This issue hurts Trump more than any other. His panicky lies show he knows it
The latest gauge on inflation, released on Monday morning, showed prices increasing 2.7 percent in December compared with the same period a year ago. Food prices were up 3.1 percent. (Reminder: Trump was elected on two issues: bringing prices down, especially food, and avoiding foreign entanglements.)
On Tuesday, Trump traveled to Detroit to deliver an address to the Detroit Economic Club. It was about “affordability” and he filled it with lies — such as Americans aren’t paying for his tariffs (of course they are) and inflation was “way, way, down” (it’s about the same as it was when he took office).
And he insisted that “affordability” is a “fake word by Democrats.” Unfortunately for Trump, “affordability” has become even more politically potent than immigration or crime. And in his first year at the helm, he’s made America less affordable.
He’s also been putting forward some ass-backward ideas for bringing down prices that will actually increase them. His biggest: Fire the current chair of the Federal Reserve Board and install a chair who’ll lower interest rates and thereby, in Trump’s addled brain, bring down the costs of borrowing to buy homes and cars. (In his speech on Tuesday, he called Fed chair Jerome Powell Powell, a “jerk.”)
Trump’s decision to open up a criminal investigation of Powell is a bizarre escalation of his pressure campaign against the central bank to cut interest rates. And it’s truly ass-backwards. Without an independent Fed committed to using interest rates to fight inflation, everyone who buys or sells or invests will have to assume the risk of runaway prices in the future. The result is a risk “premium” that makes everything more expensive instead of more affordable.
What should be done to make America more affordable? Ten commonsense initiatives:
1. Get rid of Trump’s tariffs
Trump’s blanket, unpredictable, on-again-off-again, gigantic and then sometimes modest tariffs have caused prices to jump on just about everything. That’s because tariffs are import taxes that are paid by the companies that do the importing and by their consumers.
Tariffs can be a tool to create American jobs, but only if they’re used in a targeted and responsible way. Targeted and responsible are two adjectives that no one uses in describing Trump’s tariffs.
The first step to make life more affordable for the average American is to get rid of them.
2. Bust up monopolies
Trump’s overriding goal is to boost share prices. He doesn’t seem to understand that most Americans aren’t directly affected by share prices: Over 90 percent of the value of shares held by Americans is held by the richest 10 percent; over half by the richest 1 percent.
In pursuit of high share prices, Trump has essentially given up on antitrust enforcement. Big corporations are now merging and buying up potential competitors at a rapid rate. But this means less competition, and less competition results in higher prices.
It’s another ass-backward approach to affordability. Trump’s overriding goal of high share prices collides with what should be the real goal: keeping prices low.
A real affordability agenda would bust up big corporations that dominate their industries and prohibit price gouging.
3. Fight for stronger unions
Trump hates unions and has done everything he can do to weaken the National Labor Relations Board and the Labor Department. He’s given free rein to corporate union-busting.
Here again, Trump’s goal of high share prices and corporate profitability is at direct odds with the needs of average workers for higher wages, which are necessary if the goods and services they require are to become more affordable to them.
Workers need more bargaining power to get higher wages. Unions do that. A real affordability agenda therefore would make it easier for workers to start or join them.
4. Raise the national minimum wage
For the same reason Trump believes unions and higher wages are bad for the economy — that is, his definition of the economy, which is the stock market — he’s been dead set against raising the national minimum wage.
But the federal minimum wage has been stuck at a measly $7.25 since 2009. Raise the damn wage. And raise it even higher for employees of big corporations that pay their top executives hundreds of times more than their workers.
5. Pass Medicare For All
Trump has been trying to destroy the Affordable Care Act because it was passed under his predecessor, Barack Obama. His latest gambit has been to block any extension of the subsidies that Americans need to be able to afford health insurance under the ACA. (The fight over this issue resulted in the longest government shutdown in history.)
Without those subsidies, the typical American will be paying 30 to 100 percent more for health insurance this year than last — which is already driving many people out of the ACA marketplace and forcing them to live without health insurance at all.
Extending ACA subsidies is necessary but not sufficient. A real affordability agenda would make Medicare available to all Americans. This will bring down health care costs for everyone, because Medicare is cheaper and more efficient than for-profit health insurance.
6. Make housing more affordable
Last Wednesday, Trump called for a ban on institutional investors buying single-family housing. I suppose it’s nice that he’s finally gotten around to this, but I’ll believe it when he actually signs the legislation.
A real affordability agenda would ban Wall Street firms from buying up housing, crack down on corporate landlords that collude to jack up rent prices, get rid of zoning laws that make it harder to build homes, and increase funding to boost the construction of housing in cities that need it most.
7. Make child care and elder care more affordable
The costs of child care take a third of the incomes of parents with young children, on average. The costs of elder care can be even higher for working people with elderly parents. Both are essential for working families.
An affordability agenda would include a universal child care program for parents and boost funding for caregivers of aging parents.
8. Give Americans paid leave
Here again, the goal of fat corporate profits and high share prices collides with what American workers need. Trump consistently opts for the former and argues that the nation “can’t afford” paid family leave.
Baloney. We’re the richest country in the world. Every other advanced nation provides paid leave. Working Americans need it. We should provide it, too.
9. Stop Big Finance siphoning off people’s incomes
Trump has deregulated big banks and allowed them to charge up to 30 percent interest on credit cards. (The banks love it because credit cards provide them with four times the return of any other line of business.) Trump has gotten rid of the Consumer Financial Protection Bureau, which stopped other sleazy financial practices. And he’s allowed more consolidation of big financial institutions, which means even less competition, higher prices, and shadier deals. (His Justice Department recently approved the merger of Capital One and Discover, which will pile even more debt on low-income consumers.)
The captains of Wall Street have never had it so good. JPMorgan CEO Jamie Dimon made $770 million last year. But average working people are being shafted.
A real affordability agenda would cap credit card interest rates at 5 percent, stop the banks from charging late fees on unsuspecting consumers (Trump’s OMB director, Russ Vought, withdrew the late fee rule in April), and bust up the biggest banks whose market power is allowing them to charge absurdly high interest rates on all borrowing.
10. Raise taxes on the wealthiest Americans and corporations
Besides tariffs, Trump’s economic policy has cut taxes mainly on wealthy individuals and big corporations. He’s imbibed the “trickle-down” Kool-Aid that assumes tax cuts at the top make everyone better off.
The reality, as we’ve learned since Trump’s first tax cut mostly benefiting the wealthy and big corporations (as we should have learned from Ronald Reagan’s and George W. Bush’s trickle-down tax cuts also mainly benefiting the rich and big corporations) is that nothing trickles down. Trickle-down economics is a cruel sham.
The cumulative effects of all these tax cuts has been to make America’s rich far richer — now owning a record share of the nation’s wealth — and big corporations far more profitable (corporate profits are also near record levels), while dramatically enlarging the national debt.
And what do we get with a bigger debt? More inflation, which makes everything less affordable. Again, Trump has it ass-backward.
It’s time we ended the trickle-down hoax once and for all.
Besides, it’s only fair that the super rich pay more in taxes so that the rest of America can afford what Americans need: housing, health care, child care and elder care.
And by the way, even after paying more in taxes, the rich will still be richer than they’ve ever been, and giant corporations will still be exceedingly profitable.
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These 10 steps are crucial for making America affordable again. Don’t fall for Trump’s ass-backward agenda, which will only make the rich richer and big corporations more profitable. You and I and everyone who wants to lower the cost of living for Americans should back the real affordability agenda.
Please share this with any Democrat or independent (hell, share it with any Republican) interested in running for office and improving Americans’ standard of living.
- Robert Reich is a emeritus professor of public policy at Berkeley and former secretary of labor. His writings can be found at https://robertreich.substack.com/.
- Robert Reich's new memoir, Coming Up Short, can be found wherever you buy books. You can also support local bookstores nationally by ordering the book at bookshop.org
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