Economist Justin Wolfers criticized President Donald Trump’s rhetoric on the rising prices, noting that his promises on the campaign trail were never realistic to begin with.
Trump’s ‘Original Sin’
On Sunday, Wolfers said that Trump’s “original sin” was telling voters that prices would fall, even though “in a healthy economy, they almost never do,” during his appearance on MS Now’s “Velshi.”
Wolfers said many Americans still hope for price declines because “the President promised prices would go back down.” But he noted that the typical pattern after a price surge is not deflation, but wage growth, something which does not seem to be taking place this time around, resulting in the current “affordability crisis.”
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“It was an irresponsible claim at the time, and hoping they’d live up to it would be dreadfully painful,” Wolfers said, referring to Trump’s promises during his Presidential campaign last year.
He added that current price pressures are tied to higher business costs, or what economists call a supply shock. “Here you might think about tariffs or lack of availability [of] immigrant labor,” he said. Because employers face higher costs, “there’s no extra money to pay for a pay rise.”
Economists Warn of ‘Serious Affordability Crisis’
Recently, Moody’s Analytics Chief Economist Mark Zandi warned about a “serious affordability crisis” brewing in the U.S. economy, while placing the blame squarely on Trump’s tariffs and restrictive immigration policies for “juicing” inflation.
As a result, Zandi warns that everything points to “even higher inflation dead-ahead,” significantly ahead of the Federal Reserve’s targeted 2%, which would have been conducive for further rate cuts.
Even as broader inflationary pressures continue to persist, the Trump administration recently claimed selective victories for bringing down the prices of certain key commodities such as eggs.
Agriculture Secretary Brooke Rollins (R-Texas) said last week that egg prices were “down 86 percent” over the past 10 months. She also said that Trump was “resolutely focused” on bringing prices down, recounting him telling her, “Brooke, we’re not going to have plastic eggs at the Easter Egg Roll at the White House. Go get the price of eggs down.”
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