‘This Is Something That Traditional Economics Isn’t Prepared to Deal With’
About this episode
In a year-end wrap-up, Klein joins Bloomberg's Odd Lots hosts to make sense of 2025. They discuss Trump's 'Liberation Day' tariffs, which jolted markets yet were absorbed — firms spread costs across supply chains while executives parsed tariff schedules for hours — and debate whether tariffs were inflationary or disinflationary. They turn to the trade war with China, where Beijing's rare-earth chokepoint proved decisive, and to the AI build-out: tech capex is now a major driver of GDP growth, financed through opaque structures (debt, SPVs, circular Nvidia-OpenAI investments) that raise bubble questions. On labor, they describe a 'low hire, low fire' market and fear of AI substitution. They dissect the 'vibecession' — the divergence between rising incomes and plunging consumer sentiment — with Weisenthal's 'it's the phones' comparison-culture theory. They close embracing 'late-stage capitalism' discourse and asking whether America is building expensive AI 'cappuccino machines' while China brews cheap drip.