President Donald Trump's claims about taming inflation have "no basis in reality," according to an analysis prominent Wall Street investor Steven Rattner gave on MS NOW Friday.
Rattner is a veteran financial analyst, commentator and investor, and previously served as a prominent economic adviser to former President Barack Obama. He is also a frequent contributor for MS NOW, where he broke down Trump's claims about inflation and affordability at Tuesday's Cabinet meeting. Among many other things, Trump claimed to have "fixed inflation," which he blamed entirely on former President Joe Biden, that he inherited the "worst inflation in history" and that persistent concerns about "affordability" were a "con job" perpetuated against his administration by Democrats.
"Like so much of what he said in the press conference, not just even on the economy but on all sorts of subjects, he just plucked things out of the air that had no basis in reality," Rattner explained.
Starting with inflation, Rattner noted that it did hit rates as high as 9 percent in the aftermath of the COVID-19 pandemic, the brunt of which was felt in the middle of Biden's term and was largely credited with turning voters against him. Rattner said that while destabilizing for many, those rates still paled in comparison to the historically high inflation rates that occurred in the 1970s due to oil embargos and even in the immediate aftermath of World War II.
"So the idea that inflation is the worst in history is absurd," Rattner said.
Trump's claims to have "stopped inflation in its tracks" were also debunked. Rates were down to 2.9 percent by the end of Biden's term, and while they continued downward as Trump's second term began, they have since creeped back up to around 3 percent.
"So inflation, in fact, has not decreased at all under Trump, and it's certainly not stopped in its tracks," Rattner continued.
Rattner also addressed Trump's claims that tariff revenues were so high, that they could both offset the federal debt and replace traditional income taxes, with enough leftover to pay out dividends to taxpayers. This, the investor explained, was "ridiculous," as tariffs have only brought in around $259 billion so far this year, while income tax revenue and the federal debt are both much higher, in the trillions of dollars.
Trump's claims about affordability being a were also bogus.
"That is certainly contrary to what everybody thinks, including most Republicans," Rattner said.
Citing real wage growth data, Rattner showed that incomes for lower and medium earners have fallen since Trump took office in January, while the incomes of higher earners have gone up.
"The idea that when you see people losing this much purchasing power over this long a period of time, that we don't have an affordability crisis is completely fictitious," Rattner said.