The GOP’s “Affordability” Problem

This post The GOP’s “Affordability” Problem appeared first on Daily Reckoning.

Midterm elections are around the corner.

And Republicans face an uphill battle to retain control of Congress. It’s crunch time for the GOP.

But their message isn’t resonating with young voters. And that’s a problem.

Today, let’s explore why.

Leavitt Fumbles

Karoline Leavitt, President Trump’s sharp young Press Secretary, was recently on Jesse Watters’ show on Fox.

They were discussing the rise of communism within the Democratic Party. A very real threat.

Leavitt started off strong, warning that Marxist ideals were becoming mainstream on the left.

Then things veered off track (my transcript is lightly edited for clarity, you can watch the full clip on Youtube):

Watters: Some of these kids have never had a real job, and they’re complaining about things being expensive. Yes, things are expensive when you don’t have a real job. Do you think that’s getting traction? Complaining?

Leavitt: Unfortunately, I do, because this generation, my generation, I hate to say it, Gen Z and those younger than me have been raised with just silver spoons in their mouths, just getting everything handed to them.

Leavitt said laziness is part of the problem, and that young people need to pull themselves up by the bootstraps. I’m disappointed in Watters and Leavitt here. This is handing ammunition to the opposition. This clip will run in Democratic attack ads.

Things are expensive, period. And Gen Z has a right to be angry about the state of the nation. I’ll show this clearly a bit further down.

But first, let’s look at another example of the GOP’s bad affordability messaging.

Ribeyes and Lobster Tails

Congressman Troy Nehls (R – Texas) was recently asked about the affordability issue.

His reply was… not ideal.

Affordability? What are you talking about? I’m gonna get me a couple of big lobster tails. I’m gonna get me some nice ribeyes.

When asked about the 60% of Americans living paycheck-to-paycheck, he replied, “Maybe the 60% of America don’t work as hard as I do.”

Nehls and Leavitt’s poor messaging is a gift for Democrats ahead of midterms.

Nehls acknowledged that the Iran situation was causing price spikes, but stressed it would be temporary. That’s true.

The problem is that affordability is not just about oil and gas prices. It’s home prices, jobs, rent, healthcare, college, and food.

Pretending that inflation isn’t serious won’t work.

Real Problems

In 1990, the average house cost about 2.7x the median household income.

Today it’s over 5x. So buying a home is basically twice as expensive.

Source: Housing Almanac

It’s gotten so bad that the average age of a homebuyer is now 59 years old. That’s up from 35 in 1990.

The GOP’s denial that there’s an affordability problem is backfiring. And I worry it will empower socialists and communists. They at least acknowledge the problem, even though they get the solution backwards.

Dual Job Threats

The job market is brutal out there. Young people are being forced to compete with two powerful rivals: cheap imported labor, and AI.

Our nation is being flooded with immigrants, both legal and illegal, who are willing to work long hours for less pay. It started out in blue collar fields, but has crept into tech, accounting, medicine, and other high-paying jobs.

The following chart shows that since 2019, the vast majority of new jobs has gone to foreign-born workers (red line) vs American-born (green line):

Source: ZeroHedge

Extremely disturbing. As you can see, essentially zero jobs have been created for U.S.-born citizens since 2019. All the job creation has benefited immigrant workers.

So when you see great jobs numbers, remember that a huge number of them are going to non-Americans.

Sprinkle in AI disruption, and it’s an ugly picture out there. For everyone, but especially young people.

We built a system that told kids if they go to college, they’ll get a high-paying desk job. But lots of kids are graduating with $150k+ in debt, applying to hundreds of jobs, and getting no interviews.

Young people today want political leaders who at least acknowledge their problems. Republicans need to start doing so immediately.

President Trump has also been tone-deaf on this topic at times. Back in May, he gifted the Dems with a free ad.

Our colleague and friend Jim Rickards wrote the following at the time:

One sign that he may be out of touch is his recent statement that “I don’t think about Americans’ financial situation.” He was making the point that his attention is focused on the war in Iran. OK. But the line came out terribly at a time when Americans are facing high prices for gas at the pump, higher grocery prices, stagnant real incomes, higher insurance rates, higher tuition, healthcare and travel costs, and much more.

You can be certain Democrats will repeat the “I don’t care” comment endlessly in the coming midterm election.

Jim has been a tremendous supporter of Trump and the Republican party. He’s lectured on Trump’s 3-3-3 economic plan all over the country. But he calls it like he sees it. And he’s right. This is a bad strategy.

The party line appears to be that there is no affordability problem. This is false and unacceptable.

Pretending everything is fine because the stock market is at all-time highs is not going to work on Americans with little stake in it.

To succeed in the midterms and beyond, the GOP needs to get its act together. Because if they continue to pretend everything’s peachy, Republicans are going to lose.

And that means the increasingly-communist Democrats would win. They’ll promise everything, and desperate people will believe it.

If the trend continues into 2028, a Democratic president would likely mean open borders, wealth taxes, welfare for all, and lax law enforcement. A nightmare scenario.

The GOP needs to get on track, quickly. They can start by acknowledging that the problems faced by Americans are real. And then work to address them.

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