I’m an Economist: 4 Reasons Americans Should Trust Kamala Harris To Bring Down Inflation
Written by
Vance Cariaga
Edited by
Ashley Barnett
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The U.S. inflation rate soared to its highest point in more than four decades under President Joe Biden, peaking at 9.1% in 2022. The yearly rate has since come down considerably to 2.9% thanks to a series of Federal Reserve interest-rate hikes. But it’s still above the Fed’s target rate of 2%.
Although Kamala Harris served under Biden during a period of high inflation, many Americans — and some economists — are confident in her ability to bring inflation down should she beat ex-President Donald Trump in this year’s presidential election.
A new GOBankingRates survey of 1,004 U.S. adults found that Harris gets higher marks than Trump when asked who they think will do a better job at tackling inflation as president. Here were the results:
- Harris: 43.63%
- Trump: 39.44%
- Either: 2.99%
- Neither: 7.87%
- Don’t know: 6.08%
One thing those results show is that Harris has largely avoided blame for the high inflation on Biden’s watch. As Forbes noted in a recent analysis, inflation rose 19% over the first 42 months of Biden’s term vs. 6% during Trump’s first 42 months.
Even so, some economists are hopeful that Harris will be effective at bringing prices down — if she makes the right decisions. Here are four reasons Americans can trust Harris to lower inflation.
She Won’t Make Rash Decisions
Harris knows what’s at stake for the economy if she can’t figure out a way to corral inflation, so she and her advisors are likely to pursue a moderate path to solving the problem.
“Inflation dynamics are largely influenced by consumer and business confidence,” Chuck Warren, political economist and host of “Political Podcast,” told GOBankingRates in an interview earlier this summer. “If the Harris administration can effect a smooth transition and communicate its intentions transparently, it could maintain or bolster confidence, thereby stabilizing inflation.”
Alan Andrews, commercial finance specialist at KIS Finance, told GBR that inflation could increase if Harris opts to maintain low interest rates to promote economic expansion.
“However, if Harris is more circumspect and advocates for steps to rein in inflation, the Fed may adjust its policy accordingly,” Andrews said.
She’ll Battle Anti-Competitive Practices
CBS News reported that Harris favors enacting the first federal law against price gouging by food suppliers and grocery stores. The idea is based on data showing that some food companies have seen record profits even as they’ve blamed inflation for skyrocketing grocery prices.
Dan Scheitrum, a professor of agribusiness at California Polytechnic State University, San Luis Obispo, told ABC News that Harris’ plan to crack down on potential anti-competitive practices in the food sector could lower prices for some household staples.
“If price fixing is taking place and it gets addressed, I expect that could undo some of the price increases,” Scheitrum said.
Not everyone is sold on the idea, however.
“There are lots of reasons for the high inflation we’ve suffered over the past several years, but aggressive or unfair pricing practices are at bottom of list of reasons, if they’re on the list at all,” Mark Zandi, chief economist at Moody’s Analytics, told CBS MoneyWatch. “It may have been more of an issue back when supply chains were being disrupted by the pandemic, but today it’s hard to point to any significant, meaningful examples of price gouging.”
She’ll Avoid Tariffs
Some economists warn that inflation will get worse should Trump win a second term. That’s largely because of his proposals to raise tariffs and crack down on illegal immigration — both of which could push prices higher, the Wall Street Journal reported.
“I think there is a real risk that inflation will reaccelerate under a Trump presidency,” Bernard Baumohl, chief global economist at the Economic Outlook Group, told the WSJ. He added that such a trend would likely lead the Fed to set interest rates higher than if inflation continued on its current downward trajectory.
In contrast, Harris has criticized Trump’s support of higher tariffs and is unlikely to adopt a similar policy as president.
Inflation Is Already Heading in the Right Direction
One thing that’s certain is that inflation rates have fallen considerably over the last couple of years, so Harris doesn’t have nearly as much work to do to bring it down further than she would have in 2022. One important step she can take if elected president is to inspire confidence that she has economic matters under control.
“Inflation is not just mere monetary expansion; it is a multifaceted phenomenon driven by several factors, including political stability and policy direction,” Warren said. “A probable transition from Biden to Harris might occasion short-run volatility but will certainly not have massive impacts on future trends of inflation if managed properly. The key will be clear communications backed up with steady hands on economic policy.”
Meanwhile, inflation is far and away the most important economic/finance issue in the 2024 election cycle, according to the GBR survey. Here’s how respondents gauged five different issues in order of importance:
- Inflation: 49.20% of respondents
- Social Security and Medicare: 26.89%
- Government spending: 9.06%
- Healthcare costs: 7.97%
- Unemployment: 6.87%
Editor’s note on election coverage: GOBankingRates is nonpartisan and strives to cover all aspects of the economy objectively and present balanced reports on politically focused finance stories. For more coverage on this topic, please check out I’m an Economist: Here Are My Predictions for Inflation If Trump Wins.
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