Voters Are Not Happy With How Trump Is Handling Inflation

 

The charts above reflect the results of the Economist / YouGov Poll -- done between February 9th and 11th of a nationwide sample of 1,430 registered voters, with a 3.3 point margin of error.

The Public Doesn't Think Trump Is Doing Enough To Lower Prices

The chart above reflects the results of the CBS News / YouGov Poll -- done between February 5th and 7th of a nationwide sample of 2,175 adults, with a 2.5 point margin of error. 

Five Areas Economists Will Be Watching In 2025

 

The economy is good right now (although it could be fairer). With Trump as president the economy won't get any fairer, but it could get worse. Here are five areas that economists will be watching in 2025:

1. Tariffs

Trump’s plans to impose sweeping tariffs are likely to be one of the biggest threats to the economy, experts say.

The president-elect has vowed to penalize the country’s largest trading partners by levying tariffs — an extra 10 percent on Chinese goods and 25 percent on imports from Mexico and Canada — that economists say could quickly raise prices. The necessities that could soon be getting costlier range from big-ticket items such as cars and appliances to everyday basics like groceries and gas. During his campaign, Trump also discussed sweeping tariffs on all imports, not just from those countries, which would affect even more goods if implemented.

“Tariffs make things more expensive,” Alex Durante, an economist at the Tax Foundation, a right-leaning think tank, told The Washington Post. “They shrink the economy, and they make people poorer.”

2. Deportations

A recent surge in immigration has helped power economic growth and boost the job market. But economists say Trump’s plans to deport millions of undocumented migrants and curb immigration more broadly could hobble the labor market.

3. Tax cuts

The sweeping tax cuts Trump signed into law in his first term are set to expire at the end of 2025. Those will “almost certainly” be extended, according to Howard Gleckman, a senior fellow at the Tax Policy Center.

The gains, though, would be concentrated at the top: The wealthiest Americans would see the largest gains, with families making over $450,000 reaping nearly half the benefits if existing tax cuts are extended, according to an analysis by the Tax Policy Center.

4. Inflation

The Federal Reserve has made strides in bringing down inflation with a series of aggressive interest rate hikes. But lately, progress has stalled, and economists say it could unravel even further next year if Trump moves forward on some of his more draconian tariff and immigration plans.

Deutsche Bank estimates that one measure of inflation — now at 2.8 percent — could rise to as much as 3.9 percent next year if the new tariffs are enacted, up from original estimates of about 2.5 percent.

5. Stocks

During his last term, Trump routinely boasted about the stock market’s performance, which reached new highs under his watch. But economists say a repeat performance may be tough to pull off.

Stocks have continued their ascent under Biden, with all three major indexes — the S&P 500, Dow Jones Industrial Average and Nasdaq composite index — hitting all-time highs in recent weeks. That’s boosted the portfolios of the country’s wealthiest, allowing them to keep spending in a way that’s powering the economy.

But the market’s heyday may soon be coming to an end: Stocks tumbled after the Federal Reserve suggested in mid-December that it is rethinking how often it will cut interest rates next year. And economists warn that any additional curveballs, including government policies that hamper growth, could quickly reverse recent gains.

Trump Promised To Lower Grocery Prices - He Won't

 The following is part of a post by Dan Rather:

Trump clearly knows how to appeal to the electorate. He understood that high inflation and the promise to bring prices down were the most important issues facing Americans. He exploited the fear of economic uncertainty to win. Of the 70% of voters who said they were “very concerned” about prices, 6 in 10 cast their ballot for Trump.

On December 8, Trump crowed about it on NBC’s “Meet the Press.” “I won on groceries. A very simple word, ‘groceries.’”

Four days later, he backpedaled.

“Look, they got them up. I’d like to bring them down,” he told Time magazine. “It’s hard to bring things down once they’re up. You know, it’s very hard.”

So let’s get this straight. The president-elect is reneging on promises six weeks beforehe takes office.

Trump isn’t wrong about it being “hard.” Curbing inflation, slowing the rate of price increases, is difficult enough. But Trump is talking about deflation, actual price drops.

Those usually happen only during an economic downturn like a recession or a depression. Trust me, we don’t want either.

So it looks like all those people who voted for him, despite all the reasons not to, will be abandoned on aisle 6, in the hoodwink section. Because not only will Trump be unable to bring prices down from the day he “takes the oath of office,” most economists say his proposed policies, like imposing tariffs and deporting undocumented workers, would actually drive prices up — way up.

Trump, an Ivy League-educated, trust-fund billionaire, is an unlikely populist. A member of the 0.1% who has likely never been grocery shopping figured out how to appeal to Americans at the bottom of the economic ladder, with, it turns out, empty promises.

That bottom rung is getting larger. The wealth inequality in our country is astounding and worsening. In 1970, 61% of the U.S. population was considered middle class. It’s now down to 50% and shrinking. Today, the top 1% of Americans hold 31% of the wealth; the bottom half holds just 2.6%. We all might want to pause to fully consider those percentages.

Then there is this: According to the U.S. census the median household income in the United States was just over $80,000 a year in 2023. Half of all Americans earn less than that. No wonder the price of eggs, which has soared 37.5% in part because of an avian flu outbreak, is a big problem. Grocery prices have risen 28% in five years, according to the USDA. That is a stunning increase. Besides bird flu, supply-chain disruption and pent-up demand from the pandemic are among the problems. So is the war in Ukraine. Ukraine is normally a major grain supplier to the U.S.

Another factor is “greedflation.” Corporate profits have increased by 29% since the start of the pandemic; grocery prices have risen by almost the same percentage. According to the Groundwork Collaborative, this increase accounts for a large portion of the higher prices we are all paying. By their assessment, as much as 53 cents of every dollar spent can be attributed to corporate profit-taking.

Corporations are entitled to make profits, of course. Indeed, in our economic system we need them to be profitable. But how much is too much — especially considering the astronomical salaries of many corporate executives? According to the Economic Policy Institute, over the past 45 years, top CEO compensation increased by 1,085% (not a typo) while their typical worker’s salary inched up by just 24%.

Bending the truth and overpromising on the campaign trail are as American as cherry pie.

Basing a campaign on something you know you can’t make happen is a low reserved only for Trump. It will be worth watching what happens during the 2026 midterm elections if prices continue to rise on the most basic of necessities. Control of Congress could again hinge upon the price of eggs.

Biden Was Reducing Inflation - Trump Will Increase It

 

The policies of President Biden was working to reduce inflation. And it was not just gas prices, but inflation reduction for most other items, too.

Unfortunately, the MAGA cult (who refused to accept the truth) and low-information voters (who don't watch the news) combined to re-elect Donald Trump. 

Trump's stated agenda (huge tariffs on imported goods and mass deportations) will cause inflation to again start rising - probably by a huge margin.

These Products Will Be Affected By Trump's Tariffs On Mexico/Canada

 The following is from Newsweek:

If the tariffs are imposed, they could cost Americans an estimated $78 billion annually, NBC News reported, with everyday goods costing more.

Below are the seven major product categories that would be most affected.

Automobiles and Automotive Parts

Canada and Mexico are major suppliers of vehicles and parts, and many cars sold in the U.S. are assembled in those countries or use components sourced from them. Analysts have estimated that a tariff could add $1,000 to $5,000 to the price of a new car, with parts such as engines, transmissions and tires becoming more expensive. Replacement parts would also become more expensive because of the tariffs.

Agricultural Products

Canada and Mexico are also significant exporters of agricultural goods to the U.S., including fruits, vegetables, meat and dairy. A 25 percent tariff would make everyday staples such as avocados, tomatoes, beef and cheese more expensive for U.S. consumers.

Canadian beef exports across all markets are projected to total 595,000 tons this year, with about 80 percent destined for U.S. customers. Last year, the U.S. imported $2.7 billion worth of avocados from Mexico, the U.S. Department of Agriculture reported.

Electronics

Many electronics—including smartphones—are assembled in Mexico or rely on components manufactured there. Tariffs on electronics could lead to higher prices for consumer goods, especially devices such as TVs, laptops and home appliances that rely on Mexican manufacturing.

Mineral Fuels and Oils

Canada is the largest exporter of crude oil and refined petroleum to the U.S. A 25 percent tariff would increase fuel costs, affecting gas prices and heating oil. This means consumers would likely see higher prices at the pump, with several cents per gallon being added to gasoline and diesel prices.

Plastics and Plastic Products

Canada and Mexico supply a significant amount of plastic materials and products used in packaging, construction and consumer goods. Tariffs would raise costs for businesses and consumers across industries that rely on plastic.

Machinery and Industrial Equipment

Canada and Mexico also export heavy machinery, engines and industrial tools used in manufacturing and construction.

If Trump's tariffs are imposed, U.S. industries will face higher costs for equipment, such as industrial machinery, boilers and electrical equipment. The higher costs could slow down construction and manufacturing projects, which in turn could hit companies in those industries.

"If you voted for Trump because you thought he was going to bring down the cost of housing, a lot of our lumber, cement and other materials comes from Canada, which means that construction costs are going to go up," commentator Catherine Rampell said on CNN on Monday.

Aluminum and Steel Products

Canada is a top supplier of aluminum and steel, which are essential for construction, automotive manufacturing and packaging. Tariffs would raise the cost of raw materials, affecting industries that use these metals and even products such as soda cans.

It's Not Just Tariffs - Trump's Deportation Plan Will Also Increase Inflation

The following is part of a post by Nobel Prize-winning economist Paul Krugman in The New York Times:

For the past few years, over and over, voters have told pollsters and pundits that they’re hopping mad about inflation. Well, we just elected a president who, if he follows through on two of his central campaign promises — across-the-board tariffs and mass deportation of undocumented immigrants — will probably cause soaring inflation. . . .

I’ve written about the likely inflationary impact of Donald Trump’s policies. All of that still stands. But there’s an issue that I haven’t stressed as much as I probably should have: the specific effects of his proposed deportations on grocery and housing prices. . . .

With the economy starting from, essentially, full employment in his second term, Trump, with mass deportations, would degrade productive capacity, balloon deficits and — yes — bring inflation roaring back. . . .

Here’s what I mean: If you’re upset about grocery prices now, see what happens if Trump goes after a huge part of the agricultural work force; immigrants are around three-quarters of agricultural workers — and roughly half of them are undocumented. (And do you really doubt that many workers legally here will be caught up in Trump’s threatened dragnets?) Undocumented immigrants also play a large role in food processing. For example, they account for an estimated 30 to 50 percent of workers in meatpacking.

If these workers are deported, the food industry will probably have great difficulty replacing them. Even in the best case, the industry will have to offer much higher wages — and, of course, these higher wages will be passed on in higher prices.

(Oh, and while we produce most of what we eat, we also import a lot of food — whose prices would be raised by tariffs.)

And when it comes to the downstream economic effects of deportations, it’s not just about grocery prices; it’s also about the cost of housing. The answer to that problem is to build more housing units. But undocumented immigrants are more than a fifthof the construction work force, so deportations would severely hamper efforts to increase the housing supply. (And no, contrary to what JD Vance said, immigration hasn’t driven the recent spike in housing costs.)

Could we easily make up for the loss of these workers by replacing them with native-born workers? No. Employment among native-born adults in their prime working years is higher than it was at any point during Trump’s first term. There just isn’t a large pool of idle but employable native-born Americans to put to work. 

Voters Showed An Astounding Economic Ignorance

Exit polls showed that voters (especially those voting for Trump) thought Trump could fix the economy. They were particularly fond of his promise to fix inflation. They could not have been more wrong.

Trump has no policy proposals that would either fix the economy or reduce inflation. In fact, the opposite is true. Most economists agree that Trump proposals would actually make the economy worse (and maybe even wreck it) and increase inflation.

Two policies - mass deportation and stiff tariffs - will cause inflation to rise precipitously. 

Many industries depend on the immigrants to do jobs that Americans don't want (low-paying, dirty, and sometimes dangerous jobs). Deporting the immigrants with these jobs will hurt those industries - causing them to increase prices and make inflation even worse.

The tariffs on other nation's imports into this countries will act as a national sales tax - increasing the cost of these goods for consumers. And consumers couldn't avoid paying this new "tax", because there are many goods that are no longer produced in the United States. This will increase inflation - not lower it.

This is true of the cost of groceries. About 40% of vegetable and 60% of fruits sold in our supermarkets are imported. Consumers will have no choice but to pay the higher taxes.

Add this to the fact that Trump (and his Republican cohorts) would not raise the minimum wage (which would put upward pressure on all wages) - forcing many full-time workers to continue to live in poverty.

The rich will make out like bandits under Trump, because he wants to give them more massive tax cuts. But the working and middle classes will be hurt by the Trump agenda. 

The amount of economic ignorance his voters displayed by voting for him is amazing!

Economists Say Trump Policies Will Cause More Inflation Than Harris Policies

 The following is part of a post by Zeeshan Aleem at MSNBC.com: 

Much of the Republican case against a Kamala Harris presidency has rested on the claim that she’s responsible for — and would continue — policies that caused eye-watering inflation for people during the Biden administration. But a new survey of economists, conducted by The Wall Street Journal, finds that most economists believe that former President Donald Trump would pursue a more inflationary policy regime.

The Journal polled 50 economists as to whether they believed Harris’ or Trump’s proposed policies would cause higher inflation and found that 12% said Harris and 68% said Trump, while another 20% responded there would be no material difference between the two. Nobel Prize-winning economist Paul Krugman described the coalescing around Harris as less likely to produce high inflation as “as close to unanimity as the profession gets.”

More striking still: That survey represented a broader consensus pinning higher inflation on Trump than an earlier version of the survey in July, which compared Trump with Biden, since Biden was still the expected Democratic nominee at that time. In that earlier poll, 16% of economists said Biden would cause higher inflation, 56% answered Trump, and 27% said it would make no material difference. 

These survey results are damning for Trump, whose main pitch to voters outside of his diehard base is that his economic record is stronger than Biden and Harris’ — and that he alone can bring down high prices. And yet, the more economists are hearing about his plans, the more they’re convinced he’s more likely to cause prices to surge. . . .

The Journal’s poll is good news for Harris. Now a key task of the campaign is to make sure that ordinary citizens — especially the coveted low-information swing voter — understand that she should be the obvious preference for people worried about how expensive everything is

Trump's Tariffs Would Substantially Increase Inflation

 

From The Washington Post.

Tariffs Are A Tax On Americans - Not Foreign Nations

While campaigning in the 2016 election, Donald Trump said he would built a wall between the United States and Mexico - and Mexico would pay for the wall. It was a ridiculous assertion, and it did not come true. Only a few miles of that wall was ever built, and that was paid for by U.S. taxpayers - NOT Mexico.

Now he is trying to fool the American people again. He wants to continue his tax breaks - 82% of which went to the rich and super-rich. And he wants to pay for it by imposing tariffs on foreign goods entering the United States by between 10% and 60%.

He's upset because Democrats are telling the truth about his tariffs - that it just amount to a big tax on American consumers. He keeps saying that foreign countries will pay the tariff (tax) and not Americans.

He's either blatantly lying or he doesn't understand how basic economics work - or both!

Consider how a tariff works. The tariff is not imposed until the foreign goods enter this country (not when they are shipped). And who pays the tariff? That would be the American company that ordered the goods. And that company would recover the money they spent on a tariff by raising the price of goods when they sell them to the American consumer. 

That means if a 10% tariff is imposed, then the imported goods will cost the U.S. consumer an extra 10% in price. 

Now, a Republican might tell you to just buy products made or grown in the United States. But that is almost impossible to do. About 40% to 60% of the fruits and vegetables in our grocery stores are imported, and the price for them will be inflated. Also, there are many products that are not made in the United States (like TV's). If you buy one of these, the price will be inflated by the amount of the tariff.

Trump would like you to believe his tariff's would be paid by foreign countries - but that isn't true. His tariffs are nothing more than a tax on Americans - a tax that will make the already too high inflation even worse.

No One Willing To Work Should Be Paid A Poverty Wage

 Inflation has made life hard for everyone but the rich. While the rich get much richer, most other Americans are lucky if their wage gains can just equal the rising inflation.

Since 2009, inflation has driven prices up by 46.6%. A dollar today will only buy about 68% of what it would buy in 2009. It's no wonder that inflation is one of the major issues in the 2024 campaign.

But while everyone (except the rich) is hurt by this, no one is hurt more than workers making the national minimum wage. In 2009, the minimum wage was raised to $7.25 an hour (about $290 a week or $15,080 a year). That's a wage that keeps a worker in poverty.

It is estimated that a worker should pay no more than 25% to 30% of their income to rent an apartment. But there is no state in the country where workers making the minimum wage can rent a decent apartment. Housing alone will eat up most of the minimum wage - leaving little to nothing for food, transportation, and other expenses. Not for a single person and especially not for a family.

The minimum wage should be raised to a wage that will lift workers out of poverty. The most often mentioned figure is $15.00 an hour. You might think that's a big jump (more than double the current minimum wage). It is, but it's the minimum needed to lift workers out of poverty.

A $15.00 an hour minimum wage would be about $31,200 a year. That's still less than half of the country's median wage (about $75,000). But it would allow a family to rise out of poverty and have a minimally decent standard of living.

Democrats have been trying to raise the minimum wage for several years now, but they have been blocked at every turn by Republicans. While Republicans want to give billionaires more tax breaks, they don't care about the millions of hard-working Americans living in poverty.

Do you think people willing to work hard should be paid a wage that keeps them in poverty? If you don't, then you should go to the polls in November and vote to put a Democrat in the White House - and Democratic majorities in both houses of Congress. 

In a rich nation like the United States, all citizens should share in the rising productivity - not just the millionaires and billionaires.

Wage Gains/Government Spending Not Cause Of Inflation

 

Robert Reich exposes the Republican lies about what is causing inflation:

You’ve probably been told that the main causes of rising prices are wage gains and excessive government spending. Wrong. 

Prices have risen and remained high — especially in critical sectors such as energy, drugs, and food — largely because giant corporations have been raising their prices to increase their profits. 

They can do this because they face such little competition.

Worried about sky-high airfares and lousy service? That’s largely because airlines have merged from 12 carriers in 1980 to only four today.

Concerned about drug prices? Between 1995 and 2015, 60 leading pharmaceutical companies merged to only 10.

Upset about food costs? Four large companies now control 85 percent of beef processing, 70 percent of the pork market, and 54 percent of poultry.

Worried about grocery prices? Just three giants — Albertsons, Kroger, and Walmart — control 70 percent of the grocery sales in 167 cities.

And on and on through almost every sector of the economy, including rental housing, adtech, chemicals, and health care.

Monopolies can raise prices and keep them high because they don’t face enough competitors charging lower prices and grabbing consumers away.

 

Right now, the Federal Reserve Board has responsibility for fighting inflation. When prices rise, the Fed raises interest rates to slow the overall economy. 

But slowing the economy with high interest rates causes many people to lose jobs. It keeps wages low. And it raises credit card fees as well as the costs of home loans, car loans, and every other borrowing cost. These burdens fall especially hard on people with lower incomes. 

A better way to avoid inflation and lower prices would be to fight pricing power at its source: Break up monopolies with antitrust laws, so that a handful of giant companies can’t artificially raise their prices.

Instead of relying solely on the Federal Reserve Board to tame prices, we should rely on monopoly-busters at the Federal Trade Commission and the Antitrust Division of the Justice Department. 

Joe Biden’s appointees at the FTC and the Antitrust Division — Lina Khan and Jonathan Kanter, respectively — have been aggressive monopoly-busters, but much more needs to be done.

 

Will a President Kamala Harris keep the heat on?

Matt Stoller, on the Substack competition beat, believes she is likely to. He writes that Biden’s anti-monopolists have made so much progress to date — bringing cases against Amazon, Google, and Ticketmaster; halting the merger of Kroger and Albertsons; and issuing new rules on airlines, shipping, junk fees, credit cards, hearing aids, pharmaceuticals, and data — that the momentum would be hard to slow even if she wanted to. Moreover, the public has come to expect action against monopolies. 

Maybe it’s just the optimism of the moment, but I think Stoller is correct and that Harris as president would be as much an economic populist as Biden, if not more.