LIZ PEEK: Trump’s economic wins are real — now he needs to convince the country
Americans are not being told the truth about the economy. Hint: it is growing, investment is increasing, real incomes are rising and inflation is lower than it was a year ago, and considerably below where it was in 2022 and 2023.
Democrats and their media henchmen spin economic developments in the worst possible light, trying to scare voters and undermine the White House. President Donald Trump, responding to polls showing Americans unhappy with his stewardship, is trying to set the record straight.
He has a good story to tell and is frustrated that the country is not applauding our lower trade and fiscal deficits, growth above 4% and record energy production. But he undermines his own story by exaggerating his successes. In a speech at the World Economic Forum in Davos, for instance, Trump said that the U.S. has "virtually no inflation" and that grocery prices are coming down. That isn’t true. Inflation is not yet down to the Fed’s 2% goal, and except for gasoline and eggs, very few prices have actually declined.
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Trump has the high ground here and should not cede it by straying from the facts. Democrats yap about affordability, but their every policy — high taxes, cumbersome regulations, climate zealotry — raise the cost of living. That’s why blue cities rank as the most expensive places on earth to live.
Painting the economy with a dark brush, as the liberal media does, has real-world consequences. Confidence sinks and the consumer retrenches, torpedoing growth. That’s what the Left wants. A booming economy hurts Democrats in two ways. First, rising incomes tee Republicans up to maintain control of Congress and give them two more years to further the Trump agenda. Second, it proves that lower taxes, lighter regulations and pro-energy policies deliver more jobs and rising wealth.
Democrats, regulatory zealots who love to hike taxes, (hello, Virginia Governor Spanberger! Hello NYC Mayor Zohran Mamdani!) would like to plow under our nation’s great fossil fuel reserves, and cannot tolerate real-time evidence that they are wrong on all counts.
The Left correctly claims that the country expanded under President Joe Biden. But it grew on the shoulders of massive federal spending, which led to 9% inflation and one of the worst hits to middle-class Americans since the Great Recession.
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The liberal media cannot play it straight. Consider their take on Trump’s nomination of Kevin Warsh to become chairman of the Federal Reserve. After months of stoking fears that the Fed would soon lose its fabled (and mythical) independence under a Trump-picked chair, media analysts twisted themselves in pretzels hyping the dangers of a Warsh-led Fed even as markets proved them wrong by demonstrating exactly the opposite.
After Trump announced his choice of Warsh, metals prices, which had been on a tear, staged an epic collapse. Silver futures slid 31%, the worst day’s trading since 1980, and gold futures, which had been skyrocketing, dropped 11%. Why? Because Warsh is known as a hawk, concerned with keeping inflation and government spending under control. Gold and silver prices had been soaring for several reasons, but among them was the expectation that Trump’s pick would provide what the president wanted — lower interest rates. That, we were told confidently, would lead to accelerating inflation.
It was almost funny watching Bloomberg analysts, for instance, deal with the reality of the Warsh nomination. It was, they opined, an "odd" choice, implying that Trump could not possibly tap an independent thinker, but rather would demand total control over Fed policy. Wall Street, they acknowledged, expected Warsh to lead with a "hawkish" bias. Far from being a pushover, eager to do Trump’s bidding, Warsh will "need to navigate a president who…has pilloried Fed officials for not easing policy as aggressively as he would like."
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The liberal media has also been endlessly critical of Trump’s tariffs, and especially the impact they would have on America’s small businesses. But surveys by the NFIB, the country’s largest association of small businesses, show that group’s proprietary optimism index rising in December to 99.5, above its 52-year average of 98. In addition, the NFIB Uncertainty Index fell in December to the lowest reading since June 2024.
The NFIB isn’t alone in seeing positive trends. Investment bank Evercore ISI’s weekly company surveys show the same trends. Recently, the surveys had zoomed to the highest level since March 2024.
Much of the positive news of late has reflected steady spending by consumers, who are regularly reported to be running out of cash, sinking deeper into debt and depressed about the country’s outlook. And yet, hail the U.S. shopper, who once again defied expectations and stepped up to produce better-than-expected holiday sales.
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But why should consumers pinch? Real incomes are rising, the stock market keeps hitting new highs, producing a "wealth effect" on spending, and even Fed Chair Powell says the jobs market is stable, if not booming.
Notwithstanding those positive trends, consumer sentiment has weakened. But the pessimism reflects not so much present conditions — i.e. the reality on the ground — as future expectations, and especially among Democrats and Independents. My view: those glued to liberal newscasts are understandably gloomy about the future. Of course they are! All they hear is hand-wringing about how Trump’s tariffs will destroy global trade and how AI will slaughter job prospects.
Of course, not everything is perfect, but Trump is right that he had to fix an economy addicted to ever-higher government spending; he is also right that trends are positive. Gasoline prices are down more than 7% from a year ago, and mortgage rates are just above 6%, off from nearly 7% when Trump took office. Meanwhile, investment is flooding into the U.S. and AI will almost certainly boost productivity and incomes, and drive inflation lower.
President Trump has the facts on his side; he should stick to them and win back Americans’ confidence.