Trump’s ideology and even fantasy-driven economic policies are more and more backfiring. Two of the big reasons that voters chose Trump over Biden were inflation and immigration concerns. Yet the evidence is that Trump is delivering the worst of all possible worlds (save a crash) of stagflation. As we’ll discuss soon, the comparatively small Fed rate reduction of 25 basis points even in the face of weak job numbers says they don’t like what they see on the inflation front. Wolf Richter described the current profile:
….inflation in goods was low in August, except in gasoline, food, and used vehicles. The driver behind inflation came from services – housing, insurance, subscriptions, healthcare, etc. – and services are two-thirds of consumer spending,
Consumers are extremely sensitive to increases in food and gas prices, since they are essentials and the frequency of purchases makes price increases all too evident.
📈 Electricity 6% 📈Food. 5% 📈Shelter 4%
2.9%. Reported inflation
*if you average out the 3 things we need on a daily basis the real inflation rate is 5% pic.twitter.com/esRq2jbEb8
— The Coastal Journal (@1CoastalJournal) September 11, 2025
Please click through on this tweet to see some of the categories subject to tariffs that also showed outsized price increases:
The middle-class squeeze from tariffs is here. Inflation hit 2.9% in August, the highest since January and up from 2.3% in April. It’s troubling that so many basic necessities are rising in price again: Food, gas, clothing and shelter all had big cost jumps in August. And this is… pic.twitter.com/uJrSb8jx2z
— Heather Long (@byHeatherLong) September 11, 2025
Price increases for health insurance expected for 2026 are nosebleed level. From Mercer in early September on employer plans, Employers prepare for the highest health benefit cost increase in 15 years:
The total health benefit cost per employee is expected to rise 6.5% on average in 2026 — the highest increase since 2010 — even after accounting for planned cost-reduction measures. Employers estimated that plan cost would increase by nearly 9%, on average, if they took no action to lower cost…
Based on the projections, 2026 will be the fourth consecutive year of elevated health benefit cost growth following a decade of moderate annual increases averaging only about 3%. With pressure mounting on their healthcare budgets, the 2026 cost spike has been a call to action for many employers. Survey results indicate that while the majority of employers will make changes to reduce cost increases in 2026, many are pursuing longer-term — even disruptive — strategies to slow cost growth.
“Lower cost” = crapify.
From Health System Tracker in July on the rises expected for Obamacare policies:
Enhanced premium tax credits that make coverage more affordable will expire at the end of 2025, driving up out-of-pocket premium payments by over 75% on average. This is expected to cause healthier enrollees to drop their coverage and create a sicker risk pool. An earlier Peterson-KFF Health System Tracker analysis showed the expiration of enhanced premium tax credits raised proposed rates by an additional 4 percent, on average.
Tariffs could drive up the cost of some drugs, medical equipment, and supplies. Some insurers report that tariffs—and the uncertainty around them—are driving rate increases about 3% higher than they otherwise would be.
And for Medicare:
This year, Part B enrollees pay a standard monthly premium of $185, the exact amount that the trustees estimated last year. That’s up $10.30, nearly 5.9 percent, from $174.70 in 2024. The 2025 Part B annual deductible is $257, up 7 percent from $240 in 2024.
But next year the Part B premium is projected to jump 11.6 percent, $21.50, to $206.50, the Medicare trustees reported in July. That would raise the Part B annual deductible by 12 percent, $31, to $288 in 2026.
And some anecdata via MikeinFromMN in comments:
I don’t find insurance premiums mentioned too often in MSM inflation articles. This is a concern for me as my premiums have gone up 80% in 3 years:– 164% for my wife’s ACA plan– 96% for home– 44% for car– 30% for life– 25% for my Medicare B/supplementContinuous increases anywhere near those levels will be ruinous for our finances over time. Are others experiencing such large increases?
On the immigration front, voters have gone from pre-election support for Trump policies to post-election opposition. Admittedly this may be due to implementation, as in the deliberate cruelty and regular abuses, as in rounding up and even deporting people who do have visas and even American citizenship, as the Hyundai plant raid demonstrated.
Illustrating the severity of the Trump policy backfire:
Is immigration a good thing for the USA
Yes 79% (Highest ever)No 17% (Lowest Ever)
Gallup pic.twitter.com/THrYZmkQtd
— Political Polls (@PpollingNumbers) September 7, 2025
And from earlier in the year. When you’ve lost Fox and Piers Morgan:
Fascinating Fox poll re immigration. Most Americans want migrants who commit crimes deported, but NOT those who DON’T commit crimes, and they think ICE is currently being too aggressive. https://t.co/xBKdmBYNjH
— Piers Morgan (@piersmorgan) July 29, 2025
A fresh New York Times op-ed, Trump’s Economic Magic Trick Is Coming Undone, highlights how Trump’s aggressive deportations are lowering growth:
The essence of President Trump’s pitch to the American people last year was simple: They could have it both ways.They could have a powerful, revitalized economy and “mass deportations now.” They could build new factories and take manufacturing jobs back from foreign competitors as well as expel every person who, in their view, didn’t belong in the United States. They could live in a “golden age” of plenty — and seal it away from others outside the country with a closed, hardened border.
Trump told Americans that there were no trade-offs. As the saying goes, they could have their cake and eat it, too. Even better, eating the cake would, on its own, produce more cake — no need for new ingredients or the skill, time and labor necessary to make something new….
As promised, Trump began a campaign of mass deportation….
Beyond this [Hyundai] raid, we can see the economic consequences of the president’s immigration policies on workforces across the country. In states with large numbers of undocumented immigrants, the construction, agricultural and hospitality sectors have seen a decline in growth this year, according to a recent report from the Economic Insights and Research Consulting group. The Congressional Budget Office warned last week that the U.S. population is projected to grow more slowly than expected — and potentially even contract — as a result of deportations and other anti-immigration policies. The result could be higher inflation and lower economic growth in the near future. And according to an analysis from the Wharton School, the president’s alma mater, a long-term crackdown on immigration could shrink the economy by up to 1 percent of G.D.P. and depress wages for the typical American worker.
Even those at the top of the food chain and represent a critically important donor/influencer group, CEOs, are, by a significant majority, unhappy with Trump’s economic policies, per a new story on a CEO conference organized by Yale: Inside the Room Where CEOs Say What They Really Think of Trump’s Policies. While the main, and named, source, is Yale economist Jeffrey Sonnenfeld, who is so anti-Russia that he does not see straight on that topic, the Journal spoke to other CEO conference participants, so this is not one person’s account.
Keep in mind that even before the famously vindictive Trump took office, governments have become obsessed with spin control, to the degree that even people who many would see as powerful keep their heads down rather than cross the official storyline. For instance, during Brexit, top executive were mum rather than pointing out problems with the Government’s plans. And had those concerns been aired, particularly with practicalities about the mechanics of cross-border commerce, they could have produced salutary course corrections.
Key sections of the Journal’s report:
In a series of poll questions, the executives in the room made their frustrations known. Asked if tariffs had been helpful or hurtful to their businesses, 71% of respondents described the levies as harmful. Another question centered on the legality of tariffs. About three quarters of respondents said courts were correct in saying the tariffs are illegal as executed. The Supreme Court will take up the matter this fall.
Executives also said U.S. consumers and domestic importing companies were the ones bearing the brunt of the costs on tariffs, not international exporting companies or countries….
When asked whether they planned to invest more in U.S. manufacturing and infrastructure, 62% of respondents said they didn’t plan to do so.
The reason, Yale’s Sonnenfeld said, is because tariffs, immigration policies and concerns about the economy are all weighing on leaders and preventing them from feeling confident enough today to make new investments. “They’re holding back doing anything,” he said….
CEOs were nearly unanimous in expressing displeasure about Trump’s efforts to pressure Federal Reserve Chair Jerome Powell to lower interest rates: 80% of respondents said Trump wasn’t acting in the best long-term interests…71% of respondents said the Fed’s independence had been eroded by Trump’s actions. Fed policymakers approved the first interest-rate cut in nine months on Wednesday—and signaled more cuts are likely. ..
A good portion of the discussion on Wednesday, those in attendance said, focused on so-called state capitalism. Nvidia and Advanced Micro Devices will share a portion of certain overseas chip sales with Washington, while the U.S. will get what has come to be known as a “golden share” in U.S. Steel as a condition of Nippon Steel’s recent takeover. Some executives saw the recent moves as concerning, a sign of the government encroaching on the free-market ethos that long defined the U.S., or potentially favoring some companies over others.
Keep in mind that we haven’t mentioned the catastrophic effects the Trump tariffs have had on farmers.
So aside from the military-industrial-surveillance complex, and crypto bros, Trump has lost support in the world of commerce. Nicely played. And if the CEOs are representative, businessmen are not buying Trump’s efforts to scapegoat the Fed.
Needless to say, this does not bode well for Republicans in the midterms either. The only thing that is holding up the appearance that conditions are not that bad is the giddily valued stock market…which depends on a very few companies with the AI bubble as the driver. How long before that deflates or even crashes?
Congresscritters face the choice of how to distance themselves from him without becoming targets of his wrath. Will the shift come in large enough numbers to blunt the impact on them as individuals? The famously changeable Trump could change course, but he’s long been fixated on tariffs as a policy measure and the fight with the Fed has become personal, so Trump is far more likely to double down than moderate his actions. It would be nice if watching the wreckage were spectacle, but pretty much all of us are set to suffer costs.
