IkePoR said:
sc94597 said:
The fact that inflation is the main reason why Trump won, and his two main policies: tariffs and deporting undocumented workers are highly inflationary is a great irony. Trump will succeed the most by not succeeding in his campaign promises here. Why are tariffs inflationary? The point of tariffs are to create a price-floor to make local manufacturing competitive with foreign manufacturing. They are taxes designed to make up for the fact that companies can underpay workers abroad to sell products at a lower price (while netting some margin with the arbitration for themselves.) The whole point of them is to make sure prices go up. Why is deportation inflationary? Many industries that almost all Americans consume and were complaining about price-increases in: construction, farming, housekeeping, and child-care have 10-30% of their workforce as undocumented immigrants. If you deport them, that gives the remaining workers more bargaining power and ability to request higher wages. This is good for those workers of course, but the business/owners are going to want to offset a part of that onto their customers. If we could teleport back in time and give Democrats a message, they should have focused on how to explain this to as many people as possible, while pushing the fact that they were ready to subsidize child-care, home-purchasing, etc and save Americans money. They should have also found a way to explain that while inflation was high over the course of the pandemic it has finally come down and while they are still not feeling the effects it takes a bit of time for these effects to be felt/noticed, just as it did for the high inflation of 2022 to be felt in 2023 and 2024. Democrats just threw graphs at these people without doing the work to ELI5 for them.Â
Edit:Â Â
Democrats love to talk about how they appeal to the educated, without doing the work to appeal to the less formally educated by educating them in a non-condescending manner. That is what needs to change. |
Can you explain how to improve the economy in a non-inflationary manner, and that is better than tariffs? |
Essentially what the Fed has been doing, they got inflation under control by raising interest rates so the cost of borrowing money (business loans/credit cards/mortgages) went up and decreases demand but did so in a slow and steady process in order to prevent a recession and mass layoffs.
Now that inflation is close to its ~2% goal, they have started to lower interest rates, but also in a slow and steady process so demand doesn’t explode and cause inflation to kick back in.
Inflation has stabilized but prices are still up from the high inflation of 2022/2023 and they aren’t going to come back down, the way to lower the cost of living is by having wages grow at a faster rate than inflation which is what had been happening over the past year.
The most recent data I believe is inflation +2.4% & wages +4.1% year over year. We need to see this continue for the next few years and people will slowly but surely feel their purchasing power increase.
The problem is that most people don’t understand the economy and don’t want to hear that it’s a slow process that gradually gets better, they want to hear a simple and quick fix. Trump went with promoting tariffs and Harris went with cracking down on price gouging. For many people their view on the economy might be as simple as “Trump’s a business man and prices were lower under him and Harris is the current VP so why aren’t her and Biden already doing what she’s proposing?”
