Donald Trump’s affordability blues

So President Donald Trump may have dozed off during his cabinet meeting on Tuesday. Who could blame him? Listening to Secretary of State Marco Rubio drone on about Russia would prompt souls less hardy than Trump to catch some shuteye. 

What should be keeping Trump awake, or at least uneasy, is the shaky state of the American economy. The federal government may not be releasing much data about the economy, but the payroll processing company ADP is reporting that private employers cut 32,000 jobs last month. The losses were heavily concentrated among small employers who have been slammed by Trump’s capricious tariff policy. The only positive sign has been in the data center industry, where investments in AI have been fueling stock market gains. A recent Fox News poll indicated that 76 percent of voters view the economy negatively and that twice as many blame Trump as Biden. 

When he’s not hosting foreign dignitaries or playing golf or discussing the architectural plans for his ornate new ballroom or anathematizing media organizations with a “Hall of Shame” on the White House website, Trump has been grasping at whatever straws he can to try and prop up the economy. On Tuesday, Trump mused about appointing his economic advisor Kevin Hassett as Federal Reserve chairman in the expectation that he will push for radically lower interest rates – a move that might briefly juice the economy but would also send inflation soaring. 

On Wednesday, he took a fresh swipe at former president Joe Biden’s Green New Deal policies by rolling back fuel standards, a measure that the American Petroleum Institute has been advocating. That may benefit Ford and GM in the short term but exacerbates their dependence on gasoline cars that are being phased out abroad. Add in the tariffs that Trump is imposing and American industry could become increasingly unable to compete abroad. 

A sign of the vexation that businesses are feeling towards Trump came with retail giant Costco’s announcement this past Friday that it intends to sue the administration over its tariffs. For the most part, big business has tried to placate rather than confront Trump. No longer. Bumble Bee Foods and Ray-Bans, among others, are already suing Trump. Meanwhile, the Supreme Court appears likely to rule that Trump’s tariffs are unconstitutional.  

Nothing could boost the economy more than a sweeping verdict that abolishes them. But the administration remains fixated with Herbert Hoover economics – retaining tariffs, whenever and wherever possible. If the Supreme Court rules against it, then “we can recreate the exact tariff structure with [sections] 301, with 232, with 122,” Treasury Secretary Scott Bessent said in an interview at the New York Times DealBook Summit.  

Trump himself has been touting a $2,000 tariff dividend that would be paid to Americans. But Fortune notes that the math doesn’t add up. It would cost roughly twice as much as the tariffs have raised to disburse a dividend. According to the Committee for a Responsible Federal Budget, the dividend check would cost $600 billion a year – or $6 trillion over a period of 10 years. 

Trump, a serial bankrupt, is not unaccustomed to financial obstacles. But his struggles with the economy are starting to tax his skills at political prestidigitation. As prices go up and jobs go down, Trump has made it clear that he doesn’t like what people are saying. “They just say the word,” he said during his cabinet meeting. “It doesn’t mean anything to anybody. They just say it – affordability. I inherited the worst inflation in history. There was no affordability. Nobody could afford anything.” They still can’t.