Exactly one year ago this week, Donald Trump boasted, “You know, we’ve already solved inflation. We’ve solved prices.” The president’s claim was plainly false, but it wasn’t a one-off: Week after week, month after month, the Republican repeatedly told Americans that higher inflation is a thing of the past, thanks entirely to how awesome his awesomeness is.
It was a problem that Trump’s claims were absurd. For the White House, it was a bigger problem that Trump’s handpicked chair of the Federal Reserve, Kevin Warsh, didn’t have the luxury of living in the alternate reality the president tried to pitch to the public.
On the contrary, Warsh and his colleagues at the Fed had to address the economic conditions in the real world. In the face of discouraging data on inflation and consumer prices, the threat of new turmoil in the bond market and the real possibility of lasting harm to global investors’ confidence in the Fed, Warsh this week approved the first interest rate increase in three years.
Predictably, Trump responded with furious economic illiteracy — his inability to understand the basics of economic policy is becoming even more common of late — and a ridiculous conspiracy theory.
At a certain level, it’s easy to understand why the president was so upset. Not only did he falsely assume that his handpicked Fed chair would follow the White House’s demands, but higher interest rates, by design, will slow the economy.
But stepping back, there are two things the president ought to at least try to understand. The first is the fact that he’s the one causing the problem that the Fed took steps to address. As The Atlantic’s David Graham summarized last week:
A paradox of this moment is that inflation is a big reason for Trump’s cratering approval and his party’s sinking odds in the midterm elections, but nearly every one of his signature policy ideas is inflationary. The basic challenge is not novel to this president—voters hate inflation, yet most anti-inflation measures the government can take will hurt the economy, which voters also hate.
But Trump’s strategy seems to be to commit to new proposals that would drive up costs.
There is no great mystery here: The biggest drivers of inflation and increased consumer costs are the war with Iran, which Trump launched and can’t get out of, and the White House’s trade tariffs, which he has championed with irrational enthusiasm.
The president, in other words, has no one to blame but himself. If Trump didn’t want the Fed to respond to stubbornly high inflation and increased consumer costs, then he shouldn’t have adopted an agenda that caused stubbornly high inflation and increased consumer costs.
The second thing Trump ought to try to understand is that he doesn’t have anything resembling a plan to address the problem he created but prefers not to notice. There’s no plan to end the war and no plan to abandon ineffective tariffs. The only new idea the president has presented in months is spending more than $1 trillion on $5,000 checks to every American adult, which would necessarily make inflation even worse.
Voters looking for solutions to the affordability crisis will have to look away from the one person responsible for exacerbating the affordability crisis.
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