The conservative Wall Street Journal editorial board had a dire assessment of Trump’s current economy: he’s effectively fiddling while it burns, rather than deliver on any of the GOP’s more conservative, growth-focused policies.
“Regarding prices, the consumer-price index came in somewhat hotter than expected with an increase of 0.3% in December and 2.7% over the past 12 months. Overall inflation isn’t rising, but it also isn’t coming down. Increases last month were especially notable for categories of goods and services that Americans buy on a regular basis like shelter (0.4%), medical care (0.4%), food (0.7%) and energy bills (1%).”
The sectors that saw the most inflation disproportionately hit lower-income Americans, the board noted. Worse still, earnings aren’t getting any better, the board wrote.
“Real average hourly earnings rose 0.7% during the first five months of this year, but income growth has since stalled. For production and nonsupervisory workers, real average hourly earnings have declined 0.2% since May. The reason is a bump in inflation in the summer months that erased the gains from wage increases.”
“This goes a long way to explain why so many Americans feel as if they are treading financial water,” wrote the board — and it makes Trump’s legal bullying of the Federal Reserve to try to lower interest rates look even more counterproductive, since the Fed isn’t even at its inflation target yet and doesn’t have room to lower rates to what Trump wants.
Instead, the board concluded, Trump is scrambling to try to implement price controls — something that has been tried and failed in previous inflation spells — most recently controls on credit card interest.
“The President has recently been rolling out a flurry of counterproductive policies worthy of Bernie Sanders in the name of reducing prices (see the editorial nearby on credit-card interest rates). But what the President really needs is what he promised in the campaign, which is rising real wages,” wrote the board. “That means further reducing inflation and letting deregulation and tax policy drive faster economic growth and productivity. That will make everything more affordable.”
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