Trump Is Falling Into the Same Trap That Ensnared Biden
Republicans learned nothing from how badly Dems bungled inflation.
THE PARTY IN POWER just lost an election because the party out of power hammered them hard for not cutting prices. If that sounds familiar, it’s because pretty much the same thing happened last year, except the antagonists have swapped places.
Turns out it’s easy to win while running as an outsider promising “affordability.” It’s much harder to actually do anything about it.
It’s doubly hard if you insist the problem doesn’t exist in the first place and suggest voters should just shut up about it. Triply hard if your economic policy agenda (cough-cough, tariffs) cuts in the opposite direction, making life more expensive.
In short, President Donald Trump and his fellow Republicans have learned nothing from how badly Joe Biden and the Democrats bungled inflation. Instead they’re repeating some of the same mistakes and adopting the same useless gimmicks. Only this time, they’re also pursuing policies that make the problem worse.
Affordability crisis? What crisis?
USUALLY TRUMP AND HIS ALLIES are great at creating their own alternative reality, and getting their voters to buy into it. Tax cuts pay for themselves? Sure. Horse dewormer cures your ills? Swell. Immigrants are eating your pets? You betcha.
This strategy is a bit more challenging when it comes to the cost of living, because voters presumably notice whether their grocery and electricity bills have gone up or down. Not that that has stopped the White House from trying.
In the past week, Trump has called complaints about affordability a “con job” orchestrated by the Democrats. Asked about voters’ anxiety on the economy—as documented in numerous polls—Trump told Fox News’s Laura Ingraham: “I think polls are fake. We have the greatest economy we’ve ever had.”
Not only that, he has stressed, but maybe prices are already falling!
As he explained to reporters last week, “The reason I don’t want to talk about affordability is because everybody knows that it’s far less expensive under Trump than it was under ‘Sleepy Joe Biden,’ and the prices are way down.” Republicans, he has said, can win on the issue if only they resolve to “talk about the fact that prices are down.” (To be clear, prices are not down. They’re still rising, up about 3 percent in September from a year earlier.)
In some ways this is a more strident version of what Biden and the Democrats did during the first year of his term.
For most of 2021—until, coincidentally, the weeks leading up to Thanksgiving—Democrats and allied commentators often downplayed or dismissed public concerns about inflation. The significance of rising inflation had been, well, inflated by media exaggeration, right-wing “propaganda,” and Republican lies, they stressed. Surrogates and pundits said stuff like this even as inflation seemed increasingly un-transitory, and continued shooting upward; in November 2021, the headline consumer price index was 6.9 percent higher than it was a year earlier.
CPI cooled significantly toward the end of Biden’s term but not enough to spare Democrats in 2024. Under Trump, it’s begun to tick back up. But luckily for him, his administration can at least temporarily dodge the damning data. The prolonged government shutdown has left the country in a statistical blackout, since the federal agencies that usually release measures on prices, jobs, GDP etc. have been shuttered. And even though the government has now reopened, it may take some time before those data releases resume.
Trump has decided to fill this void with rosier numbers, including by repeatedly citing a Walmart press release advertising a cheaper Thanksgiving meal bundle this year. Alas, that Walmart bundle includes less food and fewer name brands than it did a year prior, so is not exactly an apples-to-apples (squash-to-squash?) comparison.
Trump has also delivered up some other more appetizing data. On Monday, the White House blasted out DoorDash’s “State of Local Commerce” report as evidence “that inflation has been tamed,” because apparently breakfast foods ordered on the DoorDash app have gotten cheaper in the past year.
Look, proprietary data can certainly be helpful in understanding how the economy is doing. (I use private datasets all the time.) But there’s a reason why we don’t usually rely on self-serving corporate press releases as a wholesale replacement for the official federal stats. When it comes to prices, for instance, firms always have an incentive to say they’re offering an unbeatable deal right now. In any event, Trump’s efforts to gaslight Americans about grocery prices clearly isn’t working.1
The not-so-magic bullets
TRUMP’S APPROVAL RATINGS on the economy and inflation are going down those gilded toilets he has installed in the White House. So the administration is trying to pivot. His aides are reportedly contemplating sending him on a national tour to talk up his economic agenda. (Which again, sounds kinda familiar.)
Trump has also begun touting some “solutions” that may or may not be grounded in reality.
First is his idea to send out $2,000 stimulus checks. These checks would allegedly be funded by tariff revenue. There are a few problems with this plan, however.
Among them: The tariffs have not raised nearly enough revenue to cover the cost of this proposal. The Supreme Court is also expected to kill off most of the Trump tariffs in place anyway. And Congress would also have to agree to send out stimulus checks to households, which seems unlikely to happen. After all, we’ve run this stimmy experiment several times already in recent years—under both Biden and Trump 1.0—and those cash infusions likely contributed to the high inflation we’re still trying to stamp out today.
Then there’s Trump’s undercooked health care “plan.” As dedicated Bulwark readers know well, the enhanced subsidies for purchasing Obamacare marketplace insurance are about to expire. As a result, premiums are skyrocketing, and roughly 4 million people are estimated to become uninsured. Rather than extend those premium subsidies—as Democrats demanded during the prolonged shutdown fight—Trump has proposed siphoning money away from insurance plans and giving the cash to individuals for health care–related purchases.
It’s not totally clear what this would entail, and it’s always dangerous to spend more time analyzing a Trump policy than he spent coming up with it. It sounds sort of like an expanded Flexible Savings Account. Which already exists, and is not going to reduce health costs—particularly if paired with broader repeal of Affordable Care Act provisions, which Republicans are (again) eyeing. (Read my colleague Jonathan Cohn’s recent pieces on this.) Either way, it’s almost certainly not becoming law.
With even less elaboration, Trump has promised that he’ll get gas prices back to $2 per gallon, as they were during (part of) his last year in office. Of course there was also a global pandemic that year. People stopped driving to work, and businesses needed less energy, which caused fuel prices to plummet; I suppose we could find a way to replicate those circumstances, but few want to.
Finally, there’s housing. There are housing shortages nationwide, and homebuying is increasingly out of reach. We learned this week, for instance, that the median age of a first-time homebuyer just reached 40. Trump’s solution? A fifty-year mortgage. It’s not clear what problem this solves, exactly. It would result in slightly smaller monthly payments, sure. But it would lead borrowers to pay much more over the long run, and take much longer to build equity.
Meanwhile the obvious solutions Trump could adopt mostly involve reversing his own agenda. He could stop canceling all those energy projects around the country, for instance. He could stop deporting the agricultural workforce, which his own administration acknowledges is threatening higher food prices.
And he could cool it with the tariffs. The Yale Budget Lab estimates that current tariff levels raise costs by the equivalent of $1,800 for the average household, though we haven’t felt the full effect yet.
Trump sometimes seems to acknowledge this. The administration has started teasing plans to cut tariffs on certain grocery items as part of an effort to reduce food prices.
“You’re going to see some substantial announcement over the next couple of days in terms of things we don’t grow here in the United States, coffee being one of them,” Treasury Secretary Scott Bessent told Fox News. “Bananas, other fruits, things like that. So that will bring the prices down very quickly.”
Hot dog man would like a word.
How do you actually promote affordability in the long run?
ASIDE FROM REVERSING all those unforced errors, making people’s lives more affordable is legitimately challenging. Biden’s people came to understand this during the course of his administration. Trump’s team is experiencing that now.
In fact, despite Trump’s campaign promises, lowering prices overall is nearly impossible, unless the economy is in serious distress.2 The best we can reasonably hope for is slower price growth (as opposed to negative price growth).
In the long run the best ways to make life more “affordable” are to pass policies that boost productivity and wages; make the supply of things that are expensive—such as housing and energy—more plentiful; and perhaps provide targeted subsidies on specific expenses like health care.
But all those things are complex and hard to message. They also often require legislation, which itself requires complicated tradeoffs and ticking off various constituencies. It’s much easier to just make sweeping promises about sending out cash, freezing prices, cracking down on greed, and so on.
Which is part of the reason why you should be watching not only the GOP’s approach to affordability in the next year, but Democrats’ too. Because if Dems also start promising a bunch of stuff they can’t deliver, we might be back here once again come 2029.
Trump’s decisions to withhold food assistance and throw decadent Gatsby-themed ragers probably aren’t helping either.
Individual product prices might fluctuate in either direction and that’s normal. But if the overall price level is falling (known as “deflation”), it’s often a sign that demand has cratered and everyone is having a huge simultaneous fire sale in order to entice customers to start buying again. For example, the last time the U.S. economy experienced a major deflationary episode was in the early 1930s, during the Great Depression. Other famous examples include Japan in the 1990s or Greece in the 2010s.
Catherine, you outlined your piece as stating that the following is a blueprint to bungle the affordability issue : 1) Deny the problem exists. 2) Once you begrudgingly acknowledge it, propose some useless “solutions.” And then, 3) enact policies that make the problem worse.
I never was a Biden cheerleader, but please explain how his administration did any of the three. It may be fair to say that his administration "begrudgingly" acknowledged the issue of prices. They were also quite late in the game to acknowledge voters' concern about the border & illegal immigration.
But what solutions were "useless" and what policies "made it worse?" GDP was up & unemployment was down on Election Day.
There **is** an argument that Biden's expanded COVID relief and (especially) infrastructure spending juiced inflation . . . but that's essentially a conservative/libertarian type of position. Some Bulwark readers probably have fiscal hawk tendencies . . . but I can't think of a single Democrat or Democratic-leaning talking head who was encouraging Biden to spend **less.**
The anger towards Joe Manchin was that he was standing in the way of greater spending. The AOC/Bernie wing wanted infinitely more green energy spending.
And so on. Personally, I don't think the data is there to indicate the Biden Administration made inflation worse. As this piece notes, it was *down* come Election Day.
Now **messaging** is an entirely different matter. But the main point here seemed to be that they were "denial" and then--on the *policy* side--enacted measures that were either "useless" or "made the problem worse."
I don't think either were the case. At the end of the day, the core of the problem was COVID. It battered the economy & when the worst was over, pent-up public demand unleashed inflationary effects. Again, one can argue that gov't spending (first under Trump, mind you) made the inflationary effect worse . . . but I'd think you'd incur the wrath of Team Blue for suggesting so.
Intellectually, I agree with all of this. But MAGA so far, has demonstrated that they are insatiable for the lies. Jan 6. COVID. There's really no lie they won't swallow. Why will this be different?