By Bill Sargent and Mark Mansius
Affordability! It’s an issue in the midterm elections: gas prices are up but falling; younger people often can’t afford homes; rents are retreating though still high. Inflation minus food and energy is stable at 2%. For the first time this decade, wages are out stripping inflation. So, what’s the “real story” about our economy and affordability?
First, A Side Bar:
Wholesale gas prices in Texas are now below $3 per gallon. Diesel fuel remains high and this impacts the price of food. Agriculture relies heavily on diesel fuel for its farm equipment thereby raising the cost for food itself. Additionally, the cost of getting these commodities and products to market rely upon diesel fuel. These factors are impacting the cost of food.
There are two primary reasons for the shortage of diesel fuel and, by extrapolation, the high cost for it. First, Russia and Ukraine have been targeting each other’s oil and refining infrastructure taking refineries off line. Second, California Governor Newsom (D) has taken at least two refineries off line in the last 12 months. The reduction of the availability of these refining assets is directly impacting the availability diesel fuel. Most of the crude oil we are getting is “light” not “heavy” reducing the capability to produce diesel fuel. This is one reason why the importation of Venezuelan crude, which is “heavy,” was such an important move by the President.
Now back to the story:
So how strong and viable is our economy? Well, let’s start with inflation. The problem has always been Congress. It doesn’t matter which Party controls it. Both have an insatiable hunger for spending. The president doesn’t control spending, Congress does! That said, when a president encourages spending that isn’t tied to growth (i.e. productivity), and when Congress goes along with it, one of two things has to happen. First, more revenue needs to be generated through economic growth or — God forbid — by increasing taxes. Or second, if this does happen then the government must borrow what it doesn’t have, thereby raising the debt and its associated servicing costs or create money (i.e., “fiat money” that increases the money supply out of thin air). The latter results in high inflation.
We are still experiencing the aftermath of the Biden-era out-of-control spending. The Washington Post recently carried an OpEd piece that clearly explained how 80% of the inflation in 2026 is still a residue from Biden spending. For many years the spending of “fiat money” is what we have been witnessing. During Democrat “rulers,” U.S. productivity failed, often embarrassingly, and the resultant inflation becomes out of control.
With this as a backdrop, how is our economy really doing?
Many are saying it’s strong and growing. Recently the Washington Times noted President Trump has brought home lots of jobs and billions of dollars in investment, even to bluest of blue states. He is delivering an economic windfall to political leaders who’ve spent years battling his agenda. In California, New York, Illinois and other democrat-controlled states, companies are pouring money into factories, technology centers, and other projects, creating opportunities for workers in places where Trump remains deeply unpopular. These investments strengthen our economy and increase our productivity.
Since Trump returned to office, roughly $670 billion in announced, or completed, investments have gone into the 19 states that voted for Kamala Harris, most of these states currently have democrat governors. This number doesn’t include the $1 trillion for new investment projects in both red and blue states. Projects like a $500 billion Apple investment that will create jobs in California, Oregon, Texas and Kentucky. Another $50 billion investment in the U.S. to establish research centers here has also been announced with California, Massachusetts, Indiana and North Carolina being beneficiaries.
The $670 million investment is estimated to create more than 400,000 direct jobs and potentially an additional 1 million indirect jobs. According to the national Association of manufacturers’ (NAM) data, 2.4 million manufacturing jobs were saved because of the tax incentives in Trump‘s One Big Beautiful Bill Act.
In Summation: So, even though gas prices are high; Trump‘s actions continue to grow the economy. Trump‘s tariff policies have also benefited the U.S. economy. Cleaning up the mess from the missteps made in the 1970s under President Jimmy Carter, and subsequent administrations, will take time. Unfortunately, the mess we are left with is masking what many incorrectly see as our real economy. The truth is, the “real economy” is getting better and the Trump economic initiatives are working; we need to continue the course he has set.
