It’s particularly distasteful that so many in the media and the Democratic Party are openly wishing for higher inflation and a recession as a result of Donald Trump’s tariffs.
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Partisanship. I get it. But in an inflationary spiral, as we saw during the Biden administration, it causes real pain and uncertainty for real people. It’s not just a political game. Some families have to decide between putting food on the table and buying a needed drug for their child.
Hoping for that to happen so that the Democratic Party can make electoral gains is one more indication that the Democratic Party is broken and out of ideas.
NBC tried to point out that the poor will suffer the most under Trump’s tariff regime. “Trump’s new tariffs will hit lower-income households the hardest,” they warned.
CNN was positively hysterical. “Trump chaos has already damaged the economy. It may be too late to fix it,” screamed a headline. All that’s missing is Snidely Whiplash twirling his mustache and cackling.
All this seems out of phase (Star Trek fans know what I’m talking about). On Thursday, several economic reports were released that showed the expected April catastrophe to be something totally different.
Axios, citing newly released data, reported that there are not signs “of recessionary or inflationary conditions implied by business and consumer surveys.”
The data, according to Axios, show “steady retail sales and a surprising drop in wholesale prices in April.” Data also reportedly indicate that “spending at restaurants and bars, among the few service-sector categories in the retail sales report, rose by 1.2% in April.”
“The Producer Price Index … showed little sign of tariff-related price pressures that businesses have warned about,” the report continued.
On Monday JPMorgan Chase & Co. abandoned its earlier prediction that the U.S. would fall into a recession.
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In the expectations game, the Democrats and the media are losing. Rather than backtracking or even celebrating the positive economic news, TDS sufferers are doubling down.
Paul “The National Debt Doesn’t Matter” Krugman, the Hysteric-in-Chief on the left, tried to gin up the fear by warning his readers not to pay attention to what’s in front of their eyes.
The reality is that we’ve gone from a completely insane tariff rate on imports from China to a rate that’s merely crazy. And China accounts for only a fraction of our imports. Tariffs on everyone else are still at 10 percent, a level we haven’t seen in generations. And there are still other shoes to drop: Trump has, for example, been promising tariffs on pharmaceuticals.
The trade war is still very much on. Anyone who reports otherwise (a) hasn’t done their homework (b) is misleading the public. And while the stock market has to some extent bought into unwarranted optimism, markets with fewer naive investors like oil and bonds don’t seem fooled.
Perhaps the oil and bond markets are listening to Krugman rather than the evidence in front of their faces.
Take the Producer Price Index (PPI). This is one of the most closely watched inflation indices because it shows what inflation will look like in two to three months.
“PPI fell by 0.5% in April after a flat reading in March, rounding out an upbeat inflation snapshot after the index’s consumer counterpart released Tuesday,” reported Axios.
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The report added, “Services prices fell by 0.7%, the biggest drop since the index began in 2009. (Emphasis added).
Walmart says it will pass some tariff-related price increases on to consumers, which, oddly, the left is cheering.
“We will do our best to keep our prices as low as possible. But given the magnitude of the tariffs, even at the reduced levels announced this week, we aren’t able to absorb all the pressure given the reality of narrow retail margins,” CEO Doug McMillon said.
Those “reduced levels” of tariffs will take most of the pressure off prices and keep the increases on some products to a minimum.
I’m sending a box of Kleenex to Krugman as a gesture of goodwill.
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