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This article states that both Trump and Biden lost points due to the inflation issue. The main reason is that they failed to understand voter sentiments, policy responsibilities and the importance of stable prices. In future, the government will have to return to the right path of fiscal discipline and order.
The US consumer price index (CPI) increased by 3.7% year-on-year in September, and the average wage growth of 3% in the same month could not be maintained.inflation . President of the United Statestrump A campaign promise to lower prices was backfired in the vote. Polls showed that two-thirds of respondents were dissatisfied with Trump’s handling of economic issues, falling into the same trap as the previous president.biden Same dilemma.
Michael Strain, an economist at the conservative think tank American Enterprise Institute (AEI), wrote that future US governments should learn four lessons from this.
1. Voters are not interested in analyzing the overall economy and will only evaluate the economic outcomes they will face now and in the future. Like Biden, Trump is also trying to shift voters’ attention from rising inflation to low unemployment. This makes sense in the context of economic analysis; But it doesn’t work from the voter’s perspective. Even during the most severe times, the 2008 global financial crisis and the Great Recession, nine out of ten workers still had jobs. But over the past five years, 1 in 10 workers have seen prices rise rapidly.
2. Voters believe that inflation is inseparable from policy. Biden’s 2021 stimulus package was estimated to have added about 3 percentage points to underlying inflation that year, and polls at the time showed that some voters blamed his policies for worsening inflation. Similarly, the American people now believe that Trump’s war against Iran caused gasoline prices to rise, and that Trump’s trade war also caused prices to rise. Some Republican lawmakers have even openly opposed Trump’s tariff policies.
3. When voters elect a president, they expect solutions to problems, not diagnoses of the causes of the problems. The current high inflation in the United States is certainly partly a legacy of high prices during Biden’s tenure, as well as the Federal Reserve (Fed)’s failure to fulfill its responsibility to maintain price stability. However, Trump has not taken serious action to ease voters’ affordability concerns. Instead, he deliberately downplayed this concern, claiming that higher prices were a ploy by the Democratic Party, and suggested that American families buy fewer “dolls” and “pencils” for their children.
4. The President should adopt policies that will help reduce and stabilize inflation. The truth is clear, but both of these presidents’ tenures have seen the most wasteful fiscal policy in decades (Biden’s stimulus package) and a self-inflicted trade war (Trump’s branding tariffs), making it more difficult for American workers to balance their books.
After the midterm elections, the focus will be on who will be Trump’s successor. The next US president must treat responsible fiscal policy and trade liberalization as a priority, and respect the Fed’s independence to reduce upward pressure on inflation and interest rates. Implementing policies that promote productivity improvements, including avoiding unnecessary regulations on artificial intelligence (AI), could also help wages grow faster than inflation.
In the long run, the success of politicians ultimately depends on the success of their policies. Voters view rising inflation as a policy failure. Neither Democrats nor Republicans have fully learned this lesson.
Summary FAQ
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Because although they promised to reduce prices, they actually failed to effectively improve people’s burden. He also used tariffs to combat inflation and reduce anxiety. As a result, the sentiments and expectations of the voters were disappointed.
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Voters do not analyze aggregate economic data, but rather directly evaluate the pressures of their present and future lives. Therefore, rising prices will more easily influence their views on the government than the unemployment rate.
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We should prioritize responsible fiscal policies, trade liberalization and respect for the Fed’s independence, avoid unnecessary AI regulation, and reduce inflation and interest rate pressures by improving productivity.
