Inflation Is Up Again. What Does That Mean For Your Wallet?
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It's Thursday, February 13th. I'm Jane Koston, and this is Water Day, the show that believes that while Bourbon, the nine-year-old whippet, did not win the Westminster Dog Show, her efforts to come out of retirement for one last run at the crown make her the champion in our hearts. On today's show, Tulsi Gabbard is our new director of national intelligence, thanks to all but one Republican senator, and President Donald Trump chit-chats on the phone with Russian President Vladimir Putin about the war in Ukraine. But first...

The economy. Is it good? Bad? Something in the middle? Who gets to decide? I know, those seem like silly questions. One could easily look at the stock market, the unemployment rate, and have a pretty good idea of how well the economy is doing right now. But during the 2024 presidential election, millions of Americans said that while the economy might be doing well on paper, their own personal economies, their ability to buy groceries, pay their mortgage, and who knows, take time off for a vacation, were not.

President Trump said a lot about the economy during his campaign. You remember how he was going to lower prices on day one? But now, the Trump administration is trying to lower expectations for what they can actually do to help consumers and when Americans can expect relief. And on Wednesday, the Consumer Price Index jumped, raising concerns that inflation, which had been declining since it hit a recent peak of 9% in 2022, might get worse again, which the Trump administration immediately took responsibility... No, no they didn't.

Here's White House Press Secretary Caroline Leavitt. On the inflation point, we did receive those numbers and they were worse than expected, which tells us that the Biden administration indeed left us with a mess to deal with. Of course, part of the challenge of thinking about the economy is that how voters view the economy is often tied to who they vote for.

Pew Research Center found in a study released on Tuesday that 64% of Democrats expect the economy to get worse this year, while 73% of Republicans think the economy will get better. You probably won't be surprised to learn that this is a big decline for Democrats from last year and a big increase from Republicans. So to make sense of what's actually going on with the economy right now and what it all means for Trump, I spoke with Victoria Guida. She's an economics correspondent for Politico.

Victoria, welcome to What A Day. Thanks for having me on. So I think a lot of us saw the inflation numbers went up unexpectedly Wednesday morning and maybe had a little bit of a panic because I remember how inflation was a couple of years ago and that was bad. So what's your take? What do you see in those numbers?

So I don't think there's reason to panic yet. The problem that we've had with inflation is so it peaked in 2022, right? And inflation was above 9% then. And we're now down to 3%. So first of all, way better than it was.

But also, it improved a lot, and then it hasn't really gotten that much better for a while, right? So for much of last year, it's been sort of bouncing around in the high twos, low threes kind of area. So while this was hotter...

than, you know, economists were expecting. This isn't necessarily hugely out of line with what it's been doing, but the Federal Reserve, which is the body that's responsible for fighting inflation, wants to see it come all the way back down to 2%. Now, we're a little over three weeks into the Trump administration. How much blame can we reasonably put on them for this spike?

So that is a complicated question, as you might guess. Generally, I would say the economy does not change very much in the course of three weeks. However, there are a couple of things to take into account. One of the biggest things that President Trump did in sort of the lead up to and in the early days of his presidency was to do tariff threats. So in

In January, there is a lot of price setting that happens, right? People write contracts and stuff. And so the question would be, and I don't have an answer to this question, whether the anticipation of tariffs could have potentially led to price increases. Now, that doesn't mean that that's what happens.

here because, um, seasonally you often do see prices go up a lot in January. They went up a lot last January. And so I would say, uh, to be safe, inflation is not doing that much different from what it had been doing that this probably isn't president Trump's fault. However, uh, you can't, you can't rule out completely that there was some Trump effect here. Now Trump campaigned hard on lowering prices, but it's starting to back away from that.

I know that I think every president goes through their election season kind of pretending like there's a button in the Oval Office that makes the economy go boom. But realistically, how much control does any president have over prices for things like groceries and other goods?

So it's a fantastic question because, yes, you're absolutely right. The president doesn't really have that much control. And you'll notice that President Trump actually wasn't the only candidate who ran on lowering prices. This was something that a lot of politicians run on because they know that this is something that matters to people.

right? And so if you talk about it, it's sort of an acknowledgement of the fact that you know this is something people are struggling with. But actually, if prices generally go down in deflation, that's usually caused by a recession. So unless they really want to crash the economy, prices are not going to come down. And the more healthy way to try and to deal with cost of living is to try and pursue things that will help people's wages rise faster than prices so that people then get ahead. But yeah, I mean,

Prices are set by private businesses. That's the way our economy works. Trump said on social media Wednesday that the government should slash interest rates. Now, could you explain in terms for people like me, why is he saying this now and what would cutting interest rates do to the economy?

So President Trump generally likes lower rates. I mean, he's he built his career in real estate and real estate is financed by, you know, mortgages, commercial mortgages and and residential mortgages. And so he's somebody who likes to have a lower cost of debt in general.

But the way that the Federal Reserve works is they raise rates or keep rates high when they're worried about inflation, and they cut rates when the economy is weakening.

And so this isn't really the time where the Fed wants to be lowering rates. They were lowering rates a little bit last year because there was signs that the unemployment rate started to go up. But now, as I mentioned, inflation has continued to stall. And so the Fed has decided they kind of just want to hold here. But

Basically, to answer your question, if they were to cut rates, it could cause more of a problem for inflation if it allows prices to start creeping up faster. At least within the last decade or so, it seems like so much of people's perceptions of the economy has been tied up in politics. And you see this happening right now, that with Trump in office, Democrats are increasingly negative on how the economy is doing. And we saw the reverse under Biden. But what

What's your read on the state of the economy for the average American? Is it good or is it at least OK? So this is a really difficult thing to answer because it's compared to what. Right. So one of the reasons why the economy is good right now is because the unemployment rate is low.

And so people generally have jobs. Now, whether those are jobs that they want, that's another question. I will say that wages have been growing faster than prices for at least a couple of years now. And so people are starting to gain a bit of an edge. But there

There are a lot of reasons why people might be unhappy. Another reason that the economy isn't as good as maybe it was is it's a lot harder to switch jobs now because there are fewer job openings. So you might remember the great resignation that everyone talks about where people were quitting their jobs. And the reason that happened was because there were a lot of opportunities for people to move to other jobs. And so that's something that...

is empowering to workers and allows them to get more pay and maybe get a better job. And we see less of that now. So I would say that the economy is definitely a lot better than it was. Unemployment is low. Inflation is a lot lower than it was. But there's a lot of reasons why people still might not feel great. And I think during the election, Democrats really struggled with their messaging on the economy because

Even if the kind of monthly reports looked good on paper, people were not feeling it for some of the reasons you just mentioned. And they were not in the mood to be told that things were actually good. So what are the risks in your view for Trump and Republicans right now, now that they're in control of the government and they'll be the ones telling everyone that the economy is good? Yeah.

Well, we have the midterm elections. And so, you know, this is the time period when the Republicans have control of both chambers of Congress and the White House. Obviously, President Trump is on his second term, so he's not personally going to be running for reelection. But we could see in just a couple of years the Republicans lose some power in Congress. And so the risk is real still for them.

I'm not an economist. I did not do very well in econ in college, but it seems like the economy is in this kind of precarious moment. Where do you see the headwinds going forward?

Well, first of all, I would say that one of the things that's been surprising is that we were sort of supposed to have a recession. It's a weird thing to say, but the Fed was raising rates to fight inflation. And often when the Fed raises rates to fight inflation, they cause a recession. And that didn't happen. And one of the reasons for that is because the economy has been really resilient and the labor force has been really resilient. And so the precarious moment comes from all of this policy uncertainty. Right. So we talked about, for example, the tariffs.

Is that going to slow the economy? Is that going to raise prices? Some of the immigration policies could have an impact as well, where if we have fewer workers to do jobs when people are still spending money, that can lead to inflation. And so I would say that the precariousness comes from whether the economy continues to just sort of keep on keeping on. And there is a lot of business optimism because of President Trump,

But some of the stuff that I was just mentioning, right, like the tax cuts and the deregulation are good for businesses, but the tariffs and the immigration might hurt some of them. And so the question is, what's the next? So we could see a shift now just because there's so much changing. Victoria, thank you so much for your time. Thank you.

That was my conversation with Victoria Guida, economics correspondent for Politico. We'll get to more of the news in a moment, but if you like the show, make sure to subscribe, leave a five-star review on Apple Podcasts, watch us on YouTube, and share with your friends. More to come after some ads.

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Here's what else we're following today. ♪ Headlines ♪ - President Putin wants to have peace now, and that's good. And he didn't want to have peace with Biden.

And you tell me why that is, okay? President Trump said on Wednesday that he and Russian President Vladimir Putin spoke by phone and have agreed to, quote, work together very closely to end the war in Ukraine. In a post on Truth Social, Trump said that his call with Putin was productive and that the U.S. and Russia will begin negotiating how to resolve the conflict immediately. You know, the conflict Putin started by invading Ukraine, a sovereign country.

This is the first publicly announced call between Trump and Putin since Trump took office. Trump has kept in contact with the Russian dictator privately since he lost the 2020 election. The White House has not contacted the Kremlin in years. Former President Biden refused to speak with Putin over his invasion of Ukraine. Trump also called Ukrainian President Vladimir Zelensky on Wednesday after speaking with Putin. Trump wrote in another Truth Social post that their call went, quote, "...very well."

Zelensky later tweeted that their conversation was, quote, meaningful. Also on Wednesday, Defense Secretary Pete Higgsess spoke to NATO allies in Belgium about Trump's commitment to end the war. We want, like you,

a sovereign and prosperous Ukraine. But he also said that Ukraine likely won't become a member of NATO, despite Zelensky's pleas to join the alliance. The United States does not believe that NATO membership for Ukraine is a realistic outcome of a negotiated settlement. Trump said on Wednesday that he plans to meet with Putin in person in Saudi Arabia, though it's unclear when. A spokesman for the Kremlin said that Putin has invited Trump to Moscow.

I just want to say thank you from the bottom of my heart for the trust that you have placed in me to fulfill this critical position as Director of National Intelligence. Tulsi Gabbard was sworn in as Director of National Intelligence on Wednesday after the Senate voted to confirm her. Gabbard was one of President Trump's more contentious cabinet nominees. Republicans expressed concerns about her ties to authoritarian world leaders like Putin and former Syrian President Bashar al-Assad when Trump tapped her to be the country's top intelligence official.

The Senate voted mostly along party lines to confirm Gabbard. Senator Mitch McConnell of Kentucky was the lone Republican to vote against her. His office released a statement on Wednesday saying that he couldn't back Gabbard because she, quote, failed to demonstrate that she is prepared to assume this tremendous national trust during her confirmation hearings. And that Gabbard has a, quote, history of alarming lapses in judgment.

Also on Wednesday, the Senate voted to advance anti-vax activist Robert F. Kennedy Jr.'s nomination to be secretary for health and human services. He's expected to be confirmed. Linda McMahon, Trump's education secretary nominee, is scheduled for a Senate confirmation hearing today. This is not a time for political theater and partisan attacks.

The American people are watching. The legislative branch can't sit on the sidelines. Oh, they can't? Could have fooled me. Georgia Republican Representative Marjorie Taylor Greene was all business as the House Subcommittee on Delivering on Government Efficiency, or DOJ, held its first meeting Wednesday.

Greene, who chairs the subcommittee, said she will fight the war on waste shoulder to shoulder with President Trump, Elon Musk, and the Department of Government Efficiency, also Doge. Greene said the committee is focused on, quote, improper payments by the federal government. Wednesday's hearing was focused on Medicare and Medicaid. Democratic Representative Robert Garcia of California said, quote, we should in no way be cooperating with House Republicans who want to shut down the Department of Education and destroy Medicare and Medicaid.

He also seemed to ignore Greene's comment about political theater and reference the time she showed sexually explicit photos of Hunter Biden in a 2023 hearing. In the last Congress, Chairwoman Greene literally showed a dick pic in our oversight congressional hearing. So I thought I'd bring one as well.

Now this, of course, we know is President Elon Musk. Garcia then held up a picture of Musk's face and said he's leading a power grab encouraged by both Trump and Green. The top Democrat on the subcommittee, Melanie Stansbury of New Mexico, said Democrats have bipartisan ideas to root out waste, fraud, and abuse, and referenced the recent dismantling of government agencies.

The people who actually investigate waste, fraud and abuse at these agencies are the inspector generals who Donald Trump fired his first week in office in a midnight massacre. So we have to ask ourselves, what is really going on here? She called on Musk to testify in front of the subcommittee because the American people, quote, want to know what you're up to.

Trump's interest in buying Greenland has one Georgia congressman very excited. House Republican Earl "Buddy" Carter introduced a bill Tuesday that suggests renaming Greenland "Red, White, and Blue Land." Glad we have our priorities straight.

Carter's proposal would give President Trump authority to enter negotiations to acquire the autonomous territory, which belongs to Denmark. It would also require the federal government to call it red, white, and you know that name on official maps and documents.

Trump has said buying Greenland is essential for national security and freedom throughout the world. His other current obsessions include making Canada the 51st state, taking back the Panama Canal, oh, and taking over Gaza. He's just a president with normal dreams. But leaders from both Denmark and Greenland have pushed back on Trump's idea, saying Greenland is not for sale.

And Danes are now making light of the plan by turning the tables. A petition to Danify California is trying to garner 500,000 signatures and raise $1 trillion. The petition says, quote, Let's buy California from Trump, Denmark's next big adventure. It currently has more than 230,000 signatures. And that's the news. One more thing.

Donald Trump's all-out attack on climate and environmental policy is still in full force. On Tuesday, the president took yet another step back in time, saying he is instructing the Environmental Protection Agency, or EPA, to relax efficiency requirements for household items like dishwashers, washing machines, toilets, faucets, and light bulbs. Let the water gush and the electricity burn, basically. Side note, I did not ask to know this much about Donald Trump's views on toilets. Back

Back in January, the Trump administration also withdrew a plan to set limits for PFAS chemicals, so-called forever chemicals, in industrial wastewater. Because clean water is woke, I guess. This is all bad news, and it gets even worse. The Trump administration is sparking intense chaos at the EPA. Last week, 1,000 staffers were told they could lose their jobs. Days later, the 168 staffers who make up the Office of Environmental Justice and External Civil Rights were put on administrative leave.

Here to tell us why that matters is Crooked Climate correspondent, Anja Zolodzowski.

Anya, welcome back to Water Day. Hello, so good to be here. Can you just remind us what the EPA does and what's at stake here? Yeah, absolutely. Like it does a lot from testing chemicals to environmental stewardship, doling out grants, testing sites for contamination and pollution, and ultimately enforcing and creating rules that force industries like the fossil fuel industry to act.

Comply with laws like the Clean Air Act or the Toxic Substances Control Act. And so the point is to keep water and air clean for all Americans, and especially in areas that are most likely to suffer environmental harms. A former administrator at the EPA had told me that the Environmental Justice Office is particularly concerned

important because it's the office that basically serves as an intermediary between communities that are underserved by governments. And so they're really like the boots on the ground that go and consult with these communities. Recently, there was billions of funding promised and allocated to these community-led projects, largely thanks to Biden's Inflation Reduction Act.

Right now, that money is frozen. And so everyone I spoke with put it bluntly that by eroding the EPA and the Environmental Justice Office specifically, we are risking dirtier air, dirtier water, and that's going to harm Black, brown, Indigenous, and low-income communities the most. Here is what Jasmine Gill said. She's the Climate and Environmental Justice Lead at Hip Hop Caucus. Single-handedly, the fossil fuel industry...

Petrochemicals, LNG, oil and gas, you name it. They are polluting our communities with illnesses. What we're losing here is a strong ally in being able to protect our communities across the nation against this major villain. So really we're losing...

you know, our frontline defense against big industries like the fossil fuel industry. You mentioned this a little bit earlier, but I'd love to know more about how EPA staffers are feeling in this moment.

Everyone who's been speaking with folks on the inside has said that, one, they're super nervous about their livelihoods. But also what's come up a lot is that, you know, these are really mission-driven folks, and they're feeling really isolated from their ability to protect the communities that they have devoted their lives to protect themselves.

And finally, a concerning thing that came up in the interviews was that young people may not want to go into this line of work if it continues to be this unstable. And so where does that leave an agency that is so critical to public and environmental health?

How are people fighting all of this at the state and local level? Because it sounds like this is something that's going to need to be, once again, a grassroots effort. So these battles will have to play out at state and local levels now. You need to be paying attention to mayoral elections, county commissioner elections,

Any sort of legal battle, protests. And what Jasmine said was even if it seems like a small win, it's actually a big win. You know, even a delay in a project means that the air will be cleaner for that much longer. So here's what she had to say about, you know, the onslaught of executive orders that we're seeing right now. These things can feel finalized.

They can feel one and done, and they are not. And so that's another thing that people need to understand is that you still have power. The American people still have the power to turn around a lot of these things. And we still have a long way to go in order to be able to fight some of these things that are being passed through executive orders. So all that to say, even though it seems pretty, pretty dire, people can still push ahead. And yeah, as always, thank you so much for joining me. Thank you so much for having me.

That was my conversation with Crooked Climate correspondent, Anya Zolojewski. This segment was supported by our nonprofit partner, Crooked Ideas.

Before we go, Elon Musk's Doge gang just got slapped down by a federal judge, but not before infiltrating the Treasury first. If you're wondering how we let billionaires hijack the government, tune into the newest episode of Assembly Required. This week, Stacey Abrams unpacks how Musk and his cronies carved out unchecked power and what we can do about it. With Wired editor Leah Feiger, they unpack Doge's grip on the Treasury. Then, strict scrutiny's Kate Shaw joins to answer the big question. Is this even legal?

Listen now to stay informed and get practical steps on ways you can fight back. Just search for Assembly Required wherever you get your podcasts or on YouTube.

That's all for today. If you like the show, make sure you subscribe, leave a review. Remember that Valentine's Day is tomorrow and tell your friends to listen. And if you're into reading, and not just about how seriously Valentine's Day is tomorrow, like me, Water Day is also a nightly newsletter. Check it out and subscribe at crooked.com slash subscribe. I'm Jane Koston and get your flower orders in now.

Waterday is a production of Crooked Media. It's recorded and mixed by Desmond Taylor. Our associate producers are Raven Yamamoto and Emily Fore. Our producer is Michelle Alloy. We had production help today from Johanna Case, Joseph Dutra, Greg Walters, and Julia Clare. Our senior producer is Erica Morrison, and our executive producer is Adrienne Hill. Our theme music is by Colin Gillyard and Kashaka. Our production staff is proudly unionized with the Writers Guild of America East.

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And trust me, it's always a great hang when Woody's there. So why wait? Listen to Where Everybody Knows Your Name wherever you get your podcasts. At Comcast, our commitment to the military community goes back to our founder, U.S. Navy veteran Ralph Roberts. Today,

Today, we honor his legacy by partnering with organizations to help veterans, transitioning service members, and military spouses succeed in today's digital world. Delivering the internet connection, skills, and support they need to advance economic mobility and open doors to new opportunities. Visit ComcastCorporation.com slash military to learn more. Comcast, proudly supporting our military community because your service matters.