Politics & Government
Consumers want 2019 prices
Although some economic indicators are strong, Trump gets low economic poll ratings; Wesleyan economist says there are a variety of reasons
By Scott Benjamin
Six years ago when he apparently was poised for a second, consecutive term, President Donald Trump had so many autograph hunters that he was envy of Shohei Ohtani.
The economic expansion – which had begun under Democrat Barack Obama – was in its record 11th year, unemployment in three years had been trimmed from 4.7 percent to 3.5 percent and workers’ wages were growing.
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Today, a year into his second, nonconsecutive term, the only way that the president could displace Aaron Judge with a comic-strip profile and signature on the package of Grand Slam Grape would be to give Big League Chew the deed to Trump Tower.
Wall Street Journal (WSJ) reporter Aaron Zitner wrote recently that a WSJ poll showed that, “By 15 points, more voters rate the economy as weak rather than strong.”
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In a recent Substack post, former New York Times economics columnist Peter Coy stated that the economy is “objectively doing quite well.” However, “A lot of consumers are nostalgic for the prices they used to pay for things. Trump dug himself a hole by promising that he would being pieces back down. That was never realistic – the overall price level rarely falls except in severe recessions.”
A report from the Democrats on the Joint Economic Committee of Congress indicated that Americans, on average, paid $310 more for groceries in 2025 than in 2024.
Trump appears to be on the verge of hitting into a routine 6-4-3 double play to the St. Louis Cardinals infield, circa 1982, which collectively captured 24 gold gloves, including 13 by Hall of Fame shortstop Ozzie Smit.
Inflation is beyond the Federal Reserve Board’s target of 2.0 percent and over the last year there has been meager job growth
Inflation is at 2.7 percent.
Interestingly, Trump’s imposition of tariffs hasn’t produced the dire consequences.
In a recent New York Times discussion, statistician Nate Silver of FiveThirtyEight stated, they “didn’t have as large an impact on consumer prices as most economists were expecting.”
In an e-mail interview with Patch.com, Balazs Zelity, an assistant professor of Economics at Wesleyan University in Middletown stated, “There are four potential reasons to note here. First, trade policy uncertainty remains extremely high as tariffs are paused and renegotiated on a regular basis. As a result, firms may choose not to pass tariffs onto customers for the time being in hopes that they may prove temporary. Second, firms have front-loaded imports prior to the implementation of the tariffs.”
He added, “Third, firms have also rerouted trade flows towards countries with more favorable tariffs. Finally, the world’s largest exporter, China, is experiencing manufacturing overcapacity and fierce competition among its manufacturers – factors that have kept price pressures bottled.”
Also, Zelity wrote that Trump’s harsh criticism of Federal Reserve Board Chairman Jerome Powell, whose term needs in May, “is worrying as central bank independence is key to ensuring price stability.”
Trump has proposed addressing the lack of affordable housing by extending 30-year mortgage limits to 50 years.
David Hebert of the American Institute of Economic Research disagrees, stating in a recent Wall Street Journal column that too often the federal government tries to save buyers and ignores producers.
He contends that the solution is to, among other things, ease zoning restrictions so that there is more housing supply.
Wrote Zelity, “I agree that one of the key reasons for the lack of housing affordability is that housing supply growth has been low since the Great Recession. To a large extent this is due to restrictive local regulations, such as zoning.”
He added, “Subsidizing the demand- side, by using methods such as 50-year mortgages or other subsidies to home buyers, is likely to achieve nothing more but further house price increases.”
Trump has engaged in state capitalism during his second term.
Marla Shagina wrote in the International Institute for Strategic Studies that the federal government “acquired a golden share in U.S. Steel as a condition for approving its acquisition by Japan’s Nippon Steel.”
Coy wrote recently on Substack that economist Clifford Winston of the Brookings Institute stated in his 2025 book, “Market Corrections Not Government Interventions: A Path to Improve the U.S. Economy” that governments should be reticent about jumping in to fix what policymakers perceive as market failures, because governments themselves often fail to fix the failures or even make things worse.”
Even when markets do underperform, they have a “capability to self-correct” that is rarely seen in government, Winston stated.
He wrote, “In the 1980s, when it was Japanese rather than Chinese cars that Americans were trying to keep out, Japan’s supposedly voluntary restraints on its automakers’ exports to the United States “limited the availability of fuel-efficient Japanese vehicles that U.S. consumers preferred over less-fuel-efficient U.S. vehicles” he writes. The reduction in competition made it possible for domestic automakers to “significantly raise their prices.”
Zelity stated that Winton’s statement is general, and he would want to read his book before making any assertive evaluations.
However, he added, “I would say that there is a newly emerging tendency towards industrial policy (governments actively aiding specific domestic industries) in many advanced economies, which risks creating inefficiencies at great cost to taxpayers while potentially achieving limited economic gains. Dr. Winston's description of Japanese export restraints in the 1980s provides one example of this. However, some might argue that even if such policies are costly and not economically optimal, they may be the right choice from a long-term strategic, geopolitical standpoint.”
Justin Lahart and Danny Dougherty of The Wall Street Journal have reported that job growth for 2025 was the lowest since 2003, excluding the 2008 Great Recession and the 2020 pandemic recession.
Wrote Zelity, “There are four factors behind slowing job growth in 2025. First, immigration restrictions have reduced population growth which has a direct negative effect on payroll growth. Second, there is a cyclical cooling in the labor market. That is to say, elevated interest rates as well as a return towards more normal conditions following the post-COVID boom have both exerted a negative force on job growth.”
“Third, public sector job growth was abnormally high in 2022-2024,” he remarked. “It has come back down closer to historical norms in 2025. And fourth, private sector hiring has also been cautious due to increased AI implementation.”
Yet, there is a contrast: Consumers are gloomy, yet reports state that the stock market is booming.
Zelity stated that is “to a very large extent caused by the AI boom. Companies with significant exposure to AI are the ones driving the gains and they are making up an increasingly larger share of leading indices such as the S&P 500.
The sustainability of this boom, reminiscent of the dot-com bubble, has been brought into question by many commentators. The vast majority of US stock market trades are made by institutional, not retail, investors which might explain the disconnect with consumer confidence. Consumer dissatisfaction is driven at least partially by stubbornly high inflation and prices.”
Resources:
E-mail interview with Balazs Zelity, Patch.com, on Thursday, January 15, 2026.
E-mail interview with Balazs Zelity, Patch.com, on Monday, January 19, 2026.
https://www.pbs.org/newshour/e...
https://www.aol.com/articles/s...
https://www.nytimes.com/2020/02/04/business/economy/trump-economy-state-of-the-union.html
https://www.nerdwallet.com/investing/learn/inflation.
Peter Coy, Substack.
