Don't Underestimate Trump's Plan to Kill Higher Prices: He Knows Exactly What He's Doing

James Carville once famously quipped, "It's the economy, stupid." This phrase still resonates today because, in many ways, it's true. People often vote with their wallets, and while by far it wasn't the sole reason for Donald Trump's historic comeback in 2024, it played a significant role.

As I've mentioned before, we can't simply erase past inflation and suddenly see lower prices at the grocery store or for other items that we buy. Inflation is a past event. It has already happened. The only thing that can truly bring prices down is deflation, and one doesn't need to be a master economist to understand that deflation is worse than inflation.

However, there is one area of our economy that has the potential to reduce costs on goods and services and profoundly impact the overall economy.

The cost of energy.

Energy costs are factored into every aspect of everything we buy because energy is a crucial part of production and transportation.

Factories rely on electricity to run their machines, while trains, ships and trucks all run on diesel. Although the cumulative inflation we have experienced over the past 3 1/2 years was not solely due to energy costs, they still represent a significant portion. By reducing these costs, the savings can be passed on to consumers, potentially lowering prices.

This is a crucial aspect of Donald Trump's plan to alleviate some of the pain we've endured. It addresses at least some of the root issues that were a contributing factor to inflation in the first place. By opening the U.S. to more exploration and drilling, we can better control our energy costs.

The thing is, and it's very important here, that it's never been about price gouging. And of course, I think most Americans outright rejected that ridiculous claim anyway. "Mrs. Harris," the American people said. "If you think that's why prices are higher, you have no real idea how to make them lower." It's one thing Trump does understand and made it a point to make it a strong part of his campaign.

Granted, some may argue that businesses will just pocket the savings and keep prices the same. Those damned greedy corporations, right? But I believe businesses are fully aware that Americans are simply exhausted by higher prices. They've had enough, and consumer pullback from spending has clearly shone to be a real thing that could have a very negative impact on business' bottom lines.

Discretionary spending has slowed significantly. People have been opting for store brands over name brands and cutting back on fast food. Businesses are suffering more than people realize. The reality is, they can't just charge whatever they want and expect to get it. Consumers decide.

Again, this absolutely denies the idea that price gouging is not only a thing, but any real benefit to businesses who would engage in it.

In other words, gouging customers would literally be biting the hands that feeds them, and in the most fundamental of ways, it makes no sense to do it. They aren't dumb. They know their customers and what drives them.

Any good business, if it wants to be successful, knows full well what makes their customers come and what makes them go away. And they know customers are tired. Their wallets are worn out at the seams. Companies will be more than eager to pass along any cost savings to consumers because they desperately want to regain customer confidence and have them waltzing back through their doors.

Trump understands the economy. He knows how money moves and what drives spending. So naturally, it makes sense that he's going to target the very things that make an economy thrive and grow and home in on stimulating the economy in a way that supports more jobs and even better wages. And if wages can grow, we can catch up to past inflation more quickly.

Energy is the first step in the bigger picture plan Trump has—an important one, but just the beginning. What drives an economy? Money. The more people and businesses have, the better the economy performs. Trump understands this. By lowering costs, reducing prices, and cutting taxes, you essentially put more money in everyone's pockets to spend on what matters most.

Commerce.

Even for those who argue that Trump's tariffs could negatively impact efforts to reduce consumer costs, I think they are thinking about this rather narrowly. There's more to consider. His threat of tariffs, combined with his desire to cut the corporate tax rate to 15% could have more benefits than drawbacks. These measures not only encourage businesses to operate within the country, but it also incentivizes other businesses to open new factories or return labor to the U.S.

It's the economy, stupid, is right. James Carville nailed it. But I think the more important thing here is that the person we put in charge understands how to make it go. And I think Trump does. It doesn't mean there isn't still a long road ahead. It doesn't mean it will be easy. The impact won't be felt overnight. But what we do know is that Trump will be leading the charge day and night, putting in place ideas and policies that can have a major positive impact on our wallets and more importantly, giving people back a large portion of the spending power that was stripped away from them during the Biden years.

If people are busy trying to poo-poo what Trump is proposing, I think it's simply because they don't understand what he knows and aren't willing to more deeply explore what it is he's actually up to. The worst thing one can do is underestimate Trump's intelligence. He's way smarter than most would ever dare give him credit for.

It won't be long before that becomes all too evident that he knows exactly what he's doing. Mark my words on that.

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© 2024 Jim Bauer

When it Comes to the Economy, The Democrats Did That

"What magic wand do you have?"

That was the question posed by Barack Obama in response to Donald Trump in the 2016 election when Trump said he could restore the economy and bring back American manufacturing. Of course, this was after eight long years of a virtually no-growth economy under Obama's reign, and it was his contention that the United States was simply transforming into a new economy.

What it was, essentially, was his excuse to try and explain what he was never able to do, and that was to lift the economy out of the throes of the economic crisis he faced when he took his first term in office. "Some of those jobs just aren't going to come back," he said. "Well, I'm going to negotiate a better deal. How are you going to do that?"

Of course, President Trump did in fact, negotiate better deals. Granted, it can be up for debate what real impact some of these deals had on actually bringing back manufacturing in a significant way, but many jobs did return, and certainly the policies that were implemented by Trump had a major positive impact on the economy itself.

Obama's comments signaled, to me, a capitulation and an admission (although quietly) that he had no idea how the economy actually worked, or how to fix it. It certainly showed in his results. And time and time again when he was asked about why the economy was experiencing one of the slowest recoveries in history, he simply pointed blame back at the Bush administration before him.

He blamed Republicans for the economic crisis in 2008 that was largely a result of Bill Clinton's, "Every American should be able to own a home," and blamed Republicans for hurting his economic efforts, and of course went on to simply blame the "new economy." 

It was very clear that he felt that this was just the way things are now, and we're going to have to accept it and adapt to it. That was the capitulation part. "I can't fix what can't be fixed. We now just have to deal with what we have."

Only to turn around when Trump's economy soared and proved Obama very wrong and claim, "I did that."

Now Democrats are fit to claim that all of the economic woes we face today are the result of Trump's policies coming back to bite us in the butt. So, which is it? 

On top of that, what Democrats are doing now is outright dismissing the first three years of Trump's rapid economic successes and only pointing to the last year. "See what he did? See what his policies left us with?"

Only it misses one big point. Covid. Because that was what sunk the economy in Trump's final days. But not through his policies. But through the recommendations of people like Dr. Fauci and Democrat leadership that insisted that businesses be shuttered, and the country should be locked down.

Of course it killed the economy. How could it not? Suddenly we had to print all sorts of money we didn't have to shore up business owners and workers who were sidelined by the shutdowns. It set the wheels in motion to face one of the biggest supply chain crises we've seen in decades.

The odd thing is that right before Trump left office, we actually began to see a massive uptick in the economy. It can only be argued that policies were implemented quickly by Trump to ensure we could get things moving again post-pandemic. They would have worked.

But Biden turned it around and stopped it in its tracks with new policies that made no sense, such as introducing the American Rescue Plan and reversing Trump's energy policies, both actions which catapulted us into 10% inflation by the end of 2021.

Whose fault is it we're in the boat we're in now? According to Biden and the Democrats it's Trump's fault. 

It's the usual Democrat game. Blame someone else when things are bad and take the credit when things are good. Only there's one big problem here.

If Barack Obama wants to claim that Trump's stellar economy was a result of Obama's policies, and Biden won the election in 2020 and essentially continued Obama's policies, why is the economy not ten times better today instead of ten times worse?

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