Neither Nominee Will Make Things More Affordable

Kamala Harris and Donald Trump are proposing one unserious, self-defeating economic policy after another.

Not so long ago, Donald Trump held a commanding polling lead against his Democratic opponent (first Joe Biden, then Kamala Harris) on who voters trusted most to handle the U.S. economy.

It was easy to understand why.

For the first three years of the Trump presidency, the economy was strong and inflation was low. Things felt great. Then came Covid-19. From a leadership perspective, most Americans recognized that Trump handled the pandemic poorly (which may well be why he lost reelection), but one could hardly blame him for the economy tanking. A once-in-a-century global health crisis did that. And because Trump was voted out, he was gone from office before the country had to deal with the inevitably high inflation caused by our (and the rest of the world’s) pandemic recovery.

That’s not to say that President Biden didn’t contribute to the inflation problem. He absolutely did. Like Trump (who added nearly $8 trillion to the national debt), he did a lot of reckless spending, with a good chunk of it sold as recovery stimulus. But even if Biden had made much smarter economic decisions, inflation was going to be a huge problem (and would have been regardless of who won in 2020).

Most Americans don’t look at economic matters with such nuance. They instead recognize their personal financial situation, and correlate it (for better or for worse) with whoever was (or is) sitting in the Oval Office. And since things were relatively cheap under Trump, and expensive under Biden/Harris, Trump has had that political advantage.

Even so, recent polls have been showing some tightening on the issue. Harris has been gaining ground against Trump. It’s doubtful she’ll overtake him, but I do think there’s a rational explanation for why the economic polling is starting to look more like the head-to-head polling. I think it’s because the issue-advantage is fading as a result of neither candidate’s economic platforms making a lick of sense.

My phrasing there may have been a little generous. More bluntly, most of the ideas they’ve been proposing are asinine, and would further hurt American consumers.

Let’s look at a few of them.

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Price controls

Kamala Harris wants them… primarily on food, rent, and medication.

From her website:

As President, she will direct her Administration to crack down on anti-competitive practices that let big corporations jack up prices and undermine the competition that allows all businesses to thrive while keeping prices low for consumers. And she will go after bad actors who exploit an emergency to rip off consumers by calling for the first-ever federal ban on corporate price gouging on food and groceries, which will build on the anti-price gouging statutes already in place in 37 states.

Just as she did as Vice President, she will take on Big Pharma to lower drug prices and cap insulin costs, not just for seniors but for all Americans. And she’ll keep fighting to bring down prescription drug costs by taking on pharmacy middlemen, who raise consumers’ prices for their own gain and squeeze independent pharmacies’ profits

Donald Trump wants price controls too… primarily on credit card interest rates.

From a recent rally speech:

“While working Americans catch up we’re going to put a temporary cap on credit card interest rates we’re going to cap it at around 10 percent. We can’t let them make 25 and 30 percent.”

“When policymakers decide that the market rate is too high and impose an interest rate cap, they leave businesses with two options: reduce the quantity or the quality,” Nicholas Anthony of the Cato Institute reminds us. “In other words, consumers will either face a shortage or receive lesser products. Either way, consumers lose.”

Trade policy

The other day, this was posted on Kamala Harris’s official social-media accounts:

Referring to Trump’s draconian tariff-proposals as a “Trump Sales Tax” is actually pretty smart, since most Americans (including Trump, if you believe him) don’t understand what tariffs are. They are in fact taxes on imported goods, and contrary to what our former president says, U.S. tariffs are paid by Americans, and they increase prices for U.S. consumers while generally weakening the U.S. economy. In a period of already high inflation, adding tariffs and expanding existing ones is an especially terrible idea. Yet, it’s somehow Trump’s plan for bringing down grocery prices.

Of course, the problem for Harris is that she’s pretty pro-tariff herself. Sure, her (rather vague) proposals aren’t as zany as Trump’s; they’re more selective, being that Trump wants to tariff all imports (10-20% globally, and 60% on China). But they’re still counterproductive on the matter of inflation.

It would be great if there were a major-party presidential nominee who understood the wisdom of free trade, and how it lowers prices, but that’s sadly not the case.

Entitlements

As of the time I’m writing this, our national debt is about $35.5 trillion, which exceeds our GDP. Both candidates strongly oppose entitlement reform, which means they support letting the shortfalls for Social Security and Medicare (the major drivers of our debt) climb toward insolvency. This will amount to projected $4 to $5 trillion deficits within the next decade.

Trump additionally wants to expand Obamacare, while Harris, a few years ago (as a U.S. Senator), co-sponsored the Social Security Expansion Act, which would have increased minimum Social Security benefits.

Violinists on the Titanic.

Taxes

Both Harris and Trump are campaigning on making tips tax-exempt, which is a ridiculous policy for numerous reasons including additional debt. The same goes for Trump’s proposals of no taxes on overtime pay, and no Social Security taxes paid by seniors.

Harris wants a wealth tax on wealthy families, which would ultimately be paid for by average Americans. She wants to raise the capital gains tax rate to 33%, despite such hikes historically losing revenue, and hurting economic growth and investment. She wants to raise the corporate tax rate to 28%, which would put the United States at a large global disadvantage competitively.

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In other words, if these two are left to their own economic devices, we’re screwed.

“But unlike Harris, Trump has proven himself on the economy,” some of you are surely thinking.

Well, let’s look at that for a minute.

People can be forgiven for not remembering that Trump’s economic proposals, when he first campaigned for president eight years ago, weren’t very good either. Thankfully, he shelved them once he took office, and largely deferred to Gary Cohn and Paul Ryan on such matters. Their ideas, and Trump signing them into law, juiced an already strong economy Trump inherited from Obama.

Trump certainly deserves credit for going in a different direction (adopting a traditional Republican approach); the move paid off for a lot of Americans. But by the end of Trump’s second year in office, the architects of his most successful economic policies had been chased out of American politics, thoroughly villifed by Trump and MAGA-world, and replaced with populist and nationalist yes-men who were more than willing to prop up Trump’s worst economic instincts (like waging self-defeating trade wars that included huge new government subsidies).

Trump has only moved further toward statist, protectionist economic policy since then… to the point that he’s now much more closely aligned with Bernie Sanders and Elizabeth Warren than he is Cohn and Ryan. And he’s showing no signs of turning back. Yet, many of the former president’s supporters laughably insist (along with Trump) that he’s the guy who will save us from socialism.

Of course, there’s always the argument that Trump and Harris won’t actually pursue these terrible ideas once in office. Maybe a lot of it is baseless rhetoric they hope sounds good to economically illiterate voters. Also, Congress of course has a huge role to play in such initiatives.

All are valid points. Then again, I’m not sure there are many examples these days of either party going head-to-head against their respective leaders’ policy ideas. Far more often, they serve as a rubber stamp. Truth be told, fiscal conservatives are all but gone from both parties, and there’s always a special price to be paid for Republican members of Congress who try to take on Trump.

That’s why it kind of saddens me that millions of Americans think lower costs for goods and services are on this year’s presidential ballot.

They’re not.

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Catch Up on the Sean Coleman Thrillers

All of John Daly’s Sean Coleman Thriller novels can be purchased through Amazon, Apple, Barnes & Noble, Kobo, Books-A-Million, and wherever else books are sold.

Now’s a great time to catch up on the series.