Economic Delusions

Spectator

By Stephen Tuttle | Jan. 17, 2026

According to our president, the United States was “dead” and the rest of the world “had no respect for us” and we had “no leadership.” That was sort of the tip of a Trumpian iceberg of relentless negativity regarding the country and our last president.

He claimed he inherited the “highest inflation ever” with “everybody looking for a job.”
Thank goodness our knight in gold-plated armor came to our rescue and now, according to him, we are “the hottest country in the world.” Uh-huh (maybe not so much in Venezuela, Colombia, Mexico, Cuba, Greenland, Iran, or Syria, all of which he’s either invaded, bombed, or threatened to invade or bomb).

There is data, and plenty of it, or what are now popularly called receipts—evidence that what someone is saying doesn’t add up.

Let’s start with that “record high” inflation. The Federal Reserve Bank of Minnesota has been keeping detailed tracking information on inflation since 1913. The highest annual rate ever recorded was 17.8 percent in 1917, and it peaked again at 13.5 percent in 1980, though there are some records of spikes as high as 34 percent during the Civil War. (During the Great Depression, deflation was the problem as supplies far outweighed demand.)

There was never anything vaguely close to record highs during Biden’s term. Supply chain miscues and energy costs plus exorbitant government bail-out spending raised inflation to an unacceptable 9.1 percent, and it remained high for too long. But in January of 2025, when Trump was again inaugurated, inflation was 3.0 percent, and it is now 2.74 percent.

Then there’s unemployment. In January of 2025, when Donald Trump was sworn in, U.S. unemployment according to our Department of Labor’s Bureau of Labor Statistics was 4.0 percent of the available, job-seeking population. It is now 4.4 percent, and was as high as 4.6 percent just last month.

The administration would like us to believe this is even a good thing because they have eliminated and continue to eliminate government jobs. Except the latest Labor Department numbers include actual job losses in the private sector including manufacturing, construction, and some services. Manufacturing job losses are especially troubling since we were promised a rebound in that sector.

As an interesting aside, the COVID pandemic skewed the unemployment numbers in both administrations. During Biden’s tenure, it reached 6.2 percent, but there is an irony here—in April of 2020, during the Trump Administration, unemployment hit 14.7 percent. The highest ever recorded was 24.9 percent in 1933 during the Great Depression.

We all surely recall we were told one of the many benefits of tariffs would be foreign companies would have to pay the U.S. Treasury a lot of money, and to avoid tariffs they would build factories here, boosting our manufacturing economy and creating jobs. If only at least some of that was true.

Foreign-based companies exporting to the U.S. don’t actually pay the tariffs at all. So if ABC Novelties exports a million tariffed ping-pong balls to Conglomerate Sports in the U.S., the American company pays the tariff at the port of entry. American companies have been absorbing as much tariff cost as possible, but smaller companies have little choice but to pass the increased costs to consumers. According to research on the impact of tariffs on consumers by Harvard social scientists and reported by the Tax Foundation, tariffs have increased consumer goods almost 5 percent and projections are for that to increase.

The Yale Budget Lab estimates tariffs will raise nearly $100 billion in 2025, but only about half will be absorbed by the importing companies and the rest will be passed on to consumers.

The left-leaning Center for American Progress reports small businesses spent about $500,000 on new tariffs in 2025 and expect to spend more this year. (The Small Business Administration generously defines “small business” as one with fewer than 500 employees.)

It’s troubling that the promise of a manufacturing boom tariffs were supposed to create has not come to fruition. There is some factory construction underway, but more than 100,000 manufacturing jobs were lost last year. In June, August, and October last year, we actually lost jobs overall, rare declines in employment and the first since the pandemic eased according to the Bureau of Labor Statistics.

You might also recall we were going to end that trade deficit since, according to the president, all those countries have been taking advantage of us and our “weak leaders” for decades. While the trade deficit was shrinking toward the end of 2025, it is still projected to be nearly eight percent higher than it was in 2024.

Every president makes economic promises that aren’t kept. But Trump’s outlandish claims of how bad it was when he took over and how great it is now are well beyond his usual hyperbolic nonsense and have drifted into delusion.