Smart Money Podcast — How Presidential Policies Affect Prices: Tariffs, Price Control, Immigration and More

The rating system considers coverage options, customer experience, customizability, cost, and other factors. The rating system takes into account coverage options, customer experience, customizability, cost, and other factors. The rating system considers coverage options, customer experience, customizability, cost, and more to determine the final score. The rating system considers coverage options, customer experience, customizability, cost, and more. To contribute your thoughts on the election and your personal finances, you can leave a voicemail or text the Nerd hotline at 901-730-6373, which is 901-730-N-E-R-D. You can also email a voice memo to [email protected]. Today, we have Derek Stimel, an associate professor of teaching economics at the University of California, Davis, joining us to discuss the influence of presidents on inflation and prices.

Typically, presidents are not seen as the main drivers of inflation in the economy. Factors like monetary policy, global events, and shocks play a larger role. However, government policies like spending can contribute to inflation in some cases. For example, some attribute recent inflation to government spending post-COVID.

Regarding campaign promises, former President Trump’s proposal to impose tariffs on foreign goods could lead to higher prices for imported products. Tariffs act as taxes on imports, causing businesses to decide whether to absorb the tax or pass it on to customers, resulting in increased prices.

While Trump claims tariffs would boost American manufacturing, businesses may relocate to avoid tariffs, but the overall impact on prices may not be offset. As for Trump’s promise to lower gas prices, presidents can influence gas prices to some extent due to the U.S.’s position in the global energy market. Gas prices, particularly energy prices, are often influenced by global shocks, such as the disruptions caused by Russia’s invasion of Ukraine. These geopolitical events are likely the main drivers of energy prices in recent years, rather than any direct action a president could take. This is more of a geopolitical issue than an economic policy one.

When it comes to immigration and consumer prices, labor costs play a significant role in driving inflation. With an aging population and reduced labor supply, wages are likely to increase, leading to higher prices as businesses pass on these costs to consumers. Restricting immigration further reduces the labor supply, putting pressure on wages and prices.

Deporting millions of undocumented immigrants from the workforce could disrupt service sector jobs and create shortages in various industries. This could lead to unexpected impacts on the economy, such as businesses struggling to find employees and potential cascading effects on other sectors.

Proposals to weaken the independence of the Federal Reserve, such as bringing it under more direct control of the president, could erode the Fed’s credibility as an inflation fighter. The Fed’s independence is crucial for maintaining public trust in its ability to make decisions based on economic factors rather than political influence. If this independence is compromised, it may impact the Fed’s effectiveness in controlling inflation over the long term. The lack of credibility leads people to doubt the Fed’s ability to maintain low inflation rates, causing expectations of higher inflation. This is why the Fed’s independence is crucial in anchoring inflation expectations and maintaining credibility to combat inflation effectively.

Moving on to Vice President Kamala Harris’s plan to combat inflation, she aims to ban price gouging, which involves unfairly raising prices in response to certain situations, like natural disasters. While states have laws against price gouging during emergencies, Harris’s proposal seeks to implement a federal ban on all forms of price gouging, which could potentially lead to price controls in the market.

Price controls involve the government setting maximum prices for goods, similar to what Harris’s proposal might entail. Economists generally dislike price controls because they can lead to unintended consequences such as reduced product availability and lower quality. Harris’s plan to ban price gouging could be seen as a form of price control, which raises concerns about its impact on businesses and consumers.

In addition to preventing price gouging, Harris also aims to lower prescription drug prices by allowing Medicare to negotiate prices, speeding up generic drug delivery, and cracking down on big pharma. These efforts could have a significant impact on making prescription drugs more affordable, especially since Medicare’s market power allows for effective negotiation with pharmaceutical companies. Earlier, we discussed housing, specifically Harris’s proposals to make housing more affordable, including preventing corporate landlords from using price-fixing algorithms. This is an interesting approach considering the use of technology to drive business decisions. Harris also plans to support the construction of 3 million new housing units in the next four years to increase housing supply. However, the implementation of these proposals may face challenges at the local level due to various regulations and political factors.

In addition to housing, both presidential candidates have focused on addressing inflation, with Trump emphasizing energy costs and Harris targeting food costs. It’s worth noting that these factors are typically excluded from the Fed’s measures of inflation. The candidates’ approaches to addressing inflation may involve increasing domestic production of natural gas and coal, which could impact inflation rates. Furthermore, the national deficit and debt levels could also play a role in inflation, potentially affecting the economy in the long run.

Overall, the candidates’ proposals and priorities in addressing housing affordability and inflation highlight their potential impact on the economy. While individual presidents may not have the power to transform the economy single-handedly, their policies and priorities can influence specific issues and sectors. The focus on strategic promises and relevant issues by Trump and Harris demonstrates their awareness of the economic challenges facing the country. In the realm of politics, it’s important to remember that while a president may not have complete control over certain aspects such as pricing, they do hold significant influence within their political party. This often results in party members rallying around the president’s policies, making them more achievable.

Collaboration with Congress is crucial for a president to enact their proposed legislation and fulfill campaign promises. While party members may not always agree entirely, they tend to work together to advance the president’s economic agenda. Therefore, having the support of their party in Congress greatly enhances the president’s ability to achieve their goals.

It’s essential for voters to pay attention to candidates at all levels of government, not just presidential hopefuls. Congressional, city council, and school district candidates also impact public finances, which directly affect taxpayers. Staying informed about their spending plans is key. Stay updated on financial news through resources like BW’s financial news hub.

In the upcoming episode, we’ll delve into a topic that affects everyone’s finances: taxes. We’ll explore the tax proposals of current presidential candidates and how they impact taxpayers. Stay tuned for insights into tax policies and their implications on your paycheck.

Remember, if you have financial questions, reach out to the Nerds at 901-730-6373 or email us at [email protected] Follow our podcast on Spotify, Apple Podcasts, and iHeartRadio for new episodes.

This episode was crafted by Tess Vigeland and Anna, with editing assistance. Rick VanderKnyff and Amanda Derengowski fact-checked the content, while Megan Maurer handled audio mixing. Special thanks to BW’s editors for their support.

As a reminder, we are not financial advisors. The information provided is for educational and entertainment purposes and may not be applicable to your specific situation. For personalized advice, consult a financial professional.

Until next time, stay informed and turn to the Nerds. phrase “I am going to the store” as “I will be going to the store.” sentence to make it more clear:

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