Tariffs, grocery prices and other listener questions
Jan 17, 2025
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Brooke Gladstone, co-host of a public radio show about media, dives into the economics behind a potential second Trump term. They tackle whether Trump can influence grocery and oil prices, the complexities of tariffs, and their impact on tech purchases like iPhones. The discussion also highlights the ongoing struggles of NPR funding, exploring its historical political battles and the vital role of public broadcasting in rural communities. It's a thought-provoking mix of politics, consumer behavior, and economic strategy!
The podcast emphasizes the limited presidential power in directly influencing long-term economic conditions, especially regarding grocery and oil prices.
It highlights how elevated grocery prices persist despite decreased inflation, showing the complex interplay of supply chain issues and market conditions.
Deep dives
Understanding Presidential Economic Power
The podcast addresses the nature of presidential power and its influence over the economy, particularly in the context of Donald Trump's potential policies. It highlights how much control the president truly has in shaping economic outcomes, such as tackling inequality or adjusting tariff policies. Despite various promises made during campaigns, the speaker emphasizes that many economic questions are complex and cannot be answered definitively at this point. The importance of understanding the limits of presidential power is underscored, particularly during times of economic uncertainty.
Impact of Oil Production on Prices
The discussion examines the president's ability to influence oil prices through two primary strategies: increasing drilling permits on federal lands and utilizing the Strategic Petroleum Reserve. Although opening federal lands is seen as a lever available to the president, it accounts for only a small fraction of U.S. oil production, which is largely derived from private lands. Experts assert that while short-term measures such as releasing oil from reserves might stabilize prices, they do not possess long-term efficacy in reducing inflation rates. Moreover, even if more drilling is permitted, market conditions and global production levels may render such actions ineffective in affecting prices significantly.
Persistent High Grocery Prices
The conversation delves into the ongoing issue of elevated grocery prices despite an overall decrease in inflation. It is explained that while inflation rates have slowed, the price level, particularly for groceries, remains significantly higher than in previous years, largely influenced by factors such as supply chain disruptions and product-specific issues like bird flu impacting egg prices. The discussion clarifies the distinction between price levels and inflation, comparing it to water levels in a pool being filled at different rates. Ultimately, the suggestion is made that grocery prices tend to rise over time rather than decline, indicating that consumers should prepare for sustained high costs in the future.
Donald Trump is just about to begin his second presidency. And it may be safe to say that every single person in America has at least one question about what's to come in the next four years.
So, we thought we'd try to answer your questions — as best we can — about the economics of a second Trump term. Is now the time to shop for new tech? Can Trump actually bring down grocery and oil prices? And, does the president have the power to get rid of NPR?
This episode of Planet Money was hosted by Amanda Aronczyk. It was produced by Emma Peaslee and edited by Meg Cramer. It was engineered by Neil Tevault and fact-checked by Sierra Juarez. Alex Goldmark is Planet Money's executive producer.