By Chris Fry
Well, that didn’t last long.
In his November 6 victory speech, Trump promised the working class that he would bring forth a “Golden Age.” His election campaign repeatedly promised prosperity to his working-class supporters:
On the campaign trail Trump repeatedly promised he would lower prices and inflation, as HuffPost reported Thursday [December 12]:
“’We will end inflation and make America affordable again, and we’re going to get the prices down, we have to get them down,’ Trump said at a rally in September. ‘It’s too much. Groceries, cars, everything. We’re going to get the prices down.’”
“’We will cut your taxes and inflation, slash your prices, raise your wages and bring thousands of factories back to America,’ Trump said at a Georgia rally in October, reciting a line he used in speeches at several other events.”
“Trump also specifically promised to get gas prices down: ‘I will cut your energy prices in half within 12 months.’”
This appeal by this billionaire “master of deceit”, unanswered by the Democrats, was enough to persuade many workers to vote for Trump.
But his actual program would not actually do any of these things.
He announced a massive tariff increase, including a new 25 per cent charge on all goods from both Mexico and Canada, and an additional 10 per cent charge on all goods from China on top of the already steep Trump/Biden tariffs. These will sharply raise, not lower, prices across the board.
The National Retail Federation released another analysis this week evaluating how Trump’s plans could impact six product categories: apparel, toys, furniture, household appliances, footwear and travel goods. The study found the proposed tariffs would reduce American consumers’ spending power by $46 billion to $78 billion every year the tariffs are in place.
Trump also announced that on “day one” he will start a massive gestapo-style roundup to deport undocumented workers, refugees and their families. On top of this barbaric violation of human rights, this will sharply raise, not lower, grocery prices around the country, along with home construction and home renovation prices.
Economists have coined a new term for this – “reflation”.
Now that the election is over, Trump is reneging on his inflation-ending promises to the working class.
In an interview with Time magazine after being named “Person of the Year”, he said:
“It’s hard to bring things down once they’re up,” Trump told Time in an hourlong interview for its “Person of the Year” feature. “You know, it’s very hard.”
During another interview, Trump said:
“I can’t guarantee anything. I can’t guarantee tomorrow,” he told NBC News’ Kristen Welker on “Meet The Press”
On that same day, as he rang the bell to open the stock exchange, he told the crowd of his adoring Wall Street patrons that he will attend to their every need, guaranteed:
Speaking about the economy, Trump said he plans to incentivize companies to return to the United States and prioritize the production of products in the country.
“We’re going to give tremendous incentive like no other country has. We’re cutting your taxes.”
Trump said the country is a leader in oil and gas and he is going to make the country “number one plus,” promising to bring gas prices down.
“The economy, I believe, is going to be very strong.”
Trump’s approach to the podium to ring the bell was met with loud applause, followed by chants of “USA.”
The corporate liberal portion of the media objects to Trump promising to lower prices in the first place, agreeing with his current stance that it’s “very hard” to reverse inflation. Biden had left the solution to the huge spike in prices during the pandemic entirely up to the Federal Reserve bankers, who raised interest rates to deliberately stop any general rise in incomes while not doing anything to stop the corporate monopolies from raising prices.
Economist pushes price controls.
Although nearly all capitalist economists agreed with Biden’s do-nothing approach, a December 13 article in the Guardian points to one capitalist economist, Professor Isabella Weber, who argued in 2021 and now still calls for “targeted” price controls:
Weber wrote a Guardian op-ed that went against how economists usually thought inflation should be managed. Most believed that the only way to combat inflation was to increase interest rates, which at the time were at zero.
In the op-ed, Weber argued that tempering inflation is not a zero-sum game. “If your house is on fire, you would not want to wait until the fire eventually dies out. Neither do you wish to destroy the house by flooding it,” Weber wrote at the time.
She called for an alternative solution, “tailored controls on carefully selected prices”. She pointed out the “explosion of profits” that were seen in the middle of the pandemic: corporations were benefiting greatly from government stimulus and, in turn, continued to jack up prices. The government could step in by capping prices strategically.
The response to her op-ed was eviscerating. First, it was people in crypto and rightwing groups on Twitter that started piling on Weber. Then the economists started weighing in. The Nobel prize winner Paul Krugman said in a tweet – that he later deleted and apologized for – that the idea was “truly stupid”.
“It basically opened up the floodgates of hate,” Weber said.
Weber researched talks between corporate executives and major stockholders. She discovered that these parasites consider price hikes an opportunity to improve their bottom line:
Weber argues that much of America’s economy does not operate within traditional market forces. Competition in many industries has been whittled down by consolidation, giving more power to the big companies that dominate an industry.
The power of these sellers only goes up when there are economy-wide shocks, and they increase prices to pump up profit in return.
More than half of the inflation that was seen in 2021 could be attributed to corporate markups, according to an analysis from the Kansas City Federal Reserve.
Weber talks about how the Democrats failed economic policy in turn caused their failed 2024 election campaign against the demagogue Trump:
“It’s not enough to walk around and say, ‘I am defending democracy, therefore please vote for me.’ To defend democracy, you have to deliver policies that the majority of people feel are actually making their lives better. Otherwise, it will be very, very hard to prevent the sliding down on the slippery slope toward more fascist-looking political arrangement.”
Inflation and socialism
If we look at inflation globally, we find that other nations and economies do have government control over prices to protect the people’s standard of living.
In socialist China, for example, there is the National Development and Reform Commission (NDRC), which has a Department of Price that is responsible for setting prices for important commodities and services, organizing cost surveys, and drafting price and charging regulations.
Consequently, the rate of inflation for China’s working class is a small fraction of what U.S. workers face:
This is possible because key industries in China are owned by the people, not capitalist billionaires, and their government uses scientific planning rather than the “market” to control production and distribution, including prices, over both their public and private companies and their banks.
Objectively, the evolution to giant monopolies in the U.S. makes it feasible to convert the economy to socialism in order to control prices for the workers and oppressed. There are now far fewer monopoly corporations for the people to expropriate, and a high level of technical infrastructure to enable scientific planning that ensures a fair and prosperous distribution of goods and services for the workers and oppressed communities.
But of course this will entail an organized revolutionary mass struggle.
Next: Part 2 – Trump and Silicon Valley’s crypto trap
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