This week I joined Susan Demas and Sam Osterhout on Lincoln Square. I also joined Maddie Hale on The Trump Report. These are different shows, with different audiences, but the problem was the same: how to talk about this crazy week.
On Lincoln Square we started with Kevin Hassett. He had been on Fox News saying that the American economy was strong. His evidence? The hamburger he bought for his barbecue was $2 cheaper than last time.
I’ve got standard advice for situations like this. When someone talks about cost of living falling, and their evidence is the price of a single good, ask yourself why. Does that item really represent the entire economy? In the U.S., the total cost of living — which economists measure — is rising. Beef is up about 6% since a year ago, with the USDA predicting another 9.4% increase before the year ends.
I will say the White House did one thing right here, which is they discovered that beef was expensive and they cut the tariff on it. Now imagine if they cut the other tariffs.
Susan also asked me how a sustained diesel spike affects grocery prices. I took a moment to reflect here.
I get asked about gas prices a lot. It’s an important thing — but is it the most important thing? The U.S. is at war with Iran. Young Americans are being killed in that war, and future defense budgets will only be higher. Maybe billions or trillions of dollars higher. America’s place in the world is changing. I told Susan that I’m lightly disgusted by how much time we spend on the pump when the stakes are so much higher. And she put it better than I did: we’re substituting talking about gas prices for actually naming our fears.
These fears come in every era. For my father-in-law, it was being drafted and sent to Vietnam. During COVID we wondered if we’d ever be near people again. There are people right now who have children in the service who might be stuck on an aircraft carrier for nearly a year. We should speak to those fears directly, not just tell people about gas because we think that’s what they want.
And then I went back and I answered the original question.
Then there was the Trump Report. Maddie asked me about a claim the president had made — how much of it really stood up. I told her that I’m thinking more and more it might not be worth it to answer questions that begin with “the president said.”
What the president said was that the U.S. economy is the envy of the world. Is that true? The economy is doing quite well. Unemployment is 4.1%, inflation is 3.4%. That isn’t ideal, but it isn’t 10 percent either. The claim that the naysayers were wrong is defensible. But are we the envy of the world? I asked Maddie, who lives in the U.K., how envious she is. “Not much.”
Susan’s last question on Lincoln Square was how to think about the economy 40 days before the midterms. My belief: This election isn’t about the economy in 2027. It’s about the economy in 2060. Prosperity comes from institutions like the rule of law, markets, a free press, and capitalism (not crony capitalism). Those are the things under attack.
So let’s talk about what matters.
Many more journalists and pundits and podcasters should realize, as Prof Wolfers noted, "it might not be worth it to answer questions that begin with “the president said.” He has nothing to say of value. Watch what he and his minions in the regime DO and look at the impact on our country and our future. What we can see across multiple measures is that trump, the bribed Supreme Court , and corrupt Republicans have done is destroy the once solid and respected American economy and system of governance. Fox propaganda and others have made fortunes by using the statements of a declining and deranged person as click bait for their blabber. But when the last episode of trump reality television is over, we STILL have to rebuild and form a functioning form of government. THAT is what real journalists and real pundits should be discussed day in and day out.
Sorry mate, I have to disagree. To an economist, the election is about the future. To a political scientist, it is about our fears. To the current crop of voters, it is about NOW: "we can all be dead later." That is why all that matters is the monthly payment, not the underlying cost of the asset. When you combine FOMO, YOLO, financial illiteracy, and lack of impulse control, you get chronic insolvency.