As the beginning of this post notes, I’ll be a bit less active in the comment section this week. I’m traveling around vietnam! If anyone has any recs for Saigon and Hanoi lemme know. I’ll also be around vinh hy
Can I note that the three things Americans probably have the most complaints about are items Dems can actually bring down prices “day 1”. I would say in order they are groceries, cost of mortgages and cost of car loans. Groceries is the item that if you get rid of tariffs cost of a lot goods should actually possibly come down. Furthermore, housing and cars are Americans two biggest purchases. Policies that actually meaningfully bring down the 10-year would actually lower prices.
Back to the tariffs though. It pains me to no end that Democrats seems to be rhetorically supportive of tariffs. That somehow the only issue is Trump is implementing them stupidly. Which at least as the virtue of being true. But my god is there a “horse shoe” theory going on with tariffs. Maybe a reminder that Trump was once a Democrat and this issue might be a reason why. Basically it’s the absurd utterly out of date mental model of “blue collar workers” as somehow all “lunch pail” steel workers. For Trump he wants to bring back these jobs because they somehow bring some fake time when “men were men, grrrr”. But for Dems it seems to be all about bringing back old school unions.
And to piggyback off that last point. I’m not even particularly anti Union. I actually have a decent amount of sympathy for SEIU or workers trying to unionize Starbucks. But these older unions? These relics of an economy that doesn’t exist? I will repeat to Dems; These aren’t your friends! Even the ones who endorsed Harris. The membership of Teamsters, Dockworkers, etc voted for Trump. For the love of god Dems can you please also update your mental model of the modern economy. And to bring it back to the post at hand. You know what can bring down prices? Automating ports! The dockworkers had no greater friend than Biden and it did square root of f**k all. So why are we trying to protect their jobs decades after any time they could deliver votes?
I have some qualms with the latter half of this comment, but I do agree wholeheartedly with the first half.
Lower interest rates would make it cheaper to buy cars and houses which are some of the largest recurring payments people make. Even people who already have a cheap mortgage are affected by higher rates because it hinders their ability to move and sell.
In their heart of hearts, Democrats see tariffs as a tax paid by Business™ and not a cost passed on to the consumer. Eliminating tariffs is a gift to Business™, and Business™ is evil.
On the flip side, you could probably convince a critical mass of Democrats to unite around a complicated Tariff Offset and Mitigation Credit written into the tax code that would refund one hundred percent of the tariff cost passed on to the consumer, but which would be so byzantine to claim and administer that it would actually cost money.
I agree with your comments about tariffs and old-school unions. As experience under DJT is proving, tariffs do not accomplish the supposed goal of reviving manufacturing jobs. They increase costs and prices, and they inherently create opportunities for cronyism and corruption. ... It's quite unfortunate that Dem leaders in several "blue collar" swing states are fans of tariffs (just not DJT's tariffs) ...
Lowering mortgage rates will allow people to pay more for a house for the same monthly payment. Thus, in the absence of a huge increase in housing supply, lower rates won’t lower house prices, they’ll raise prices and leave payments the same. People will just be allowed to be even more in debt.
Long-term we have much bigger problems in the housing market. If anything, today’s interest rates are helping stop the skyrocketing price trend of the last 10+ years.
I don’t think the problem is so much that it’s boring as much as that a normal person would have a hard time understanding how it addresses costs, especially the salient ones people complain about so much.
It’s really hard to connect the dots for people on this stuff and if we’re honest wages explain many of the most salient things (people post 2019 restaurant menus all the time)
Do you need to explain? The flip side of voters not having a good grasp on policy is that, if the President makes a bunch of moves in year 1 to reduce inflation such that it's lower by year 4, voters will give him credit even if he doesn't do something like rent control that they think will lower inflation. It worked for Reagan – voters don't know why the economy got better, it just did.
I think most voters understand that inflation drives prices, but what they want is lower prices, not lower inflation. I remember during the Biden administration, Paul Krugman was writing columns about inflation coming down, and then the comments section would be full of people saying that prices were too high, and he'd respond with ... well, but inflation is going down! See this number? It's lower! When he was really providing an accurate answer to the wrong question.
Wages did go up during this period, but not evenly across the board, and even though lower wage earners benefited, those increases were rapidly eaten up by rising cost of food, rent, and (for homeowners) actual increases in their mortgage payments driving by higher property taxes on their now more valuable houses. And those costs are a larger share of spending for lower income earners. So people are making more money but not feeling materially any better off -- in some cases, they may be worse off in real dollar terms, depending on the wage/price increase ration in their own household.
I'm not sure how you really address from the policy perspective; lower interest rates won't help people who bought a house ten years ago and had their mortgage payment go up a few hundred bucks a month, or the change the fact that it is now more expensive to buy the same amount of food.
The tragedy of Yglesisnism is the worst stupidities in the discourse really could be fixed by making people take a two week macro economic seminar. Basic Keynesian economics requires only arithmetic. Average IQ people could understand it if they just devoted a quarter of their screen time to it for a month.
I don't know what the standard is these days, but when I was in high school you typically had at least 3 credit hours of electives each semester in sophomore year and later where you chose the class to take and it wasn't something that necessarily counted towards requirements. If that's still true (or true in most school systems), you could require an economics class without "giving up" anything except one elective class.
I don't think the commenter meant that you need math to do econ, they meant that in this country we struggle to teach essential knowledge via school. Therefore, the idea that the public would be more educated on a topic if we required it in high school is specious.
It's more of a rhetorical point. Of course many students do learn the material taught in high school. But it's hard to read so many articles showing the struggles of secondary education in the U.S. and not react when someone proposes it as a remedy to another problem.
Lower deficit = lower inflation and lower interest rates (Ie mortgages, car loans, credit card debt, etc).
A competent politician can sell this. People also have a natural understanding for things like "not living outside your means" and other such comparisons.
But like the thing I see posts on is usually like the nominal inflation in food prices. I’m not sure how much these policies lead to 6 dollar burritos.
I know the effect you’re describing but it doesn’t seem that related to what people bitch about.
This is where having a communicator like Bill Clinton or Barack Obama would come in handy, but unfortunately that's about as actionable as telling the Jets "you guys should draft somebody like Josh Allen."
The bigger problem: the public no longer trusts people in positions of traditional authority on confusing topics (for good reason, I’d say) but also the public doesn’t actually have ability to make sound judgments on its own.
Folks can understand, "Interest rates are too high, and that's why your car payment/new mortgage payment is too high." If you focus that, and leave the cancellation of tariffs to do the work on the other front, you can win rhetorically and on substance. And these are things you can do through fiscal policy.
But if you want to go beyond that, there's a ton more that can be done, especially if you're willing to gore some more sacred cows.
Embrace automation rather than pearl-clutching at the the potential loss of employment for taxi drivers or whatever. The biggest thing that's driven cost increases over my lifetime has been the price of human labor, as a result of Baumol's cost disease. Products and services that haven't realized productivity gains on the inputs of human labor relative to the broader economy are more expensive. So invest in automation where possible. Replace (supplement?) massive data center CAPEX with massive investment in automated manufacturing of high-value products.
And implement a massive reform to the immigration system. Implement draconian enforcement laws at the borders along side a not-very-generous-by-quite-large guest worker program. Take whatever unpalatable steps on enforcement seem necessary to get folks on board. Don't just focus on the most skilled folks at the top of the income ladder, but let in folks at many levels. You wanna see prices drop for labor-intensive sectors like food service, groceries, and child care? Increase the labor supply in those sectors!
The personal pocketbook metaphor Obama used is really compelling (you're tightening your belt, so the government should too). But it's actually the opposite of what Keynesian economics says. Is there a compelling story we can tell that actually aligns with the economics?
Or do we just fudge it a bit and *say* that people are tightening their belts because times are hard, when the existence of inflation means they're actually doing the opposite.
I don’t think moving inflation from 2.7% to 1.7% would meaningfully change public opinion. When people complain about “affordability,” they’re not doing CPI arithmetic — they’re saying “I want more status.” Higher GDP growth would help, but a couple of percentage points spread over four years is thin gruel and much of status is relative.
The deeper problem is national malaise: we’ve lost even the pretense of shared purpose. Biden clinging to power as a dotard didn’t just hurt Democrats electorally; it ceded the moral high ground by signaling that in-group aggrandizement mattered more than renewal or honesty. In a society without shared purpose, people don’t rally around policy competence — they resent their betters. Envy hardens into politics, and performative outrage flourishes.
Shared purpose is eggheadist abstraction that the Professional classes focus on.
Rebuild sense of opportunity and you get purpose. Putting the Abstraction in front is the Cart before the Horse.
Reduction of inflation towards 2% and reducing pricing pressures including interest rates within the economy and acclerating growth goes a long way to meeting the public where their concerns are (versus hand-wringing about the abstractions)
and Democrats ceasing to focus on Academics abstractions and digging themselves holes into complexity via excessive focus on abstraction (example trying to run a campaign on the abstraction of Democracy) would be a good place to start, to focus on the practical.
I am about 50% with Abbott on this one. To take it super academic for a moment, Francis Fukuyama's writing around the importance of feeling respected and the quest for superior status, which Fukuyama has a couple of Greek names for, has always been a really important part of politics. And in our current information economy is ever more visible and salient. Redirecting some of that energy to some shared sense of pride and purpose would be good, if possible.
That said, people actually care about their material lives and budgets, especially the people who switch parties from election to election.
If finding a shared national purpose were easy, we would have done it. France also has a notoriously hard time finding shared purpose.
There are certainly many purposes I don’t want to share- defending Taiwan, revivifying christianity, eliminating racial gaps. I suspect the next time we converge on a national purpose we will be at war. And yet I’m confident the politics of envy will persist until a shared purpose is found.
This is a hard problem. Matt hasn’t solved it, and I think he’s being too earnest about prices in part because he can’t solve the purpose coordination problem.
The good news is someone with Obama level charisma and discipline might be able to solve this problem even though Matt can’t.
I think you're wanting something that's almost a contradiction in terms -- a democratic republic of hundreds of millions of free citizens with liberty to make how to live their lives, AND who all happen to want the same thing. By design, the only purpose that really has to be shared in our country is a shared commitment to giving each other the space and freedom to make our own decisions. That's a pretty weak, lowest-common-demonimator bond, except when it's under perceptible external threat. If you want to be part of a polity with a stronger sense of shared purpose that than, you'll probably have to find it in a smaller government within this large Union.
The problem is that Democrats are running on middle-class tax cuts, which we all know would increase the deficit and inflation. As the piece acknowledges, undoing Trump tax cuts, increasing taxes for "the rich," and minor subsidy cuts aren't going to be nearly enough
I have to admit, while I understand why lowering costs is undesirable, and not possible anyway, it is a little hard for me to wrap my head around the idea that $20 burgers and $6 for a small bag of chips are just how things are going to be going forward. I think a lot of people are in the same boat. Especially when you throw in the average price of a new car being $50k and average house prices over $500k.
Prices are anchored in our minds but they also become unanchored eventually. If you think back to your childhood I'm sure prices were wildly different.
People can live with prices moving up 2-3% a year. The problem is that during the aftermath of COVID we had a couple of years of 5%+ inflation, or large non gradual changes, and it's going to take a while for people to internalize that. But if inflation stayed at 3% forever people would eventually adapt as long as salaries move in tandem.
Useful. I think the international lessons on inflation essentially say it takes several years for people to adjust to new price levels (what people particularly hate are sudden bursts of inflation / rapid changes in rate), as what happened). As Noah Smith has touched on as well.
In terms of austerity - the Clinton model probably is excellent - real tax hikes plus showing some belt-tightening goes a long way for credibility and upending the 'tax & spend'
Abundance and broad program of regulatory simplification / streamlining (don't call it deregulation, call it regulatory streamlining [which as Biden Admin inability to make things move showed is badly badly needed]) and removing the proliferation of veto-points for everything.
Energy abundance: Looking for opportunities for public-private funding where US Federal guarantees (along with regs streamlining) at a fairly modest budgetary costs can reduce risk, reduce interest rate cost on financing - with big and extensive program on Grid Expansion and promoting (a) expanded and reinforced interconnects for true continental grid for max potential on energy wheeling / exchange and time/generation arbitrage [great for RenEnrgy], (b) guarantees backing and promiting regional and local transmission and distribution grid modernisation / upgrading of in place grid (smart grid management [metering etc], improved cable tech, promo of high cap transmission) and co-siting for existing potential right-of-ways to enable particularly rapid build out of Transmission. Generation needs connection, connection needs grid, and cheapest generation needs focus not on touchy-feely greeny left anti-scale concepts but economy-of-scale installations (storage, generation) where per-unit pricing on installation benefits from scale.
How much do you think requires new federal spending (fed backed loans, tax credits, etc) vs how much of it could be done with better/new regs (eg permitting) and better leadership/priority setting from FERC?
Note on a completely unrelated topic. I would like to think I’m not a particularly egotistical person. Or at the very least, I am in general one to not be too much of a braggadocio.
But you know what? There certain times where there are exceptions and certain times I’m going to say “you know what, I’m going to indulge a bit”…
I am taking an absolute victory lap about Bari Weiss.
I cannot emphasize enough I had her pegged back in pre 2020 days. This commitment to being a free speech warrior? Yeah, not so much if it happens to conflict with her own political goals. Knock me over with a feather this 60 minutes fiasco happened. I am jack’s lack of surprise. Really, the person who first gained fame trying to get an Israel critic fired wasn’t actually committed to all free speech especially when it’s comes to anything even mildly critical of Likud? Really, the person who did her very best to use her New York Times perch to elevate “intellectual dark web” bigots and crazy people because they happened to hate the same lefties she hated (I said it then, you can defend free speech without needing to elevate the worst bigoted garbage out there).
As I said indulge me. Because I got a lot of crap especially when I was more active on Twitter from a lot of right of center and left of center types for making what I thought was a pretty easy thing to see which was “she’s a conservative with conservative policy goals who you think is your ally because she personally used to be anti Trump but is clearly not anymore and is not actually your ally against Trump and lefty overreach!”
Just like how a previous column pointed out that voters conceptualize corruption differently, I think people's view of prices and inflation doesn't map neatly to actual prices. In particular, people often dislike service sector productivity increases, because they (necessarily) involve getting less time from a person helping you. You might even describe that as inflation -- you pay the same price and get less service at the grocery store when they eliminate baggers or at the restaurant when they switch to counter service. Unfortunately given the dominance of the service sector, this is a big problem.
Maybe, but shrinkflation is usually getting less product for the same price. If you conceptualize grocery stores as places that sell you groceries, then the quantity of store staff isn't part of what you're paying for.
Way back in 2015 and 2016 one of Hilary's problems vs both Sanders and Trump was that she had a BS Deficit, at least on economic promises. In part that resulted in her turn to identity issues, with all that has led to since then.
Attacking the deficit used to have a populist bent and it seems like one could bring that back to a degree by explicitly tying it to inflation. There's probably a list of reasonably popular tax targets that one can use as examples such as the carried interest, but there's no real reason to mimic the overly specific health-care debates that Democrats tend to have in the primary.
The rest can be put on to a Blue-Ribbon Commission, or some such formulation, which are sort of unreasonably popular with voters since they seem to promise reasonable yet, somehow easy, solutions.
People trust Bernie’s heart is in the right place but didn’t for Hillary. This is important when they’re going to negotiate a compromise on your behalf with the forces of evil. You want every concession to be hard-fought. Bernie has always been practical when it comes to his actual voting record, he’s rarely let the perfect be the enemy of the good when it’s put to a vote. Democrats need someone they can put confidence in to be like this, and ideally one committed to putting all the costs of austerity on those who voted for Trump.
Ha, this reminds me of when my brother was an attorney in New Orleans. He said nothing much gets done between Christmas and Mardi Gras. I asked if he meant between Christmas and New Year's Day. He said, no, Mardi Gras.
Seems like Trump’s 2024 victory (or at least, the impressive margin of victory, considering how bad the fundamentals of his candidacy were) came down to a campaign very narrowly optimized on winning above all else because he didn’t want to go to jail.
Trump is a vaccine guy all the way, but he let RFK Jr into the tent because he wanted to win.
Trump literally launched air strikes on Assad but he invited Tulsi into the tent because he wanted to win.
Trump knew there would be no bringing down nominal prices, but he told a lie that would destroy his long-term credibility because in the short-term he didn’t want to go to jail so he WANTED TO WIN.
I’m not saying that if Gavin is the 2028 nominee we should wink wink nudge nudge a state AG in Idaho or Arkansas to come up with a phony prosecution just to light a fire under his ass but… I’m not… not saying that.
It's baffling that Democrats have had two presidents (Carter and Biden) derailed by inflation but Democrats still don't really care about lowering inflation.
A selfish political reason for elected officials to favor higher birth rates is it bakes in a chunk of the electorate that didn't mentally anchor on {2012, 1997, 1982} prices. Probably good for the economy to have at least some voters who are not psychologically reactive to contemporary prices.
I really want to understand Mitt Romney's mind in 2012, at some level did he decide that making unpopular economic promises was more important than winning?
As the beginning of this post notes, I’ll be a bit less active in the comment section this week. I’m traveling around vietnam! If anyone has any recs for Saigon and Hanoi lemme know. I’ll also be around vinh hy
Woah cool. Food reviews please!
Can I note that the three things Americans probably have the most complaints about are items Dems can actually bring down prices “day 1”. I would say in order they are groceries, cost of mortgages and cost of car loans. Groceries is the item that if you get rid of tariffs cost of a lot goods should actually possibly come down. Furthermore, housing and cars are Americans two biggest purchases. Policies that actually meaningfully bring down the 10-year would actually lower prices.
Back to the tariffs though. It pains me to no end that Democrats seems to be rhetorically supportive of tariffs. That somehow the only issue is Trump is implementing them stupidly. Which at least as the virtue of being true. But my god is there a “horse shoe” theory going on with tariffs. Maybe a reminder that Trump was once a Democrat and this issue might be a reason why. Basically it’s the absurd utterly out of date mental model of “blue collar workers” as somehow all “lunch pail” steel workers. For Trump he wants to bring back these jobs because they somehow bring some fake time when “men were men, grrrr”. But for Dems it seems to be all about bringing back old school unions.
And to piggyback off that last point. I’m not even particularly anti Union. I actually have a decent amount of sympathy for SEIU or workers trying to unionize Starbucks. But these older unions? These relics of an economy that doesn’t exist? I will repeat to Dems; These aren’t your friends! Even the ones who endorsed Harris. The membership of Teamsters, Dockworkers, etc voted for Trump. For the love of god Dems can you please also update your mental model of the modern economy. And to bring it back to the post at hand. You know what can bring down prices? Automating ports! The dockworkers had no greater friend than Biden and it did square root of f**k all. So why are we trying to protect their jobs decades after any time they could deliver votes?
I have some qualms with the latter half of this comment, but I do agree wholeheartedly with the first half.
Lower interest rates would make it cheaper to buy cars and houses which are some of the largest recurring payments people make. Even people who already have a cheap mortgage are affected by higher rates because it hinders their ability to move and sell.
In their heart of hearts, Democrats see tariffs as a tax paid by Business™ and not a cost passed on to the consumer. Eliminating tariffs is a gift to Business™, and Business™ is evil.
On the flip side, you could probably convince a critical mass of Democrats to unite around a complicated Tariff Offset and Mitigation Credit written into the tax code that would refund one hundred percent of the tariff cost passed on to the consumer, but which would be so byzantine to claim and administer that it would actually cost money.
I agree with your comments about tariffs and old-school unions. As experience under DJT is proving, tariffs do not accomplish the supposed goal of reviving manufacturing jobs. They increase costs and prices, and they inherently create opportunities for cronyism and corruption. ... It's quite unfortunate that Dem leaders in several "blue collar" swing states are fans of tariffs (just not DJT's tariffs) ...
Lowering mortgage rates will allow people to pay more for a house for the same monthly payment. Thus, in the absence of a huge increase in housing supply, lower rates won’t lower house prices, they’ll raise prices and leave payments the same. People will just be allowed to be even more in debt.
Long-term we have much bigger problems in the housing market. If anything, today’s interest rates are helping stop the skyrocketing price trend of the last 10+ years.
I don’t think the problem is so much that it’s boring as much as that a normal person would have a hard time understanding how it addresses costs, especially the salient ones people complain about so much.
It’s really hard to connect the dots for people on this stuff and if we’re honest wages explain many of the most salient things (people post 2019 restaurant menus all the time)
Do you need to explain? The flip side of voters not having a good grasp on policy is that, if the President makes a bunch of moves in year 1 to reduce inflation such that it's lower by year 4, voters will give him credit even if he doesn't do something like rent control that they think will lower inflation. It worked for Reagan – voters don't know why the economy got better, it just did.
I think most voters understand that inflation drives prices, but what they want is lower prices, not lower inflation. I remember during the Biden administration, Paul Krugman was writing columns about inflation coming down, and then the comments section would be full of people saying that prices were too high, and he'd respond with ... well, but inflation is going down! See this number? It's lower! When he was really providing an accurate answer to the wrong question.
Wages did go up during this period, but not evenly across the board, and even though lower wage earners benefited, those increases were rapidly eaten up by rising cost of food, rent, and (for homeowners) actual increases in their mortgage payments driving by higher property taxes on their now more valuable houses. And those costs are a larger share of spending for lower income earners. So people are making more money but not feeling materially any better off -- in some cases, they may be worse off in real dollar terms, depending on the wage/price increase ration in their own household.
I'm not sure how you really address from the policy perspective; lower interest rates won't help people who bought a house ten years ago and had their mortgage payment go up a few hundred bucks a month, or the change the fact that it is now more expensive to buy the same amount of food.
The tragedy of Yglesisnism is the worst stupidities in the discourse really could be fixed by making people take a two week macro economic seminar. Basic Keynesian economics requires only arithmetic. Average IQ people could understand it if they just devoted a quarter of their screen time to it for a month.
Econ 101 needs to be a mandatory class in High School.
We have a hard enough time teaching people arithmetic
also opportunity cost is literally the first concept you learn in econ. If we're making that mandatory, what are we giving up?
I don't know what the standard is these days, but when I was in high school you typically had at least 3 credit hours of electives each semester in sophomore year and later where you chose the class to take and it wasn't something that necessarily counted towards requirements. If that's still true (or true in most school systems), you could require an economics class without "giving up" anything except one elective class.
I took IB Econ and it was one of my favorite classes in high school. Don't remember it being math heavy.
I don't think the commenter meant that you need math to do econ, they meant that in this country we struggle to teach essential knowledge via school. Therefore, the idea that the public would be more educated on a topic if we required it in high school is specious.
It's more of a rhetorical point. Of course many students do learn the material taught in high school. But it's hard to read so many articles showing the struggles of secondary education in the U.S. and not react when someone proposes it as a remedy to another problem.
Macro is usually 102, but I agree.
Lower deficit = lower inflation and lower interest rates (Ie mortgages, car loans, credit card debt, etc).
A competent politician can sell this. People also have a natural understanding for things like "not living outside your means" and other such comparisons.
People often hold incompatible beliefs.
I am fully onboard with some fiscal hawkishness but this heuristic is far too simple imo
But like the thing I see posts on is usually like the nominal inflation in food prices. I’m not sure how much these policies lead to 6 dollar burritos.
I know the effect you’re describing but it doesn’t seem that related to what people bitch about.
It's indirect at best to food prices. For that the answer is really tariffs and other supply side reforms.
But with housing costs it could make a difference.
Lower deficits is certainly not a cure all.
This is where having a communicator like Bill Clinton or Barack Obama would come in handy, but unfortunately that's about as actionable as telling the Jets "you guys should draft somebody like Josh Allen."
The bigger problem: the public no longer trusts people in positions of traditional authority on confusing topics (for good reason, I’d say) but also the public doesn’t actually have ability to make sound judgments on its own.
Folks can understand, "Interest rates are too high, and that's why your car payment/new mortgage payment is too high." If you focus that, and leave the cancellation of tariffs to do the work on the other front, you can win rhetorically and on substance. And these are things you can do through fiscal policy.
But if you want to go beyond that, there's a ton more that can be done, especially if you're willing to gore some more sacred cows.
Embrace automation rather than pearl-clutching at the the potential loss of employment for taxi drivers or whatever. The biggest thing that's driven cost increases over my lifetime has been the price of human labor, as a result of Baumol's cost disease. Products and services that haven't realized productivity gains on the inputs of human labor relative to the broader economy are more expensive. So invest in automation where possible. Replace (supplement?) massive data center CAPEX with massive investment in automated manufacturing of high-value products.
And implement a massive reform to the immigration system. Implement draconian enforcement laws at the borders along side a not-very-generous-by-quite-large guest worker program. Take whatever unpalatable steps on enforcement seem necessary to get folks on board. Don't just focus on the most skilled folks at the top of the income ladder, but let in folks at many levels. You wanna see prices drop for labor-intensive sectors like food service, groceries, and child care? Increase the labor supply in those sectors!
> It’s really hard to connect the dots for people
The personal pocketbook metaphor Obama used is really compelling (you're tightening your belt, so the government should too). But it's actually the opposite of what Keynesian economics says. Is there a compelling story we can tell that actually aligns with the economics?
Or do we just fudge it a bit and *say* that people are tightening their belts because times are hard, when the existence of inflation means they're actually doing the opposite.
I don’t think moving inflation from 2.7% to 1.7% would meaningfully change public opinion. When people complain about “affordability,” they’re not doing CPI arithmetic — they’re saying “I want more status.” Higher GDP growth would help, but a couple of percentage points spread over four years is thin gruel and much of status is relative.
The deeper problem is national malaise: we’ve lost even the pretense of shared purpose. Biden clinging to power as a dotard didn’t just hurt Democrats electorally; it ceded the moral high ground by signaling that in-group aggrandizement mattered more than renewal or honesty. In a society without shared purpose, people don’t rally around policy competence — they resent their betters. Envy hardens into politics, and performative outrage flourishes.
Shared purpose is eggheadist abstraction that the Professional classes focus on.
Rebuild sense of opportunity and you get purpose. Putting the Abstraction in front is the Cart before the Horse.
Reduction of inflation towards 2% and reducing pricing pressures including interest rates within the economy and acclerating growth goes a long way to meeting the public where their concerns are (versus hand-wringing about the abstractions)
and Democrats ceasing to focus on Academics abstractions and digging themselves holes into complexity via excessive focus on abstraction (example trying to run a campaign on the abstraction of Democracy) would be a good place to start, to focus on the practical.
I am about 50% with Abbott on this one. To take it super academic for a moment, Francis Fukuyama's writing around the importance of feeling respected and the quest for superior status, which Fukuyama has a couple of Greek names for, has always been a really important part of politics. And in our current information economy is ever more visible and salient. Redirecting some of that energy to some shared sense of pride and purpose would be good, if possible.
That said, people actually care about their material lives and budgets, especially the people who switch parties from election to election.
If finding a shared national purpose were easy, we would have done it. France also has a notoriously hard time finding shared purpose.
There are certainly many purposes I don’t want to share- defending Taiwan, revivifying christianity, eliminating racial gaps. I suspect the next time we converge on a national purpose we will be at war. And yet I’m confident the politics of envy will persist until a shared purpose is found.
This is a hard problem. Matt hasn’t solved it, and I think he’s being too earnest about prices in part because he can’t solve the purpose coordination problem.
The good news is someone with Obama level charisma and discipline might be able to solve this problem even though Matt can’t.
I think you're wanting something that's almost a contradiction in terms -- a democratic republic of hundreds of millions of free citizens with liberty to make how to live their lives, AND who all happen to want the same thing. By design, the only purpose that really has to be shared in our country is a shared commitment to giving each other the space and freedom to make our own decisions. That's a pretty weak, lowest-common-demonimator bond, except when it's under perceptible external threat. If you want to be part of a polity with a stronger sense of shared purpose that than, you'll probably have to find it in a smaller government within this large Union.
Our “shared national purpose” should simply be punishing MAGA.
The problem is that Democrats are running on middle-class tax cuts, which we all know would increase the deficit and inflation. As the piece acknowledges, undoing Trump tax cuts, increasing taxes for "the rich," and minor subsidy cuts aren't going to be nearly enough
Beat me to it. Democrats have needlessly backed themselves into a corner with this stupid pledge.
Fudge it. Avoid any details.
Democrats have been continuously redefining their middle class threshold upwards as more well to do college graduates join their ranks.
I have to admit, while I understand why lowering costs is undesirable, and not possible anyway, it is a little hard for me to wrap my head around the idea that $20 burgers and $6 for a small bag of chips are just how things are going to be going forward. I think a lot of people are in the same boat. Especially when you throw in the average price of a new car being $50k and average house prices over $500k.
You need to look at the wage side of it as well. One of the reasons those burgers are expense is how much wages have risen for folks at the bottom.
Prices are anchored in our minds but they also become unanchored eventually. If you think back to your childhood I'm sure prices were wildly different.
People can live with prices moving up 2-3% a year. The problem is that during the aftermath of COVID we had a couple of years of 5%+ inflation, or large non gradual changes, and it's going to take a while for people to internalize that. But if inflation stayed at 3% forever people would eventually adapt as long as salaries move in tandem.
Productivity gains cause real price declines.
When I was a kid you could get a burger for $3 and still have money for the bus ride home ... We will be that generation.
Useful. I think the international lessons on inflation essentially say it takes several years for people to adjust to new price levels (what people particularly hate are sudden bursts of inflation / rapid changes in rate), as what happened). As Noah Smith has touched on as well.
In terms of austerity - the Clinton model probably is excellent - real tax hikes plus showing some belt-tightening goes a long way for credibility and upending the 'tax & spend'
Abundance and broad program of regulatory simplification / streamlining (don't call it deregulation, call it regulatory streamlining [which as Biden Admin inability to make things move showed is badly badly needed]) and removing the proliferation of veto-points for everything.
Energy abundance: Looking for opportunities for public-private funding where US Federal guarantees (along with regs streamlining) at a fairly modest budgetary costs can reduce risk, reduce interest rate cost on financing - with big and extensive program on Grid Expansion and promoting (a) expanded and reinforced interconnects for true continental grid for max potential on energy wheeling / exchange and time/generation arbitrage [great for RenEnrgy], (b) guarantees backing and promiting regional and local transmission and distribution grid modernisation / upgrading of in place grid (smart grid management [metering etc], improved cable tech, promo of high cap transmission) and co-siting for existing potential right-of-ways to enable particularly rapid build out of Transmission. Generation needs connection, connection needs grid, and cheapest generation needs focus not on touchy-feely greeny left anti-scale concepts but economy-of-scale installations (storage, generation) where per-unit pricing on installation benefits from scale.
Love the grid stuff - but it's a lot.
How much do you think requires new federal spending (fed backed loans, tax credits, etc) vs how much of it could be done with better/new regs (eg permitting) and better leadership/priority setting from FERC?
Note on a completely unrelated topic. I would like to think I’m not a particularly egotistical person. Or at the very least, I am in general one to not be too much of a braggadocio.
But you know what? There certain times where there are exceptions and certain times I’m going to say “you know what, I’m going to indulge a bit”…
I am taking an absolute victory lap about Bari Weiss.
I cannot emphasize enough I had her pegged back in pre 2020 days. This commitment to being a free speech warrior? Yeah, not so much if it happens to conflict with her own political goals. Knock me over with a feather this 60 minutes fiasco happened. I am jack’s lack of surprise. Really, the person who first gained fame trying to get an Israel critic fired wasn’t actually committed to all free speech especially when it’s comes to anything even mildly critical of Likud? Really, the person who did her very best to use her New York Times perch to elevate “intellectual dark web” bigots and crazy people because they happened to hate the same lefties she hated (I said it then, you can defend free speech without needing to elevate the worst bigoted garbage out there).
As I said indulge me. Because I got a lot of crap especially when I was more active on Twitter from a lot of right of center and left of center types for making what I thought was a pretty easy thing to see which was “she’s a conservative with conservative policy goals who you think is your ally because she personally used to be anti Trump but is clearly not anymore and is not actually your ally against Trump and lefty overreach!”
Just like how a previous column pointed out that voters conceptualize corruption differently, I think people's view of prices and inflation doesn't map neatly to actual prices. In particular, people often dislike service sector productivity increases, because they (necessarily) involve getting less time from a person helping you. You might even describe that as inflation -- you pay the same price and get less service at the grocery store when they eliminate baggers or at the restaurant when they switch to counter service. Unfortunately given the dominance of the service sector, this is a big problem.
I'd call it shrinkflation
Maybe, but shrinkflation is usually getting less product for the same price. If you conceptualize grocery stores as places that sell you groceries, then the quantity of store staff isn't part of what you're paying for.
Way back in 2015 and 2016 one of Hilary's problems vs both Sanders and Trump was that she had a BS Deficit, at least on economic promises. In part that resulted in her turn to identity issues, with all that has led to since then.
Attacking the deficit used to have a populist bent and it seems like one could bring that back to a degree by explicitly tying it to inflation. There's probably a list of reasonably popular tax targets that one can use as examples such as the carried interest, but there's no real reason to mimic the overly specific health-care debates that Democrats tend to have in the primary.
The rest can be put on to a Blue-Ribbon Commission, or some such formulation, which are sort of unreasonably popular with voters since they seem to promise reasonable yet, somehow easy, solutions.
It isn't wrong to call it a "BS Deficit" but it can just as easily be described as being bad at politics.
Both descriptions are accurate.
People trust Bernie’s heart is in the right place but didn’t for Hillary. This is important when they’re going to negotiate a compromise on your behalf with the forces of evil. You want every concession to be hard-fought. Bernie has always been practical when it comes to his actual voting record, he’s rarely let the perfect be the enemy of the good when it’s put to a vote. Democrats need someone they can put confidence in to be like this, and ideally one committed to putting all the costs of austerity on those who voted for Trump.
The Federal Holidays are on Thursdays not Wednesdays as stated in your first paragraph!
But what day have you checked out mentally?
November 26th
Ha, this reminds me of when my brother was an attorney in New Orleans. He said nothing much gets done between Christmas and Mardi Gras. I asked if he meant between Christmas and New Year's Day. He said, no, Mardi Gras.
Dear Larder gave Feds Wednesday and Friday off as holidays this year.
Huh. Indeed he did! https://www.whitehouse.gov/presidential-actions/2025/12/providing-for-the-closure-of-executive-departments-and-agencies-of-the-federal-government-on-december-24-2025-and-december-26-2025/
Classic copy-paste error…
Seems like Trump’s 2024 victory (or at least, the impressive margin of victory, considering how bad the fundamentals of his candidacy were) came down to a campaign very narrowly optimized on winning above all else because he didn’t want to go to jail.
Trump is a vaccine guy all the way, but he let RFK Jr into the tent because he wanted to win.
Trump literally launched air strikes on Assad but he invited Tulsi into the tent because he wanted to win.
Trump knew there would be no bringing down nominal prices, but he told a lie that would destroy his long-term credibility because in the short-term he didn’t want to go to jail so he WANTED TO WIN.
I’m not saying that if Gavin is the 2028 nominee we should wink wink nudge nudge a state AG in Idaho or Arkansas to come up with a phony prosecution just to light a fire under his ass but… I’m not… not saying that.
It's baffling that Democrats have had two presidents (Carter and Biden) derailed by inflation but Democrats still don't really care about lowering inflation.
I think Matt is the vanguard of bringing people like me (Romney Republicans who hate Trump) into the Dem coalition.
A selfish political reason for elected officials to favor higher birth rates is it bakes in a chunk of the electorate that didn't mentally anchor on {2012, 1997, 1982} prices. Probably good for the economy to have at least some voters who are not psychologically reactive to contemporary prices.
It bakes that in 20 years down the line, so it’s not that selfish.
I really want to understand Mitt Romney's mind in 2012, at some level did he decide that making unpopular economic promises was more important than winning?