Why Donald Trump Can't Quit His Inflation Narrative
Even the Wall Street Journal editpage concedes the crisis is over. But Trump can't bear that the Fed will drop interest rates next month.
Some enthusiastic supporter knitted this “Whip Inflation Now” sweater for then-President Gerald Ford. Courtesy of the Gerald R. Ford Presidential Library and Museum.
An editorial in today’s Wall Street Journal headlined, “Is Inflation Whipped Now?” erases any lingering doubt I possessed that the Fed waited too long to drop interest rates (as it’s now all but certain to do in mid-September). Two years after inflation peaked at 9.1 percent, the Journal concedes, reluctantly, that the inflation crisis is over. Although “Chairman Powell’s caution to date has been warranted,” the editpage says, “Markets seem to think inflation is whipped and the Fed should start worrying about being late to cut rates…. Cutting rates in September might make sense.”
If that’s the new conservative line, don’t hold your breath for Donald Trump to repeat it. As I write in my latest New Republic piece, the man can’t quit the inflation narrative, partly for emotional reasons (he loves it too much) and partly because he doesn’t want to give aid and comfort to Fed Chairman Jerome Powell, whom he’s been accusing all year of plotting to throw the election to the Democrats by restoring the punch bowl. Now Trump prediction is becoming true and he’s too deep into narcissistic paranoia to understand that Powell (a registered Republican whom Trump himself appointed) is motivated by concerns about the economy, not about the election. Trump is himself an inflation dove, as he demonstrated throughout his presidential term by constantly urging Powell to lower interest rates. But when a rival is in office he becomes an inflation hawk. It’s situational for Trump, as pretty much everything is. You can read my piece here.
If he had even one iota of concern for policy, and how his decisions affected the public, he would instead be talking up what a great job his appointee Jerome Powell did, and trying to say that what's good about the economy comes from that, rather than just uniformly pretending everything is terrible.
But of course he made the same kind of error around COVID, just bashing the vaccines instead of taking credit for Operation Warp Speed and the work by Azar to prep for distribution. (Of course the reality is that these things worked because he happened to have made a few good appointments and didn't interfere. But a less narcissistic politician would be able to share credit with those appointees and try to win points for their work.)