＂Prices Will NEVER Go Down＂ - Trump’s Affordability Promise COLLIDES With Cost-of-Living NIGHTMARE
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Summary
Trump administration laser-focused on affordability as Trump softens tariff strategy. White House announces Wednesday that tariffs slated to kick in Thursday on furniture, kitchen cabinets and vanities would be postponed for another year. This indicates that on some level, the White House understands that President Trump s tariffs are driving up consumer prices and that Trump and the Republican Party are incurring substantial political damage from higher prices.
Transcript
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White House laser-focused on affordability as Trump softens tariff strategy.
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Okay, so there's two stories like, well, you know, affordability is just a Democrat hoax.
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It's not a real thing. No one's really dealing with that. It's just a bunch of BS.
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But behind closed doors, apparently, guys, we got to get this affordability thing scored away
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So the Trump administration is ramping down tariffs for even more goods
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as the White House zeroes in on its messaging around affordability.
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The White House announces Wednesday that tariffs slated to kick in Thursday
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as furniture, kitchen cabinets, and vanities would be postponed for another year.
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This indicates that on some level, the White House understands that President Trump's tariffs
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are driving up consumer prices and that Trump and the Republican Party
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are incurring substantial political damage from higher prices.
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As Michael Strain said, the White House slapped a 25% tariff on furniture, kitchen cabinets,
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and vanities in October. Tariffs on furniture were slated to increase to 30% in January,
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and tariffs on the cabinets and vanities were set to increase to 50%.
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But they're trying to figure out something going on here with affordability.
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We talked about this, and we said that the tariffs, and we said at the beginning of the year,
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they would be tactics, not taxes. And guess what? All the economists come out and so surprised.
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Oh, wow. Well, you know, it really hasn't gone up. It hasn't been as inflationary as we thought.
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Even the Fed, Jerome Powell, you know, the short timer who's about to lose his job, has said that.
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And what's happening this week is the president is talking more about affordability to kind of take
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the messaging back from the Democrats who keep saying, oh, it's inflationary, inflationary.
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If you look at one of the things that was happening this week, it was a bunch of pre-made
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construction stuff. These are things that, you know, average Americans buy every week, not.
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Vanities, kitchen cabinets, you know, higher-end furniture, come on. Those aren't the things that
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people are buying every week, and that's not what tariffs are going to cause inflationary.
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As a matter of fact, he moved on some agricultural tariffs that were in Italy, and it took the
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tariffs down to 1.2 percent on certain Italian pastas. So the pastas that are coming in, it was
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less than one-seventh of our sales tax. So what's happening right now, point one, the president
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hears these messages Democrats are trying to push on affordability. So now he's fighting back saying,
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hey, it wasn't inflationary in the first place, and I'll tell you what, let me suspend this tariff
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over here, this tariff here that was on kitchen vanities, cabinets, and things that you would
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use for remodels. And Americans aren't really doing that right now, right? There's not a lot of
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remodeling going on. You see the quarterly reports from Home Depot and Lowe's. But energy is down,
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heating oil is down for the winter. And also, he just did like what he did on the imported Italian
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pasta. Make it like a one percent tariff coming over there. So he's getting the joke that he can't
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just say to the microphone, oh, affordability is a headline issue that's being spun by the Democrats.
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No, there's some reality to it because the prices haven't come back down from Biden inflation. And so
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now the White House and the president are out there speaking to it to counter the message of the
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Democrats. And yes, certain things like Italian pastas came down a little bit.
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Jeff, your thoughts on this? Yeah, this is not a messaging thing. And the fact that they try to
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treat it as a messaging problem shows that they're still kind of out to lunch. You're saying it's a
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real thing. It is absolutely a real thing. And, you know, the original problem here that Republicans
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had specifically is they came in, you know, last year or the year before. Sorry, it's 2025 or 2026.
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Now they came in the year before and said, we're going to bring prices down. Well, in economics,
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prices don't go down. That was a mistake to begin with. When prices went up back in 21 and 22,
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that was a permanent change. You can't go backwards. Every supply shock in history,
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prices go up in a step fashion and then they level off where they are at a new step fashion or the new
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equilibrium and they stay there. So Republicans should have said is, you want to blame Biden for
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that? Fine. Biden made you poorer. Now we're going to try to fix it. Not by getting prices to go down
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because they will not go down. They should have been clear on that. Prices will never go down again.
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We are never going to see 2019 prices again. So what we're going to try to do is our absolute best
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to make sure the jobs market is as strong and as resilient as matching the rhetoric coming from all
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these different economists in the Federal Reserve. So that what happens is what should have happened
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if we had a strong economy, that you have prices that went up in 21 and 22 or 21 back then, five years
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ago, and then incomes rise to, first of all, meet prices and then exceed them. What happens first?
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What happens first? Cost of goods goes up first, then income rises? What is the typical pattern?
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Well, in this case, because prices were forced higher by government action, it was a non-economic...
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Income should naturally go... If there was an actual recovery from the pandemic and the lockdowns,
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incomes would naturally rise over enough time that it would equalize with the prices from 21 and 22
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and then exceed them. So even though the cost of a car is now 50,000 instead of 30,000, you have more
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than enough income to pay for it. And so we all get used to the new higher prices and it doesn't
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No, that's the problem. What really happened was prices went up massively in 21 and 22 and incomes never
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caught up. This is what people are talking about when they talk about inflation and affordability.
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It's not about the price of a dryer or something that's gone up in the last year. It's the price
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of everything that went up five years ago and incomes never went up enough for people to
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So one, whose fault is that, too? How do you address it?
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First, whose fault is that? It's the government's fault. They created the pandemic and the lockdowns
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Under Biden, when they did the pandemic and the lockdown...
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Yeah, it was both sides. I mean, you got to blame both sides for this part.
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2020? Two weeks to flatten the curve? That was in Trump's watch.
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Right. The lockdown. But it wasn't a... You're not talking about the lockdown that happened
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No, the repeated emergency pandemic measures, that was absolutely devastating. That's where
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Because what happened is you had the economy starting to come back from the lockdowns,
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so there's more demand that was rising. But at the same time, supply, the supply side
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of the economy was hindered by all those emergency measures and logistics.
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Not money printing. Not money printing. What happened was it's called a supply shock,
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which is an imbalance between demand and supply. So you have demand and supply that completely
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plummeted during the lockdowns. When they came back, demand started to come back, but supply
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couldn't. It was restrained. People were home. They couldn't work. We couldn't get stuff shipped
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from overseas. So demand came back faster than supply, and this is basic economics.
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What happens when demand is growing faster than supply is? The only way to reconcile those
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is prices have to rise. Think about it as an auction process. If you have an auction where
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a ton of people show up and there's only a couple of sellers, the sellers are going to
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So because supply was restricted, that's why it's called supply shock, prices had to rise
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to meet for the rising demand. Now, what should have happened, what the government said was
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going to happen, was that we are going to do all these stimulus plans. We're going to
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give money to people. And what that's going to do is that's going to temporarily stimulate
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the economy so that the process I talked about, where incomes would start to rise and then
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slowly over time, they would offset and exceed price changes. But that never happened.
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Because stimulus never really actually stimulated.
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How do you address it now is we got to get the labor market back working again, which
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means the economy needs to hit some kind of equilibrium coming off of that three years
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ago, four years ago, where it was artificially stimulated in all the worst ways. Now it has
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to clear out all the bad stuff, including the stuff we're going to talk about here with
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fraud. I mean, fraud and government waste was a huge part of stimulating the economy, which
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is the worst way to try to create a sustainable economic growth pattern. You don't
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you don't create growth from waste and fraud and inefficiency and unproductivity. So we
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got to clean all that stuff out and let the economy start growing. It's like the same reason
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why you cut back all your weeds in your garden, you know, all the bad growth. You got to get
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Tom, what do you think we're going to be saying?
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So there's a couple of things here. First of all, I agree that there is this cataclysmic
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jump in prices that happened under Biden. And you can argue whether it started as Trump,
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but you can certainly look at the charts and it went nuts under Biden. And there's a lot
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of core products that probably aren't going to be able to come down. Energy is one where
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the president can help it get down. I mean, look what Biden did. Biden depleted the SPR,
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Strategic Petroleum Reserve, to artificially drop gasoline prices in the face.
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That's never happened. They used the SPR and it didn't actually get oil prices to go down.
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Correct. But that's what he said he was doing. Instead, it just depleted it.
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But again, that's all just messaging. We need to do something to appear to be doing something.
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Correct. Well, he didn't do anything. What Trump is doing something, and you can look at the price
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of gas outside of the blue states where it have the artificial cap taxes. California's got $1.90
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cap tax on the true price of gas. So you take a look at what you'd pay, say, in Texas,
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Alabama, even New Jersey, and then put $1.90 on it, the California cap tax. And that's why it's
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$5 in California and $2.99 in other states. So the president can push down on energy. But this
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president needs to talk about affordability to blunt what's happening with the Democrats.
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That's the messaging thing. What you're saying, solution. I agree the solution isn't messaging.
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But one year, you're not going to have a 30% increase in American income. That is, by the way,
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we do see that around the world. It's hyperinflation, right? If everybody's income goes up,
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then all the companies that pay those people... That's why it happens over time. What I'm
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arguing for is that from the president and political perspective is that what they should
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do is be honest. They should just be honest and say, look, we're not going to get prices to go
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back. That's not how economics works. So that's... We're not even going to try. That's not our goal
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here. What do you think any president would say, you know, the other guy did it, and I can't fix it.
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I'm not even going to try. No, that's what I'm saying. No, I'm saying is... He's not saying that.
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What he's saying is... We need to go in another direction. What's not saying is we're officially
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in a new reality. The new reality is... And this new reality is... $50,000 a year cars instead of
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$30,000. So then, but what do you do with that? How do you address that, Brandon? You're not going to
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get the cars to go... I understand that. That's what I'm saying to you. So when you're saying...
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So is the solution to... The messaging, if you want to go to the messaging, the messaging needs to be... Not messaging.
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And I'm not talking messaging. I could care less about messaging. What I care about is
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results. I want to find out what do you do. So... Strongest job market that we can possibly
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have. How do you do that? That's the only way to get out of this is to make sure that incomes
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grow in a fashion that pays for all of those price changes from five years ago. Yeah.
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How do we get jobs growing again? We need a lot of things to take place, but among them
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is we need the banking sector to be more efficient and actually start making loans again instead
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of just lending to BlackRock and the most liquid borrowers out there. We need a more efficient
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banking sector. We need a more efficient monetary system. We also need... Like I said, we got to get the
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government out of the economy. The government is the biggest impediment because the government is all
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fraud, waste, and inefficiency. I agree with that, but you've just... Can you hear me? Yeah.
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Yeah. I agree with that, but you can't fix every layer of the lasagna all at once.
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I'm not arguing that we should. What I'm saying is the government should come clean and say,
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look, we're not going to focus on prices because that's a lost cause. They should be honest about
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that. That's a lost... Prices are never going to go backward. Prices of what? Prices of...
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Everything. Just general prices. General prices. Houses, yeah. Because gas, you saw the article that
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came out saying with gas prices being where it's at right now, saving Americans a half a billion
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dollars. I don't know if you saw that number or not. Yeah. I mean, the wholesale price of gasoline
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at the CME is $1.70 a gallon. That's where it is right now, which is the lowest it's been in five
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years. That's actually not a good thing. What about the deflationary innovation though?
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Like the way that a flat screen TV started off at $10,000 and now I'd say it's $200. So there's
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examples of things going down in price. Yeah. There's always individual items that go down
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in price and tradable commodities can go up and down in price. Sure. But we're talking about
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goods that usually... The economists use the term sticky. This is what sticky really applies
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to, which means that when prices go up, they tend to stay there.
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But the things that are killer though is like electricity, food, housing. I think those are the core
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things that people really get upset about if those are unaffordable. And I mean, I think the
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problem too is like, I think deficit spending in general is a bigger example of what happened
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during COVID. Like that M2 money supply chart I sent you, Rob. So this is the amount of money
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in the economy and like obviously went up a ton in 2020. But just the fact that we're spending
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like an extra trillion dollars per year than what we actually have, like that's the creation
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of new money. I know it's not money printing. It's like the treasury issuing new debt, but that's
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adding new money into the economy. That's artificially increasing demand. So, you know,
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of course things are going to be more expensive and we're like putting more money in the economy
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every year. And that's such a waste of capital too, by the way. Like the Fed created like an
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extra $9 trillion of money on its balance sheet. So that went to banks. So why aren't banks using
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those loans efficiently? Like where are they just sitting on that money?
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Yeah. What they've been doing is buying U.S. treasuries because they're risk averse.
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So we need risk taking in the economy, which can't happen because of all this other stuff.
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I think the one part that you talked about, which I agree with, Rob, can you pull up the
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number of banks in the history of America over the years? How many we had and how many
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That's exactly that. Small banks, just banks, total banks in America. If you go to, yeah,
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while you're doing that, I'll look up the reports. But the question becomes of prices,
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like you said, you know, flat screen TVs went from $10,000. You can buy a TV right now for
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four or five hundred bucks. I can't believe how cheap it is right now to buy a, yeah.
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So what does it say? It says 4,000 commercial banks in the U.S. 2023. Okay. So let's just
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say around 3917, according to FDIC, the number of banks peaked in the 20th century would
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estimate is typically around 29,400, 30,400. That's before the Great Depression. But even
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at 1980s, we had 14,000 banks. To go from 14,000 banks to 3917, no longer lending money
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to small business owners to start because the underwriting becomes tighter. They want the
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bigger deals. They want the bigger business. I can see this happening. I can see this happening.
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But, you know, the other part is as well where the incentive comes about, let's develop cheaper
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cars. Okay. More cost-effective cars. Let's develop housing that's going to be more cost-effective.
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How do you do that? Innovation. This is a time where innovation can really lead. But go to that
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chart right there, Rob. Go to that chart right there. Look at that. I mean, that tells a whole
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story right there. Consolidation. Look at that. That's not good. Yeah, it wasn't a contraction. It
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was a roll-up. Yeah, it was a roll-up. That's exactly what it was. That's all mergers.
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Mergers. It's all mergers. And the consumer wins there. Look how sudden it is from 1980. So
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why, by the way, Jeff. That's the Eurodollar system. Why is that sudden from 1980, though? If
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you look at the number, it's increasing 50s, 60s, 70s, 80s, and then it drops. Yeah, the
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reason why is because of international consolidation. You have international competition. So we
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internationalized the monetary system starting in the 50s, 60s, and 70s. And by the 1980s, it
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became hyper-international, which meant that you don't have a small regional
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bank in a local U.S. location competing with other small regional banks in that same
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location. Now you have large-scale banks in Switzerland and Japan and Asia competing with
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the large banks on Wall Street. And those are the only banks that suck up all the money
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and oxygen. And as a big bank, what do you do? You buy all the smaller ones. It's the
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cheapest way to continue to grow in scale. The average person watching this, what can
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they do? What can they do? What can the average person do? As far as, you're talking
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about prices, the economy? To fight against this. Last time I was here, you talked about
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is invest in yourself. Make sure that you are individually doing everything you can to
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maximize your own talent. So whatever prices are due and whatever the, you know. You're
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not affected by it. You are affected by it, but you can better, you're better able to
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handle it. If you're investing in yourself and raising your own income potential, then you
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can handle higher prices. I agree. I agree. I mean, this is terrible. This is horrible
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stuff. But I mean, it's the reality. The reality is we can't change it. We can't go
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backwards. So let's be honest about it and deal with it moving forward.
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To your point about wages, you've got a couple of things that are going to happen this year
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and that you're going to hear headlines that are more and more talking about like job
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retraining and displacement. And you're going to hear going to the election. No, the labor
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market's actually better than people think. But we have some people in the wrong places
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and robots are taking over the warehouse jobs. So those people need different training
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and need to be other places. You're going to hear about displacement, geographic labor
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shortage and job retraining, which is all messages that's true. But they're going to
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be trying to say, hey, better paying jobs are available here, here and here. Because
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