companies are using that data to set effectively individualized or personalized prices for goods, and potentially when you're most desperate. When they know you're flush, they take a peek at your bank account, and hey, hey, you can pay a little more for those eggs today, as it turns out. So surveillance pricing is something I'm also interested in and I cover in the book as well.

0:51:49 Thomas: That is dystopian as hell. Looking forward to that book.

0:51:51 Owens: And it's here. It's here. That's the really scary part. It is like there are times when I write about it in the future tense and then I have to remember, no, no. It arrived. It Is Upon Us.

0:52:03 Thomas: We need to realize there aren't smoke -filled rooms anymore. Not that could be vape -filled room, but it is mostly some kid named Big Balls with his laptop. That's really – it's not a smoke -filled room.

0:52:12 Owens: Right. Right. That's right. Just hoovering up all your data, deciding what you can afford.

0:52:18 Matt: Really was trying all the times he's been running to run as an economic populist. And of course, he is absolutely not an economic populous. He was talking about abolishing tips and lowering regular people's taxes. But it still seems to me that economic populism belongs on the left. And how do we get that message out there? How do we pick that narrative up and reach out to the people right now that are still listening the Trump message?

0:52:38 Owens: I mean, look, not to get too deep into politics here, but I do think we have to look at the mirror a bit here and be honest about the fact that we as a party, progressives, Democrats, whatever you want to call it, have not always authentically been the side of the American worker, have not always been on the side of the consumer and have often looked like we were governing on behalf of the billionaire class. And so I those in glass houses can't throw stones. I think there is some work to do to run candidates who authentically pick the right fights with the corporations who are using their power to make our lives more difficult, to extract more profit from our everyday lives, whether that's squeezing us as workers or gouging us as consumers. We have some work to do on our side if we want to be able to call out the charlatans like Trump. Think the better we do with that, the better it will do at the ballot box.

0:52:58 Matt: Doubt.

0:53:37 Thomas: Well, is there anywhere you want to point our listeners if they want to learn more, maybe support what you're doing?

0:53:42 Owens: Come on over to our website at groundworkcollaborative.org. Follow us on Twitter at Groundwork Collaborative. Us on Blue X Sky, yeah, Groundwork Collaborative.

0:53:53 Thomas: Thank you so much for taking the time today. We really appreciate it.

0:53:56 Owens: Anytime. Thanks for having me.

0:53:58 Matt: Thanks again.

0:53:58 Clip: This podcast is a production of Opening Arguments Media, LLC, All Rights Reserved. It is produced and edited by Thomas Smith, who also provided the fabulous intro and outro music used with permission.

0:54:16 Thomas: Found out we were working I think they reported us is is that who's that mad or lindsay

0:54:20 Matt: They're coming for me. Yeah, they're coming. That's me.