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Micah Loewinger: On Tuesday, the president touted his on-again, off-again tariff plan, saying it would make America rich again, but the details are hazy.

Gordon Hanson: We can't go back to those 1950s factories because they just don't exist anymore.

Micah Loewinger: From WNYC in New York, this is On the Media. I'm Micah Loewinger. Also, on this week's show, why the political rhetoric around our national debt is misleading.

Mark Blyth: We're a superpower with the global currency. This is all based on running the economy like a corner shop. Unless someone's coming in and buying this soda. "Kids, we don't have any money to spend on our vacation." Nonsense.

Micah Loewinger: Plus, why RFK's food policies stick out in a MAGA administration.

Helena Bottemiller Evich: What then are they going to do about food additives? Are they going to crack down and have this big regulatory agenda where the rest of the administration is decidedly deregulatory? We don't know.

Micah Loewinger: It's all coming up after this.

[music]

From WNYC in New York, this is On the Media. Brooke Gladstone is out this week. I'm Micah Loewinger.

On Tuesday night, in front of the Senate, the Congress, the gathered dignitaries and their guests, President Trump gave the "speech of a lifetime."

Male Speaker: Tonight was incredible. It was by far his best.

Male Speaker: It was brilliant, and the Democrats looked like complete [unintelligible 00:01:24] clowns.

Male Speaker: We're just over a month into it and he had a litany of victories that we've already won. One after the other after the other.

Micah Loewinger: Right-wing pundits rhapsodized. Republican senators gushed. Outside the cocoon of conservative media at town halls across the country, the Trump administration's victories have not been met with the same enthusiasm, especially when it comes to Elon Musk and DOGE.

Senator Keith Self: [unintelligible 00:01:51] leaders in those programs.

[cheering]

Micah Loewinger: Senator Keith Self in Wylie, Texas, last weekend talking to his constituents. Senator Roger Marshall faced a similar crowd in Oakley, Kansas on March 1st.

Female Speaker: Can we count on you to go back to Washington and demand immediate oversight into DOGE and Elon Musk?

Senator Roger Marshall: I'm not a Democrat, but I'm worried about the veterans, man.

Micah Loewinger: Moments later, Senator Marshall ended the town hall.

Senator Roger Marshall: I do have two more commitments today. Appreciate everybody making the drive out, and God bless America.

Speaker: Hey, no, wait.

Female Speaker: [crosstalk] an hour.

[crosstalk]

Micah Loewinger: Republicans in Georgia, Wisconsin, Oregon, Idaho, and Oklahoma have also faced angry constituents. The party that ran as champions of free speech responded accordingly.

Male Speaker: Representative Richard Hudson of North Carolina, the chairman of the House Republicans campaign arm, issued a stark message to the GOP rank and file. "Stop having in-person town halls with your constituents."

Micah Loewinger: Disgruntled voters can be ignored and avoided for now, but the stock market not so much.

Female Speaker: If you pull up a chart of the Dow right around when President Trump started taking questions about tariffs this afternoon, you're going to see this. It went off a cliff.

Micah Loewinger: Donald Trump, of course, ran on the promise of tariffs. In his speech on Tuesday, he lingered on his plans for a trade war with friend and foe alike.

President Trump: Whatever they tariff us, other countries, we will tariff them. That's reciprocal, back and forth.

[applause]

President Trump: Whatever they tax us, we will tax them. If they do non-monetary tariffs to keep us out of their market, then we will do non-monetary barriers to keep them out of our market.

Micah Loewinger: The threat of tariffs keeps coming and going. At the beginning of February, it was tariffs on.

Male Speaker: President Donald Trump is making good on at least one of his campaign promises, imposing major tariffs on three of the biggest trade partners of the US.

Female Reporter: The US will impose a 25% tariff on all goods from Canada and Mexico, including a 10% tariff on Canadian energy and a 10% tariff on all goods from China.

Micah Loewinger: Then tariffs off.

Male Speaker: President Trump now pumping the brakes on a trade war, pausing tariffs on both Canada and Mexico for at least 30 days.

Micah Loewinger: Those 30 days were up this week so--

Female Reporter: President Trump plans to impose tariffs on Canada and Mexico starting tomorrow, in addition to doubling the 10% universal tariff charged on imports from China.

Micah Loewinger: Then another pause. First for the auto industry.

Female Reporter: The White House is easing up on some of the tariffs it imposed on Canada and Mexico, giving the big three US automakers a one-month exemption on vehicles coming through the United States' neighbors to the north and south.

Micah Loewinger: Then, for some goods from Mexico and Canada.

Female Reporter: About 50% of goods coming in from Mexico and about 38% of goods coming in from Canada will now be exempt from tariffs.

Micah Loewinger: Along the way, the president and his proxies have told us we have to do this because of fentanyl and illegal immigration and trade deficits and bringing back US manufacturing jobs. On Wednesday, the White House press secretary hinted at something else.

White House Press Secretary: He feels strongly that it would be very beneficial for the Canadian people to be the 51st state of the United States. They wouldn't be paying for these tariffs. They'd have much lower taxes if they were part of our great country.

Micah Loewinger: Are these tariffs a bargaining chip or part of a coherent economic policy? If it's the latter, what is this economic policy trying to accomplish? The media coverage hasn't exactly been clarifying, so I called up Gordon Hanson, an economist at the Harvard Kennedy School who's done extensive research on the effects of tariffs from Trump's first term.

When I first spoke to Gordon last spring, he told me about his research into the effects of the tariffs on imports from China during Trump 1.0. The results? A 1-to-1 increase in prices. As in a 25% tariff meant that prices were 25% higher for us. This time around he says?

Gordon Hanson: I think we are seeing America first come into full fruition. If he follows through with the full set of tariffs that he's promised, this will move us in a direction in which we are breaking off our free trade agreements, not just with Mexico and Canada, but presumably with many other countries. We are distancing ourself from Europe if we're going to put 25% tariffs on the European Union, and we are moving to a world in which we're not about multilateral approaches to trading with the rest of the world, but by producing as much as we can for ourselves.

Micah Loewinger: This promise that tariffs will bring back American factories, as you've studied, has great political appeal. You're skeptical of this idea that we can even return to this 1950s model when around 35% of Americans worked in manufacturing.

Gordon Hanson: The share of American workers in manufacturing has declined for a bunch of reasons. Part of it is international trade. Globalization has shifted manufacturing jobs out of the United States. Equally important, if not more important, is technological change in which we now just require far fewer workers for every dollar of manufacturing output that we produce. We can't go back to 1950s factories because they just don't exist anymore. If we bring more manufacturing production back to the United States by erecting very high trade barriers, the dollar of output of manufacturing goods produced inside our borders may go up, but manufacturing employment is going to go up by far, far less.

Micah Loewinger: You've studied the impact of tariffs from President Trump's first term, which President Biden kept in place. When I spoke to you in May, you explained that these tariffs did not bring back US manufacturing jobs. What they did was raise the price of goods for US consumers and the price of production for American businesses. Trump said on Tuesday that his new trade policy will be great for American farmers.

President Trump: Our farmers are going to have a field day right now. To our farmers, have a lot of fun. I love you too. I love you too.

Micah Loewinger: Did Trump's last round of tariffs actually help American farmers? Is there any indication that this time around will be better?

Gordon Hanson: No, there's no indication whatsoever. The tariffs on the last round hurt American farmers, not because of what the US did, but in terms of how China retaliated. We export a lot of agricultural goods to the Chinese economy. China did a pretty good job of reducing those exports by tacking on substantial tariffs on goods going into the Chinese economy. They're going to do more of that still. What we're going to see in response to the Trump tariffs is not just China retaliating but Mexico and Canada retaliating, the European Union retaliating. I see no state of the world in which that is good for American agriculture.

Micah Loewinger: You shared an article with us from The Wall Street Journal that shows how the production of a single car part involves trade back and forth with Canada and Mexico. There was a clip on Fox News earlier this week of a car dealership owner explaining how his vehicles are already 25% more expensive because of these tariffs. He said:

Car Dealership Owner: $80,000 truck, it's $100,000 now. It's going to sit on my lot and nobody's going to buy the truck because it just had a $20,000 price increase.

Micah Loewinger: Now, this was on Fox News. We know the president watches Fox News. It's entirely possible he saw this clip. It's possible he just heard from angry car manufacturers in the United States and has decided to give these car manufacturers a month before they're hit with the tariffs.

Gordon Hanson: Putting tariffs on automobiles is crossing the Rubicon. You're now going all in on Fortress America. That's because the US auto industry is not the US auto industry anymore. It's the North American auto industry. We have production capacity that's spread across the United States, Mexico, and Canada. You've got different countries specializing in different parts of the production process. It might be one pattern for pickup trucks, another pattern for minivans, and yet another pattern for just regular old sedans.

If we put tariffs in place, we take this production model, which we spent the last three decades putting together, and we blow it up. That means that automobiles overnight would become much more expensive to produce. We don't exactly know how automobile producers would respond. By making those automobiles more expensive, we open the door to imports from other countries, even if those imports are now going to have substantial tariffs tacked onto them. If we're trying to expand auto production in the United States, we actually want Mexico and Canada as partners because that's the way we've built the system.

Micah Loewinger: Let's say Trump does take us to what you refer to as Fortress America that imports a lot less from foreign countries. What would that mean for our economy to be reshaped in that way?

Gordon Hanson: It would mean that a bunch of manufactured goods that we've grown accustomed to buying at low prices now would be available at much higher prices. That's automobiles, that's electronics, that's clothing, footwear, furniture, all the stuff that we fill our homes with. When you expand manufacturing production in the United States, you have to pull those resources from somewhere. That means we're going to be doing less of the stuff we're doing for the rest of the world. That might mean less agricultural production. It might mean less mining and energy production. It might mean less production of high-tech goods. You can't just expand manufacturing substantially without reallocating production away from some of our existing sectors.

Micah Loewinger: What would that mean for the world economy?

Gordon Hanson: The US has an outsized role in the global economy. We're 5 to 6% of the global population, but we're a little under 25% of global GDP. We're taking that production, we're taking that demand for the world's goods, and we're taking our supply of goods partly offline. It leaves the rest of the world poor as a consequence. Now, Trump has this idea, Fortress America is based on this idea that if we go and put all these trade barriers into place, the rest of the world's just going to sit there, they aren't going to retaliate, and so what we're going to get is we're going to put pressure on other countries to lower their prices.

If that were, in fact, the case, there's an element to that argument that goes through. We would put downward pressure on the rest of the world's prices. We'd be still paying more for those goods because we're tacking tariffs on top of them. This is the optimal tariff argument that the proposed chair of Trump's Council of Economic Advisers, Steve Miran, has put forward. The rest of the world's not going to sit idly by. They're going to retaliate.

So what happens? We get a beggar-thy-neighbor situation, which we haven't seen since the 1930s in terms of the global response to the Smoot-Hawley tariffs that the United States put in place, which we then spent the next several decades dismantling.

Micah Loewinger: Beggar thy neighbor?

Gordon Hanson: Beggar thy neighbor. The idea is, "I'm going to make myself richer and you poorer by putting downward pressure on your prices so I can enjoy your goods at a cheaper price and you have to pay more for mine." You can do this by manipulating your currency. You can do this if you're a big buyer of goods on the global market by exercising what we think of as monopsony power, your ability to restrict demand and put downward pressure on the prices of other countries' exports.

That only works me making you poorer if you don't retaliate. If you do retaliate, I make you poorer, you make me poorer, and we both end up worse off than when we started.

Micah Loewinger: That doesn't sound very good.

Gordon Hanson: It doesn't. You might think, "Oh, this is just abstract economic theorizing," but no, we actually lived through this in the 1930s. What did we do? We jacked up tariffs to around 33-34%, and we lived with the retaliation of other countries. A more segmented, a more fortressed-off world. After World War II, we realized this just doesn't make sense. That's where the movement that ultimately created the World Trade Organization came from, that we would be richer if we are producing for each other's markets.

Micah Loewinger: Does the Trump administration not have access to this history? Do they think it will play out differently?

Gordon Hanson: I think they have an alternative read on it. The Trump narrative would be countries then systematically cheated. It was Japan in the 1980s and early 1990s. Then it was China in the later 1990s and the 2000s. Somehow, Europe has cheated along the way too, though it's not entirely clear how Europe has cheated. I'm not sure what exactly Mexico and Canada are guilty of, but what the Trump administration has said is the rest of the world hasn't treated us right. He uses trade deficits as evidence of this, but man, that is an argument that it'd be very hard to find economists to endorse.

Micah Loewinger: The news about tariffs has just been so chaotic, it's really hard to follow, I think, for most of us. What context would you like to see in news coverage as this storyline unfolds that we haven't been seeing enough of?

Gordon Hanson: What we're all trying to figure out here is what's the trail map. We don't know what the intended destination is. My guess is that that destination is not going to be what Trump is advertising today, which is high tariffs across the board because markets are going to rebel, major US companies are going to rebel, and the regions, the workers who are involved in that manufacturing production are going to rebel because you're upsetting a set of economic arrangements which has allowed them to hold on to their jobs. I guess what I would want to see from the media is just pressing the Trump administration on telling us where you're going.

[MUSIC - Meridian String Quartet: Life on Mars]

What are the steps along the way? What is the ultimate destination and what do you think that destination is going to provide for us that we can't get out of the Constitution of the International Economic Order today? Just saying that America is going to be richer in the future by cordoning ourselves off from the rest of the world's goods and services is not sufficient.

Micah Loewinger: Gordon, thank you very much.

Gordon Hanson: My pleasure, Micah. It's been great to be with you.

Micah Loewinger: Gordon Hanson is an economist at Harvard University's Kennedy School. He's also the co-director of the Reimagining the Economy Project.

Coming up, I get schooled on global economics. This is On the Media.

This is On the Media. I'm Micah Loewinger. All this talk of tariffs and trade wars has the market so nervous that they're invoking the R-word.

Male Speaker: Recession risk right now are elevated maybe about 40% [crosstalk]

Female Speaker: We are honestly about six years overdue for a recession. People are going to be [crosstalk]

Male Speaker: Predictions not just of a Trump recession, but in The Wall Street Journal, predictions of a Great Depression.

Micah Loewinger: While there's always disagreement, one definition of recession is two straight quarters with a decline in gross domestic product, or GDP, the measure of all goods and services produced in the country. We're not there yet, but what happens if the GDP falls in the woods and no one is there to hear it?

Male Speaker: The governments historically have messed with GDP.

Micah Loewinger: Secretary of Commerce Howard Lutnick last Sunday on Fox, making a case for changing the formula used for calculating GDP going forward.

Howard Lutnick: They count government spending as part of GDP. I'm going to separate those two and make it transparent.

Male Speaker: There's a lot of concern about how we will know the economy is doing going forward.

Micah Loewinger: A new definition of GDP could also make it harder to understand the effects of DOGE's cuts. Last week, the Trump administration took a further step.

Male Speaker: The Commerce Department has disbanded two groups that help make sure the government's economic data paints a realistic picture of what is going on.

Micah Loewinger: One of those groups, the Federal Economic Statistics Advisory Committee, advised government agencies on how to track economic statistics like inflation and employment GDP data. MSNBC's Rachel Maddow.

Rachel Maddow: If they are going to cook the books so that economic indicators like unemployment numbers and economic growth and whether or not we're in a recession or a depression just don't mean anything anymore because they've recalculated them with special Trump numbers, what does that mean for our ability to know the truth about what's going on and what does it mean for us economically?

Mark Blyth: Everything is up for dispute now, right? There are no fixed facts. There are no fixed standards. It's all up for political interpretation. That's the point.

Micah Loewinger: Mark Blyth is a professor at Brown University.

Mark Blyth: A really good definition of a recession is everybody's uncertain all at once so no one invests. If no one invests, the economy slows down.

Micah Loewinger: Okay, let's talk about the bigger plan at work, if there is one. You had talked about this sort of loose coalition within the Republican Party, what they want out of this administration, what they're all vying for, and how it kind of fits into a plan. Can you break it down?

Mark Blyth: Well, I don't know if it fits into a coherent plan, but it fits into some kind of emergent plan. Here's what it is. The first one is this. Who are the losers in this? It's the old-time neoliberal Republican hawks. I'm thinking about Marco Rubio and the people like him, the ones that have basically said, "We're not going to be never Trumpers because we still want a job."

You've got the insurgent MAGA wing. Think of people like Bannon, the national [unintelligible 00:20:19] conservatives, if you will. They basically want to gut the so-called administrative state and put up tariffs and rebuild American industry on carbon lines in particular. Then the third wheel of this is the tech lords. The tech lords want tax cuts, which is what Rubio's crowd also wants. They also want something else. They want us to be nice to China because of their investments. What is it the Rubio crowd want? They want us to be bad to China.

Okay, what's the commonality? They also want the state smashed. Why? Because they don't want to be regulated on their digital platforms so they continue to make monopoly profits. You've got these people that have certain interests in common, certain very divergent interests, and in the middle of this, you've got Trump. Now, what does Trump see himself as?

I think he's a latter-day McKinley. He believes in 19th-century spheres of influence. This is why the Greenland stuff and the Canada stuff makes sense. This is turning away from NATO, this is dumping the Europeans. This is the way that he wants to see the world evolve. Tariffs are at the heart of that. Changing the nature of the American state and its commitments are at the heart of that. There's a lot at stake here. It's that coalition around Trump that basically, are influencing which way this plays out.

Micah Loewinger: How does this inform what's happening right now with our economy?

Mark Blyth: Why would you bully Canada? I mean, just stop there and just ask this question. Basically, Canadian industry as a whole, Canadian finance, everything, it's all integrated in the United States already. You already have it. You want any rare minerals in the north, they'll be happy to open a mine for you. So why are you doing this? Because the supply chains that cross the border multiple times in things like the auto sector, Trump wants them back home. He wants them on this side of the border.

The bigger picture here is that we've been running a global system for about 30 years where you've got too many exporters and the one big consumer, the importer, on the other side is the United States. The United States has been paying for this with digital dollars for the past 30 years. In exchange has been great. We got cars, we got pharma, we got toys, I got a room full of musical instruments. It's all fabulous except for one thing. When you do that for 30 years, what's the largest private sector employer in the United States?

Micah Loewinger: I know the answer. It's Walmart.

Mark Blyth: Boom. You got it. What's one of the fastest-growing private-sector employers in the United States? Amazon Logistics. The guys in the vans. Essentially, you're importing stuff made elsewhere, which you no longer make here. Eventually, you end up hollowing out the economy. We've seen this movie before in a very different frame. It was Biden and the IRA. That was tariffs in green industrialization. What you've got now is tariffs in carbon-led industrialization. Two sides of a similar coin?

Micah Loewinger: What you're talking about here are efforts to address one of Trump's favorite issues, the trade deficit. According to The Wall Street Journal, in 2024, the US's annual goods deficit reached a record $1.2 trillion as the nation relied on other countries for electronics, cars, machinery, and oil. Is this as urgent a problem as the president and his supporters have made it out to be?

Mark Blyth: There's two schools of thought on this. One of them says, no, it's not a problem, because what it's really all about is the aggregate balance of savings and investment around the world. There's another one that says, well, strictly from the point of view of a national economy, do you really want everyone to work at Amazon? Do you really want everybody to work at Walmart? We had a big scare in the pandemic when we found out we didn't do a lot of stuff and maybe we should be doing this.

Biden's response to this with the Inflation Reduction Act was to essentially incentivize the private sector to come here, lots of foreign investment, and build green manufacturing and get into that game. Trump's coalition is totally different. It's based upon what I call carbon-heavy states. They're very much on the other side of this, strangely looking for a rebuild of not just manufacturing but some notion of a national economy, a turn away from the globalization that we've had. There's two ways of looking on it. We could adjudicate which one's better in theory, but the fact is one of them is in power and practice.

Micah Loewinger: Okay, but I'm trying to understand your perspective as an economist. You think addressing our big importing problem is worthwhile, but you don't think it's quite as urgent as Trump and his ilk have made it out to be.

Mark Blyth: I'm more interested in the fact that in one way or another, both parties have decided we can't keep doing what we did before, and we need to build some kind of domestic industry back up. Irrespective of how they got there, that's where we are. My question then becomes, where do we go from here? How does this play out?

Micah Loewinger: I want to ask you about another term we hear discussed a lot by this administration, the national debt, which sits around $36 trillion. For years, Republicans have said our government spending is unsustainable. Is it?

Mark Blyth: Well, if it's unsustainable, why do they want to add to it by 1.4 trillion in tax cuts? Well, the answer is trickle-down. That hasn't worked at all. There is zero evidence for this. That tells me right now they're being disingenuous. Is there a genuine concern over this? Well, it depends how you look at it. Again, you know that clock on Wall Street buzzing around the size of the national debt? That's literally also national savings. Because that bond market where they say the private sector, how about you give me a bunch of money and I'll give you this promise that 10 years from now, you'll get all the money back with interest.

You know, the only thing you can redeem the bond for? Money. What is the government print? Money. 70% of American bonds are in the United States. They're basically savings bonds that sit at the bottom of loads of credit arrangements for banks and financial firms. If you reduce the United States' stock of debt overnight, you would cause the world's largest financial crisis. These things are called assets as well as liabilities. When you only look at this as a liability that we need to pay back, which so far hasn't actually seemed to be much of a problem because the whole world wants to hold them as the savings asset, then you're only getting half the picture.

The other side is this is the positive side of the balance sheet. That's the savings asset that everybody else uses. Now, there are costs to this, which is everybody's so willing to hold this stuff and then give us stuff in return that we've had this hollowing-out effect on the economy. Maybe you want to do something about that. The notion that this is leading to bankruptcy, et cetera, is just nonsense.

Micah Loewinger: When we hear Republicans talk about this debt crisis, is it that they don't understand this math or is this just a politically expedient story to tell?

Mark Blyth: I think some of them reject that math and just simply say, "That's not true," and, "It can't be the case." For others, though, just look at the track record. Reagan went on about this and then he did huge tax cuts. Bush, the first one, actually raised taxes and lost the election because of it. Then, the second Bush administration made exactly the same noises when Trump did tax cuts. Again, all they care about is getting tax cuts. One way to get tax cuts is to say, "This is unsustainable. We've got to do something about the deficit. We have to cut spending." The cut in the spending pays for the tax cut. If you cared about the deficit and the debt, you would basically not do the tax cut.

Micah Loewinger: Yes. To your point, as reported by ProPublica, in 2021, Trump added $7.8 trillion to the national debt when he was in office, largely due to these tax cuts, followed by a worldwide pandemic that ranks as, "The third biggest increase relative to the size of the economy of any US Presidential administration."

Mark Blyth: What gets blamed for that? It's not that. It's Biden sent out all those checks. Right? This is all about the political manipulation of selected facts to tell the story you want. What matters is the narrative. These guys are brilliant at controlling the narrative.

Micah Loewinger: Okay, but let's get to the material reality. House Republicans passed a budget plan to extend these tax cuts, which would otherwise expire at the end of the year. How are they going to pay for this?

Mark Blyth: Well, the whole notion that you need to pay for it is part of the problem. Think about it this way. It takes 10 years and $100 billion or some insane amount of money like this to build a single aircraft carrier. Do you think that the Pentagon goes to a bank account and says, "How much have we got in there?" before we actually build this thing, before we commit to any of this stuff? Of course not.

We're a superpower with the global currency. This is all based on running the economy like a corner shop. Unless someone's coming in and buying this soda. "Kids, we don't have any money to spend on our vacation." Nonsense. We could, if we wanted to kill the deficit, easily do it. Raise taxes, because right at the top end, there's loads of room, and loads of people pay no taxes because they don't declare any income.

In terms of comparing the United States to lots of other countries, we are actually a pretty low-tax society. We have this huge structural advantage, everybody else wants dollars. So long as that is the case, which has been the case for the past 30 years, and there doesn't any sign of changing, you don't really have to think that way unless you want people to think that way and create the notion that we're all going to go bankrupt soon so we can then smuggle in a giant tax cut while paying for it with Medicaid.

Micah Loewinger: You're talking about this narrative of visualizing the national debt as if it were like household debt or like a small business debt. Where did that come from, that framework of thinking and talking?

Mark Blyth: I wrote a whole book about this. You can go out and get it. 2015, Austerity: The History of a Dangerous Idea. There's the book plug. It goes back a very long time. One version of it comes from the Scottish philosopher David Hume. He worried about public debt because he thought, "Okay, there's only a certain amount of credit in the world at any point in time." If you're an entrepreneur, you want to take that credit and borrow it, let's say at 5%, and then invest it and get 10%. You made 5%. Whoop-de-doo. What if the government wants to basically spend a lot of money? They're going to have to issue bonds at 5.5%.

Then what happens is the bakery doesn't get built, it goes into government debt. That's less productive than the private sector. You get this phenomena called crowding out. The available pool of money for the private sector goes down, the interest rates go up, this is bad for the economy, et cetera, et cetera. The problem is that's probably not been true for about at least 30 years.

The way it actually works is banks create money out of nothing. We learned this in the financial crisis. I walk in and say, "I want to buy a new guitar." They're like, "Great." I want a loan. "How much do you want a loan for?" I want a $1,000 loan. The minute they create that loan, that has created an asset on their books because I will pay that loan. When I come back and pay the loan, that closes the loop and creates the deposit.

The way that banks actually create money and 90%, if not more of the money we all spend is bank credit, is basically created out of nothing, out of expectations of profitability. If that's the case, the notion that the government's coming in and crowding out this limited market is just nonsense. It's an incredibly intuitive nonsense.

Angela Merkel played this one like a classic one. The Swabian housewife in the financial crisis 10 years ago. The notion that the German government has to run itself as if it's like a hausfrau in the 1950s. Think about this for a second. Think about it. Have you issued any bonds recently?

Micah Loewinger: Have I? No. No.

Mark Blyth: Do you have your own currency?

Micah Loewinger: No.

Mark Blyth: Do you get to bring people into your household and tax them for the next several generations?

Micah Loewinger: No. [laughs]

Mark Blyth: Well, countries do. That's why they're not households.

Micah Loewinger: Yes. To help reduce the national debt, they claim, Trump and Musk have advocated for austerity, tightening the government's purse strings, in this case through the axe-chopping assignments of DOGE. At least this is again the story they're telling. How does this portend for the austerity we're currently experiencing?

Mark Blyth: You're not experiencing austerity. What you're experiencing is an attempt to destroy the American state in a very particular way. The [unintelligible 00:32:22] imaginary of these folks is that there's such a thing as the administrative regulatory state. It gets in the way of business, it disables things. It's just a bunch of bureaucrats sitting there pushing paper around. It costs us a fortune and it could all be happily cut away.

Now, leave aside lots of things like all the technologies in the iPhone actually came out of government-backed research. Steve was just the guy smart enough to put it all together in a box. Where do you think biotech came from? That's what the NIH is for. Just park all that for a minute. Let's assume that this is the game.

Let's say you cut all that. It's only 1% of total workers. You could probably do it. What can't you do if you hack away at this? Who gets targeted? The IRIS. If it's concerned about deficits and debts, what country fires its tax collectors? That's what's going on. What you're doing is you're taking in specific parts of the state that you don't like that if you disable it will basically enable you to do lots more things. This is why Musk taking control of treasury payments is so central, et cetera.

It basically allows you to create a much smaller state that won't tax you, that won't interfere. That basically will allow people like Musk to do whatever they want. It's not about austerity for austerity's sake, it's just a cover. It's essentially we're going to wipe out the administrative state because we don't like it, and we don't want to live with it.

Micah Loewinger: I guess to just tie up some of the threads that we've introduced here, if you were to shake listeners right now and say, "This is what you need to pay attention to over the next few months," what would you point to?

Mark Blyth: Think about what your life is made up of. Think about basically what's important to you and ask, "Is this government or any government actually addressing this?" I'll put shade on the Democrats for this. They had no response in 2020 as to what they stood for other than more of the same. At the same time, America is facing a housing crisis that we've never seen before, an affordability crisis. Millennials are just completely priced out of the market. Nobody's even addressing these very basic things that are fundamental to having a successful economy. Don't look at the numbers, don't look at the theater, think about what's important to you, and ask are these people even talking about this?

[MUSIC - Accentuate The Positive (Instrumental): Syd Dale, Syd Dale Double Dozen & Alec Gould]

Micah Loewinger: Mark, thank you very much.

Mark Blyth: It's been a pleasure.

Micah Loewinger: Mark Blyth is a professor at Brown University and co-author of the upcoming book Inflation: A Guide for Users and Losers. Coming up, the plan to make America healthy again might make us very sick. This is On the Media.

This is On the Media. I'm Micah Loewinger. An ongoing measles outbreak in Texas has already killed a child and an adult. It's far from contained. On Fox News, the head of the Department of Health and Human Services offered this advice to concerned Texans.

RFK Jr: They have treated most of the patients, actually over 108 patients in the last 48 hours, and they're getting very, very good results. They report from Budesonide which is a steroid,- it's a 30-year-old steroid- and clarithromycin, and also cod liver oil, which has high concentrations of vitamin A and vitamin D.

Male Speaker: Number one, vitamins do not prevent measles. Hands down. Number two, vitamin A in high doses can have side effects and can have issues, can be toxic. You want to be careful. Then number three, the best measles prevention by far is the vaccine.

Micah Loewinger: Okay. RFK Jr. now oversees 13 agencies that are critical to US health policy. As part of his Make America Healthy Again, or MAHA agenda, he has declared regulation of food a high priority.

Female Speaker: Kennedy has raised concern about the health effects of processed foods.

Male Speaker: I'm going to let him go wild on health. I'm going to let him go wild on the food.

Micah Loewinger: Not so long ago, the Republican embrace of food regulation was unthinkable. Back in 2010, when Michelle Obama introduced the Let's Move campaign to reduce childhood obesity.

Male Speaker: Get your damn hands off my fries, lady. If I want to be a fat, fat fatty and shovel french fries all day long, that is my choice.

Male Speaker: Does every American family need a dietician appointed by the government to tell them that this food is going to make you fat and this food is not?

Helena Bottemiller Evich: I'm so glad you pulled these clips.

Micah Loewinger: Helena Bottemiller Evich, editor-in-chief of Food Fix, a newsletter about food policy. Brooke spoke to her last week.

Helena Bottemiller Evich: I remember this time so vividly, I was covering food policy during the Obama administration. Republicans were furious about the Let's Move policy agenda, which included things like putting half a cup of fruits and vegetables in the school lunch program, mixing a little bit of whole grain into the refined grains that they're already serving. These were pretty modest changes. They absolutely lost it and fought back bitterly.

Brooke Gladstone: When did food regulation become a right-wing talking point?

Helena Bottemiller Evich: I think the realignment here has happened very recently. We really didn't hear any Republicans on Capitol Hill talking about concerns about food additives until really the last six months. There's always been some threads where the left and the right meet on food issues. The libertarian-minded folks, the small farm folks. What we're seeing now is a real mainstream movement on the right that is now espousing a lot of the exact policies or criticisms of the food system that we have traditionally seen on the left.

Brooke Gladstone: I want to talk about what seems to be a big right-wing conflict between more regulation or less regulation. We'll get to that in a minute. First, I want to ask you about RFK Jr.'s MAHA rhetoric involving food programs for the poor. You mentioned SNAP or school lunches, neither of which he really has power to regulate. Right?

Helena Bottemiller Evich: You are correct. HHS secretary does not have oversight over school meals or the SNAP program, which are at USDA. We still see RFK Jr. speaking out about these programs. He is working with Agriculture Secretary Brooke Rollins. She's working to align some of USDA priorities to MAHA.

In particular, RFK Jr. has actually said he believes processed foods should be taken out of the National School Lunch Program. That program serves something like 30 million kids a day for a couple of bucks per meal. There is quite a bit of food in that program that is processed to some degree. Some schools also don't have kitchens. You absolutely could remake the National School Meals programs without processed foods, but it would require tremendous investment. It would be a complete overhaul and a lot more money. I don't know exactly where that one is headed.

On SNAP, the Supplemental Nutrition Assistance Program, which some people still call food stamps, that helps about 40 million Americans afford groceries every month. Some states are working toward asking USDA for, essentially, pilot programs where they could drop sugary drinks, candy, or some other menu of products from that program. It is not something that would happen nationally. You would need Congress to do that. I do think we're going to see some state actions there.

Brooke Gladstone: There is a progressive resistance to telling poor people exactly what they can or what they can't spend their SNAP money on.

Helena Bottemiller Evich: It's an idea that anti-hunger advocates push back very strongly on. The argument is essentially this. The average household is purchasing a basket of food that doesn't look that much different than a SNAP household. It's not like SNAP households are eating way more unhealthy than the rest of us.

Brooke Gladstone: Well, there is a big difference between how rich people eat and how poor people eat because of the availability of fresh food and also because healthy food tends to cost more.

Helena Bottemiller Evich: Absolutely. On average, the shopping baskets don't look that much different. That said, you have proponents of restricting SNAP saying, "Look, the government just shouldn't be subsidizing or buying certain foods that we know are not health-promoting, like sugary drinks." There is tension there. The anti-hunger advocates have worked very hard to push back on any previous attempt to test SNAP restrictions.

The food industry is, of course, very opposed to this. Retailers also hate the idea. They don't want their checkers to have to be policing their purchases because certain things would no longer qualify. That could be a point of conflict. There's a lot of layers here. I do think, though, that states are going to be moving forward with these policies. We already saw Arkansas Governor Sarah Huckabee Sanders indicate that she plans to seek a pilot program in Arkansas to limit certain products there. I think we're going to see some real openness from the Trump administration on this.

Brooke Gladstone: Let's move on to food additives. Here is RFK Jr. at his Senate confirmation hearing.

RFK Jr: FDA employs a standard called the GRAS standard that looks at any new chemical as innocent until proven guilty. If you eat a McDonald's french fry in this country, it has 11 ingredients. With the same product, in Europe, it has three. We are allowing these companies because their influence over this body, over our regulatory agencies, to mass poison American children. That's wrong. It needs to end. I believe I'm the one person who's able to end it.

Helena Bottemiller Evich: This has been, I think, one of the more animating issues for MAHA. You see a lot of moms in particular just furious that there are products in the US that contain additives that are not in the same product in Europe, for example. There is some real concern on the left and the right about how food additives are regulated in the US.

Brooke Gladstone: What is the actual process for banning additives in the US? Is a broad crackdown even possible under such a pro-business administration?

Helena Bottemiller Evich: I think this is the central question of MAHA. The GRAS loophole, as it's called, is allowing ingredients to make it to market under a generally recognized as safe status. That essentially means that food companies, ingredient makers, can self-determine that something is GRAS or Generally Recognized As Safe. If there are some studies that basically say it's okay, that there's not a lot of reason for concern-- FDA may not even know. They don't have to tell FDA, "We are making this determination."

Many of the more reputable brands do notify FDA, and then FDA essentially gives them, "We don't have questions about this." It's called a no-questions letter.

I know you're kind of laughing. It's one of those things where if you explain it to the average consumer, they're like, "No, that's not how that works," but it is. On this point, a lot of these MAHA voices are correct in that we do not have as strict of regulation on food ingredients compared to many other countries. The central question then becomes, "This administration is decidedly deregulatory. What then are they going to do about food additives? Is this the exception?"

Brooke Gladstone: Now, in order to get these additives off the market, you sort of have to go over these chemicals one by one. There were a lot of cuts at the FDA. The team wasn't big to begin with who was doing this work. Isn't that kind of throwing a spanner in RFK's works?

Helena Bottemiller Evich: There weren't that many people at the agency already doing what are called post-market assessments. That's looking at chemicals that are already on the market and saying, "What is the new evidence? Is there evidence we need to look at? Maybe some of these things do need to be pulled." That work was being done by a pretty small unit. About a third of those people were laid off with these probationary firings that happened.

There is a lot to fix at FDA. I think looking at the foods division, that agency just doesn't meet what most consumers expect in terms of having strict oversight of food chemicals and regularly inspecting food plants.

Brooke Gladstone: Is this because of conflicts of interest? Because the food industry has so infiltrated the agency that people are encouraged to slow down?

Helena Bottemiller Evich: I don't think it is that simple. I think most folks who work at FDA are there because they want to protect public health, but the structure of that agency and the culture of that agency has been very slow. They really haven't had to answer to a lot of outside pressure from Congress or others. The resources at that agency really don't match the job we've asked them to do. If you just think about food safety, they don't have enough food inspectors to inspect the hundreds of thousands of food facilities they have under their jurisdiction very often.

Brooke Gladstone: Is that because the Congress doesn't want to give them those resources?

Helena Bottemiller Evich: There hasn't been a big coalition to really demand those resources. FDA is a really interesting agency in that it regulates about a quarter of the economy overall, a quarter of consumer spending.

Brooke Gladstone: Wow.

Helena Bottemiller Evich: You've got drugs, medical devices, microwaves, cosmetics. Foods is one part of that. The other parts of the agency are largely funded on user fees. These are paid by industry. It helps them beef up staff so that they have reliable approval timelines for things like drugs and medical devices.

Well, we don't have that on the food side. The food side has been almost 100% funded by appropriations, which means Congress is actually sending all of the money. I think that has led to this situation where the foods program has lagged in terms of staffing. There are also major cultural and bureaucratic issues here. There are a lot of challenges that are not just funding.

Brooke Gladstone: RFK Jr. says he only drinks raw milk. We know that Trump loves McDonald's and has a Diet Coke button in the Oval Office. I wonder how you square that circle. Does Trump really care about any of this MAHA stuff, do you think, or more to the point, does his administration's agenda really square with MAHA?

Helena Bottemiller Evich: I don't think Trump is pretending to be super into unprocessed foods or healthy eating. If you go back and you look at the rallies where RFK Jr. first started appearing with Trump back when he endorsed him, you can tell that the lines, "Make America Healthy Again," would get really loud cheers.

Trump signed an executive order right when RFK was sworn in, establishing what's called the MAHA Commission to look at chronic disease, particularly among children. They're going to make recommendations on what to do about it. Going back to this question of regulation, I think that's what will be important to watch. If the commission were to find- this is hypothetical- let's say it's the additives, it's the pesticides, the question then becomes, "Well, what is the government going to do about it?"

This MAHA Commission is the first test of whether or not there's going to be consistency here between really the rhetoric that's come from Trump and RFK Jr. talking about the importance of addressing chronic disease among children in particular. What this administration is really willing to do, that commission has to, I believe, issue findings within 100 days. It's going to be very interesting to watch. We really haven't seen a focus on children's health since Let's Move.

Brooke Gladstone: It's really been a pleasure talking to you. Thanks so much.

Helena Bottemiller Evich: Anytime. Thank you.

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Micah Loewinger: Helena Bottemiller Evich is the founder and editor-in-chief of Food Fix, a newsletter about food policy.

That's it for this week's show. On the Media is produced by Molly Rosen, Rebecca Clark-Callender, Candice Wang, and Katerina Barton. Our technical director is Jennifer Munson. We had engineering help from Jared Paul and Amber Bruce. Eloise Blondiau is our senior producer, and our executive producer is Katya Rogers.

On the Media is a production of WNYC Studios. Brooke Gladstone will be back next week. I'm Micah Loewinger.

 

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