U.S. President Donald Trump welcomes Saudi Crown Prince and Prime Minister Mohammed bin Salman during an arrival ceremony on the South Lawn of the White House in Washington, D.C., U.S., November 18, 2025. REUTERS/Kevin Lamarque

Georgetown University School of Business Senior Fellow Robert J. Shapiro says President Donald Trump likely won’t be fixing his “affordability” conundrum in time to save himself or his Republican Party.

“There’s little the government can do about either in time for the 2026 midterms, and even the 2028 presidential election. Exacerbating matters, the president and Congress insist on making it worse," Shapiro told Washington Monthly. “President Donald Trump famously promised to lower prices ‘on Day One’ in his 2024 campaign. That was bluster, of course…. Yet he’s dead set against the standard way to do it — keeping interest rates elevated to slow demand.”

The Federal Reserve hiked interest rates 11 times under former president Joe Biden, and it slowed inflation from 9 percent to 2.9 percent.

But cutting rates alone won’t satisfy voters because inflation isn’t going anywhere soon. Shapiro said overall prices in America rose 25 percent, including 25 percent increases for eggs, pork, milk, cars and trucks; 30 or 31 percent increases for housing, rent, food overall, and bread; 37 percent increases for electricity; and 55 percent increases for beef.

“The government can make some purchases more affordable by subsidizing them, as it often does for health care, energy, and food. Yet Trump and Congressional Republicans have taken aim at those subsidies, making healthcare less affordable by cutting Medicaid and Obamacare supports, making food less affordable by cutting SNAP benefits, and making energy less affordable by cutting support for wind and solar energy,” Shapiro said, adding that Trump’s “mindless tariff policies have increased prices on thousands of products.

But the other half of Trump’s affordability conundrum is income, primarily because the median income of Americans, after inflation, has been stuck since 2019, even as productivity increased 10.4 percent since then. Worse, while most Americans’ earnings after inflation virtually stagnated from 2019 to 2024, sources of income for the wealthy from assets are exploding.

The Treasury reports that capital income in 2024 totaled $4.5 trillion, and that the bottom 50 percent of Americans received just 2.5 percent of it. The top 10 percent pocketed 88 percent of that fast-rising capital income, including 52 percent ($2.3 trillion) for the top 1 percent and 32 percent ($1.4 trillion) for the top one-tenth of 1 percent.

“The uncomfortable irony is that most of the capital income came from businesses that increased their labor productivity by an average of 10.4 percent,” Shapiro said. “Yet most of it did not go into people’s earnings but into capital payments to owners and shareholders.”

And Trump keeps compounding his economic malpractice.

“His tariffs and subsidy cuts not only make America less affordable for most people; they also finance $1 trillion in tax cuts for the sliver of people who collect most of the fast-rising capital income,” Shapiro said.

Former President Bill Clinton, by comparison, took a different approach that Trump can’t seem to manage, Shapiro said.

“I was an architect of Bill Clinton’s economic program for ordinary people that produced the 1990s boom, which included market-based reforms and government investments,” said Shapiro.

When the economy shifts, new politics usually follow, but the “hollowness and failures of rightwing populism under Trump” is leaving the door is “wide open for Democrats to champion populism from the left.”

Read the Washington Monthly report at this link.