Today, the Trump Court has just overturned Chevron, 40 years of consumer and environmental protections. It is buyer beware, drinking water, product safety, the air you breathe, cars you drive, and the food you eat will now be unprotected. This ruling will handcuff any agency like the Federal Trade Commission, the Food and Drug Administration, the Environmental Protection Agency, the Consumer Safety Commission, the Federal Communications Commission, the Financial Consumer Protection Agency, and any other federal agency from issuing regulations to fill in the blanks left unaddressed in legislation. Instead, like abortion, it will fall into states to do it when clearly the issues cross state boundaries, leaving confusion. Most states have laws conforming to current federal consumer and environmental consumer laws.
Concerned about inflation? Think that Trump cares about consumers? It is back to buyer beware if Trump is elected. He comes with a warning label. He will be a danger to your health, safety, and pocketbook. If Trump wins in November, it is buyer beware. He is not consumer-friendly, no matter what policy he is selling you today.
Is the Federal Reserve's attempt to slow down inflation working? If the goal is to cool down consumer spending and demand, which has been driving inflation post-COVID, it is beginning to work. Inflation figures have much to do with the interest rates controlled by the Fed. This is the only effective governmental tool available to keep the lid on inflation. Nearly a year ago, economists predicted the US would go into a severe recession within 6 months. That did not happen, either. The Fed deserves credit for avoidance of that dire prediction, as well as for tapping the brakes instead of causing a crash landing. It is the only brake available to control inflation and takes finesse and expertise.
Trump has other plans for the Federal Reserve and consumers, which would be a lasting idiocy. Finesse and trustworthiness are not Trump's strong suit. Developing, selling, and lying about the values of real estate are not qualifications to be an economist. Tinkering with the national central bank, which is the Fed, is not for amateurs or those with political agendas like Trump. So far, the US has the strongest economy in the world as it recovers from COVID-19. The Fed is not broke, but Trump plans to break it. Trump is working on plans to set Federal Reserve rates himself. https://www.wsj.com/economy/central-banking/trump-allies-federal-reserve-independence-54423c2f You can trust Trump to do what will benefit him politically in the day's news cycle, but that is not the best basis to make complex economic judgments. The economy will be thrown into uncertainty dependent on Trump's whims of the moment, and only "Yes, boss" advisors will surround him to give him no shot of reality.
So far as consumers go, he has promised his oligarch friends who are coughing up campaign money he will lift the burden of environmental consumer and lender protections from their backs. Buyer beware did not work before, which is why those consumer protections became laws and rules in the first place. It is back to the days of being unsafe at any speed and not breathing the air or drinking the water.
One advantage in living so long is that I remember those days. There are few of us left with an institutional memory like that. It is now like what happened to Roe v Wade. We took it for granted for 50 years, and only when it was yanked away by Trump's appointments to the Supreme Court did we suddenly miss it. We have had a history of the past 50 years of being protected from unfair credit practices and products kept safe by laws and rules. In the meantime, for all but the profit-craven and uncaringly blind, environmental protections became more than applied to clean water and air, but also to the extremes in climate change caused by man's indifference and exploitation. We will miss those protections, too, when they are yanked away or subverted by Trump-loyal appointees.
Consumer spending is slowing down after a post-COVID buying binge. This raises the possibility of a reduction in interest rates in the near future. A little pain in these past months of high interest rates has kept us from a financial crash and a rip-roaring pain.
Target, Walmart, and Home Depot are seeing consumers shift to buying less, reacting to what they see as unjustified price rises that only pump up corporation's balance sheets. That is what the term "greedflation" has come to mean. In fact, grocery chain profits are out of sight: https://www.reuters.com/markets/us/us-regulators-urge-congress-look-into-grocery-profits-2024-03-21/
So far, Target has reduced price reductions in response, but expect Walmart to roll back and Home Depot to follow. That is how "greedflation" is fought with the free market system. It is a slow process, indeed, but in time it can work. Much of our economy is driven by consumer spending. At the same time, wages have increased faster than the inflation rate, enabling consumers to afford higher prices on items they buy, which has offset attempts to cool down inflation. Inflation has been Biden's political Achilles heel. Consumers have just not felt any improvement. However, the inflation ship is slowly turning around, perhaps enough by November 2024.
So what would Trump do instead of the current Biden approach? We consumers need to brace ourselves for some idiocy. There is no return to the good old days of pre-COVID, so stop dreaming. Trump is out to upset the apple cart with his plans for a second term. He pretends to be the friend of those on a budget, but the policies he has promised us would do the opposite. A lesson in capitalism: The government cannot set consumer prices. That only happens in communism. The government can influence prices, however, by allowing monopolies to set those prices among themselves as they snuff out competitors. Trump has made it clear he is the friend of and a beggar of their campaign donations from American oligarchs who love being monopolies and Trump's policies of keeping their taxes low and sabotaging consumer protections and environmental regulations. He who pays the piper calls the tune, and while Trump's volatility day-to-day is the rule, he is, if anything, a keeper of political promises to those loyal to him.
The whole consumer movement began with Nader's "Unsafe at any speed," and Trump would make us sicker and unsafer as protections are sabotaged. He would also put us at the mercy of unfair loan practices again as he ends the agency that watchdogged it.
Trump promises to take the pedal off the brakes of inflation by putting interest rates in his self-serving hands, which would make decisions based on short-term political gains to make Boss Trump look good. That idiocy would take the lid off sound economic principles and throw the economy into chaos in the longer run but benefit Trump in the eyes of his low-information supporters. The other Trump policy is to raise duties on all imports by 10% across the board to protect US manufacturing and jobs. Those are no more than 10% taxes on consumers, which will be passed onto all of us consumers used to cheap clothes, furniture, and electronics of imports as retailers try to keep up their margins. Another Trump proposed idiocy is to round up an estimated 10 million migrants to put them in concentration camps to determine if they had documentation of legality to deport them, which is also inflationary. We already have a labor shortage and the best employment rates since the 1960s, which has been one of the contributors to inflation. along with the supply chain, COVID-19 caused shortages.
Prices at the gas pumps will increase this summer as they always do to take advantage of higher demand by vacationers. Prices per barrel are set mostly by international cartels, which is always an unknown factor. Still, another idiocy aimed at Tumrp's low-information supporters is to "drill baby drill." Under Biden, we have pumped oil so much that we are now the largest producer of oil in the world and are a net exporter. We never have ever pumped so much.
https://www.reuters.com/world/us/us-senate-panels-launch-probe-into-trump-quid-pro-quo-with-energy-execs-2024-05-23/
More on the subject, some appearing in past postings:
Update 5 15 24 https://www.bloomberg.com/news/live-blog/2024-05-15/us-cpi-report-for-april
The good and bad news From Forbes May 22, 2024 "Walmart, the world’s largest retailer, noted in its earnings call that customers are spending more on essentials and less on discretionary categories. Home Depot reported a drop in sales for the third quarter in a row as high interest rates cause customers to defer costlier home improvement projects that are typically financed. "
Grocery price inflation is cooling down, per April figures; housing and gas at the pump are still inflationary, but signs are good enough that experts think it is possible the Fed will lower interest rates in the fall because the trend lines for inflation are going lower. Another good sign is that the free market system is still alive as retailers realize there is a business opportunity to compete with lower prices. Update: 5/20'24 https://www.foxbusiness.com/lifestyle/target-reduces-prices-5000-products-high-inflation-persists Many of the items are in the grocery department. Look for the yellow tags.
https://mufticforumblog.blogspot.com/2024/05/still-ticked-at-high-grocery-prices-and.html
https://mufticforumblog.blogspot.com/2024/03/crony-capitalism-magas-threat-to.html
https://www.cbpp.org/research/economy/tracking-the-recovery-from-the-pandemic-recessionJuly 2020, CBO published its first complete projections of GDP following the outbreak of the pandemic. They showed real GDP down 11.3 percent in the second quarter of 2020 and still down 5.2 percent in the fourth quarter of 2021, relative to CBO’s pre-pandemic January 2020 projections. CBO projections made in February 2021 were less pessimistic, showing GDP 2.3 percent below the pre-pandemic projection at the end of 2021. But in data available at the end of 2023, actual GDP generally tracked CBO’s pre-pandemic projections after the fourth quarter of 2021 and was above those projections at the end of 2023.
There is strong evidence the current deficit and debt and future projections are heavily due to the tax cuts for the rich. Trump is promising to carry on with them. https://www.americanprogress.org/article/tax-cuts-are-primarily-responsible-for-the-increasing-debt-ratio/
Felicia Muftic's resume points to a lifetime of advocacy for consumers. She began as an activist for consumers in the late 1960s and 1970s. Her first consumer project was as a volunteer leader and coordinator to prove Denver's poorer consumers paid more at grocery stores by launching volunteers to survey and collect the data, and then she published it. She is the author of the Colorado Consumer Handbook and has served as a consumer representative on many boards and commissions. She is a former white-collar crime and consumer protection unit director in Denver's district attorney's office. She has served as a president of the board and government relations staff of the local consumer credit counseling nonprofit agency.
