{"id":1029158,"date":"2024-01-07T20:35:34","date_gmt":"2024-01-07T20:35:34","guid":{"rendered":"https:\/\/democrats.org\/?p=1029158"},"modified":"2024-05-23T19:57:08","modified_gmt":"2024-05-23T19:57:08","slug":"icymi-washington-post-trump-is-promising-to-reduce-inflation-his-plans-may-reignite-it","status":"publish","type":"post","link":"https:\/\/democrats.org\/news\/icymi-washington-post-trump-is-promising-to-reduce-inflation-his-plans-may-reignite-it\/","title":{"rendered":"ICYMI: Washington Post: Trump is promising to reduce inflation. His plans may reignite it."},"content":{"rendered":"\n<figure class=\"wp-block-image size-large\"><img loading=\"lazy\" decoding=\"async\" height=\"341\" width=\"1024\" src=\"https:\/\/democrats.org\/wp-content\/uploads\/2024\/05\/War-Room-Master-Image.png?w=1024\" alt=\"\" class=\"wp-image-1031397\" srcset=\"https:\/\/democrats.org\/wp-content\/uploads\/2024\/05\/War-Room-Master-Image.png 1500w, https:\/\/democrats.org\/wp-content\/uploads\/2024\/05\/War-Room-Master-Image.png?resize=300,100 300w, https:\/\/democrats.org\/wp-content\/uploads\/2024\/05\/War-Room-Master-Image.png?resize=768,256 768w, https:\/\/democrats.org\/wp-content\/uploads\/2024\/05\/War-Room-Master-Image.png?resize=1024,341 1024w\" sizes=\"auto, (max-width: 1024px) 100vw, 1024px\" \/><\/figure>\n\n\n\n<p><strong>Key Point: <\/strong><em>\u201cIf elected, Trump would inherit an economy that has proved surprisingly strong but still remains vulnerable to new shocks\u2026 many analysts fear that Trump\u2019s approach \u2014 intensifying the impulsive and chaotic management of his first term \u2014 could further unsettle an economy still finding its footing after the disruptions of the pandemic.\u201d<\/em><\/p>\n\n\n\n<p><a href=\"https:\/\/www.washingtonpost.com\/business\/2024\/01\/07\/trump-economy-inflation-biden-campaign\/\"><strong>Washington Post<\/strong><\/a><strong>: Trump is promising to reduce inflation. His plans may reignite it.<\/strong><\/p>\n\n\n\n<p>[Jeff Stein, 1\/07\/24]<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Donald Trump is vowing sweeping changes to the nation\u2019s economy that threaten to reignite inflation \u2014 even as the former president blames President Biden for higher prices and says he\u2019ll bring the problem under control.<\/li>\n<\/ul>\n\n\n\n<ul class=\"wp-block-list\">\n<li>With a substantial lead in the 2024 GOP presidential primary days before the Iowa caucuses, Trump has proposed <a href=\"https:\/\/www.washingtonpost.com\/business\/2023\/08\/22\/trump-trade-tariffs\/?itid=lk_inline_manual_2\">imposing unprecedented new tariffs on trillions of dollars worth of imports<\/a> and <a href=\"https:\/\/www.washingtonpost.com\/politics\/2023\/12\/22\/trump-campaign-immigrants-mass-deportations\/?itid=lk_inline_manual_2\">deporting<\/a> undocumented workers on a vast scale. <strong>Both campaign pledges risk exacerbating the price spikes that have subsided over the last year, according to liberal and conservative economists alike<\/strong>, in addition to some estimates cited by the former president\u2019s own advisers. If he\u2019s elected, Trump could implement these policies at least in part without needing Congress to act.<\/li>\n<\/ul>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Trump\u2019s enormously disruptive policy proposals come as he appears likely to jettison the more cautious and establishment-friendly economic advisers that restrained his most nationalist and confrontational impulses during his first term.&nbsp;<\/li>\n<\/ul>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Trump\u2019s exact intentions on the economy remain hard to predict, in part because <strong>his trade proposals as stated would likely prove so unwieldy and painful for U.S. consumers<\/strong> that even some of the former president\u2019s allies say they are unlikely to ever fully go into effect. <strong>But they fit a broader pattern of Trump seeking to harness sweeping new executive powers to pursue what <\/strong><a href=\"https:\/\/www.washingtonpost.com\/elections\/2023\/04\/21\/trump-agenda-policies-2024\/?itid=lk_inline_manual_9\"><strong>critics have termed an \u201cauthoritarian\u201d agenda<\/strong><\/a> \u2014 even as attacking Biden over inflation remains one of his central campaign messages.<\/li>\n<\/ul>\n\n\n\n<ul class=\"wp-block-list\">\n<li>If elected, Trump would inherit an economy that has proved surprisingly strong but still remains vulnerable to new shocks. Although voters give the former president higher marks for his economic stewardship than they do Biden, <strong>many analysts fear that Trump\u2019s approach \u2014 intensifying the impulsive and chaotic management of his first term \u2014 could further unsettle an economy still finding its footing after the disruptions of the pandemic.<\/strong><\/li>\n<\/ul>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Casey B. Mulligan, who served as chief economist for Trump\u2019s White House Council of Economic Advisers, estimated in an interview that Trump\u2019s 10 percent import tariff proposal would add an extra percentage point to inflation, or a quarter percent a year if spread out over four years. The Federal Reserve has been trying to wrestle inflation down from four-decade highs to the more normal level of 2 percent. While the Fed has made significant progress, they are far from declaring victory, and routinely caution that any number of threats could upend their fight. (A new policy that adds a quarter-point per year would be one such threat.)<\/li>\n<\/ul>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Some estimates are even higher. Adam Posen, president of the Peterson Institute for International Economics, a Washington-based think tank, estimates that <strong>Trump\u2019s 10 percent tariff plan would increase the overall consumer price index by two to three percentage points, which would amount to roughly doubling the current pace of inflation.<\/strong><\/li>\n<\/ul>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Speaking to a crowd in Iowa in September, Trump said that he is planning \u201cthe largest domestic deportation operation\u201d in U.S. history if elected again. The former president has talked of wanting to forcibly deport millions of immigrants, echoing a 1950s enforcement campaign targeting Mexican field workers.<\/li>\n<\/ul>\n\n\n\n<ul class=\"wp-block-list\">\n<li>\u201cOne of the major differences between now and 2017 is in 2017 he pulled together a coalition that included most of the folks on the right and the business community from New York, which acted as a moderating voice,\u201d said Paul Winfree, an economist who served as director of budget policy during the Trump administration. <strong>\u201cA lot of the folks who acted as moderating influences have distanced themselves from Trump.\u201d<\/strong><\/li>\n<\/ul>\n\n\n\n<ul class=\"wp-block-list\">\n<li>This change in personnel could leave Trump free to pursue a mass deportation campaign regardless of its impact on businesses. Although economists are divided on whether restricting immigration would meaningfully increase inflation overall, many economists say mass deportations \u2014 beyond their devastating effect on individual lives and communities \u2014 would also almost certainly cause price spikes in particular sectors. <strong>Labor shortages would quickly emerge in residential construction, housekeeping, and agricultural work, particularly for fruit and other laborious forms of farm work, said Posen, the PIIE economist, driving up costs for consumers.<\/strong><\/li>\n<\/ul>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>\u201cIt would lead to very sudden spikes in prices of key goods like fresh produce, hotel rooms, and housing repairs,\u201d Posen said.<\/strong><\/li>\n<\/ul>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>\u201cThis would severely impact the ability of the meat and poultry industry to be able to produce the amount of meat and poultry we\u2019re used to in this country. We\u2019d have shortages, which would increase prices,\u201d <\/strong>said Debbie Berkowitz, a fellow at the Kalmanovitz Initiative for Labor and the Working Poor at Georgetown University.<\/li>\n<\/ul>\n\n\n\n<ul class=\"wp-block-list\">\n<li>That\u2019s when Trump fired off a scathing tweet: \u201cMy only question is, who is our bigger enemy, Jay Powell, or Chairman Xi?\u201d The jab \u2014 which followed months of Trump practically demanding the Fed to lower interest rates \u2014 <strong>sent financial markets tanking.<\/strong><\/li>\n<\/ul>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Even now, the story is a cautionary tale about what Trump\u2019s reemergence could mean for the central bank<\/strong>. Officials have been laser-focused on wrestling inflation down to normal levels, staying steadfast in their pledge to bring down inflation at any cost. Policymakers routinely say that letting prices keep increasing rapidly would make households and businesses worse off in the long run than raising interest rates has.<\/li>\n<\/ul>\n\n\n\n<ul class=\"wp-block-list\">\n<li>If Democrats retain control of the Senate, they could prevent Trump from stacking the Fed with his acolytes, as they did in rejecting Trump\u2019s 2019 attempt to elevate the pizza magnate Herman Cain to the board. But if Republicans take the majority, Trump could remake the central bank, particularly because some of the GOP officials who resisted his previous picks, such as former senator Patrick J. Toomey (Pa.), have since retired.<\/li>\n<\/ul>\n\n\n\n<ul class=\"wp-block-list\">\n<li>\u201cThe most successful economic institution in this country is the Fed; we have just seen how their independence and their credibility can work economic miracles,\u201d said Jason Furman, a Harvard economist who served in the Obama administration and stressed Trump could only influence the Fed if he fired or replaced Powell. <strong>\u201cIf Trump undermined their independence and their credibility \u2014 which he has proven he is quite likely to try to do \u2014 that could make it very difficult to keep inflation under control.\u201d<\/strong><\/li>\n<\/ul>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>But other economists caution that the Federal Reserve is supposed to be independent for a reason: The central bank must be willing to tackle inflation even if it causes short-term political pain for the nation\u2019s elected leaders. Trump has demonstrated his priority is preserving his own power, regardless of the costs to the Federal Reserve\u2019s credibility.<\/strong><\/li>\n<\/ul>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>\u201cTrump has made it very clear he wants to literally run everything, and he doesn\u2019t give a damn about central bank independence,\u201d said Dean Baker, a White House ally and economist at the Center for Economic and Policy Research, a left-leaning think tank. \u201cIf Trump is in the White House, the Fed is very likely to not have a free hand to fight inflation if they need to.\u201d<\/strong><\/li>\n<\/ul>\n","protected":false},"excerpt":{"rendered":"<p>Key Point: \u201cIf elected, Trump would inherit an economy that has proved surprisingly strong but still remains vulnerable to new shocks\u2026 many analysts fear that Trump\u2019s approach \u2014 intensifying the impulsive and chaotic management of his first term \u2014 could further unsettle an economy still finding its footing after the disruptions of the pandemic.\u201d Washington [&hellip;]<\/p>\n","protected":false},"author":263,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[1],"tags":[],"class_list":["post-1029158","post","type-post","status-publish","format-standard","hentry","category-press-release"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v26.0 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>ICYMI: Washington Post: Trump is promising to reduce inflation. His plans may reignite it. - Democrats<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/democrats.org\/news\/icymi-washington-post-trump-is-promising-to-reduce-inflation-his-plans-may-reignite-it\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:site_name\" content=\"Democrats\" \/>\n<meta property=\"article:published_time\" content=\"2024-01-07T20:35:34+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2024-05-23T19:57:08+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/democrats.org\/wp-content\/uploads\/2024\/05\/War-Room-Master-Image.png?w=1024\" \/>\n<meta name=\"author\" content=\"Claire DePree\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"Claire DePree\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"6 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"WebPage\",\"@id\":\"https:\/\/democrats.org\/news\/icymi-washington-post-trump-is-promising-to-reduce-inflation-his-plans-may-reignite-it\/\",\"url\":\"https:\/\/democrats.org\/news\/icymi-washington-post-trump-is-promising-to-reduce-inflation-his-plans-may-reignite-it\/\",\"name\":\"ICYMI: Washington Post: Trump is promising to reduce inflation. 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