Orange price tag: Inflation is attacking America
Inflation is still seen as the United States' most serious problem. According to a Washington Post, ABC News, and Ipsos poll, the majority of Americans say they spend more on food and utilities than they did a year ago, and blame the president for the price increase. Food prices have increased by 25%, and the average price of a new car has exceeded fifty thousand dollars. And energy bills and insurance premiums have reached record levels. At the same time, housing prices increased by 30%. It was inflation that became the defining issue of the 2024 election and contributed to Trump's return to the White House. However, a year later, this negatively affects his rating: 59% of Americans blame Trump for the current level of inflation. Why can't anyone in America beat inflation? How do economic factors influence Trump's foreign policy? The answers are in the Izvestia article.
High inflation and low ratings
According to a survey conducted at the end of October, approximately seven out of ten Americans say that their food costs have increased over the past year, and six out of ten say that utility costs have increased significantly. About four out of ten say the same thing about healthcare, gasoline, and housing fees. These results reflect concerns about the cost of living, which has become a key issue in American politics.
Americans' dissatisfaction reflects government data indicating a steady increase in inflation. In particular, the cost of utilities has jumped by 12% over the past year. Food prices have increased by an average of 25%. For example, meat prices have increased by more than 8% since last year, and canned fruits and vegetables — by 5%. Coffee has risen in price by almost 20%.
About six out of ten Americans blame rising prices and inflation on Donald Trump. About two-thirds of independent voters (66%) and 92% of Democrats blame him, compared with 20% of Republicans. The survey also showed that 65% of Americans disapprove of Trump's policy on tariffs, and 62% disapprove of his economic policy.
89% of Democrats and 52% of Republicans reported spending more on groceries than they did a year ago. Overall, Democrats were more than 30 percentage points more likely than Republicans to report increased spending on a range of essential goods, including gasoline, healthcare, and housing. Many Americans spend between $200 and $250 a week on groceries, which is at least $70 more than before.
By the way, the victory of Socialist Zohran Mamdani in the New York mayoral election has become a symbol of the economic crisis, rising prices and declining living standards. "All politicians say that New York is the best city on the planet," Mamdani said in his first campaign ad. "But what's the point if no one can afford to live here?" Mamdani's recipes and slogans were exclusively leftist. He won the election by offering subsidized kindergartens, rent freezes and free public transport, as well as social support for the general population.
Given the near-record prices for eggs and many dairy products, as well as high tariffs from countries in the South, where fruits and vegetables are imported to the United States, it is difficult to expect an improvement in the situation. At the same time, the cost of food is a key factor for many Americans. The majority of American adults (62%) say that this issue is of primary importance to them.
Inflation is invincible
Vasily Koltashov, an economist and director of the New Society Institute, noted in an interview with the Izvestia newspaper that the issue of inflation in America is a complex, multifaceted and, most likely, inevitable phenomenon. The interlocutor stressed that, in fact, no one in the American elite is really fighting inflation, and in order to stabilize the economy and correct the imbalance, a deep redrawing of the political and economic system of the United States is required, including constitutional issues and federalism.
Donald Trump
— Let's calculate what Trump has achieved. Firstly, low global oil prices are around $63 per barrel. It hasn't been lower for a very long time. Secondly, his relatives have greatly enriched themselves this year on the stock market fluctuations. Third, the tariff policy. And here we see serious problems. They raised the prices for absolutely everything. Trump hopes that the tariff war will be followed by an automatic revival of American industry. But this has not happened yet," the economist said.
According to the interlocutor, Trump has also promoted the interests of American energy and the military-industrial complex in the world. That is, he has certain results, he continues: the militarization of Europe and the purchase of weapons from American military corporations, the growth of American energy supplies to Europe, and the planned revival of the coal industry.
— But at the same time, Americans began to live worse. That's a fact. They will live even worse in a year. And then it got worse. The standard of living in the United States is declining and will continue to decline. The reason, on the one hand, is, of course, Trump's protectionist policy, but the first reason is the expensive dollar. This gives them a fairly favorable exchange rate and a number of advantages. But at the same time, labor, real estate, food and services are very expensive," Koltashov said.
The economist recalled that the salary of a "coffee machine assistant" in India or in a third world country can be $100-200. And in the United States, the "coffee machine assistant" will receive several thousand dollars. At the same time, everyone will be unhappy. This is one of the characteristic features of American society — the loss of faith that you can earn decent money. The expert added that Americans not only began to live worse, they also lost faith that they could somehow change the situation.
The American economy is not in crisis. She's degrading
Experts believe that the American economy is not in crisis, it is largely deteriorating.
— They need a new constitution, they need new rules of the game, they need the devaluation of the dollar, which Trump dreamed of and which in 2019, in particular, he asked the Federal Reserve System for. He was refused. He needs a completely different management situation. He needs the governors to obey. He needs the National Guard to eliminate crime on the streets," Koltashov stressed.
Alexey Bobrovsky, an economist and director of the Institute for the Study of World Markets, also referred to the depth and consistency of problems in the American economy and society in an interview with the Izvestia newspaper. In addition, Mr. Bobrovsky noted other reasons for the deterioration of the economic situation and inflation, namely the shutdown.
— The direct and obvious reason for the deterioration of the price situation was the introduction of a shutdown, because the disruption of various kinds of chains, including government financing of certain areas and even industries, caused prices to rise. It's a predictable story. In addition, the second important reason for high inflation was the trade war and tariffs. The tariff policy has strongly influenced the price increase," the specialist noted.
But its effect will be visible only next year, Bobrovsky points out. That is, rising prices in the United States, which is associated with a huge amount of money in the system, with the very "printing press", leads to the depreciation of the American currency, and, of course, to higher costs, to higher prices.
— If we talk about specific steps, what will happen next, then the first thing that suggests itself, of course, is a further reduction in the key interest rate. If inflation or government debt get out of control, then we are likely to see some extraordinary measures. American inflation is not going anywhere," the economist said.
Both experts agree that the way out of the situation may be to search for new opponents and enemies. Trump and his administration can follow the well—trodden path of his predecessors: "If I can't beat inflation, then I can beat Iraq, Afghanistan, or some other third world country."
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