As I said in my post yesterday I think that Democrats are likely to run on “affordability” in the 2026 midterms if not in the 2028 general election as well. IMO the issue is a will o’ the wisp if not a poisoned pill for Democrats.
I speak and write idiomatically. A “will o’ the wisp” is (figuratively) a misleading or elusive goal or hope. A “poisoned pill” refers to a solution that imposes considerable damage on the one who applies it.
The reason “affordability” is misleading or elusive is that our political and economic systems depend on continued inflation. Without inflation quietly reducing the real burden of debt and obligations, the political system would be forced to make hard choices—explicit tax increases or explicit spending cuts—that neither party is willing to own. The Republicans don’t want to balance the budget because it would require higher taxes. Democrats don’t want to balance the budget because too many in the party depend on federal spending and they are aware that they will pay a political price if they raise taxes. Few actually believe that the primary beneficiaries of increased federal spending are the poor and the “working class” (by which is generally meant the lower and middle section of the working class). That’s part of the “poisoned pill”.
The other part of the poisoned pill is that the Biden Administration’s policies produced the highest inflation in over a generation. Following the Trump Administration’s tax cuts, increased spending, and the supply shocks caused by COVID-19, Biden’s policies amplified forces already well underway.
There is another aspect of our conundrum that is rarely mentioned and is a bit contentious but which I think is central. The Federal Reserve which maintains the interest rate levers that manage inflation famously has a “dual mandate”: stable prices and low unemployment. For the last generation at least the Federal Reserve has behaved as though it has a third mandate: ensuring that asset prices always rise. Examples include quantitative easing, its post-2008 policy, the “Fed put”, and its policy during the COVID-19 pandemic. That is in direct conflict with stable prices.
Ensuring that stock prices always rise is also in direct conflict with greater domestic production. If there is zero risk of decreases in stock prices, why risk capital by building factories or enhancing productivity? The result is constrained productive capacity, weaker supply growth, and higher prices for goods that actually matter to households—precisely the opposite of affordability.
