This is a multipart series on the different ways the 2024 Presidential Election is likely to affect Texas.
On any list of issues most important to U.S. voters heading into the 2024 presidential election, economy tops them all. Gallup surveys show that 52 percent of Americans rate the economy as “most important,” topping other hot-button issues like preserving democracy, national security, and immigration.
Of course, “the economy” is a nebulous collection of vastly different measures, including unemployment, wage stagnation, trade gaps, and gross domestic product. However, one issue stands out most in 2024: the price of goods. Price inflation rose dramatically across the globe once the lockdowns related to COVID-19 subsided. Between 2020 and 2021, U.S. inflation rose 4.7 percent, and again by 8 percent between 2021 and 2022. That inflation strained family budgets considerably as the price of almost all daily goods climbed.
This deeply affected Texas. The Dallas-Fort Worth area saw the highest inflation in the country, a problem exacerbated by the state’s sales tax. Texas has one of the highest sales taxes in the nation to make up for its lack of state income tax, and when prices grow the sticker shock can be daunting.
Now, inflation is slowing considerably. Though it is still climbing, the rate of growth is down to 2.4 percent, below the expected average. Which president is likely to keep the number moving in the proper direction?
Claims that the Biden-Harris Administration caused the spike in inflation are ridiculous. It was a worldwide phenomenon following the pandemic. While the U.S. did have the highest inflation among the G7 countries, it fell to the lowest inflation by July 2023. The U.S. is now in a more stable economic position on prices than most wealthy nations.
It’s likely that some of the actions of the Biden-Harris Administration are responsible for that stabilization and the slowing of price growth. For instance, the Federal Reserve raised interest rates, and the strategic supply of oil was tapped to alleviate gas prices. Biden-Harris also instituted a set of policies that seriously unsnarled the supply chain issues that dominated the early days of the pandemic. Under the administration, supply chain pressure has tumbled.
The fact that unemployment has plummeted under Biden-Harris and wages have started to outpace inflation also helps. The gains in wages are modest, but definitely present.
For her part, Vice President Kamala Harris has promised to go after price gouging in her first term as president. How much blame price gouging deserves when it comes to inflation is debatable, though it is almost certain that some companies took advantage of supply shortages to raise prices. Harris’s plan will not return prices to pre-pandemic levels because nothing would except a protracted recession, but it may lessen the impact of future crises.
Meanwhile, former president and current convicted felon Donald Trump is running on a platform that promises to bring back the low prices before COVID. His most consistent plan is an increase in international tariffs, taxes on imported goods he claims will be paid by foreign entities like China.
This is fundamentally inaccurate. Tariffs are paid for by importers, who pass the cost into consumers. Trump’s plan to tax Chinese-made goods at 20 percent alone would likely add another $2,600 to the average American family’s cost according to the Peterson Institute.
While in office, Trump did increase tariffs, and inflation was low. However, his raises were small, and the Federal Reserve was more worried about recession than inflation. His new raises are exponentially larger and would have a much more significant impact.
The price of food is also tied directly to immigration practices. While Republicans generally decry the surge in immigration that has happened under Biden, that surge undoubtedly lowered food prices. Most of America’s crops are picked by migrant labor, especially in Texas, and the more of them there are the more stable the pay is. Trump’s anti-migrant policies are likely to severely shrink the workforce, leading to higher wages needed to find employees, and higher prices for food.
Possibly the most negative affect Trump would have is a political takeover of the Federal Reserve. While the president can certainly make a case to the Fed, the decision to raise or lower interest rates is supposed to be made from economic data, not political orders.
Trump has vowed to exert more power over the Fed in order to push short-tern economic policies. This will contribute to a feeling of stability, putting one of the most powerful levers of the American economy under the whim of the president. Harris has vowed to maintain the current distance from the Fed.
Whoever is elected president, prices on consumer goods are not going to return to where they were five years ago. The world changed during COVID. The actions of Biden-Harris slowed inflation to normal levels while also rebuilding the American workforce. Their results are positive, but moderate.
Trump’s previous history with inflation is competent at a time of economic stability. His current policy plans would introduce massive price increases on imported goods and domestically produced food. The vast majority of economists say his proposals would make prices worse, not better.