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All posts tagged "economy"

Politicians hooked on 'lazy' policy craze that keeps backfiring: columnist

Both Republicans and Democrats are rallying behind economic fixes that poll well but collapse catastrophically once they hit the real world, a columnist warned.

In a Thursday column, Catherine Rampell argued that the country has entered "the era of FAFO economics." She described the era as a cycle in which politicians push ideas that sound good in the abstract until voters live through the consequences.

Rampell's prime exhibit is price controls. A recent CBS News/YouGov poll found nearly two-thirds of Americans want the government to cap how much companies can raise prices, with a majority of Republicans, about 54 percent, on board. She described the policies as "lazy, poorly researched" fixes that voters sour on once they arrive.

Price controls have a long record of failure, Rampell noted. She pointed to shortages and black markets from the Soviet Union to 1970s America. Support tends to crater once the policies take effect, which is a pattern strategists bank on even as voters turn against the results, Rampell added.

"Politicians have gone all-in on lazy, poorly researched policies that sound terrific in the abstract — until people experience them and live to regret how terrible they are," Rampell wrote.

She pointed to tariffs that came as the "FAFO" cycle had already completed. Broadly popular after President Donald Trump's 2024 win, they have since cratered, with even protectionist Democrats like former Sen. Sherrod Brown (D-OH) now running ads against them.

Rampell reserved her sharpest criticism for the operatives she says have displaced actual economists in both parties.

"The experts have been ejected by both parties, often replaced with political operatives masquerading as scholars," she wrote. "Their job seems to be to reverse-engineer fake scholarship 'proving' the wisdom of whatever policy already polls well."

She quoted Heatmap's Matt Zeitlin on the limits of favorable polling. "All the polls in the world can't help you if people are also mad when they get implemented," Zeitlin wrote.

The result is "a sort of economic policymaking race to the bottom" in which both parties "compete to see who can FA harder," Rampell warned.

Trump conceded his economic strategy is floundering with beef move: GOP strategist

GOP strategist Marc Short called out President Donald Trump's strategy for lowering beef prices as an admission that he raised prices.

During a Thursday appearance on CNN, Short spoke about Trump's executive order renaming Lake Ontario to Lake America and how Republican candidates are feeling about it ahead of a critical midterm race in November.

"I think there are a lot of Republicans who are facing a midterm election in less than three months, and are anxious to address some of the issues that Americans view as top priorities," Short said. "And not this."

Trump might be "entertained by it, but I don't think it really helps a lot of the Republicans that are trying to win competitive races," Short stressed, adding that "voters face a really short choice in November."

Short said that Republicans have a legitimate attack against Democrats by going after them as socialists and anti-semites, "and yet we're not able to focus on that because we're talking about, you know, renaming lakes."

On top of that, Trump's tariffs with Canada won't help Republicans in the midterm, Short said, adding that Americans have bigger problems closer to home.

"That trade war that's ongoing with Canada is really counterproductive when they have been one of our greatest trading partners," he explained. "Americans are concerned about affordability, and the tariffs continue to raise prices."

Then Short attacked the White House's denial of raising prices through its policies. He pointed out that the Trump administration employed a strategy to lower beef prices by lowering tariffs.

"I know there's a lot of conversation from the administration that says they don't raise prices," Short said. "But just last week, to lower the price of beef, what did they do? They lowered tariffs, and so it's a clear acknowledgement that that's actually the economic formula to lowering prices."

CNN anchor baffled by Trump's bizarre gaffe: 'What is he talking about?'

CNN's Abby Phillip was left baffled after President Donald Trump suggested a military intervention to tame turmoil in the bond market.

On CNN NewsNight, Phillip aired footage of Trump fielding reporters' questions about Treasury Secretary Scott Bessent's bond market intervention. Bessent more than doubled the volume of U.S. bonds the department plans to buy back after yields climbed steadily since the start of the Iran war, reporting by Mediaite noted.

One reporter asked whether Trump had directed Bessent to step into the market.

"Not at all, no," the president said. "He's a very capable man. He wanted to do it. He's very good at it. He has a good touch, very good natural touch for the bonds and interest."

Another reporter asked if he considered "another type of intervention," which prompted an odd response from Trump.

"We have many types of intervention," Trump responded. "The ultimate intervention is our military. And if we have to use that, we will."

The remark stopped Phillip cold as she struggled to make sense of it, according to Mediaite.

"Not sure what that's about," she said. "He's going to sic the military on the bond market. What is he talking about?"

MeidasTouch reporter Adam Mockler admitted he was equally stumped, saying, "Uh, I don't know, honestly."

Higher yields raise borrowing costs across the economy and force the government to pay more interest on its debt, Mediaite noted. Even so, Trump has bristled at positive economic data, arguing days earlier that good news undercuts his push for lower rates.

"Every time I hear our country is doing well I say, 'That's too bad because they lift up interest rates,'" he said Wednesday. "They should drop interest rates because it means we have a strong country."

Trump went on to tout the country's borrowing position. "It's all based on credit, meaning good credit. And we have the best credit, and we pay off the debt very easily, very quickly," he said.

Trump adviser confronted with brutal poll after touting 'amazing' economy

A top economic adviser to President Donald Trump argued Thursday that the economy was "amazing" despite a recent poll showing that most Americans don't agree.

Kevin Hassett, the National Economic Council director, told CNN anchor Pamela Brown that Trump's economy was benefiting Americans. But Brown pushed back on that, citing recent polls that showed the opposite.

"You said just a moment ago, Kevin, that consumers are optimistic," Brown said. "But we have this poll where 77% of Americans say economic conditions are overall poor. That is the lowest of Trump's second term so far. Is this the 'amazing' economy the administration thought you'd all be boasting about when the 'Big, Beautiful Bill' was passed more than a year ago?"

Hassett argued the numbers back him up.

"Right now the economy does look amazing to me," Hassett said. "The inflation is going down. The unemployment rate is low. Initial claims are like almost no one's getting fired, and final demand was up about 4%, which is about what my friend Howard Lutnick was predicting back then. It was the sort of surge in imports of capital goods that I think caught people a little bit by surprise."

He claimed that there was "strong growth."

"One of the things that I can say as an economist is that there's a big economic literature that says that in the end, people vote based on what's in their pockets," he added.

Hassett tried to argue that the economy was worse off under former presidents Barack Obama and Joe Biden.

"And so I think that the real incomes growing right now are really a positive sign politically and much more positive than something I would see at a poll," he said.

Triggered Trump lashes out as rally heckler hurls 'pedophile' jab

President Donald Trump lashed out at a protester screaming "pedophile protector!" while he was speaking in Michigan on Monday.

Trump was in the Great Lakes State to speak about the economy at the GM Proving Grounds in Milford when a demonstrator started heckling him from the crowd over his ties to convicted sex offender Jeffrey Epstein.

Trump snapped back.

"He's a communist," Trump said as the audience started chanting "U-S-A."

'You want to cry': MAGA voters tell WSJ they feel 'horrible' about voting for Trump

A Wall Street Journal report revealed Saturday the Americans who voted for President Donald Trump have soured on him amid the economic fallout of the Iran war.

According to the Journal, new polls by the Cook Political Report found that more voters disapprove of Trump's handling of the economy after gas prices jumped during the Iran war. The polls cited by the Journal found that 61 percent of voters disapprove of how Trump is handling the economy.

The Journal also included comments from Trump voters around the country who admitted that they're not feeling great about their pick because Trump seemed to prioritize a war in Iran over affordability.

"Bringing prices down, that should have been a priority," Chicago bus driver Truman Lyons told the Journal. "I don't think he's making the average American citizen the priority."

According to the Journal, Lyons also "balked" at the bombing of Iran, blamed it for raising gas prices, and said he feels "horrible" about voting for Trump in 2024.

"I regret it," Lyons said. "What did he say? He said, 'I'm the president of no wars.'"

Jim Dubela, a retired airline captain from New Hampshire, told the Journal that Trump is "failing to rein in spending and driving up prices with tariffs." Dubela added, "The Iran war has directed attention away from our affordability crisis" and caused "a huge strain on the typical American's budget."

Florida financial adviser Chris Delzio told the Journal, "The amount of money spent on these wars just really makes you want to cry," and pointed out that Trump promised, "We're going to spend the money here" and "no foreign wars."

'Completely crazy': Paul Krugman delivers scathing verdict on Trump threat against ally

Nobel-winning economist Paul Krugman offered a scathing review of Trump's recent threat against a key American ally.

In March, Trump warned of a complete trade cutoff with Spain after the country refused to allow U.S. military bases for operations against Iran. Even though Spanish Prime Minister Pedro Sanchez was unfazed, Trump again threatened to ignite a trade war with Spain during an outburst at the NATO summit in Turkey.

"It was completely crazy," Krugman said in a Substack post on Wednesday. "This is not something that is real, except that the President of the United States did say this."

Even though Krugman added that Trump's threat is "completely insane," he dismissed it as a "non-event," saying that although Trump ordered Treasury Secretary Scott Bessent to cut off trade with Spain, "this is not going to happen." He explained that a trade war with Spain isn't possible.

"Presidents have a lot of discretionary authority on tariffs and trade, more than they should, but you do not have the right as president to impose tariffs on a country just because you don't like their defense spending or you think that they haven't been nice enough to you," Krugman said. "It's not really at this point about economics. It doesn't even make sense to talk about Trump administration policies, let alone ideology."

Trump would have trouble stopping trade with Spain because it's part of the European Union, Krugman pointed out. "So this is like Europe declaring 'we're cutting off all trade with Florida': they can't do that," Krugman said.

"Also, there's a lot of U.S. business with Spain," Krugman continued. "In fact, Spain is one of those countries with which we run a trade surplus. So U.S. business would be howling."

Read on Substack

'Breathtaking': New danger posed by Trump makes James Carville rethink his famous phrase

James Carville confessed he's rethinking his most famous phrase because of a new threat posed by Trump.

During an episode of Politics War Room, Carville revisited his 1992 quote, "It's the economy, stupid," which he coined during the Bill Clinton campaign to hammer home what issue mattered the most. However, Carville said he now regrets the phrase because the economy doesn't matter anymore in the face of Trump's corruption.

"I now have come to detest the fact I said that," Carville said. "I listen to people say, 'People don't care about corruption. They care about the economy. As long as their incomes are up, they really don't care what [Trump] does.'"

Carville took another look at his quote amid new revelations about how Trump is profiting from deals, like those related to his crypto ventures and foreign mining. Carville explained that he's "afraid" he sold the economy as the top political priority so well that Trump's corruption is being overlooked.

"When I said it in 1992, you can say what you want about George H.W. Bush," who was running for reelection that year, "he was not corrupt, okay? He was not a corrupt man at all," Carville said.

The corruption under Trump is "breathtaking" and "staggering," though, Carville said, adding, "I want to punch him in the f— face." However, people keep turning their attention to the economy.

"People say, 'Yeah, you know, you're right, that's all people care about is the economy,'" Carville said. "The phrase actually haunts me today."

Co-host Al Hunt told Carville, "The bulk of the American electorate, even in this coming election, is going to be driven by economic considerations."

"I agree, and it pains me," Carville responded. "We can get over high egg prices, we can get over high gas prices, and we can get over a lot of interest rates. You can't get over systemic, endemic, persuasive corruption. That's everything."

Economist flags troubling signs in Trump's economy: 'Shouldn't be so excited'

A prominent economist on Thursday warned that President Donald Trump's economy has raised some concerns.

Justin Wolfers, an economics and public policy professor at the University of Michigan, responded to a new report from the Department of Labor, which indicated the United States has added fewer jobs in June — just 57,000 jobs that month.

"Each month we just learn a little bit more about the economy," Wolfers said. "We've seen a few really, really good months, and it was a 'yabba dabba doo' moment. I was very excited. And what we see here is maybe we shouldn't be so excited. This is an economy that is not as hot as we might have thought a month ago. It's also not an economy that's sinking by any means — it's treading water; it's doing OK. Let's cross our fingers and try not to do anything wrong, and hopefully we'll keep it."

For instance, Wolfers noted that the latest data showed there has been a decline in leisure and hospitality hiring at a time when several U.S. cities are hosting the World Cup, which he described as a "double whammy" for the economy.

He also argued that every industry outside of healthcare showed signs of shrinking.

Trump nominee gets all he can handle at heated hearing: 'You can't even do basic facts!'

Sen. Elizabeth Warren (D-MA) grilled a Trump nominee during the Senate Housing, Banking and Urban Affairs Committee on Thursday.

Warren reminded Christopher Phelan, the president's pick for White House Council of Economic Advisers, that if approved for the advisory job his role would be focused on offering "objective economic advice."

"Let's go through a few objective facts," Warren said. "Americans are spending more on everything from gas to groceries, prices are rising faster than paychecks and Trump's One Big Beautiful Bill rips away healthcare coverage for 15 million people in order to pay for tax cuts for billionaires and giant corporations, and it adds $4.7 trillion to the national debt and that is why we need someone who will tell the truth about the economy and not just say whatever it is that the president wants them to say."

Warren asked Phelan if inflation was higher today than it was in February 2025.

"Headline inflation now is certainly lower than it was during the Biden administration," Phelan said.

Warren interrupted Phelan and pushed back.

"I'm sorry. Come on. Let's not play this game," Warren said.

Phelan did not answer the question directly.

"I don't want to know how fast you can dance. I want to know if you can answer simple, factual questions," Warren said.

She pushed back with several other questions, cutting off Phelan's responses.

"You have now made clear what your position is and that is you can't even do basic facts," Warren said. "I didn't even get to the hard questions here."

"I think this person has disqualified himself in five minutes," Warren added.

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