U.S. Senator John Cornyn

Trump claimed last week on social media that “Our economy is BOOMING, and Costs are coming way down,” and that “grocery prices are way down.

Rubbish.

How do I know he’s lying? Official government statistics haven’t been issued during the shutdown — presumably to Trump’s relief (the White House said Wednesday that the October jobs and Consumer Price Index reports may never come out).

But we can get good estimates of where the economy is now, based on where the economy was heading before the shutdown and recent reports by private data firms.

First, I want to tell you what we know about Trump’s truly s----- economy. Then I’ll suggest 10 things that Democrats should pledge to do about it.

1. Prices continue to rise as real wages fall

While the cost of living isn’t going up as fast as it did in 2022, consumer prices are still up 27 percent since the onset of the pandemic. Wages haven’t kept up.

Americans know this. In a recent Harris poll, 62 percent say the cost of everyday items has climbed over the last month, and nearly half say the increases have been difficult to afford.

Much of this is due to Trump’s tariffs, which are import taxes — paid by American corporations that are now passing many of the costs on to consumers. Even Trump knows this, which is why he’s removing tariffs on coffee, bananas, beef, and other agricultural commodities. But his other tariffs will remain, boosting the costs of everything else.

As a result, wages — when adjusted for inflation — have been falling, government and private-sector data show. Since the start of the year, inflation has been rising faster than after-tax pay for lower- and middle-income households, according to the Bank of America Institute.

According to the JPMorganChase Institute, the rate of real income growth has slowed to levels last seen in the early 2010s, when the economy was still recovering from the financial crisis and the unemployment rate was roughly double what it is today.

2. Job growth has stalled

Americans are scared of losing their jobs. In the same recent Harris poll I referred to above, 55 percent of employed workers say they’re worried they’ll be laid off.

That worry is borne out in the data. Indeed’s job posting index has fallen to its lowest level since February 2021.

The Fed’s Beige Book — which compiles reports from Fed branches all over the country — also shows the job market losing steam.

The latest ADP private-sector data confirms that the labor market continued to weaken in the latter half of October, with more than 11,000 jobs lost per week on average.

Finally, Challenger, Gray & Christmas (a private firm that collects data on workplace reductions) reports that U.S. employers have announced 1.1 million layoffs so far in 2025. That’s the most layoffs since 2020, when the pandemic slammed the economy, and rivals job cuts during the Great Recession of 2008 and 2009.

3. Homeowners are underwater, and foreclosures are up

Nearly 900,000 homeowners (about 1.6 percent of all mortgage holders) are now underwater on their mortgages, the highest share in three years. Many of these buyers purchased in 2022–24 with low down payments in markets that have since cooled.

At the same time, filings for home foreclosures are up about 17 percent since the third quarter last year (according to ATTOM Data Solutions), suggesting more borrowers in trouble.

4. Corporate profits continue to rise

You might think that with all these stresses on American consumers, corporate profits would dip. But in reality, U.S. corporate profits continue to rise, and the stock market continues to hit new highs (although the stock market is wobbly, as I’ll get to in a moment).

As a result, the investor class — the richest 10 percent of Americans, who own over 90 percent of the stock market — are reaping big rewards.

How to square this with all the layoffs and so few job openings? Amazon’s profits are through the roof, but it’s laying off 30,000 people.

First, corporations are reluctant to expand and hire because of so much uncertainty about the future, caused in large part by Trump’s tariffs and his expulsion from the U.S. of many workers critical to the agriculture and construction industries.

Secondly, profits are being led by the six major high tech firms, whose monopolistic hold over their markets has given them the power to raise prices.

Third, many corporations are making use of artificial intelligence. AI is boosting business productivity while reducing the demand for workers. We’re seeing that trend mostly in the technology sector, which continues to substitute AI for jobs. But the trend seems to be spreading to other industries.

5. Inequality is widening

Put this all together and you get a two-tier economy whose inequality gap is widening.

America has always had a two-tiered economy, but for the last 80 years, the middle class has been in the upper tier along with the wealthy, while the working class and poor have been in the lower one.

Now, the middle class is joining the lower tier. This new reality has huge implications both for the economy and for American politics.

The richest 10 percent of households — whom I’ve described as the investor class — now account for nearly half of total U.S. spending, thanks to the stock market surge. (Thirty years ago they were responsible for about a third.)

Meanwhile, middle- and lower-income families are pulling back. They’re facing tightening budgets, higher living costs, declining real wages, and a raft of corporate layoffs.

The consequent divergence in spending — with a smaller group of people keeping the economy going — is fueling concerns that the U.S. economy is becoming more fragile.

With the economy so dependent on the richest 10 percent — who in turn are highly dependent on the stock market — a stock market downturn would raise risk of a serious recession.

6. What the Democrats must pledge to America

The Trump economy is truly s----- for most Americans. Every time Trump or his lapdogs in Congress tell Americans that the economy is terrific, they seem more out of touch with reality.

Democrats need to show America that they can be better trusted to bring prices down and real wages up.

This means, in my view, promising the following 10 things. These should constitute the Democrats’ pledge to America:

1. Trump’s across-the-board tariffs are import taxes that are raising the prices of just about everything American consumers buy. Democrats will eliminate them where their costs to consumers are far higher than any potential benefits in the form of new jobs.

2. Another major source of high prices is monopolies — especially in high tech, health care, food, and finance. Democrats will vigorously enforce antitrust (anti-monopoly) laws. Giant corporations will be busted up. Mergers or acquisitions by large firms, barred.

3. Workers need more bargaining power to get higher wages. Part of the answer is stronger unions. Democrats will make it easier for them to start or join unions.

4. The national minimum wage will be raised to $20 an hour. No one who works full-time should be in poverty.

5. Housing cost increases will be slowed by stopping private equity firms from buying up large tracts of housing and colluding on prices.

6. Health care costs will be lowered by making Medicare available to everyone.

7. Working families will get help with child care and elder care.

8. They’ll also get paid family leave.

9. If adequate-paying jobs are unavailable, workers will also have access to a universal basic income. It won’t make families comfortable, but it will be enough to keep them out of poverty.

10. Taxes will be raised on the wealthiest to pay for this.

What do you think?

Robert Reich is a professor of public policy at Berkeley and former secretary of labor. His writings can be found at https://robertreich.substack.com/.