Can Inflation Be Tamed?

 Popular Economics Weekly

“The Producer Price Index for final demand rose 0.3 percent in October. Prices for final demand goods increased 0.5 percent, and the index for final demand services moved up 0.2 percent. Prices for final demand advanced 6.5 percent for the 12 months ended in October.” BLS.gov

FREDppi

America’s midterm voters are now just learning what is behind the intractable inflation that has prevailed during this Trump administration.

It’s corruption on a grand scale because of the laws he has broken and constitution he ignored by enacting blatantly illegal tariffs and starting illegal wars with a Republican congress that has refused to stop him.

I would characterize the Trump administration as running a criminal enterprise under RICO, the Racketeer Influenced and Corrupt Organizations Act enacted by congress in 1970.

Trump has to be aware of what he was doing, since he barely escaped being convicted under RICO just prior to the 1916 election by settling his Trump University lawsuit for $25 million days before his election.

He was defrauding most Americans (though not the oligarchs that supported him) by enacting the illegal taxes and unlawful costs of wars that piled up the national debt under false pretenses. The sky high tariffs have raised the costs of everything and endangered our national security.

The result has been a prolonged inflationary spiral that is now becoming embedded in other parts of the economy, such as in food and the service sector, that aren’t directly affected by the tariffs and wars.

So wholesale prices of raw materials as measured by the Producer Price Index are now increasing 6.5 percent annually; not only the energy prices that have kept climbing since the beginning of the Iran war last April.

President Biden had succeeded in bringing wholesale inflation down to almost zero (0.3 percent) in July 2023 after the COVID-19 pandemic surge (see graph) because tariff rates were low at that time. We traded with the whole world that wanted to trade with us, which kept import prices from climbing.

But Trump pulled out all the stops in levying higher tariffs on all 180 countries in the world, raising those costs. As per the graph, the price of raw materials that go into what is produced began its steady climb to 6.5 percent annually in October.

No one likes inflation, it turns out, which is why so many red states turned blue. Most Americans don’t like corruption either, which became apparent when Trump used his illegal tariffs to extort deals for himself as well as his supporters from countries by threatening them with even higher tariffs.

What is so incredible is that it couldn’t have happened if Republicans hadn’t allowed it. Only congress had the power to tax and approve tariffs, which is why Trump’s TACO tariffs were illegal from the start.

This has also made it difficult for the Federal Reserve to bring inflation back down. It must raise interest rates to some degree to control it, yet doing so will raise the cost of everything, including the level of our $40T national debt.

And unwinding the labyrinth of corruption that has permeated every branch of his government will take more than one election cycle. The voters have given Democrats an overwhelming mandate to do just that, to make America affordable and livable for all Americans. The alternate if inflation isn’t tamed? Another recession if we don’t succeed.

  The alternate if inflation isn’t tamed? Another recession if we don’t succeed.

Harlan Green © 2026

Follow Harlan Green on Twitter: https://x.com/HGreen97180/

It's the Inflation, Stupid!

 Financial FAQs

“The Consumer Price Index for All Urban Consumers (CPI-U) increased 0.4 percent on a seasonally adjusted basis in October after rising 0.6 percent in September, the U.S. Bureau of Labor Statistics reported today.” BLS.gov

FREDcpi

Why is it that everyone got it, except Republicans in this election that turned into a blue wave? Inflation and corruption were at the top of voters’ concerns. Why couldn’t the rulers of the red states see it?

Gas prices are hovering above $4 per gallon and diesel up 70 percent just since January.

There’s been enough stupidity from both political parties about understanding inflation over the years.

But there had to be some Republicans with IQs above Trump’s (100?) that knew better the causes of today’s blatant inflation.

All items in the Consumer Price Index rose from 3.4 to 3.7 percent, for starters. And several Fed Governors have already said a +0.5% increase in the Fed Funds rate in December may be appropriate.

That will hurt most Americans just breaking even whose wages can’t keep up with inflation. Democrats have already voiced solutions they want to enact when they take over congress in January—end the Iran war and the trade wars with such as our closest trading partners like Canada.

The lust for money and power will blind the most intelligent who chose to ignore the smash and grab regime currently in charge.

Such actions by the new Democratic congress would have an immediate effect on energy prices and manufacturing costs at the heart of the inflation surge.

The index for shelter rose 0.3 percent in October, accounting for over thirty percent of the monthly all items increase. The food index increased 0.5 percent in October, as the food at home index rose 0.4 percent and the food away from home index increased 0.5 percent. The index for energy increased 0.7 percent over the month following a 5.2-percent increase in September.

The worker shortage can also be repaired by ending Trump’s tariff war and on undocumented immigrants that has hurt our younger generation in the don’t fire or hire labor economy. Food prices have soared in part because of the wholesale detention and deportation of agriculture workers that harvest our domestic food supply.

There are so many ways to cure inflation that can be done in January with a Democratic congress.

This is the result of an election in which ‘the people’ were heard by one party, at least.

Harlan Green © 2026

Follow Harlan Green on Twitter: https://twitter.com/HarlanGreen

Job Market Improves

Financial FAQs

 “Total nonfarm payroll employment rose by 165,000 in October, and the unemployment rate changed little at 4.1 percent, the U.S. Bureau of Labor Statistics reported today. Employment increased in professional and business services, in health care, and in transportation and warehousing.” BLS.gov

MarketWatch.com

Not only did the October unemployment rate drop to 4.1 percent but revisions to the last two months added 84,000 payroll jobs to what is now an expanding workforce that also added 421,000 employees to the workforce.

This is pushing up economic growth because more workers produce more goods. The Atlanta Fed’s GDPNow forecasts in the third and fourth quarters show above 3 percent real GDP growth.

But it’s also pushing up inflation for consumers as well as businesses, so the case is made that more rate hikes by the Fed are necessary. It will be sure to raise interest rates at least another 0.25 percent.

It won’t be enough. The lesson from the 2022 COVID-19 post-pandemic inflation surge was that if the Fed waits too long to begin to restrict credit it will take longer to bring inflation and everyday prices down.

It’s the same case today with the massive borrowing of $Trillions to fund the A.I. build out of data centers, which means credit has been too easy and won’t restrain higher inflation; especially with the additional costs of the tariffs and Iran war.

So the Fed must act now, or we will see a repeat of the 2020 inflation resurgence which didn’t peak for two years, until the Consumer Price Index reached an unacceptable 9 percent in July 2022.

It then took multiple rate hikes to get it back down to 3 percent but never again to its 2 percent target inflation goal.

The lesson seems to be that there’s not much chance of returning to a reasonable inflation rate if and until the Iran war and the Canadian trade war end that is hurting the auto industry, in particular.

But the fact is everything the Republicans have done in Trump II has been inflationary, including the massive tax cuts that have boosted our national debt to $41T, and interest to service the debt now exceeding $1T annually, which is larger than our annual military budget.

That is how Trump and his Republican Party have succeeded in siphoning so much of the wealth from working Americans into their hands, and why enough Americans have finally realized it’s time to throw the bums out.

And now we have the A.I. data centers about to replace people with bots. What will that do to our nonfarm payroll job market when A.I. data centers come to a neighborhood near you? No wonder polls show 75 percent of Americans want them either regulated or banned (NIMBYs).

So payrolls are expanding for the moment. The question will be for how long?

Harlan Green © 2026

Follow Harlan Green on Twitter: https://twitter.com/HarlanGreen

 

The Greater Lawlessness of the Republican Party

 Popular Economics Weekly

Jonathan Ernst / Reuters

I am republishing this Huffington POst blog piece in 2017 to understand the first election of Donald Trump and document the history of the Republican Party’s subservience to power and greed.

Trump didn’t make the party to suit him, the party chose him because he suited the party that wanted someone capable of a greater lawlessness to maintain power.

"We knew as far back as Nixon’s Watergate that the Republican party harbors a lawless tendency when it suits them. Why else would President Reagan engineer the illicit Iran contra arms deal with Khomeini, or President GW Bush invade Iraq when UN inspectors already knew Saddam Hussein had destroyed his weapons of mass destruction a decade earlier?

The lawlessness of Republicans’ hunger for power has now reached such a point that they have selected and continue to support a president who has lied and cheated his whole adult life; from Trump Casinos to Trump Towers, from stiffing bankers and his workers to cooking the books. This has been documented in many of the 3,500 plus lawsuits Trump has been involved in, and the reason he settled the Trump University lawsuits, one of which alleged he ran a fraudulent enterprise under RICO, the Racketeer Influenced and Corrupt Organizations Act.

The sins of Hillary or Bill pale, yet Republicans impeached Bill for lying about a sexual encounter and continue to hound Hillary over lost emails. So why have they chosen Donald Trump who hasn’t divested himself of his assets to avoid conflicts of interest and continues to profit and even solicit favors from foreign governments in direct violation of the constitution?

His 34 percent Gallup popularity rating is testimony that his support is only restricted to those that would support him, even if, “I could stand in the middle of Fifth Avenue and shoot somebody, and I wouldn’t lose any voters,” said at a January 2016 Iowa campaign rally.

And now we have President Trump condoning the lawlessness of his neo-nazi and white nationalist supporters holding a torchlight parade in Charlottesville, Virginia, Jefferson’s hometown.

CNN commentator David Gergen, advisor to four presidents, chastised Trump in commenting on the Charlottesville riot and death of a counter-demonstrator. “He said he wants to bring love, not hatred to the country,” Gergen said. “Good. We need to deal with hatred, but he needs to deal with the hatred in his own heart if he wants to bring more love to the country.”

When will the Republican Party stand up to such blatant lawlessness? Only when they can deal with the lawlessness in their own hearts. In selecting an autocrat to further their agenda, they are in effect saying freedom means anarchy, a condoning the Law of the Jungle, rather than living within a democracy of laws based on the world’s first constitution that guarantees equal rights for all citizens.

Harlan Green © 2026

Follow Harlan Green on Twitter: https://x.com/HGreen97180/

Trump Also Losing the Inflation War

Popular Economics Weekly

“Real gross domestic product (GDP) increased at an annual rate of 3.4 percent in the third quarter of 2026 (July, August, and September), according to the advance estimate released today by the U.S. Bureau of Economic Analysis (BEA). In the second quarter, real GDP increased 2.2 percent”.

BEA.gov

The sudden boost in GDP growth makes it obvious that President Trump is losing the war on inflation which he promised to win on Day One, as well as Iran. And because he can’t admit he lost, he will prolong both wars—though he can’t win either one.

The boost in the preliminary estimate of third quarter real economic growth was predicted with the $trillions being spent on AI. But it also boosted inflation.

The inflation measure formally known as the personal consumption expenditures index. climbed to 3.6% from 3.4% in the prior month, pushing inflation further away from the Fed’s 2% target.

And the Fed has elected not to raise interest rates until when, December? Big mistake, in my opinion. It will be after the midterm election when Trump has already announced he wants to continue to bomb Iran, thus creating even more energy shortages.

He directly challenged the Fed to act and they blinked, deciding not to raise their rates in October with a 10-2 decision.

And Trump is now trumpeting how much richer he and his fossil fuel buddies have become over the higher energy prices! And he’s now taunting them because of it.

Why didn’t the Fed begin the inflation fight sooner, before the war creates even more energy shortages and drives consumer prices higher, which will further exhaust consumers’ personal savings as well?

The above graph shows consumer spending and investments are still driving GDP growth while imports and exports are contracting. But how much longer can consumers continue to support such growth and avoid the inevitable; a recession?

So instead of TACO Trump, it’s now the FACO Fed (FED Always Chickens Out) that didn’t challenge Trump’s inflationary moves, which tells investors and consumers once again that it is Trump and his compliant Republicans that are almost solely responsible for the higher gas and diesel prices that are crushing households’ standard of living.

The PCE report also says that Disposable Personal Income (i.e., after taxes) is up just 0.2 percent while personal expenditure rose 0.5 percent in October. Consumers are now spending twice what they earn.

This is at the same time as the draconian cuts in social services kick in from Trump’s Big Beautiful tax cut bill that will take effect after the midterms.

Former Labor Secretary Robert Reich has been adding up the damage to ordinary consumers. Food Stamp assistance is being cut by $187B; $1.1B from Medicaid and Obamacare spending; that is knocking some 11 million off the Obamacare insurance rolls.

And those cuts are being used to fund an additional $191Billion for ICE operations. Something must give. A whopping 64 percent of disposable income is now being spent on gasoline, other energy products and transportation, while just 18 percent is left for housing and utilities.

So there is no question what this means. It’s happening while corporations are making a cynical bet that their investments in AI will enable them to replace employees with more efficient, less costly bots and artificial intelligence software.

Nobel laureate economist Daron Acemoglu has said in an interview with Fareed Zakaria that much of A.I. corporate investment is designed to replace people.

So I ask again, why is the Fed not acting sooner to slow inflation when the higher tariffs and Iran war behind the inflation surge have no end in sight?

Economists now agree the Fed acted too late in 2022 after the COVID-19 pandemic, which resulted in a 9 percent inflation peak. Would not it have been better to raise their main inflation fighter, interest rates, sooner, to maintain credibility?

So, I repeat, will we ever see a Fed 2% inflation target rate again and the FACO Fed give consumers some relief before it’s too late?

Harlan Green © 2026

Follow Harlan Green on Twitter: https://x.com/HGreen97180/

 

Does the Fed Love Inflation?

 Popular Economics Weekly

“The Committee decided to maintain the target range for the federal funds rate at 3-3/4 to 4 percent, in support of the Federal Reserve's dual mandate. The Committee is continuing its policy of maintaining ample reserves in the banking system.” FOMC

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The Fed’s October Federal Open Market Committee meeting resulted in no change in its Fed Funds rate of 3.75-4.0%.

Why are they holding their rate when the higher tariffs and Iran war behind the inflation surge have no end in sight? Wouldn’t it have been better to raise interest rates, their main inflation fighter now, to maintain credibility?

They may have to love inflation for the moment because there is little chance of taming it when they can’t control rising prices from the tariffs and Iran war energy shortages driving it.

Or, they may be more concerned the U.S. economy is on a short fuse from President Trump’s irrational policies that are damaging economic growth. Why raise tariffs on Canadian steel, aluminum, lumber and electricity, our main trading partner so important to American businesses, for instance?

The Fed’s key may be “they are “maintaining ample reserves,” to do what?  lower their rates later and pump more money into the economy because of the danger of recession?

The FOMC is saying likes our current economy and wants to keep it growing:

“While uncertainty remains elevated owing, in part, to geopolitical developments, domestic spending has been resilient. Productivity growth is strong, and capital investment is robust. Job gains have kept pace with the workforce, and the unemployment rate has changed little”

So don’t rock the boat just yet? Maybe, but if we allow higher interestrates and inflation to continue it becomes embedded, which means it affects future growth decisions of industries and consumers (slower).

And wartime spending is going through the roof, as is the A.I. investment frenzy, which is raising our federal government’s annual interest payments above $1trillion. How much more can we afford?

 And, will we ever see a Fed 2% inflation target rate again?

Harlan Green © 2026

Follow Harlan Green on Twitter: https://x.com/HGreen97180/

Economic Growth Continues

Financial FAQs

“The Conference Board Leading Economic Index® (LEI) for the US was unchanged in September 2026 at 99.6 (2016=100), after a decline of 0.1% in August. The LEI grew by 0.6% between March and September 2026, a reversal from its decline of 1.1% over the previous six months (September 2025 to March 2026).”

LEI

The Conference Board’s Index of Leading Economic Indicators (LEI) does a decent job of predicting future economic growth and recessions. So, we can use it to learn just how much recent economic events, such as President Trump’s illegal tariffs and gulf wars are affecting future growth in President Trump’s second term.

The above LEI graph is an overlay of its growth rate predictions (blue line) 6-months ahead overlaying the length of actual recessions (gray bars). That means its various dips portrayed in the graph seem to have predicted a downturn one year ahead of the last recessions.

The red line below which a recession was called had one exception—there was no recession in the 2022 to 2024 dip before the latest positive upturn.

Why the positive upturn that is predicting higher growth ahead? The A.I. data center construction is generating so much investment (approx. $800B) by the ‘Big 7’ tech companies and banks—such as Apple, Meta, Alpha (Google)—that it has boosted the stock market to record levels.

It’s also boosted interest rates and shaken the bond markets, who are worried that it is crowding out other more mundane investment that keep our government running. And several IPOs are in line, such as Anthropic which believes it can raise up to $1Trillion in its upcoming IPO.

So, economic growth has been a mixed bag until now. The growth slump in 2024 happened when Trump enacted his first tariffs and another One Big Beautiful Bill tax cut bill that added more $Trillions to the national debt.

“Five out of ten components made positive contributions to the LEI in September, led by the interest rate spread and average weekly hours in manufacturing. Nevertheless, these gains were offset by a large decline in consumer expectations and much smaller negative contributions from stock prices, new orders for capital goods and building permits.”

The huge surge in A.I. investment is giving a boost to economic growth this year. But what happens when all the data centers have been built out sometime next year? When will use of the new ChatGPTs, Claude software generate enough profits to pay for the record debt that underpins its construction and the huge amount of power required to run it?

The good news is that it’s a huge plus for upgrading our energy infrastructure that requires new electrical networks to run it as well.

But we do have examples of past over-investment bubbles that burst and caused recessions, such as the dot-com bubble of 2000 when there was a huge buildout in fiber optic cables that opened the Internet to everyone.

Then GDP growth stalled in 2001, a recession followed and growth didn’t turn positive until 2003, which lasted until the 2008-09 Great Recession.

So the LEI red line may not reflect recessions as accurately as we would like. But we are dealing with an administration that glories in its ignorance of the most basic economic verities in its quest to prolong the latest Gilded Age of robber barons as long as possible.

 A recession might not occur in the next 12 months, of course. What if the Strait of Hormuz is opened and Trump makes a deal with Iran? Or he settles the tariff trade war? Or, the Federal Reserve succeeds in taming inflation?

Harlan Green © 2026

Follow Harlan Green on Twitter: https://twitter.com/HarlanGreen