Does Trump Grasp Why He Lost?

It was painful, we don’t mind saying, to watch President Trump’s interview Sunday on “60 Minutes.” Ross Douthat was gamely questioning him on why he lost the midterms, and he started with the fact that he wasn’t on the ballot. Then the first issue was the war. What we were looking for is his failure to focus on the one issue that over time has been at the top of the list for voters — inflation and the economyIt’s a bit of a mystery to us. There are those, including these columns and our colleague Lawrence Kudlow, who pressed the point throughout the campaign that the GOP was failing to sell its growth agenda and economic achievements. To be sure, Mr. Trump last night conceded that “the fact that gasoline went up” was a factor. Yet he also stressed the Iran war and what he calls “a great dislike, incredibly, for Israel” as explanations for his party’s defeat.Mr. Trump’s misreading of the midterm message is all the more surprising in that he has evinced awareness that inflation was one of the main reasons he won re-election in 2024. “I got elected because of high prices,” Mr. Trump asserted in a rally days before the midterm vote, in a nod toward the inflationary wave unleashed during the term of his predecessor in the White House. The president has a point when he blames “Democrats” for inflation.It was, after all, President Biden and Congressional Democrats who helped spark the inflationary spiral that peaked in July 2022 with an annual rise of 9.2 percent. Unneeded Covid stimulus spending and “relief” measures — when the economy was already in recovery — were significant factors behind the surging prices. Overall, on Mr. Biden’s watch, prices jumped by some 20 percent, helping bring Mr. Trump to the White House and the GOP to win Congress.To be sure, inflation’s pace has since abated. Yet what consumers would like is to see prices revert back to the levels seen before the Covid pandemic. Prices are instead rising, just more slowly. That, as these columns have averred, is a function of our fiat money regime, which leads prices to ratchet higher without ever reversing as they tended to do, over the long run, on America’s specie standard, in which a dollar was defined as a fixed weight in gold or silver.Under that monetary system, we have explained, “the discipline of gold convertibility means that even if prices ever rise, as they do, say, in wartime, they soon ratchet back down to their earlier level.” Under this system, which endured in America until 1971, when President Nixon breached the nation’s obligations under the Bretton Woods agreements, honest money helped ensure steady growth with low inflation.President Trump is a leader who ought to be thinking big. So, based on the historic record, in the summer of 2024 we encouraged him to put monetary reform at the heart of his policy agenda to fulfill the GOP platform pledge to “defeat inflation.” To that end, we backed the idea of a monetary commission that would weigh the performance of the Federal Reserve and the economic implications of America’s turn some 55 years ago toward fiat money.Yet Mr. Trump and his advisers failed to tackle the monetary roots of the inflation crisis, even though the GOP’s Big Beautiful Bill helped spark economic growth. Mr. Trump even denied that high prices were an issue, calling the so-called crisis of affordability as a “hoax.” This led the frustration over inflation to ferment, giving Democrats the chance to reclaim Congress. For the GOP it marks a warning as much as an opportunity in the next election cycle.

Does Trump Grasp Why He Lost?

Does Trump Grasp Why He Lost?

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