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16 Nobel Prize-winning economists are warning that Trump’s economic plans could reignite inflation
Sixteen of the world’s most notable economists — all Nobel Prize winners — are warning that former President Donald Trump could stoke inflation if he wins the presidency in November and moves forward with his economic plans.
“Many Americans are concerned about inflation, which has come down remarkably fast. There is rightly a worry that Donald Trump will reignite this inflation, with his fiscally irresponsible budgets,” according to a letter signed by the economists, who include Joseph Stiglitz, a Columbia University professor who won the Nobel prize for economics in 2001; and Yale professor Robert Shiller, who won the Nobel prize for economics in 2013.
The warning comes as the U.S. continues to battle sticky inflation, with the Federal Reserve maintaining the highest interest rates in more than two decades with the goal of cooling the economy and driving inflation down to a 2% annual rate. Even though inflation has cooled from a recent peak of 9.1% in June 2022, inflation-weary Americans are glum about the economy, with 6 in 10 rating it as either bad, fairly bad or very bad, according to the latest CBS News poll.
Trump’s policies could prove to be inflationary, other economists also warned, such as his proposal to create a 10% across-the-board tariff on all imports to deporting immigrants. The tariff plan would add $1,700 in annual costs for the typical U.S. household, essentially acting as an inflationary tax, according to experts at the Peterson Institute for International Economics.
Deporting immigrants could shrink the labor force, creating more competition for U.S. workers and pushing up wages, also adding to inflationary pressure, economists warn.
While the letter from Stiglitz and the other 15 Nobel Prize winners didn’t detail the specifics of any part of Trump’s plans, it did single out praise for some of President Joe Biden’s economic policies, ranging from his Inflation Reduction Act to investment in U.S. manufacturing.
“In his first four years as President, Joe Biden signed into law major investments in the U.S. economy, including in infrastructure, domestic manufacturing and climate,” the letter said. “Together, these investments are likely to increase productivity and economic growth while lowering long-term inflationary pressures and facilitating the clean energy transition.”
They added, “While each of us has different views on the particulars of various economic policies, we all agree that Joe Biden’s economic agenda is vastly superior to Donald Trump’s.”
“Top economists, Nobel Prize winners, and business leaders all know America can’t afford Trump’s dangerous economic agenda,” Biden campaign spokesperson, James Singer, told CBS MoneyWatch.
“In Donald Trump’s America, the rich pay less, and working Americans pay more,” he added.
“The American people don’t need worthless out-of-touch Nobel Prize winners to tell them which president put more money in their pockets,” Trump campaign national press secretary Karoline Leavitt said in an emailed statement to CBS MoneyWatch.
If re-elected, Trump plans to implement a “pro-growth, pro-energy, pro-jobs agenda to bring down the cost of living and uplift all Americans,” she added.
“We the undersigned”: Read the letter
You can read the text of the letter below:
We the undersigned are deeply concerned about the risks of a second Trump administration for the U.S. economy.
Among the most important determinants of economic success are the rule of law and economic and political certainty. For a country like the U.S., which is embedded in deep relationships with other countries, conforming to international norms and having normal and stable relationships with other countries is also an imperative. Donald Trump and the vagaries of his actions and policies threaten this stability and the U.S.’s standing in the world.
While each of us has different views on the particulars of various economic policies, we all agree that Joe Biden’s economic agenda is vastly superior to Donald Trump’s. In his first four years as President, Joe Biden signed into law major investments in the U.S. economy, including in infrastructure, domestic manufacturing, and climate. Together, these investments are likely to increase productivity and economic growth while lowering long-term inflationary pressures and facilitating the clean energy transition.
During Joe Biden’s presidency we have also seen a remarkably strong and equitable labor market recovery — enabled by his pandemic stimulus. An additional four years of Joe Biden’s presidency would allow him to continue supporting an inclusive U.S. economic recovery.
Many Americans are concerned about inflation, which has come down remarkably fast. There is rightly a worry that Donald Trump will reignite this inflation, with his fiscally irresponsible budgets. Nonpartisan researchers, including at Evercore, Allianz, Oxford Economics, and the Peterson Institute, predict that if Donald Trump successfully enacts his agenda, it will increase inflation.
The outcome of this election will have economic repercussions for years, and possibly decades, to come. We believe that a second Trump term would have a negative impact on the U.S.’s economic standing in the world and a destabilizing effect on the U.S.’s domestic economy.
Signed,
George A. Akerlof (2001)
Sir Angus Deaton (2015)
Claudia Goldin (2023)
Sir Oliver Hart (2016)
Eric S. Maskin (2007)
Daniel L. McFadden (2000)
Paul R. Milgrom (2020)
Roger B. Myerson (2007)
Edmund S. Phelps (2006)
Paul M. Romer (2018)
Alvin E. Roth (2012)
William F. Sharpe (1990)
Robert J. Shiller (2013)
Christopher A. Sims (2011)
Joseph E. Stiglitz (2001)
Robert B. Wilson (2020)
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North Carolina’s Asheville devastated after Helene’s damage cuts power, floods roads
Floodwaters pushed by the remnants of Hurricane Helene left North Carolina’s largest mountain city largely cut off Saturday by damaged roads and a lack of power and cellphone service, part of a swath of destruction across southern Appalachia that left an unknown number dead and countless worried relatives unable to reach loved ones.
In North Carolina alone, more than 400 roads remained closed on Saturday as floodwaters began to recede and reveal the extent of damage. North Carolina Gov. Roy Cooper said that supplies were being airlifted to that part of the state. Cooper said two people died in his state, Helene killed at least 52 people across multiple states.
Among those rescued from rising waters was nurse Janetta Barfield, whose car was swamped on Friday morning as she left an overnight shift at Asheville’s Mission Hospital. She said she watched a car in front of her drive through standing water and thought it was safe to proceed. But her car stalled, and within minutes water had filled her front seat up to her chest. A nearby police officer who saw her car stall helped her to safety.
“It was unbelievable how fast that creek got just in like five minutes,” Barfield said.
Early on Saturday morning, many gas stations were closed because they didn’t have electricity, and the few that were open had hourlong lines wrapped around the block. The hub of tourism and arts, home to about 94,000 people, was unusually still after floodwaters swamped neighborhoods known for drawing visitors including Biltmore Village and the River Arts District, which is home to numerous galleries, shops and breweries.
More than 700,000 power customers were without power across North Carolina, including 160,000 in Buncombe County. Interstate 40 and I-26 were impassible in multiple locations, and a state transportation department map showed that most routes into Asheville and across much of the mountains were snarled. North Carolina’s Department of Transportation posted on social media on Saturday afternoon that “all roads in Western North Carolina should be considered closed.”
In Asheville, there was no cellular service and no timeline for when it would be restored.
“We have had some loss of life,” County Emergency Services Director Van Taylor Jones told reporters. However, he said they were not ready to report any specifics. Officials have been hindered in contacting next of kin by the communications outages. Asheville police instituted a curfew from 7:30 p.m. Friday to 7:30 a.m. Saturday.
“The curfew is to ensure the public’s safety and will be in effect until further notice,” police said.
Asheville transit services were also suspended, police said. The city advised residents to boil “all water used for human consumption,” as there was at least one significant water line break during the storm. Many residents might not be getting water or reduced or no pressure water.
Jones said the area experienced a cascade of emergencies that included heavy rain, high winds and mudslides. Officials said they tried to prepare for the storm but its magnitude was beyond what they could have imagined.
“It’s not that we (were) not prepared, but this is going to another level,” Sheriff Quentin Miller said. “To say this caught us off-guard would be an understatement.”
Atlanta resident Francine Cavanaugh said she has been unable to reach her sister, son, or friends in the Asheville area.
“My sister checked in with me yesterday morning to find out how I was in Atlanta,” she said on Saturday. “The storm was just hitting her in Asheville, and she said it sounded really scary outside.”
Cavanaugh said her sister had no idea how bad the storm would be there. She told Cavanaugh she was going to head out to check on guests at a vacation cabin “and that’s the last I heard of her. I’ve been texting everyone that I know with no response. All phone calls go directly to voicemail.”
CBS News
Embattled Steward Health Care CEO Ralph de la Torre to resign
The CEO of a hospital operator that filed for bankruptcy protection in May will step down after failing to testify before a U.S. Senate panel.
Steward Health Care CEO Ralph de la Torre has overseen a network of some 30 hospitals around the country. The Texas-based company’s troubled recent history has drawn scrutiny from elected officials in New England, where some of its hospitals are located.
A spokesperson for de la Torre told the Associated Press Saturday that he “has amicably separated from Steward on mutually agreeable terms” and “will continue to be a tireless advocate for the improvement of reimbursement rates for the underprivileged patient population.”
A CBS News investigation that spanned nearly two years documented how private equity investors and de la Torre extracted hundreds of millions of dollars while healthcare workers and patients struggled to get the life-saving supplies they needed.
In August, the company closed two Massachusetts hospitals, leaving about 1,200 workers jobless, according to the state.
Sen. Bernie Sanders of Vermont, who chairs the Senate Health, Education, Labor and Pensions Committee, said earlier this month that Congress “will hold Dr. de la Torre accountable for his greed and for the damage he has caused to hospitals and patients throughout America.”
De la Torre’s resignation is effective Oct. 1. The Senate approved a resolution on Wednesday that was intended to hold him in criminal contempt for failing to testify before a committee.
The Senate panel has been looking into Steward’s bankruptcy. De la Torre did not appear before it despite being issued a subpoena. The resolution refers the matter to a federal prosecutor.
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