Mother Jones
Trump’s Top Economic Adviser Doesn’t Seem to Get That People Are Struggling
On Fox News Sunday morning, President Donald Trump’s lead economic policy adviser, Kevin Hassett, dismissed Americans’ struggles to cover the rising cost of living by noting that people are “spending more.”
But Kevin, isn’t that the problem?
When the host questioned Hassett, director of the National Economic Council, on why folks are delinquent on credit card payments at the highest rate in 15 years, he replied, “People are spending more on gas, but they’re also spending more on everything else. Not just groceries but restaurants.”
“That’s a sign that you would see when people are optimistic about the future,” Hassett continued, noting that people usually spend less money when they’re worried about job security or affording rent.
Hassett: "People are spending more on gas, but they're also spending more on everything else — not just groceries, but restaurants and so on. I think that's a sign you see when people are optimistic about the future."
In fact, when measuring non-necessities, it may be the optimism of higher-income Americans that’s propping up the spending numbers. Moody’s Analytics reported, based on its analysis of federal data, that the top 10 percent of earners were behind much of last year’s consumer spending. And although Moody’s numbers have been questioned by some economists, a roaring stock market—the S&P has gained 25 percent since Trumpreturned to office—has channeled truckloads of cash into the coffers of the richest 10 percent of Americans, who, according to data from the St. Louis Fed, own more than 87 percent of all public equities and mutual funds. (The bottom half of US families only own about 1 percent of those assets.)
So, even as Hassett downplays Bureau of Labor Statistics data showing that inflation is increasing faster than wages, and President Trump dismisses the notion of affordability as a “hoax” and a “con job,” US consumersare feeling the effects.
Part of his response to the Fox host’s question on credit card delinquency data seemed particularly telling as to the administration’s priorities: “We talk to the CEOs of the credit card companies all the time and we do see some increased stress,” he said, but “there’s not any kind of financial threat to the credit card companies.”
BREAM: The Journal says percentage of delinquent credit card balances is 13%, the highest in 15 years. People are using them for necessities. Your message to them?HASSETT: We talk to CEOs of the credit card companies all the time, and there's not any threat to them. People are taking a bit longer.