President Trump’s inflation trap
What can Donald Trump do to stop morphing into Joe Biden?
The two presidents could hardly be more different in most ways — but in the one that counts most with voters, Trump is in danger of resembling his predecessor.
Americans rejected Biden and the Democrats last year because they were incensed at the lousy state of the economy.
Right now, they’re not much happier with Trump’s economy.
Inflation was the No. 1 concern on voters’ minds last year, and it’s still a top concern today.
Trump’s team say they plan to tout “affordability” as a theme Republicans can win on in next November’s congressional midterms.
If the election were held today, that pitch wouldn’t sell:
An AP/NORC poll released last week found 67% of Americans view the president’s handling of the economy negatively.
Yet Trump told Politico’s Dasha Burns in a Dec. 8 interview he’d give himself an “A-plus” grade on the economy — and when she questioned that, he raised it to “A-plus-plus-plus-plus-plus.”
The administration thinks Americans will come around to Trump’s perspective on the economy sooner rather than later, and well ahead of the midterms.
Treasury Secretary Scott Bessent reassures his colleagues, and his boss, that come April 15 — when Americans see just what the permanent tax cuts Trump shepherded through Congress this year mean for them personally — everyone will feel great.
And Trump has a plan he thinks will guarantee a high-growth economy next year: getting the Federal Reserve to slash interest rates.
He told the Wall Street Journal last week he wants “the lowest rate in the world” — indeed “1% and maybe lower than that.”
Early next year, Trump is set to appoint a new Fed chairman.
He says of one leading candidate, Kevin Warsh, “He thinks you have to lower interest rates” and “so does everybody else that I’ve talked to.”
Lower rates mean easy credit, with businesses and individuals able to take out more loans to finance whatever improvements, new ventures or other spending they wish.
That sounds great — it’s almost free money! — but it’s a recipe for inflation.
The benefits Americans get from keeping more of the money they earn, thanks to Trump’s tax cuts, will be wiped out if inflation accelerates.
A Harvard/Harris poll last week found 57% of voters think Trump is losing the fight against inflation, and while that’s an improvement over last month, when 60% said the same, it’s a warning the administration can hardly afford to ignore.
If Trump gets inflation wrong, nothing he gets right will save the GOP next November — or in 2028.
The good news for Trump is that his overall approval ratings, in the low 40s, are a little higher than Barack Obama’s or George W. Bush’s at this point in their second terms.
The bad news is Obama and Bush both saw their side lose big in the next congressional elections, and neither man was succeeded in the White House by a member of his own party.
