A Break From Pro-Wrestling Economics

As Trump and reporters exaggerate his capacity to lower prices, the president makes a stunning admission that his trade policies may hurt.

Since taking office, the press and critics in the out-party have shown a newfound skepticism of executive authority, insisting that the president is not a monarch and working to obstruct his overreach. Politically thermostatic as it may be, this skepticism is welcome. But two observations have stood out to me in how the president’s economic policy is being received. On the one hand, the president and the media are jointly operating on the false premise that the president can lower prices. On the other hand, the president and the media have been jointly honest about the potential impact of the president’s trade policies.

The first involves the renewed salience of the imperial presidency’s economic authority, specifically how its wild overstatement by watchdogs in the media aids in unwisely aggrandizing the presidency at a time when the occupant is regularly compared to an autocrat. The president does have economic influence, notably wide latitude on trade policy and comparable power in the regulatory realm. What the president says can also influence markets. But we’re talking about lowering existing prices. Absent a tariff war—or at least one that drives prices observably upward to prompt an electoral backlash—the president won’t be able to lower prices for fairly obvious reasons that should be regularly and explicitly pointed out by a media obsessed with banal and sometimes pedantic fact-checking of the president. What that means is writing and saying frequently that presidents cannot lower prices because inflation is driven by the Federal Reserve, because prices for commodities are determined by global markets, because wages and prices for consumer goods and services are determined by private businesses, and because structural costs like housing and healthcare are decentralized.

Part of this has to do with public demand for character- and conflict-driven storylines and shorter attention spans among news consumers. But that doesn’t excuse the omission of the institutions that determine prices or the media’s autocratic shorthand (e.g., "the Biden economy," "Trump’s job numbers"); or the failure to challenge a president’s claim to lower prices by presupposing the authority with, “What will you do to lower prices?” rather than a realistic approach like, “Given your limited authority, how can you say you will lower prices?”

The relationship between presidents and economic journalists goes back to the concept of kayfabe, the pro-wrestling concept involving a suspension of disbelief where those involved know the truth but continue to act out the premise for strategic purposes. The idea is to blur the line between real and exaggerated appraisals of economic policy and outcomes to drive engagement. Trump and his media critics excel at kayfabe, telling a good story about one man’s triumphant comeback to cement his legacy and achieve his stated ends over telling the truth about what’s possible—usually.

I say “usually” because, alongside the accountability theatre on prices, there is something we haven’t seen a president do certainly in my lifetime, and I dare say in modern American history—admit that his own policies may have adverse consequences for his constituents, the broader public, and the national economy. Most recently, Trump did not dismiss the possibility of a recession resulting from his trade policy but preceded it with a promise of longer-term prosperity for American industry. Commerce Secretary Howard Lutnick conceded that tariffs could lead to inflation but argued they would ultimately make American goods more affordable. In the Oval Office, Trump said his tariffs might cause “some pain” and during his joint session to Congress, he said tariffs on agricultural products would prompt an “adjustment period” for farmers. This, to me, is remarkable and refreshing in it’s own way. The president, well-regarded for being a serial liar, is taking a gamble on honesty. Conventional wisdom says such a risk will cost his party dearly, but if Republicans are able to limit those losses going into the midterms next year despite a multi-front trade war, the president could cast a victory as a message from the public that they accept the short-term pain for long-term gain strategy.

Now, what could happen is that over the course of the next eighteen months, Trump delays or conditions so many of the tariffs that none of the adverse economic impacts materialize, and he claims victory anyway. But it’s also plausible that anti-Trump, anti-tariff critics could be overstating their case.

So far, the Trump administration and many tariff advocates do not deny that tariffs can cause prices to rise for consumers, depending. Free traders, on the other hand, rarely ever have to articulate the explicit trade-offs of free trade policy, which could be why so many technocrats and electoral analysts alike missed the shifts that were occurring across the Midwest over the last decade. If you never have to defend your position, you’ll never know how many people disagree with it.

Though some are assured of economic turmoil, it’s also plausible the U.S. economy exhibits greater resilience, with businesses and consumers adapting by finding alternative suppliers or absorbing costs. Domestic production could increase more rapidly than anticipated, mitigating supply shortages. Global trade adjustments, such as shifting trade patterns, might soften the tariffs’ impact. The government could utilize tariff revenues to offset consumer costs or make infrastructure investments. Additionally, the U.S. dollar’s potential appreciation could counteract price increases, and retaliatory tariffs from other countries might be less severe than expected. The near-term obstacle the markets are facing may prove to have more to do with less the trade policy per se but the uncertainty around how and for how long tariffs are here to stay so the private sector can prepare accordingly. Or, the tariffs could prove calamitous particularly if they coincide with a yet-to-occur international crisis.

But as far as lowering prices what Trump could do is what every president does: nothing — except sit back and falsely attribute economic growth forecasts to their own policies. The press will let them do that.

Presidents have plenty of ways to make things more expensive—through tariffs, heavy spending, or regulation—but they have no real power to make things cheaper. Despite that clear asymmetry, it doesn’t seem to be acknowledged. As a result, the public is less informed about who is responsible for what, and it seems like the sort of thing that could embolden future leaders to respond by further testing the limits of the office at the risk of facing political costs for appearing too constrained. The president can bet that the opposition is waiting in the wings to exploit whatever real or perceived calamity to finally set the economy straight — just as he did.