Trump did more to set up the U.S. economy for an inflation surge than Biden | Opinion

In the modern era, when the economy is bad, it has been the No. 1 issue for presidential elections. When the economy is good, voters turn to other matters.

By historical standards, the current U.S. economy is in great shape. Unemployment is below 5%, inflation is around 2.5%, and economic growth has been around 3%. Normally, these economic conditions bode well for the incumbent presidential administration.

However, surveys show that the economy, and inflation in particular, are the top issues in this year’s election. Republicans have beaten up President Biden over inflation, and now Kamala Harris as the incumbent party’s nominee. So why isn’t the economy giving the incumbent party the boost it normally gets?

To begin with, presidents do not control the economy and have few tools to even try, especially on their own (Congress has to approve legislation for the biggest tools like tax cuts and higher spending). And yet presidents, aspiring presidents, voters, and the party not in the White House all claim that presidents can whip inflation, tame unemployment, and spark endless economic growth.

For the first 140 years of our nation’s history, presidents were not responsible for economic performance. That all changed with the election of Franklin Roosevelt in 1932, who set the bar for presidents unrealistically high. Since then, presidential electoral success has largely hinged on economic conditions, even though presidents cannot do much to reduce inflation or high unemployment, especially in the short-term. But in the real world, rightly or wrongly, voters blame presidents for poor economic conditions.

In this year’s election, the Biden/Harris administration has not been rewarded for current economic conditions. Instead, the administration has been blamed for the lingering effects of high inflation from two years ago. Critics specifically point to the economic stimulus plan Biden pushed through Congress to give more money to American households to deal with the COVID recession.

As stated, presidents have little influence over the economy and thus should not be blamed for the economy (the Federal Reserve has a lot more control). But since we’re in the real world, we’ll play the inflation blame game with Biden and former President Trump.

To determine blame, it is helpful to think about how inflation occurs and a president’s potential effect on it. In the classic explanation, inflation accelerates when there is too much money chasing too few goods. That is, consumers have a lot of money to spend, but not a lot of options to buy, so they can afford to pay higher prices.

The popular belief is that Biden is to blame for the 9% inflation that occurred in 2021-22 in the wake of the pandemic. Republicans contend that Biden’s economic relief package pumped too much money into the economy, causing consumer demand to surge. However, under this logic, little attention has been paid to the fact that Trump actually took more actions in office to stoke potential inflation.

Trump implemented tariffs on Chinese imports that directly raised prices for American consumers (this is one tool presidents have unilateral control over) and sparked a trade war with China. He pushed a significant tax cut through Congress in 2017 that gave consumers, mostly wealthy ones, more money to spend in every year thereafter. Economists warned at the time that it could lead to higher inflation. And lastly, he signed not one, but two, economic stimulus packages to put more money in American pockets going into 2021 and 2022.

Based on the sum total of inflationary actions, Trump did more to set up the U.S. economy for an inflation surge than Biden. Under the presidential blame game, Trump should bear more of the burden for high inflation, but Trump and Republicans have effectively pinned it on Biden simply by repeating it over and over again.

More recent analysis of the high inflation levels places the blame primarily on supply disruptions caused by the pandemic. After all, it is hard to make products when workers are sick and dying and factories are shut down. We also know that many other countries experienced high inflation similar to the U.S. and that our economy has recovered faster than many others.

Ultimately, if Harris loses the election, lingering inflation will be one of the primary factors, if not the main one, even though presidents have little control over inflation. And even if we play the blame game, Trump made more decisions that led to it.