The bogeyman haunting Harris (and Biden) that Trump is cashing in on

Analysis by Matt Egan, CNN

New York (CNN) — Inflation’s fingerprints are all over the 2024 race for the White House.

Skyrocketing prices at the gas station, the supermarket and virtually everywhere else frightened Americans in the early days of President Joe Biden’s term.

Fair or not, inflation almost immediately turned voters off to Bidenomics and clouded his reelection chances.

Now, the inflation rate is nearly back to normal – miraculously, without the recession and loss of millions of jobs that many predicted. The economy’s growth rate is relatively high, and unemployment rate remains historically low.

Soft landing or not, voters remain frustrated. And who can blame them?

Life is so much more expensive than it was just a few years ago. Prices have not returned to pre-Covid levels, and they likely never will.

For far too many, the American Dream feels out of reach.

It’s not just record-high home prices, it’s the fact that mortgage rates remain high even after an aggressive rate cut from the Federal Reserve. Some lucky first-time buyers got in when prices were lower and it was dirt-cheap to borrow. Many others are on the outside looking in.

Affordability frustrations continue to haunt Vice President Kamala Harris, who has been forced to repeatedly defend the administration’s economic track record.

Harris has made tackling prices a centerpiece of her agenda. She has called for boosting the minimum wage, ramping up tax credits for parents and building more homes.

Even as Harris made her closing argument from the historically significant Ellipse with the White House in the background, she prioritized affordability.

“Now our biggest challenge is to lower costs, costs that were rising even before the pandemic and that are still too high. I get it,” Harris said in her major speech last week.

Harris also gets that the economic anxiety fueled by inflation has helped boost the popularity of her opponent, former President Donald Trump.

Trump loves to remind voters that inflation wasn’t a problem when he was in the White House.

And he’s got a point: The inflation rate never exceeded 3% under Trump – a far cry from the four-decade high of 9.1% under Biden.

Of course, Trump didn’t face the supply chain nightmare that helped cause prices to spike. And he didn’t have oil prices surge above $100 a barrel when Russia invaded Ukraine, an energy crisis that lifted gas to record-high prices.

No matter the cause, prices are clearly much higher today.

The typical US household is spending $1,120 more per month to buy the same goods and services as in January 2021 when Biden became president, according to Moody’s Analytics.

But it’s also true that workers today are enjoying real wage increases.

Income is consistently increasing at a faster pace than inflation. That means paychecks are beating prices, a trend that should allow consumers to catch up and feel better.

The typical household is making $1,192 more per month than in January 2021, narrowly outpacing inflation, according to Moody’s.

Still, that doesn’t feel good enough.

Many Americans are working extremely hard and deserve those pay increases. It can be deeply frustrating if fatter paychecks are swallowed up by higher rent and bigger car insurance payments.

Trump has promised to get the cost of living under control by shaking things up.

“I will end inflation,” Trump told a roaring crowd of supporters in battleground North Carolina on Wednesday. “I will bring back a thing called the American Dream.”

Trump has proposed imposing tariffs on all $3 trillion of US imports, including steep tariffs of 60% on China. His plan calls for mass deportations as part of an unprecedented immigration crackdown. And Trump has argued that the president should at least get to voice an opinion in Federal Reserve policy on interest rates.

Trump’s calls for forceful action and sweeping change have resonated with many voters. In many polls, more voters say they trust Trump over Harris on the economy.

And yet one of the greatest ironies is that mainstream economists aren’t just dismissing Trump’s promise to solve inflation, they warn his fixes will make the situation much worse.

They fear his tariffs will spike prices for consumers and that deporting millions of undocumented workers will cause a labor shortage.

In fact, some argue that Trump’s policy proposals are extremely inflationary, perhaps the most inflationary of a major presidential candidate in a lifetime.

More than two-thirds of economists (68%) surveyed by The Wall Street Journal say prices will be higher under Trump than Harris.

“Just as Mexico didn’t pay for a wall in his first term, China will not pay for Trump’s tariffs if he’s given a second term. You will,” economists wrote in an open letter that has gathered more than 300 signatories in recent days.

And yet if Trump wins, it will be in large part because of…inflation.

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