There's a broader element about affordability beyond the price level frame, which is economic insecurity. Probably 20-30% of us are relatively secure, and perhaps 70% struggling. The fact that people are struggling to afford health care, housing, sending kids to college, saving for continencies, and the daily costs of life (and groceries) is the deeper affordability crisis. Perhaps those percentages are wrong, but the solutions are far more structural than bringing prices down.
OK, here's the thing I don't get. The 2017 Trump Tax Cuts, if they had worked as promised, would have reduced consumer prices by lowering corporate taxes. That was part of the sales pitch. But no, CPI remained pretty flat until the post-Covid jump. In other words, corporations predictably swallowed up those tax cuts as excess profits. Consumers saw none of it. Of course, this is the flaw in trickle-down economics. There's very little trickle-down. But many consumers have a vague sense that they were promised much goodness by whichever government is in power, and that goodness does not end up on their doorstep. Cognitive dissonance shows up as a vague sense that things are less affordable than they ought to be, in light of past promises.
Yep, re trickle down. I don't think of tax cuts as lowering inflation--if anything, can push other way by raising after-tax income. I vaguely recall Trump econ folks saying tax cuts will raise productivity and that will lower prices, blah-blah-woof-woof. Nonsense.
I wish you had written about the rent-seeking that leads to a lack of affordability. To expect any meaningful policy in this regard from the rent-seeker-in-chief is clearly wishful thinking of the worst sort.
Not only is a Sharpie signed declaration to cap credit card rates at 10% ineffective, it’s also irrelevant. Credit card rates are determined by state usury laws, not by the federal government. Even if it were possible under some new law, it may well stop credit card companies from issuing cards to middle or lower income consumers, the very same folks who suffer from the affordability crunch.
His White House - unlike Jared’s experience - is a missing point too. They float crap ideas into his delusional babbling, occasionally, but nod yes always. A weaker bunch we have never experienced.
Housing costs really are NOT reducible to supply, Jared. They relate to valuations which are wildly speculative. So, too, they realte to government driven policies on the availability and cost of loans, on people's EXPECTATIONS of profits from property. And what do we mean when we talk about supply and demand in housing? All over the Western world, people have moved on from having one house to having two, adding a crushing burden to supply… whole regions are empty and depopulated while others become property hotspots. And these are not necessarily places where people must be for jobs. They're fashionable because they're, well fashionable. Just as the hollowed out towns have no amenities because, well, they're hollowed out towns.
Men's wages have grown by 1% over the past 46 years, since 1979 (Federal Reserve's FRED graphs). Nonsupervisory worker's average weekly earnings were higher in 1973 than in 2025. The focus should also include raising wages. The Real GDP per capita has grown by 142% since 1973, workers are producing much more value but there's no wage gain.
Also a UNICEF study shows U.S. childcare policies rank at 40th out of 41 rich nations. "Where Do Rich Countries Stand on Childcare?" Pretty sad for the nation that has nearly the highest GDP per capita.
Just spoke with my home heating oil company, substantial increase over the current rate… I locked in the rate fearing even greater increases… and the reliance on more sweaters 🙄
What chance is there that prices will come down enough and incomes increase enough to provide significant relief to those who are living in the affordability gap? Seems to be vanishingly small if not already ZERO.
There's a broader element about affordability beyond the price level frame, which is economic insecurity. Probably 20-30% of us are relatively secure, and perhaps 70% struggling. The fact that people are struggling to afford health care, housing, sending kids to college, saving for continencies, and the daily costs of life (and groceries) is the deeper affordability crisis. Perhaps those percentages are wrong, but the solutions are far more structural than bringing prices down.
OK, here's the thing I don't get. The 2017 Trump Tax Cuts, if they had worked as promised, would have reduced consumer prices by lowering corporate taxes. That was part of the sales pitch. But no, CPI remained pretty flat until the post-Covid jump. In other words, corporations predictably swallowed up those tax cuts as excess profits. Consumers saw none of it. Of course, this is the flaw in trickle-down economics. There's very little trickle-down. But many consumers have a vague sense that they were promised much goodness by whichever government is in power, and that goodness does not end up on their doorstep. Cognitive dissonance shows up as a vague sense that things are less affordable than they ought to be, in light of past promises.
Yep, re trickle down. I don't think of tax cuts as lowering inflation--if anything, can push other way by raising after-tax income. I vaguely recall Trump econ folks saying tax cuts will raise productivity and that will lower prices, blah-blah-woof-woof. Nonsense.
I wish you had written about the rent-seeking that leads to a lack of affordability. To expect any meaningful policy in this regard from the rent-seeker-in-chief is clearly wishful thinking of the worst sort.
Not only is a Sharpie signed declaration to cap credit card rates at 10% ineffective, it’s also irrelevant. Credit card rates are determined by state usury laws, not by the federal government. Even if it were possible under some new law, it may well stop credit card companies from issuing cards to middle or lower income consumers, the very same folks who suffer from the affordability crunch.
Strong outline here, good points.
His White House - unlike Jared’s experience - is a missing point too. They float crap ideas into his delusional babbling, occasionally, but nod yes always. A weaker bunch we have never experienced.
Housing costs really are NOT reducible to supply, Jared. They relate to valuations which are wildly speculative. So, too, they realte to government driven policies on the availability and cost of loans, on people's EXPECTATIONS of profits from property. And what do we mean when we talk about supply and demand in housing? All over the Western world, people have moved on from having one house to having two, adding a crushing burden to supply… whole regions are empty and depopulated while others become property hotspots. And these are not necessarily places where people must be for jobs. They're fashionable because they're, well fashionable. Just as the hollowed out towns have no amenities because, well, they're hollowed out towns.
Men's wages have grown by 1% over the past 46 years, since 1979 (Federal Reserve's FRED graphs). Nonsupervisory worker's average weekly earnings were higher in 1973 than in 2025. The focus should also include raising wages. The Real GDP per capita has grown by 142% since 1973, workers are producing much more value but there's no wage gain.
Also a UNICEF study shows U.S. childcare policies rank at 40th out of 41 rich nations. "Where Do Rich Countries Stand on Childcare?" Pretty sad for the nation that has nearly the highest GDP per capita.
Just spoke with my home heating oil company, substantial increase over the current rate… I locked in the rate fearing even greater increases… and the reliance on more sweaters 🙄
What chance is there that prices will come down enough and incomes increase enough to provide significant relief to those who are living in the affordability gap? Seems to be vanishingly small if not already ZERO.