CNBC guest Derek Thompson forced to give a frustrated explanation to host about why crashing markets are bad
Derek Thompson: “I cannot believe what I’m listening to. I heard your last guest say if the economy shrinks, that’s good. If the stock market goes down, that’s good. If the housing market crashes, that’s good.”
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From the April 4, 2025, edition of CNBC's Power Lunch
KELLY EVANS (CO-HOST): So what's the strategy here, and how does the public feel about it? Well, let's bring in Derek Thompson. He's a writer at The Atlantic and coauthor of the new book, Abundance. Alright, Derek, have at it. I mean, where do we start? Do we say, well, the stock market reaction is one thing, but we're trying to do something different for this country.
We're trying to make housing affordable again, and I don't know. Where is your — where would you point our attention?
DEREK THOMPSON (AUTHOR): To be totally honest, Kelly, I've been listening the last 10 minutes of this show. I cannot believe what I'm listening to. I heard your last guest say if the economy shrinks, that's good. If the stock market goes down, that's good. If the housing market crashes, that's good. If there's a trade war, that's good. When did the capital class get taken over by degrowther protectionists seeking 19th century autarky?
EVANS: OK. But, Derek, let me just jump in for a second. Because if there's one refrain we've heard from millennials over the past several years, it's that the dream is gone. They can't afford a house. Groceries are too expensive.
TYLER MATHISEN (CO-HOST): It's literally the first chapter of Abundance.
EVANS: It's apparently the first chapter of your book. So aren't you a little surprised to hear the globalist, the pro stock market types who are supposed to be at fault for all of this, now reading out of your book and saying we're bringing prices back down?
THOMPSON: They're — no. They're crashing the economy. That's very, very different than making housing affordable. If you want affordable housing, you need a job. If you crash the economy, you're going to have unemployment.
And whenever unemployment hits an economy, as we just saw in 2008 and we saw before in the 1990s, who loses their jobs first? It's last one and first one out. It's young people. So if your job or if your plan is to crash the economy in the short term for the purpose of helping young people afford a house, you have got it totally backward. Young people need jobs, they need money, and then they need a plan to make housing affordable, right?
Donald Trump could have come into office and said, what I want to do is to make the construction of housing affordable. That means the inputs to housing. Instead, he slaps a 25% tariff on Canada, which we import our lumber from, and a 25% tariff on Mexico that we get drywall gypsum from, thus immediately raising two of the most important inputs for housing by 25%. This is a strategy to make housing less affordable at the same time that you make it harder for young people to keep a job because the stock market's puking.
This is not the way to go about abundance. This is scarcity meeting scarcity. This is Trump saying we don't have enough housing, so, you know, we need fewer immigrants. Or we don't have manufacturing in the U.S., so we need less trade. Abundance is a positive sum way of looking at the economy.
It says we can grow if we invest in housing. We can have a strategy that seeks to make more of what we need in the U.S. without trying to cut ourselves off from the entire global economy. I completely reject the idea that what Trump is pursuing is anything like abundance.