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Right now, there is a prominent American politician pushing for lower drug prices and higher taxes on the country's top earners.
But it's not a Democrat doing it.
I'm willing to do it if they want.
I would love to be able to give people in a lower bracket a big break.
His name is U .S. President Donald Trump and his game is appealing to voters on the right and potentially on the left. This is Swamp Notes, the weekly chat show from the Financial Times where we talk about U .S. politics, finance, and the economy.
I'm your host Mark Filippino and this week we're asking, where will Trump's populism take him?
Here with me to discuss is Rana Faroohar, our global business columnist. She's also an Associate Editor at The FT and the co -writer of our Swamp Notes newsletter.
Hey, Ronna. Hey. How are you?
Doing well. And we've also got James Polini.
He's the FT's Washington bureau chief.
Hey, James. Hey, Mark.
Great to be with you.
So, Ronna, let's start with you.
What's with this appeal to the left?
I mean, as best as you can tell, why are we seeing it now?
Well, I think the fact that his poll numbers have been so low.
The fact that we've just come through the aftermath of Liberation Day.
people are completely freaked out about markets, although they're up, they don't know they're going to stay there.
There have been some concerns about inflation.
Just the fact that you have this sort of new normal of 10 percent tariffs, even if they're being lowered as they were just in this recent US -China deal from triple digits, 10 percent is huge.
That's a sea change that's going to ripple through the economy for months, years, even decades, because tariffs tend to be quite difficult to get off once they're on.
So a lot of people are feeling insecure and so one thing I will say about Donald Trump that I admire is his animal -like instinct to understand where fear is, where anxiety is and that is where he gravitates.
Yeah James, tell me a little bit more about who Trump is trying to appeal to and what he's actually saying here.
Well I mean, Trump is trying to he's plucking out some of the more popular policies that Democrats have embraced, and he's kind of grabbing them for his own benefit.
And I think he's trying to appeal to the crossover voters who were previously democrats who came to him in the 2024 election.
And, James, what kind of measures are we talking about here?
Well, within the space of a week, we've had Trump come out in favor of raising the top income tax bracket from 37 % — where it is now — to almost 40 % for individuals that are earning more than $2 .5 million, which is quite a high threshold.
And then on Monday, he signed an executive order on drug prices with a plan to try to force drug companies to bring down their drug prices domestically and globally try to put of pressure on governments around the world to increase their own drug prices to create some kind of equalization mechanism.
And at the same time, he threatened to put export restrictions on U .S. pharma companies that are trying to export internationally to countries which have lower drug prices.
And he said that for companies that do not comply, he sort of laid the groundwork for the Federal Trade Commission to launch investigations into anti -competitive practices in the sector, essentially price fixing or price gouging or whatever kind of practices are considered illegal or not appropriate.
Right, so he's really taking the page out of, it sounds like the page out of the playbook of two people here, Vermont Senator Bernie Sanders, who is a former presidential candidate and New York Congresswoman Alexandria Ocasio -Cortez, AOC.
These are much more left -wing figures who promote much more left -wing policies.
And, you know, it's also important for me to mention that this is happening against the backdrop of negotiations over a budget bill.
But Rana, there have been other things too, right?
Not just drug prices, not just taxes.
You, in a recent article, described the proposed tariff on the movie business as a populist move.
Now aren't we talking about him appealing to the Hollywood liberal elite here?
That really took me.
Well, here's the thing though.
If you spend much time in LA, LA is actually, in many places, a middle and even lower middle class city.
And there are a lot of workers in film, people that are doing the rigs and the grips, the camera operators.
There's an entire service industry built around the movies and built around the people that run the movies.
Those people have seen many of their jobs either done by technology or even going overseas to cheaper production areas like Eastern Europe, Canada, point being, there is a, what I would call a precariat that is in Hollywood and around Hollywood and near Orange County, which is a big, MAGA hot spot, that is willing to hear this sort of classic Trump, you know, here's a problem that you're anxious about, I've got the solution.
I'm going to slap tariffs on movies.
Well, economically that is not a solution because guess what?
Hollywood makes most of its money overseas, and it would be very easy for other countries to put on retaliatory tariffs.
And by the way, domestic content in most countries has been advancing for the last 10, 20, 30 years.
So, you know, there are alternatives.
What I find so interesting about this though is the political savvy of it.
And by the way, the actor's strikes and the writer's strikes were all about this.
It was about AI is gonna do our job.
Can we have control over the pie?
That phenomenon is coming to this industry that we're in, it's coming to software, it's coming to finance, it's coming to healthcare, it's coming to the law profession.
I can imagine so many other communities, industries and cities where Trump could go in the next two to four years and say, ooh, you have to be worried.
Your job's going. Your future is not as bright as the past. Here I've got the solution.
One thing that you mentioned in your piece that shouldn't be overlooked is that, a lot of these jobs are union jobs.
So not only is he appealing to people with anxiety over just general financial situations, but he's appealing to a union base that many would argue Democrats have kind of floated away from over the course of time.
And, you know, it's interesting to me then in this last presidential for the first time you saw, um, one big union and teamsters pulling away and saying, we're actually not going to endorse Democrats.
I mean, that was huge.
So James, what did Democrats do about this?
How are they handling the fact that President Trump is supporting their policies?
Do they back his push for things like lower drug prices, even though it's coming from a guy that they've kind of villainized?
There's been a kind of, a lot of focus in the last few days on the 2024 election, rehashing the 24 election and Joe Biden and his age.
But also, I'm sure Rana, you'll be thinking, as I have thought in the last few days, about Kamala Harris' kind of pivot to the center on economics starting at about August 15th of last year and sort of reflecting on that pivot to the center on economic policies rather than taking a very kind of strong populist economic message to voters.
And now seeing Trump embracing, for instance, tougher FTC, DOJ price gouging enforcement, which was derided by many Democrats as being too far to the left when she proposed it for grocery prices.
It makes you think that, wow, that must have been quite a mistake and quite out of tune with the sort of popular sentiment at the time.
And it seemed a clever pivot, but it actually maybe was actually exactly the wrong pivot.
I 100 % agree. And James, it's interesting.
Like, I don't know what you think, but I feel like most of our peers in the US media and generally in the Beltway don't quite have that opinion yet.
Democrats don't have that finger to the wind.
Whereas Trump, like him or not, I mean, he's got that.
James, I wanna go back to Trump himself touting these policies.
So far, in a little bit more than a hundred days, We've seen a lot of change on Trump's stance, whether it's how hard he goes on Doge, and then a few other things regarding tariffs most recently.
Are these policy platforms that he's touting right now, are they gonna be here in three or six months?
Well, I mean, it's hard to tell.
In some ways, he hasn't, you know, put his full weight onto, for example, the plan to tax the wealthiest Americans.
He said it, it's off the cuff.
The White House has confirmed that it's White House policy, but he isn't out there saying, this must be done like this, or else I won't sign the tax bill.
And actually, interestingly enough, the Ways and Means Committee, which is a tax -writing committee in the House of Representatives, has just put forth their version of the tax bill, and it does not include an increase in taxes for the wealthy.
That's a pretty telling sign that, you know, when push comes to shove, Trump may not be as populist as he seems. What he does like is to present himself as a populist. And I think that that's where the Democrats have an opening in saying, look, yes, he's saying that he wants this.
He wants lower drug prices.
He wants, you know, higher taxes on the rich. but actually the bill that he's going to eventually be signing is one that kind of guts the social safety net that actually extends a lot of tax breaks and tax benefits for, you know, upper -income households.
And so, sort of, the proof is in the pudding.
And I think that's where the opening is for the Democrats and, in a way, has always been to say, well, this is kind of phony populism.
It's not actually going to help you.
and he's just doing it for show.
I'm going to bring up the midterms, even though they are a year and a half away, which sounds like a really long time, but in reality, it's not that far off.
Do we have a sense of whether or not these policies could impact the midterm elections in 2026?
I mean, my gut is it's just way too early.
I mean, the new cycle is so compressed now and so much can happen.
So much can happen.
And frankly, just to pull back the lens a little bit on the 35 ,000 foot kind of macro view, this summer alone is going to be a big tell on what 10 % tariffs, as the new normal looks like, and what kind of a demand and supply side shock is that going to be.
Because summer's when most people travel and incur a lot of these costs, right?
Well, that's certainly one reason, but basically it's when the rubber is going to meet the road.
I mean, we've just in the last couple of weeks had the first shipments coming in that are in the new tariff regime.
It takes a little time for inventory to trickle through for customers to be buying products at a higher price.
So what's that going to look like in the summer?
What's it going to look like in Q3?
That's where professional investors are really looking before they actually get back into the market.
that's another thing that you know the dips and the buys that you're seeing, this has been being driven by retail investors.
The professionals are still on the sidelines saying, we're not so sure what's going to happen in the next few years.
Definitely a little bit more cautious.
James, that's the economic side of things.
What about politically?
Do you think this messaging will carry over to the midterms?
Well, I think we know that from 2018, the democrats won back the house, not just because of a backlash to Trump as a sort of figurehead and his character and all the rest, but very specifically because they won the argument on taxes that the 2017 tax cuts were just a give away to the rich. That was a very effective message.
And they won the argument on health care too, very effectively because they argued that Trump wanted to get rid of Obamacare and they had solutions for bringing down drug prices and giving more access to medical care.
And those were the two policies that kind of really sunk Trump and the Republicans in 2018.
And I think Trump is trying to get ahead of that by trying to neutralize, disarm those arguments well ahead of time.
They know that they're going to be vulnerable on trade and tariffs, if there's a hit to the economy, if there's higher inflation, but they also don't want to be in a position and where their landmark legislation, which is the tax bill, gets put into every single ad that the Democrats use as a giveaway to the rich. So I think that the arguments are starting to take shape, even though we're kind of, you know, months away.
All right, guys, we are going to take a quick break.
And then when we come back, we're going to do out of the swamp.
When investors make a big decision … that has a real -life impact.
I'm Michaela Tundera, host of Behind The Money, a podcast from the Financial Times.
Every week, we tell one story that'll help you make sense of this moment in business news and finance.
alienating our allies to something that will hurt the United States, and it will hurt the treasury market.
There's no way of really playing this down even though China's putting on a brave face.
Follow Behind the Money wherever you listen to podcasts.
We are back with Out of the Swamp where we ask our guests to talk about something they're watching outside of Washington politics, which I hope you both find refreshing.
Rana, let's start with you.
What do you got? Yeah, I'm by this new Bank of America study that came out a couple of weeks ago showing that Gen Z is on track to be the largest and richest generation within the next few years.
And this is fascinating to me, yeah.
Because, you know, I have had a kind of a global idea that younger people simply have not seen the kind of wealth creation that the boomers did.
They're not as invested in asset markets.
And so, I think, I thought, think, not sure yet, that, that was going to make them swing more populist, more towards the Bernie AOC camp and have less invested in the system.
If you start to see that actually there is wealth creation amongst younger people, that could tip the political calculus.
One thing I will say that is concerning though, that a lot of it is becoming more and more concentrated.
Basically, if you're in tech or finance, you're doing great.
But even in professions like the legal profession or medicine that used to be routes to, if if not the 1%, at least the 5%, the 10%, not so much anymore.
So you're seeing a lot more compression, which could also fuel again, some of the populism that we've seen in recent years.
That is really interesting.
James, what about you?
What are you thinking about that isn't related to the Trump administration?
Well, I'm thinking about the Pope.
Having formerly been Rome bureau chief and jealous that I didn't get to cover a single conclave while I was there.
That was a bummer, yeah.
But also fascinated by this American Pope who kind of is in the small Venn diagram of White Sox fans and A .S.
Roma fans, that's my soccer team.
Which he confessed to being.
And he's a social liberal, right?
He cares about the poor, he cares about migrants.
Yes, cares about the poor, cares about the migrants.
But also very interesting, how he's going to position himself, especially with regards to American Catholicism, is knowing that there's this big rift between the right and the left among American Catholics, and so I'm fascinated by that dynamic.
I am also fascinated by the Pope developments, especially the Midwest angle, especially that he is a White Sox fan because the Pope is all about helping the needy and there is nobody in more need than the Chicago White Sox.
Nice. Nice pivot, Mark.
Thank you. Good one.
I want to thank our guests.
James Pleady is the FT's Washington bureau chief.
Thanks, James. Thank you.
And Rana Foroohar writes the Swamp Notes newsletter for the FT. She's also a business columnist and associate editor.
Thanks so much, Rana.
Thanks, as always. This was Swamp Notes, the U .S. politics show from the Financial Times.
If you want to sign up for the Swamp Notes newsletter, we've got a link to that in the show notes, our show is mixed by Sam Giaminco and produced by Katya Kymkova.
We had help this week from Sonia Hudson.
Special thanks to Pierre Nicholson.
I'm your host, Mark Filipino, our acting co -head of audio is Tova Forhez, original music by Hannes Brown.
Check back next week for more US political analysis from the Financial Times.
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