Why Republicans Lose When They Talk About Affordability
And Why Trump Must Shift the Frame to Cost of Living Growth Rates
by Ed Butowsky
Republicans often discuss the concept of affordability in their messaging, yet this approach has consistently failed to resonate with the general public who feel that living costs are not becoming any easier to manage. A more effective strategy for Republicans, particularly for figures like Donald Trump, would be to focus on the rate at which living costs increase, highlighting how policy can influence these rates.
1. How the Boskin Commission Altered CPI
In 1996, the Boskin Commission aimed to update the methodology of the Consumer Price Index (CPI), but its changes resulted in what many consider an artificial deflation of the index, misrepresenting the true cost pressures faced by households. Here are the main adjustments:
- Substitution: The assumption that consumers will switch to cheaper alternatives when prices rise, thus reducing perceived inflation, fails to acknowledge the reduced quality of life when cheaper products are substituted.
- Hedonic Adjustments: Adjustments for quality improvements in products do not necessarily equate to real-life value when essential costs like housing and healthcare continue to rise.
- Geometric Weighting: This method underweights the significance of price increases in volatile items, skewing the CPI further from actual experiences.
2. The Result
The recalibration of the CPI has led it to serve more as a political tool rather than a true measure of cost of living, with several direct consequences:
- Real price increases outpace the CPI.
- Wage growth appears more favorable in comparison to the CPI than it actually is.
- Politicians can claim victories over inflation that do not reflect the reality of struggling families.
3. CPI is not the Cost of Living
It is crucial to differentiate between CPI, cost of living, and affordability. These are distinct concepts that have been erroneously merged, leading to misleading political promises about reducing prices. A more accurate message would acknowledge that while we cannot stop the rise in living costs, we can effectively manage the rate of increase.
4. The Strategic Frame Trump Should Use
Trump’s messaging should pivot to focus on the controlled growth rates of living costs, which his policies have previously managed to slow. Instead of promising unfeasible price reductions, he should aim to moderate the rate of increases in essential items like housing and groceries. This approach is not only more honest but also economically sound and resonates more with the daily experiences of families.
By highlighting the limitations of the CPI and focusing on real economic pressures, this strategy could align more closely with the lived experiences of American households, offering a more tangible sense of economic stewardship.
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