Another Friendly Reminder: Trump *Wants* To Increase Inflation
Literally and seriously!
As Yr Editrix pointed out in Tabs Friday morning, there are some really friggin’ unbelievable poll results in the first paragraph — the first three, actually! — of this Vox story by Eric Levitz, pointing to an NBC News poll from last weekend that showed voters think Donald Trump would do a lot better on inflation than Joe Biden has — by a shocking 22 points. This is because people are crazy and don’t know anything about Donald Trump’s proposed economic policies, which, to the surprise of many, actually exist.
But voters not knowing about what Trump’s planning certainly gives Biden the opportunity to shine a light on those plans and make them part of the campaign. That better be a very bright light, seeing as how the poll also said voters considered inflation the top “critical issue” the USA faces right now. (No, we will not digress into the many reasons to take polls with a grain of salt, valid though they may be. It’s worthwhile for Biden to hammer Trump on his shitty economic assumptions anyway.)
Now, while it’s true that Trump’s top policy priority is What’s In It For Trump?, Levitz goes on to point at actual policy plans from Trump lackeys who are still with him and have not yet been purged for disloyalty, and big surprise: They’ll all make life more expensive for ordinary Americans, because Trump’s goal is to help American businesses’ bottom lines. That’s where the campaign money comes from, silly!
So let’s take a look at the four big ideas Levitz shows Team Trump wants to pursue, at least until Trump himself changes his mind and decides barter is the best way to do things.
Big Idea 1: Weaken the Dollar
Levitz points out that one big reason the US has lower post-COVID inflation than the rest of the big wealthy countries is that our strong economic growth, combined with the higher interest rates the Fed imposed to cool the inflation spike of 2021-22, has made the dollar really strong, because our sovereign debt bonds are paying out better rates than other countries’ are.
A stronger dollar means imported goods are cheaper, so Americans have more buying power. But because a strong dollar is not so great for US companies that export stuff, Trump’s economic dweebs, according to Politico, are “actively debating ways to devalue the U.S. dollar” if he returns to office, right after he closes the border and announces he’s deported everyone, whether he has or not.
Per Levitz,
since Trump and his former trade representative, Robert Lighthizer, have long sought to boost American manufacturing and shrink the trade deficit, they’re prepared to privilege the interests of the nation’s producers over those of its consumers.
Lighthizer reportedly hopes to coerce other nations into strengthening the value of their currencies by threatening to impose tariffs on their exports if they don’t comply. Trump’s advisers are also mulling ways to weaken the dollar without foreign cooperation, according to Politico.
Personal anecdotage: The only time I ever paid any real attention to the value of the dollar was when I taught at Osaka University and was paid in yen. I’d try to wait for dips in the dollar’s value before converting my money to dollars and depositing it back in my credit union back in the US.
Anyhow, Levitz points out that Trump’s insistence on putting exports first via devaluing the dollar and doing some trade war again might be good for some US companies, but not so much for Americans over all, because “only about 8.6 percent of US workers are employed in the manufacturing sector” and would stand to do better if exports increase, while most of us probably have “a stronger immediate interest in affordable imports[.]”
Also too, there’s the whole thing where trade wars aren’t nearly as easy to win as Trump has always said, because whatever ideas about international trade are stuck in his head really are mired in the days of steamships and telegraphs.
Big Idea 2: Add A 10 Percent Tariff On All Imports
This is the one we first heard of, months ago, and that too many folks still don’t know about. Basically, Trump thinks American manufacturing would get a boost if literally everything imported into the US were slapped with a 10 percent tax that would be paid by Americans, no not by China, it does not work that way.
As Levitz points out, there are a few instances where some foreign countries might cut their prices, and thereby their profits, to keep access to the US market, but those tend to be rare, and besides, the US economy simply can’t produce everything we need domestically.
And even if tariffs did keep foreign competition down, the result for US consumers would be that
sheltered from foreign competition by tariffs, US manufacturers would be able to raise their prices considerably without risking a loss of customers. The result of all this would be a dramatic increase in consumer prices.
Donald Trump is very smart.
Big Idea 3: Extend Trump’s Big Fat Tax Cuts For Rich Fuckwads
Many of the 2017 tax cuts are set to expire by the end of 2025, and Republicans are already hot to keep them in place, even though they add to the deficit and the federal debt they say they absolutely hate when Democrats are in office. Keeping the full set of tax cuts in place would add $3.3 trillion with a “t” to the federal deficit over the next decade, per the conservative Tax Foundation.
But on top of that, Trump wants even more tax cuts for the wealthy and corporations, and maybe a cut to federal payroll taxes to “help” the middle class by gutting funding for Social Security and Medicare. The short-term boost in disposable income would do exactly what inflation hawks hate: boost inflation. But hey, the cuts to federal revenue would also mean deep cuts in spending, which would have to come from social programs because the military always needs more.
It’ll be paradise, just trust Trump and the rich, who will be fine.
Big Idea 4: Deport Everyone So There’ll Be A Huge Labor Shortage
No budget cuts for ICE, because Stephen Miller promises to be even crueler in a second Trump presidency, with massive deportations that will make real Americans happy until they notice that food and services now cost a hell of a lot more, never mind the misery and disruption that would result. As Levitz notes,
[E]ven Americans who have no empathy for their undocumented compatriots have economic incentives to oppose mass deportation.
As scholars at the Brookings Institution noted last fall, the upsurge in immigration since the pandemic is one major reason why the US managed to bring inflation down without suffering a recession: Foreign-born workers increased the economy’s productive capacity, helping supply to catch up with rising consumer demand.
Conversely, if America abruptly deported all undocumented workers, labor shortages would devastate myriad industries, from housing to agriculture to the care economy, and prices would soar.
That said, as American Immigration Council Policy Director Aaron Reichlin-Melnick noted in an excellent Twitter thread Thursday, actually deporting all the estimated 11 million to 15 million undocumented people in the US is kind of physically impossible, even if we magically could deport recent arrivals from countries that refuse to repatriate their nationals, like Venezuela and Cuba.
The most people ICE ever deported in a single year was 237,000 in 2019, under Trump, and if that rate could be reached again, it would take 42 to 63 years to remove everyone, assuming nobody new crosses the border ever again. But that’s OK, since if we suspend the Constitution, it could go a lot faster.
Oh, right, and the resulting labor shortage would make the end of the pandemic look like good times for employers by comparison, and inflation would skyrocket, at least until American women are forced to have at least six children each, which we’re sure is probably in a footnote of the Project 2025 playbook anyway.
The best thing about all this is that the inflation rate will be under two percent, because that’s what the remaining media outlets under Trump and his children will be told to report.
PREVIOUSLY!
[Vox / Politico / Aaron Reichlin-Melnick on Twitter]
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Weird.
I put the ingredients for pizza dough out on the counter like an hour ago, and they haven't done anything at all. Like, could you at least measure yourselves, please?
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