Retribution, Check. Addressing the Real Needs of the Working Class, Not Check.

The Trump administration has, in fact, addressed the affordability crisis: they're making it much worse.

Virtually every article I read wherein regular folks talk about what’s ailing them economically comes down to affordability. As the work of Annie Lowrey and others have shown, this predates the pandemic inflation, though that certainly elevated and highlighted the crisis. But I and others were writing about this 25 years ago under the rubric of family budgets, wherein we enumerated what it cost to afford life’s necessities in different parts of the country, relative to incomes.¹

Most recently, the Abundance Agenda addresses the affordability crisis from the supply side, convincingly arguing that it is far too costly to build and innovate in America, due in part to a regulatory regime whose costs exceed its benefits.

On an everyday basis, I think of the affordability crisis as persisting in the areas of housing, child care, health care, higher education, though of course many other areas are also invoked, including retirement security, which I’ll speak to below.

Obviously, no economist should talk about costs without talking about wages and incomes. There’s no question that periods of real wage and income stagnation have exacerbated the affordability crisis, which is why addressing it requires strong labor markets, union power, higher minimum wages, and robust work supports (EITC, CTC) to help boost that side of the equation. But the truth is that even in periods of broadly shared real income growth, the affordability crisis has been ameliorated, not adequately addressed.

President Trump, along with every other candidate running for office, promised to address this crisis, explicitly touting alleged plans to lower costs. Most of those plans were “secret,” meaning they didn’t exist. Others didn’t make sense (his housing plan was massive deportation followed by legal residents moving into the places where deportees formerly resided).

But since he’s taken office, the extent to which he has ignored virtually every corner of the affordability crisis bears elevating. And it’s not just ignoring. It’s exacerbating.

Tariffs are exhibit number one. They are widely expected to eventually raise prices on imports, which will directly impact housing (imported inputs) and, perhaps less obviously, health care. Just this morning, Axios highlighted this impact (“Tariffs Drive Health Plan Premium Hikes”:

Health insurers are starting to notify states that tariffs will drive up the premiums they plan to charge individual and small group market enrollees next year…

Tariffs unveiled by President Trump are expected to drive up the cost of prescription drugs, medical devices, and other medical products and services. Some of the difference ultimately would be passed down to enrollees.

Exhibit two—sticking with exacerbating; we’ll get to ignoring in a moment—is the Rs budget, which, in tandem with the tariffs is literally an all-out attack on the affordability economics of low and middle-income households. As I’ve highlighted in many places, the budget/tariff interaction exacerbates both sides of the crisis, lowering incomes and shifting costs, particularly in the areas of health care and nutritional support, but also housing and higher ed.

Deportation will also exacerbate affordability, particularly in health and child care, along with other services, by significantly reducing the workforce in those sectors. Chief Ghoul Stephen Miller would argue that this will the raise the pay of documented and native-born workers in these sectors, which may be true. But far more people use these services than are employed by them, so deportation goes on the exacerbation-of-the-affordability-crisis list.

Then there’s ignoring. We’ve seen zero policy initiatives from the administration on child care affordability. Zero on housing. Zero on higher ed (also exacerbation here when it comes to student lending). Zero on retirement security, which is more urgent given recent updates of Social Security and Medicare’s financing.

In fact, based on important new work by Kathleen Romig and Gbenga Ajilore, we can also move retirement security onto the exacerbation side of the ledger.

Trump’s tariffs and mass deportation program will accelerate the depletion of the trust fund and risk cuts to Social Security benefits — something the President has promised not to do. If policymakers fail to act, benefits will be cut by nearly a quarter across the board. With Social Security’s reserve depletion date less than a decade away, policymakers should not dig the hole in the system’s financing any deeper.

What have those suffering from affordability constraints gotten instead from the Trump administration? Retribution on perceived enemies, including countries who “rip us off” by selling us things we willingly buy, a bunch of Democrats in handcuffs, troops on the ground in LA, purges at the Kennedy Center, attacks on universities and wokeness, and so on.

The best counterargument to the above is that Ds haven’t done much better. There’s some truth to this, but not that much. In the Biden Administration, we had strong plans to boost housing and child care affordability, and of course we tried (with more success than is often recognized) to chip away at student debt. We strengthened health coverage, which rose on our watch. We expanded Medicaid coverage, though we did not shore up Social Security and Medicare finances (in fact, we went along with the ill-advised Social Security Fairness Act, which further depleted the programs resources and is partially responsible for moving up Soc Sec depletion date).

Going forward, an affordability agenda must be at the heart of any forthcoming policy platform worthy of consideration. To be clear, that goes beyond the (essential) abundance agenda because it deals with both sides of the equation: not just a more robust supply of the goods and services that comprise the crisis, but stronger income gains for those with the least buying power.

But let’s be very clear. A lot of people voted for President Trump because they believed he’d address the affordability crisis. And, to be fair, he has addressed it: he’s making it much worse.

1. The contemporary research into family budgets dates back to work by Diana Pearce.