Trump looks ‘oddly, strangely’ like Biden in trying to downplay inflation, economist says

Like the president who preceded him, Trump is trying to convince the country of his plans to create jobs in factories. The Republican wants to reduce the cost of prescription drugs, as does Democratic President Joe Biden. Both attempted to shame companies for their price increases.

Trump is even relying on a message that echoes Biden’s 2021 claims that high inflation is just a “transitory” problem that will soon disappear.

“We’re going to get to 1.5% soon,” Trump told reporters Monday. “Everything is falling apart.”

Even as Trump keeps repeating that an economic boom is imminent, there are signs that he has already exhausted voters’ patience as his campaign promises to instantly fix inflation have not been kept.

Voters are growing frustrated with Trump’s inflation

Voters in this month’s election shifted heavily toward Democrats over concerns about affordability. That left Trump, who dismisses his weak polling on the economy as half-formed misconceptions to ease financial pressures.

He promised a $2,000 reduction in rates and said he could extend the mortgage term from 30 years to 50 years to reduce monthly payments. On Friday, Trump removed tariffs on beef, coffee, tea, fruit juices, cocoa, spices, bananas, oranges, tomatoes and some fertilizers, saying they “may, in some cases,” have contributed to rising prices.

But these are largely “gimmicky” measures and unlikely to make a difference on inflation, said Bharat Ramamurti, former deputy director of Biden’s National Economic Council.

“They’re in a very difficult position where they’ve developed a reputation for not caring enough about costs, where the tools they have are probably not going to be able to help people in the short term,” Ramamurti said.

Ramamurti said the Biden administration has learned the hard way that voters are not appeased by a president saying his policies will ultimately lead to an increase in their incomes.

“This argument finds no resonance,” he said. “Take it from me.”

How Inflation Hit Biden’s Presidency

Biden inherited an economy that was trying to rebound from the coronavirus pandemic, which closed schools and offices, causing mass layoffs and historic levels of government borrowing. In March 2021, he signed into law a $1.9 trillion relief package. Critics said this was excessive and could lead to higher prices.

As the economy reopened, there were shortages of computer chips, kitchen appliances, automobiles and even furniture. Cargo ships were stuck waiting to dock at ports, creating supply chain problems. Russia’s invasion of Ukraine in early 2022 drove up energy and food costs, and consumer prices in June of that year reached their highest level in four decades. The Federal Reserve raised its benchmark interest rates to curb inflation.

Biden tried to convince Americans that the economy was strong. “Bidenomics works,” Biden said in a 2023 speech. “Today, the United States recorded the highest rate of economic growth, leading the world’s economies since the pandemic. »

His arguments hardly influenced voters since in August 2023, only 36% of American adults approved of his management of the economy, according to a poll carried out at the time by the Associated Press-NORC Center for Public Affairs Research.

Trump could be his own worst enemy when it comes to inflation

Republicans have argued that Biden’s policies have made inflation worse. Democrats are using the same formula against Trump today.

Here’s their argument: Trump’s tariffs are being passed on to consumers in the form of higher prices; its cancellation of clean energy projects means there will be fewer new sources of electricity as utility bills climb; its mass deportations made building homes more expensive for the immigrant-heavy construction industry.

Biden administration officials note that Trump came to office with strong growth, a strong job market and inflation falling near historic levels, only to reverse those trends.

“It’s striking how many Americans are aware of his trade policies and rightly blame the price turnaround on that erratic policy,” said Gene Sperling, a senior Biden adviser who also led the National Economic Council during the Obama and Clinton administrations.

“He’s caught in a tough trap himself — and it’s unlikely to get any easier,” Sperling said.

Consumer prices had risen at an annual rate of 2.3% in April when Trump launched his tariffs, and that rate accelerated to 3% in September.

The inflationary surge has been less than what voters endured under Biden, but the political fallout so far appears to be similar: 67% of U.S. adults disapprove of Trump’s performance, according to data from a November AP-NORC poll.

“In both cases, the president caused a sizable share of the inflation,” said Michael Strain, director of economic policy studies at the American Enterprise Institute, a center-right think tank. “I think President Biden has not taken this concern seriously enough in his first months in office and President Trump is not taking this concern seriously enough right now.”

Strain noted that both presidents even responded to the dilemma in “strangely and eerily similar ways” by downplaying inflation as a problem, emphasizing other economic indicators and seeking to address concerns by issuing government checks.

The White House is betting its policies can control inflation

Trump officials argued that their combination of income tax cuts, tariff-linked foreign investment frameworks and changes in regulatory enforcement would lead to more factories and jobs. All this, they say, could increase the supply of goods and services and reduce the driving forces of inflation.

“The policies we’re pursuing right now are increasing supply,” Kevin Hassett, director of Trump’s National Economic Council, told the Economic Club of Washington on Wednesday.

The Fed lowered its benchmark interest rates, which could increase the money supply in the economy for investment. But the central bank did so because of a weak labor market, despite inflation above its 2% target, and some worry that rate cuts of the magnitude Trump wants could fuel inflation further.

Time may not be on Trump’s side

It takes time for consumer confidence to improve after the inflation rate falls, according to a study by Ryan Cummings, an economist who worked on Biden’s Council of Economic Advisers.

According to his interpretation of the University of Michigan Consumer Confidence Index, the effects of rising post-pandemic inflation are no longer a determining factor. Voters these days are frustrated because Trump led them to believe he could cut food prices and other spending, but failed to do so.

“When it comes to structural issues of affordability — housing, child care, education and health care — Trump has pushed in the wrong direction on all of them,” said Cummings, who is now chief of staff at the Stanford Economic Policy Research Institute.

He said Trump’s best chance of beating inflation now might be “if he gets a lucky break on commodity prices” thanks to a bumper global harvest and oil production that continues to outpace demand.

For now, Trump has decided to continue going after Biden for everything that’s wrong with the economy, as he did Monday in an interview with Fox News’ “The Ingraham Angle.”

“The problem is that Biden did this,” Trump said.