Donald Trump’s illegal, immoral, and unjustified war will cost taxpayers billions and put upward pressure on energy prices and inflation more generally. Purely from an economic standpoint, the war is a disaster. And the inflation picture even before Trump’s war was ominous.
In short, inflation is back, despite Trump’s preposterous assertions in his rant last Tuesday night. He insisted inflation is “plummeting.” Well, if that is “plummeting,” then the word has lost all meaning. (Plummeting things do include Trump’s approval numbers and MAGA Republicans’ prospect for holding both houses.)
Maybe it was just a coincidence, but the day before Trump and Israel ignited a regional war, a horrible inflation report dropped. With little to no oil going through the Straits of Hormuz, oil went to $80 per barrel (perhaps heading for $100). When that price hike turns up at the pump, Americans will be paying Trump’s war tax. Trump’s unnecessary, costly, and immoral war certainly will not help any family’s budget. The opposite is more likely, which may explain why — even before the full energy price spike is felt — less than 30 percent of Americans support the Iran war.
Let’s remember: Trump inherited declining inflation. Trump did not inherit “the worst inflation in the history of our country,” as he insisted amid his falsehoods in his state of the union tirade. Inflation reached 9 percent under Joe Biden, but dropped to 3 percent by the time he left office. That would be plummeting! (Even 9 percent was nowhere near the worst inflation in United States history. Between March 1979 and March 1980, inflation peaked at nearly 15 percent.)
But Trump’s most egregious lie concerned the current inflationary threat. On Friday, as CNBC reported:
The core producer price index, which excludes volatile food and energy prices, increased a seasonally adjusted 0.8%, more than the 0.6% gain in December and well ahead of the Dow Jones consensus estimate for 0.3%.
On an all-items basis, the headline PPI rose 0.5%, also above the forecast for 0.3% and 0.1 percentage point more than the prior month.
For the full year, core wholesale prices accelerated 3.6%, while the headline index posted a 2.9% gain. Both figures are well ahead of the Federal Reserve’s 2% inflation goal and suggest that rising prices are still a factor for the U.S. economy.
These numbers confirm the position of Fed officials who have been warning about inflation. Chicago Federal Reserve President Austan Goolsbee said Tuesday at the National Association for Business Economics’ annual meeting “I feel that front-loading too many rate cuts is not prudent in that circumstance.” He added, “People express that prices are one of their most pressing concerns. Let’s pay attention.”
In a similar vein, Federal Reserve Bank of Kansas City President Jeffrey Schmid said on Wednesday at the Economic Club of Colorado, “I think we have work to do on the inflation side of things.” Well, he got that right.
Trump may think that his nominee to replace the Federal Reserve Chairman Jerome Powell, Ken Warsh, is the answer to his dreams of a Fed that will ignore inflation, lower rates, and turn a blind eye toward tariffs and energy prices. His math, as usual, is faulty.
For starters, Warsh still has to get confirmed, and at least a couple of Republicans have signaled they are not going to confirm anyone until the regime backs off its phony, partisan investigation of Powell.
Moreover, even if Warsh makes it through the Senate, he is only one vote on the Federal Open Market Committee (FOMC), which sets monetary policy. The FOMC has 19 total members, 12 of whom vote. That includes the 7 governors, the president of the Federal Reserve Bank of New York, and 4 of the other 11 regional bank presidents who rotate onto the FOMC.
“The regional Fed presidents who rotated onto the committee in January have been hawkish when it comes to inflation, which suggests they’re likely to favor higher interest rates,” Politico reported. Roger Ferguson, a former Fed vice chair told Politico that the new Fed chairman always finds it hard to convince FOMC members that “whatever decision they make is independent of political influence.” With Trump proclaiming Warsh is under his thumb, that will not be easy.
Furthermore, Warsh’s record of opportunistic flip-flopping on inflation will add to doubts about his independence. “He has twice made an abrupt about-face on his usual demands for tighter money, and both occurred when Mr. Trump was in office,” Catherine Rampall wrote for the New York Times. “The first time was in 2018; the second was after the 2024 election. As recently as September 2024, Mr. Warsh was admonishing the Fed for cutting interest rates, only to reverse himself not long after Mr. Trump took office.”
Democrats would be wise to interpose themselves between voters/consumers and Trump’s inflation-creating regime. First, they need to call out Trump for perpetually paying attention to the wrong things (e.g., Middle East and Venezuela wars, terrorizing immigrants, and lying about inflation). They should repeat: Trump is making things much worse with tariffs and an unnecessary war in the Middle East. Trump is cutting your healthcare to pay for his war of choice and tax cuts for billionaires. The country is at grave risk the longer a president this out of touch and/or dishonest has a docile Congress. (A savvy lawmaker might introduce a bill to deduct the cost of war from future tax cuts for billionaires.)
Second, Democrats need to keep up the tariff drumbeat: Trump stole your money. He must give it back. Using the bully pulpit, amendments to legislation, elongated debate in the Senate, oversight and confirmation hearings, and campaign appearances for the midterms, they must remind voters that since the Supreme Court ruled the tariffs illegal, Americans are owed roughly $1700 per family. Democrats’ message: Cowardly Republicans chose to defend Trump rather than help American families recoup their money.
Finally, the Senate should not move forward on Warsh’s confirmation until Trump ends his domestic war on the Fed’s independence. That means closing investigations of Powell and Fed Governor Lisa Cook and withdrawing sweeping subpoenas. As the Wall Street Journal reports, “The Federal Reserve is waging a behind-closed-doors legal challenge to a pair of subpoenas issued as part of U.S. Attorney Jeanine Pirro’s criminal investigation into Chair Jerome Powell, according to people familiar with the matter.”
In sum, inflation isn’t “plummeting,” and Trump’s fixation with tariffs and war (which spikes oil prices) will only deepen the affordability crisis. It’s up to Democrats to force spineless Republicans to own the disasters that they allowed to unfold.
I don't want $1700. I want every last cent that these POS's gained from their frauds and manipulations while the trump regime has been in office. Going further, every last cent that they stole in the last 12 years.
We were calling our Dem political leaders spineless for a while, but the MAGA Republicans and craven CEOs have elevated spinelessness to whole new level. We must elect Dems to ensure that Trump's request for a $1.5 trillion military budget does not pass, not even close. Among other reasons...