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    Is Trump driving the US into a recession? – in charts

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    Prospects for the US economy have cooled significantly in a matter of months. After outperforming its international peers last year, warning lights are flashing on a dashboard of economic indicators as analysts warn that Donald Trump’s erratic approach is hitting the world’s largest economy.Fears of a US recession this year are growing, in what is being called a “Trumpcession”, amid a sharp decline in business and consumer confidence as the president threatens punitive import tariffs on US allies and enemies alike.Most economists reckon a recession – defined as two consecutive quarters of shrinking economic output – can be avoided. But it is clear there are storm clouds gathering within the president’s first 100 days back in the White House.GDPUS growth in gross domestic product (GDP) had outpaced international peers in recent years, and since the Covid pandemic in particular – helped by the Biden administration pumping billions of dollars into the economy through the Inflation Reduction Act. The former president did not get much credit, though, as voters felt the squeeze from the period of high inflation triggered by the pandemic and Russia’s war in Ukraine.This week, the Atlanta Federal Reserve’s GDPNow, which measures GDP economic growth in real time, suggested the US economy would contract at an annual rate of 2% in the first quarter. However, this widely followed indicator can be volatile, and it is heavily influenced by the US trade deficit, which soared in January.Trade balanceThe US goods trade gap surged to $153.3bn in January. This was driven by record import volumes, an increase of $36.2bn to $329.5bn in total, as US businesses rushed to bring shipments into the country to avoid potential tariffs.US gold importsA significant driver of the import rise was inbound shipments of “finished metal shapes”, which include bars of gold. The trend is also attributed to traders rushing to get ahead of potential US tariffs. A widening trade deficit would normally weigh on a country’s GDP, because imports are subtracted from the measurement. But because gold bought to sit in a vault is not consumed or used in production, it is excluded.This means the Atlanta Fed is likely to be overestimating the hit to first-quarter GDP. Still, there are other signs that the US economy is cooling.InflationTrump had promised to “bring prices down, starting on day one” and “cut energy costs in half within 12 months after taking office”.Official figures show the headline annual rate as measured by the consumer price index was 2.8% in February, after an unexpected rise to 3% in January from 2.9% in December. Energy costs are down by 0.2% on an annual basis.The Organisation for Economic Co-operation and Development (OECD) said on Monday that Trump’s trade wars risked stoking inflation. It increased its US inflation forecast for 2025 to 2.8%, up from a previous estimate of 2.1% made in December.EmploymentThe US jobs market has boomed in recent years, and the unemployment rate dropped to 3.5% in early 2023, the lowest level since the year of the first moon landing in 1969. The rate has ticked higher in recent months, but remains historically low at 4.1%. This has been spurred by rapid growth in the numbers of jobs being added to the economy.Wage growth has also strengthened, and has remained above inflation since early 2023, helping households to rebuild some of their purchasing power lost during the recent rise in living costs.StocksThe US stock market has powered to record highs in recent years. Tech stocks and the “magnificent seven” – Alphabet, Amazon, Apple, Microsoft, Meta, Nvidia and Tesla – have led the charge in particular, buoyed up by investors betting on the growth of artificial intelligence.The Biden administration oversaw a strong stock market performance, helped by the economic recovery from the pandemic. However, Wall Street surged after Trump’s election victory in November, amid investor expectations for tax cuts that could increase company profits. Markets have been rattled in Trump’s first 100 days amid concerns over his erratic approach to the economy and the threat of tariffs hitting growth and stoking inflation.The US dollarThe US dollar had been rising sharply against other leading currencies, reflecting the strength of the economy and investor concerns that Trump’s policies could stoke inflation. Tariffs pushing up the price of imported goods, driving up inflation, could force the US Federal Reserve to hold back from cutting interest rates.With inflation having fallen back, the Fed cut its benchmark rate last year by a whole percentage point – from a range between 5.25% and 5% to between 4.25% and 4.5%. Higher inflation could limit its capacity for further rate cuts.A dramatically slowing economy could force the central bank to take action to lower borrowing costs. This has led to a pullback in the dollar in recent weeks.Washington has long held a “strong dollar” policy in the view that it supports the purchasing power of US consumers, helping to keep inflation low. The dollar is also used as the currency of choice for world trade and underpins the financial system. The US Treasury secretary, Scott Bessent, has said this approach is not changing. But Trump has argued that a weaker dollar would benefit US manufacturing by making exports cheaper for overseas buyers.Prices of inputs for manufactured productsBusiness surveys have shown a marked increase in input costs for US manufacturers, providing an early warning sign for growth and inflation. The price gauge on the Institute for Supply Management (ISM) manufacturing purchasing managers’ index (PMI) shows raw material costs rose sharply at the start of this year, in the first signs of supplier difficulties and discussions about who will pay for tariffs. The rise in input costs could dent US manufacturing output, and is likely to be passed on to consumers in the form of higher prices for finished goods.Consumer spendingUS consumer spending unexpectedly dropped in January for the first time in almost two years, with a fall of 0.2%, the biggest decrease in nearly four years. Cold temperatures in some parts of the country, as well as wildfires in California, were likely to have hit spending. However, some analysts warn consumer sentiment has taken a knock amid mounting concern over the strength of the economy. More

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      Trump can’t fulfil his promise to fix the economy, so he’s blaming workers instead

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      During his presidential campaign, Donald Trump never missed an opportunity to harp on inflation, promising that “on day one” he would “end inflation” and lower the costs of groceries, cars and other common goods.Well, it’s day 40, and inflation saw its largest increase in over a year. Blink and you might have missed that Trump and his fellow Republicans have largely abandoned their concerns about inflation to focus on government “waste”.While Trump hasn’t fulfilled his campaign promise, he is living up to his usual brand of politics: the blame game. And this blame, as usual, is rooted in generating anger against “undeserving” Americans.This time, the undeserving are federal workers and poor people who get nominal benefits from the federal government – like Snap, which administers food stamps, and Medicaid. To fix so-called waste, the president apparently has no choice but to crack down on spending (and enlist help from Elon Musk), an issue that barely registered in the public consciousness in the past 10 years but is somehow now a rampant problem, according to Trump.There are policy frameworks backing Trump and the GOP’s divisiveness, including the well-known Project 2025 and a lesser-known House proposal published in 2024, Fiscal Sanity to Save America, that centers government “waste” instead of corporate greed. And now, with Republicans controlling the House, Senate and presidency, Republicans have the power to act on cuts that will harm millions of Americans.Musk and Trump, of course, have already worked to cut thousands of federal workers’ jobs. And with the Trump-backed budget bill the House passed on Wednesday, including $800bn in likely cuts from Medicaid, Republicans are one step closer to bulldozing America’s already paltry social safety net.This isn’t just at the federal level. Republicans have been floating proposals in state governments that would restrict healthcare, housing and food benefits instead of making it easier to afford things.The party of “freedom” is endorsing government home visits to surveil “fraud” in all US states (according to page 43 of the GOP’s “Fiscal Sanity” plan). The party of “family values” is also turning its attention to school lunch and breakfast programs, which it claims are subject to “widespread” fraud and abuse (page 46). The party that wants to “make America healthy again” is floating restrictions to Medicaid that would make recipients work at least 80 hours a month, a proposal that wastes government time and money to verify work requirements and which would probably just deter people from getting healthcare, as a flailing GOP work requirement experiment in Georgia has shown.And as Trump touts himself as an anti-war president, his proposals belie the fact that much of these spending cuts will now be diverted to defense contracts and other military and border spending, not on improving the economic lives of everyday workers to whom he made sweeping campaign promises.Meanwhile, straightforward proposals to simply give people more money (which does have evidence of working), such as universal basic income, would be outright banned at the federal level under the GOP plan. So as the cost of living is primed to increase, Republicans have ready-made excuses to justify cutting billions of dollars from these programs, an exceptional sort of cruelty.Of course, no one wants to see public money being spent wastefully or fraudulently. But incessant focus on “waste” stems from faulty, selective evidence. According to reports from Musk’s own so-called “department of government efficiency”, nearly 40% of cancelled contracts to cut costs are expected to yield no savings. It also stems from something else that does have proven results: the utility of public outrage.Focusing on extreme examples and “undeserving” government beneficiaries animates America’s existing propensity for divisiveness, giving Trump and his party wide latitude to wreck the lives of millions of people who don’t engage in fraud, waste or abuse. When Reagan wanted tax cuts for the rich, we saw the “welfare queen” trope. When neoliberal Democrats and Republicans wanted to cut public housing at the federal and local level, we saw extreme stories about the criminality of people who lived there. We cannot waste the money of hard-working Americans on these “others”. It’s a narrative – often hinging on racism and sexism – that has great outcomes for America’s capitalist class and the politicians who support them.So instead of protesting against the rising cost of living or making demands for universal healthcare, federal job guarantees, increased labor rights, or Snap benefits for all, or cutting the bloated defense budget and increasing taxes on the super-rich to pay for the nominal social welfare benefits that other industrial countries have normalized, working-class Americans are engaging in petty debates about what kinds of groceries other working-class Americans should buy and deputizing themselves to root out “abuse” among other workers.Republicans redirecting blame towards people who are suffering in this economy under the guise of “waste” is a distraction. As inflation is poised to worsen under Trump, Americans would be wise to focus their anger more on the elected officials and billionaires who profit from their pain than on each other.

      Malaika Jabali is a 2024 New America fellow, journalist and author of It’s Not You, It’s Capitalism: Why It’s Time to Break Up and How to Move On More

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      The forgotten faces of Christmas in China | Letter

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      Reading “made in China” on his toys for the first time, my young Chinese nephew asked me innocently whether Santa was Chinese. Oddly, like Santa’s elves, toy assembly workers in China remain remote and faceless to most of us in the west. In Britain, most Asian migrants work backstage, too, kept in kitchens or workshops, taking the first and last train, earning low wages and hidden from our eyes. In many countries this Christmas, instead of being acknowledged for alleviating our cost of living crisis, those foreign workers will be vilified for stealing our jobs and threatened with tariffs whose consequences economists are still not certain about.It is always easier to blame people who remain invisible and voiceless. Although our world has never been so interconnected, and hence our nations so reliant on each other’s labour, Chinese society remains poorly understood. In the west, Chinese people remain enigmatic, the ever-silent and under-represented minority. When scrutinised, it is often with a political lens as well, maybe showing some cognitive bias.The question today should be how much value the free movement of products and people has brought to our nations and how to ensure that it keeps doing so in the future. As evidenced by world history, curiosity and interest towards foreign societies has often been an engine of progress. Christmas is a time to reach out and be thankful to one another: it is hoped that this spirit will continue to animate our politicians and societies in this coming year.Hugo WongAuthor of America’s Lost Chinese; London More

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      Trump wants you to believe that the US economy is doing terribly. It’s untrue | Steven Greenhouse

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      If Donald Trump wins next week’s election, it would be the first time in US history that a candidate wins based on such a huge lie – his falsehood that we have “the worst economy ever”. The former president’s big lie has distorted the views of millions of Americans, wrongly convincing many that the US economy is in bad shape.There’s no denying that many Americans are struggling economically and that inflation was painfully high back in 2022, but inflation is far lower now, and most economists agree that our economy is strong. The unemployment rate is low, inflation is way down, economic growth is solid, and job growth has been remarkably strong. Indeed, the country has added nearly 18m jobs – a record – under the Biden-Harris administration. Not only that, median household income has climbed to $80,610, higher than it was in Trump’s last year in office.“In the 35 years I’ve been an economist, I’ve rarely seen an economy performing as well as it is,” Mark Zandi, chief economist of Moody’s Analytics, said recently. “I’d give it an A+.” But the US public, still upset about the surge in inflation several years ago, sees things very differently: 62% say the economy is in bad shape, while just 38% say it’s in good shape, according to an October AP-NORC poll.The public holds this negative view even though there’s been very good news for blue-collar workers: the US has added more than 700,000 factory jobs under the Biden-Harris administration, far more than during Trump’s presidency, indeed more than under any president since the 1970s. There’s also been good news for small businesses – a record 19m new business applications have been filed under Biden. There’s also good news for the wealthy – the stock market has climbed to record levels, which is Wall Street’s way of saying the economy is in excellent shape. Let’s not forget that Trump warned that if Biden was elected president, the stock market would crash. Wrong again, Donald. Under Biden, the Dow Jones Industrial Average is 36% higher than when Trump left office, and the S&P 500 is 53% higher.Trump’s repeated claim that today’s economy is the worst ever shows either an appalling ignorance of history or an appalling contempt for the truth. The truth is that the economy was in far worse shape during Trump’s last year in office, when the unemployment rate soared to 14.8% during the pandemic, compared with 4.1% now. Moreover, there were many other times when the economy was in worse shape – it was worse during the 2008 recession under George W Bush, far worse during the 1980-81 and 1974-75 recessions, and catastrophically worse during the Great Depression of the 1930s. When Trump tells his Maga crowds that today’s economy is the worst ever, he’s taking everyone for an idiot.The US economy has grown the fastest among major industrial nations since the pandemic began. Our economy has grown twice as fast as Canada’s, three times as fast as France’s and Japan’s, and four times as fast as Britain’s. Under Biden, the average unemployment rate has been lower than under any president since Lyndon Johnson.If Harris loses to Trump, historians and economists will long debate why she lost while Ronald Reagan was re-elected in a landslide in 1984 even though unemployment was far higher back then (7.2% versus 4.1% today), inflation was higher (4% versus 2.4% today), and the Federal Reserve’s interest rates were far higher (10% versus 5% today). One thing working for Reagan was that GDP growth was strong in 1984.Don’t get me wrong, today’s economy has serious problems. Millions of Americans are struggling, but it’s wrong to blame Biden and Harris for that. I’ve been writing about America’s workers and economy for more than 40 years – from Reagan to Clinton to Trump to Biden – and under every president, millions of American have struggled economically. Trump makes believe that far more Americans are struggling now than ever before, but that’s just not true. Take this important statistic: 11.1% of Americans currently fall below the poverty line. That’s essentially the same percentage as under Trump and is only slightly above its lowest point in half a century.Many Americans say the economy is in poor shape mainly because of their lingering dismay about the high inflation from mid-2021 to mid-2023. But they may not know that wages have risen faster than inflation over the past two years and that real wages are higher than before the pandemic. Trump blames Biden and Harris for causing inflation, but they weren’t the cause. The two main causes were the pandemic’s closing factories and disrupting supply chains worldwide and Russia’s war against Ukraine, which increased energy and food prices. Americans complain that gas prices are higher, but that’s Vladimir Putin’s and Opec’s fault, not Biden’s or Harris’s. US oil production has hit record levels.Housing affordability remains a big problem. Not only have housing prices soared, but high interest rates – which are finally coming down – have made it far too difficult for many Americans to buy a house. Again, the housing squeeze is not Biden’s or Harris’s fault; it was caused by a huge slowdown in housing production that began during the 2008 recession.It’s unfortunate that Trump’s dishonesty and deceit too often make us focus on his lies rather on something far more important: the future, and what a second Trump term would mean for the country. Many economists warn of disaster if Trump wins. They warn that his plan to impose tariffs or taxes on all imported goods will send inflation soaring and ignite a dangerous trade war that could cause a recession and throw millions out of work. Economists also warn that Trump’s plans, including his plan to slash taxes on the wealthy and corporations, not only will increase the federal debt by a colossal $7.8tn, but could bankrupt the social security system and lead to a 33% across-the-board cut in social security benefits.No wonder 23 Nobel Prize-winning economists signed a recent letter calling Trump’s economic agenda “counterproductive” and warning that it “will lead to higher prices, larger deficits, and greater inequality”.In contrast to Trump, Kamala Harris has specific plans to improve the economy and help Americans cope with high prices. She has pledged to build 3m new housing units to help bring down housing prices. She also plans to give $25,000 in down payment assistance to first-time homebuyers. To help with the high cost of raising a family, she has called for creating a $3,600 tax credit per child and $6,000 for newborns. Recognizing how expensive caregiving needs can be, she wants to create a trailblazing Medicare at Home program to help pay for care for ageing parents.Nobel-winning economists said Harris’s economic agenda is “vastly superior” to Trump’s and “will improve our nation’s” employment opportunities, health, investment and fairness.American voters have a clear choice. They can choose Harris’s agenda, which promises a stronger, fairer economy, or Trump’s agenda, which will bring a worse, less stable economy with higher prices and less fairness.Unlike Trump, I’ll be honest and won’t claim that his economic agenda will bring the worst economy ever, even though his agenda looks plenty dangerous.

      Steven Greenhouse is a journalist and author, focusing on labour and the workplace More

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      Trump is falsely blaming Harris for high prices. His plans will cause huge inflation | Steven Greenhouse

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      As the presidential campaign enters the home stretch, one of Donald Trump’s most dishonest – and effective – attacks is that Kamala Harris is to blame for inflation.That attack makes no sense. Several things caused a surge in inflation, but the US vice-president wasn’t one of them. Blame inflation on the pandemic or on Vladimir Putin’s war in Ukraine, but don’t blame it on Harris. Blaming her for inflation makes as much sense as blaming her for the leak in your roof. In seeking to blame Harris for inflation, Trump is absurdly trying to turn her – a vice-president who, like other veeps, has very little power – into some all-powerful economic tsar who somehow controls everything from egg prices to gasoline prices.Any American who is truly concerned about inflation should be much more worried about Trump than about Harris. She is far more serious about fighting inflation and helping households cope with the high cost of living. What’s more, Trump’s plan to impose steep tariffs on all imported goods will significantly push up prices and hit consumers hard, especially less wealthy consumers.If Trump is elected and implements his tariffs and other plans, inflation will probably – and quickly – rise to an uncomfortable 6% to 9.3% per year (from the current 2.5%), according to a respected thinktank, with prices climbing a very painful 20% to 28% during Trump’s four years in office. That means there’s a good chance that inflation would rise more in a second Trump term than it has under Joe Biden. Not only that, economists say the higher prices caused by Trump’s tariffs will cost the typical American household from $2,600 to $3,900 a year. Ouch.Trump blames Harris for causing “the worst inflation in American history”. Comments like that insult everyone’s intelligence and show that Trump knows zilch about American history. Inflation was far worse in the years immediately after the second world war and far worse in the late 1970s and early 1980s.More absurdity: JD Vance recently blamed Harris for higher egg prices, even though we’ve been repeatedly told that bird flu and the loss of more than 100 million chickens were what caused egg prices to soar. (In fact, the not-always-truthful Vance embarrassed himself by blaming Harris for $4-a-dozen egg prices while he stood in front of egg cartons marked $2.99 for a dozen.)Instead of listening to Trump’s attacks about inflation, every American should be rejoicing that inflation has come way down – back to nearly 2%. If we look honestly at inflation, we see that two main factors fueled the spike in inflation back in 2021 and 2022. (Neither of those factors is named Kamala Harris.)The first factor was the pandemic, which closed thousands of factories worldwide and badly disrupted supply chains, causing prices of everything from furniture to cars to soar.The second factor was Putin’s war against Ukraine, which pushed up agricultural prices around the world because Ukraine is a major grain and fertilizer exporter. That war also caused oil and gas prices to soar because Russia is a huge energy exporter and the war disrupted energy exports.There was another important factor behind inflation. Many corporations took advantage of the situation by raising prices far higher than necessary. This “greedflation” jacked up corporate profits while hammering consumers. The Economic Policy Institute, a progressive thinktank, said these moves to boost corporate profits caused one-third of the growth in prices since the pandemic began.Under Biden, Congress enacted the American Rescue Plan, which gave an important boost to our pandemic-plagued economy and sent checks to millions of households to help them weather the pandemic. Thanks to that ambitious plan, the US under Biden has had far stronger economic growth than other G7 countries while also having the lowest average unemployment rate under any president since Lyndon Johnson. Indeed, the 16.2m jobs added under Biden are a record, far more than were added under any previous president in a four-year term.The American Rescue Plan was a huge success: the billions of dollars it put in people’s pockets contributed modestly to inflation, but far less than other factors did. Mark Zandi, chief economist at Moody’s Analytics, has said: “There’s a long list of reasons for the high inflation. At the top of the list is the pandemic and the Russian war … [the American Rescue Plan is] at the bottom of the list.”The truth is, the US economy is in good shape, even though many people are unhappy because prices are considerably higher than when the pandemic began. Many Americans fail to realize that wages have been rising faster than prices.As for what will happen to prices in the future, economists are far more worried about Trump than Harris. They fear that Trump’s promised tariffs will send prices shooting upwards and trigger a huge trade war that could drag the US economy into recession. Trump has talked up two economic policies: big tax cuts for the richest 1% and corporations and, second, steep tariffs – up to 20% on all imports, from TVs to shoes to bananas – and a 60% tariff on imports from China.Trump says foreign companies will pay for those tariffs even though economists keep saying he’s 100% wrong on that. American consumers will pay for those tariffs in the form of higher prices. Economists warn that a second Trump term will dangerously increase inflation through his tariffs, through his plans that will cause the budget deficit to soar, and through his threats to limit the Federal Reserve’s ability to reduce inflation. Sixteen Nobel-prize winning economists have warned that Trump’s policies “will reignite” inflation and have a “destabilizing effect” on our economy.Unlike Trump, Harris has serious plans to fight against higher prices. Seeing how housing prices have soared (largely because builders haven’t built enough homes since 2008), Harris has a bold plan to build 3m new housing units nationwide. She also wants to give a $25,000 down payment subsidy to first-time homebuyers.To battle high grocery prices, Harris has vowed to crack down on price-gouging by food suppliers and supermarket chains. She also wants the government to do more to reduce bloated prescription drug prices, in the same way Biden has chopped insulin prices to $35 a month for seniors.Recognizing how expensive it is to raise a family, Harris has called for creating an annual $3,600 tax credit per child and a $6,000 credit in a newborn’s first year. She is also pushing for a trailblazing measure: to subsidize childcare so that no family spends more than 7% of its income on childcare.Trump is once again attacking people for what he’s guilty of. He is falsely attacking Harris for causing inflation, while he is the one whose economic plans will cause inflation to climb skyward.

      Steven Greenhouse, a senior fellow at the Century Foundation, is an American labor and workplace journalist and writer More

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      Warren and Dean demand Coke, Pepsi and General Mills stop ‘shrinkflation’

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      It’s becoming a common experience for Americans going to the grocery store: your bag of chips seems lighter, your favorite drink comes in a slimmer bottle, and you’re running out of laundry detergent more quickly than usual. And yet things are staying the same price.On Monday two Democratic lawmakers launched an attempt to get to the bottom of the phenomena, accusing three major companies, Coca-Cola, PepsiCo and General Mills, of shrinking the size of products while charging consumers the same price – a price-gouging practice known as “shrinkflation”.Senator Elizabeth Warren and US representative Madeleine Dean allege in letters to the CEOs of the three companies that they have participated in shrinkflation, subtly decreasing the size of cereals and sodas sold in stores.General Mills decreased its box of “family size” Cocoa Puffs from 19.3 ounces to 18.1 ounces over the last few years, the letter alleges. Meanwhile, PepsiCo downgraded the size of Gatorade bottles from 32 ounces to 28 ounces.Companies often say that decreases in size can be attributed to changes in packaging that are unrelated to pricing or the economic environment. PepsiCo told NBC News in July that their 28-ounce bottle has been around for years and that the company had planned to widen its distribution as part of a long-term strategy.But many remain skeptical at the widespread variety of products that seem to be shrinking.“Shrinking the size of a product in order to gouge consumers on the price per ounce is not innovation, it’s exploitation,” Warren and Dean said in a statement. “Unfortunately, this price gouging is a widespread problem, with corporate profits driving over half of inflation.”People on social media have been talking about the slimming down of products for months, with users posting about their shrinkflation experiences with side-by-side pictures of products before and after shrinking.“Major corporations are trying to gaslighting us, trying to make us believe that what we’re seeing is not real,” said TikTok user Melissa Simonson in a video from March, where she points out the sizes of drinks, cereals, chips, orange juice, gum and laundry detergent, among other grocery store items, have gotten smaller.Coca-Cola, PepsiCo and General Mills did not immediately respond to requests for comment on the letters.skip past newsletter promotionafter newsletter promotionThe Bureau of Labor Statistics, which calculates the US inflation rate each month, says its economists try to incorporate any instances of shrinkflation into its inflation calculations. For example, if a tub of 64-ounce vanilla ice cream was priced at $5.99 in January, then the price-per-ounce is $0.093. If in February, the tub remains the same price, but shrinks to 60 ounces, the price-per-ounce has gone up, representing a kind of price increase.Warren and Dean also used the letters as an opportunity to blast the companies for paying less taxes on higher profits after Donald Trump’s corporate tax cuts in 2017. The lawmakers cited a recent report from the Institute on Taxation and Economic Policy that said Coca-Cola, PepsiCo and General Mills all paid taxes at a rate of 15% or under from 2018 to 2022, despite making billions in profit.“We strongly oppose these corporate tax giveaways, and have fought to pass tax increases on big corporations, including the 15 percent minimum tax on billion-dollar corporations,” the lawmakers said in their statement. “No corporation should pay a lower tax rate than working Americans – especially when that same corporation turns around and gouges consumers on the other end through shrinkflation.” More

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      Price-gouging is illegal in 37 US states. Let’s make it 50 | Bob Casey

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      Over the past few years, Erin Wiggle has approached every trip to the grocery store with a sense of dread. During each visit, the retired army veteran, small business owner and mother from Worcester Township, Pennsylvania, has seen her budget stretched thinner and thinner as prices keep ratcheting up for the goods her family relies on. Erin’s burden has grown heavier despite pandemic-related supply chain issues subsiding, and she has a growing sense that the companies making the products she needs are padding their profits at the expense of her family.Erin is right. Under the cover of inflation, companies have raised the prices of everyday household items to rake in record profits at the expense of American families. As my investigation into what I’ve called “greedflation” shows, from mid-2020 to mid-2022, corporate profits rose by 75% – five times as fast as inflation. In fact, corporate profits jumped so much that they played a major role in causing inflation – according to the Federal Reserve, corporate profits accounted for all the inflation from July 2020 through July 2021 and 41% of all inflation from July 2020 through July 2022.We should not let powerful corporations use a crisis to jack up prices way beyond what is necessary to make a profit. In fact, many states across the country have already steeled themselves to fight the most egregious examples of this shameful practice. Laws against price-gouging are on the books in 37 states and the District of Columbia, giving state attorneys general the power to investigate and prosecute companies that excessively raise prices during emergencies. In the US Senate, I’ve introduced legislation with my colleagues Elizabeth Warren and Tammy Baldwin to give the federal government power to do the same.In recent weeks, after Kamala Harris embraced our bill as a part of her economic agenda, the legislation has come under fire from various defenders of corporate greed. These critics appear to have missed the fact that the federal legislation is modeled on laws that are already in effect across the nation, where capitalism is still alive and well. In Texas, for example, where the attorney general has the power to take on companies that unfairly exploit state residents, the governor regularly touts the state as the best place to do business in the country.Similarly, the critics are ignoring the very real protections these laws have offered for consumers. In Pennsylvania, where a price-gouging ban was enacted in 2006, the office of the attorney general investigated hundreds of cases of businesses taking advantage of Covid-19 to price-gouge desperate consumers. The investigations ultimately led to fines and to restitution for many consumers who were taken advantage of in the early days of the pandemic, including hundreds of thousands from just one seller alone.Bans on price-gouging protect victims from companies that would take advantage of different crises to rip off scared consumers. In New York, the state was able to punish Walgreens for taking advantage of customers during the infant formula crisis when supply chain issues reduced the availability of baby formula across the country. In North Carolina, the attorney general won a series of cases against companies that gouged consumers following hurricanes. In both Kentucky and Idaho, companies were held accountable for artificially forcing up gas prices in the wake of pipeline closures.These laws don’t just prevent price-gouging on a case-by-case basis; they also send a message to companies about where and when to draw the line. In the 37 states with price-gouging bans, companies can still raise prices, and they can still bring in a healthy profit for their shareholders. It’s only when they seek to take advantage of a crisis to fleece consumers that they can expect the government to step in and stop them. Our bill would apply this standard to massive corporations that exploit consumers while specifically protecting small businesses under $100m in earnings that don’t have the same power to set prices.There are multiple factors that contribute to the high cost of living, but there is no question that corporate greed plays a role. While companies have a right to turn a profit – even a substantial one – American consumers deserve to pay fair prices. That means holding giant corporations accountable when they go too far to make a buck.Giving the federal government the power to investigate and prosecute large companies that price-gouge isn’t a campaign gimmick, nor is it the beginning of the end of capitalism in America. It’s simply a way of ensuring that when corporations are using a crisis as an excuse to jack up prices on consumers, we will not surrender – instead, we will fight back.

      Bob Casey is a US senator representing the state of Pennsylvania More

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      Trump appears to tie high bacon prices to ‘horrible’ wind energy

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      Donald Trump revived questions about his mental acuity after appearing to say that wind energy was to blame for the increased price and decreased consumption of bacon.The former president’s bizarre remarks came at a town hall-style campaign gathering in Wisconsin on Thursday, when an audience member asked the Republican nominee for November’s White House election what he would do to help bring inflation down.Trump delivered a lengthy answer, apparently saying that he blamed wind power for bacon being more costly and therefore eaten less.“You take a look at bacon and some of these products – and some people don’t eat bacon any more,” Trump said. “We are going to get the energy prices down. When we get energy down, you know … this was caused by their horrible energy – wind. They want wind all over the place. But when it doesn’t blow, we have a little problem.”Video clips of Trump’s comments quickly made the rounds online and brought out critics in full force. Some detractors dismissed his answer as “incoherent” and “word salad”.On Friday, Mehdi Hasan – a broadcaster and author and a Guardian US columnist – posted the video of Trump’s remarks on X and asked whether his answer would draw the same level of editorial scrutiny as comments from Democratic presidential nominee Kamala Harris or her running mate Tim Walz.“Will any of the army of factcheckers obsessed with Tim Walz’s dog or Kamala Harris’s McDonald’s summer job be giving any attention to Donald Trump suggesting windmills cause high bacon prices?”In another post featuring the video clips, Hasan argued that Trump should face the same kind of media pressure to end his run for president that preceded Joe Biden’s decision to halt his re-election campaign after a poor performance at a 21 June debate.Hasan wrote: “Historians will scratch their heads about 2024, in which 1 candidate was forced to quit the race for being old & having a bad debate while the other candidate said mad, rambling stuff like this & not only stayed in the race but didn’t get pressured to step aside by the media.”In what seemed like a reference to Trump’s recent comments about bacon, a Thursday night cooking-themed virtual Harris campaign fundraiser hosted by the Democratic congressman Eric Swalwell featured some recipes with bacon.Swalwell on Friday sent out an email touting the success of the cooking call, which included some well-known chefs, and a “notable moments” list conspicuously mentioned the bacon recipes. More

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      in US Politics

      Majority of Americans wrongly believe US is in recession – and most blame Biden

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      Nearly three in five Americans wrongly believe the US is in an economic recession, and the majority blame the Biden administration, according to a Harris poll conducted exclusively for the Guardian. The survey found persistent pessimism about the economy as election day draws closer.The poll highlighted many misconceptions people have about the economy, including:
      55% believe the economy is shrinking, and 56% think the US is experiencing a recession, though the broadest measure of the economy, gross domestic product (GDP), has been growing.
      49% believe the S&P 500 stock market index is down for the year, though the index went up about 24% in 2023 and is up more than 12% this year.
      49% believe that unemployment is at a 50-year high, though the unemployment rate has been under 4%, a near 50-year low.
      Many Americans put the blame on Biden for the state of the economy, with 58% of those polled saying the economy is worsening due to mismanagement from the presidential administration.The poll underscored people’s complicated emotions around inflation. The vast majority of respondents, 72%, indicated they think inflation is increasing. In reality, the rate of inflation has fallen sharply from its post-Covid peak of 9.1% and has been fluctuating between 3% and 4% a year.In April, the inflation rate went down from 3.5% to 3.4% – far from inflation’s 40-year peak of 9.1% in June 2022 – triggering a stock market rally that pushed the Dow Jones index to a record high.A recession is generally defined by a decrease in economic activity, typically measured as gross domestic product (GDP), over two successive quarters, although in the US the National Bureau of Economic Research (NEBR) has the final say. US GDP has been rising over the last few years, barring a brief contraction in 2022, which the NEBR did not deem a recession.The only recent recession was in 2020, early in the Covid-19 pandemic. Since then, the US economy has grown considerably. Unemployment has also hit historic lows, wages have been going up and consumer spending has been strong.But the road to recovery has been bumpy, largely because of inflation and the Federal Reserve raising interest rates to tamp down high prices.Despite previously suggesting the Fed could start lowering rates this year, Fed officials have recently indicated interest rates will remain elevated in the near future. While inflation has eased considerably since its peak in 2022, officials continue to say inflation remains high because it remains above the Fed’s target of 2% a year.After a tumultuous ride of inflation and high interest rates, voters are uncertain about what’s next. Consumer confidence fell to a six-month low in May.So even though economic data, like GDP, implies strength in the economy, there’s a stubborn gap between the reality represented in that data – what economists use to gauge the economy’s health – and the emotional reality that underlies how Americans feel about the economy. In the poll, 55% think the economy is only getting worse.Some have called the phenomenon a “vibecession”, a term first coined by the economics writer Kyla Scanlon to describe the widespread pessimism about the economy that defies statistics that show the economy is actually doing OK.While inflation has been down, prices are at a higher level compared with just a few years ago. And prices are still going up, just at a slower pace than at inflation’s peak.Americans are clearly still reeling from price increases. In the poll, 70% of Americans said their biggest economic concern was the cost of living. About the same percentage of people, 68%, said that inflation was top of mind.The poll showed little change in Americans’ economic outlook from a Harris poll conducted for the Guardian on the economy in September 2023.A similar percentage of respondents agreed “it’s difficult to be happy about positive economic news when I feel financially squeezed each month” and that the economy was worse than the media made it out to be.Another thing that hasn’t changed: views on the economy largely depend on which political party people belong to. Republicans were much more likely to report feeling down about the economy than Democrats. The vast majority of Republicans believe that the economy is shrinking, inflation is increasing and the economy is getting worse overall. A significant but smaller percentage of Democrats, less than 40%, believed the same.Unsurprisingly, more Republicans than Democrats believe the economy is worsening due to the mismanagement of the Biden administration.Something both Republicans and Democrats agree on: they don’t know who to trust when it comes to learning about the economy. In both September and May, a majority of respondents – more than 60% – indicated skepticism over economic news.The economy continues to present a major challenge to Joe Biden in his re-election bid. Though he has tried to tout “Bidenomics”, or his domestic economy record, including his $1.2tn bipartisan infrastructure bill from 2022, 70% of Republicans and 39% of Democrats seem to think he’s making the economy worse.But it’s not all bad news for Biden. Republican voters were slightly more optimistic about the lasting impacts of “Bidenomics” than they were in the September Harris poll. Four in 10 Republicans, an 11 percentage-point increase from September, indicated they believe Bidenomics will have a positive lasting impact, while 81% of Democrats said the same. And three-quarters of everyone polled said they support at least one of the key pillars of Bidenomics, which include investments in infrastructure, hi-tech electronics manufacturing, clean-energy facilities and more union jobs.Yet even with these small strands of approval, pessimism about the overall economy is pervasive. It will be an uphill battle for Biden to convince voters to be more hopeful.“What Americans are saying in this data is: ‘Economists may say things are getting better, but we’re not feeling it where I live,’” said John Gerzema, CEO of the Harris Poll. “Unwinding four years of uncertainty takes time. Leaders have to understand this and bring the public along.” More