Tariffs as a stagflation machine
 

Let’s start with tariffs. Economists have been saying for more than two centuries — ever since David Ricardo — that tariffs make countries poorer. They raise prices for consumers, disrupt supply chains, and invite retaliation from trading partners. Occasionally, politicians justify them on national security grounds or as a temporary shield for “infant industries.” But tariffs as a core strategy for economic growth? That’s a recipe for higher costs with no corresponding benefits.

Trump’s across-the-board tariffs amount to a giant sales tax on American households. They don’t just raise the price of imported goods; they also allow domestic producers to charge more. So tariffs are inflationary, full stop. At the same time, by raising costs and discouraging trade, they reduce growth. In other words, they’re practically designed to generate stagflation.

Deportations and the labor squeeze
 

Then there’s the labor market. Mass deportations of undocumented workers — many of whom are deeply embedded in agriculture, construction, and service industries — shrink the workforce in sectors where employers already struggle to find people. Less labor supply means higher wages in those sectors, but also fewer goods and services produced. That’s another supply shock, which again raises prices and crimps output.

Put these two forces together — tariffs and deportations — and you’re looking at a one-two punch of slower growth and higher inflation. Exactly the conditions that define stagflation.

The war on data
 

As if that weren’t enough, Trump’s decision to fire the head of the Bureau of Labor Statistics sends a chilling message: bad news will be punished, and inconvenient facts will be massaged or buried. The problem here isn’t just institutional vandalism — though it certainly is that. It’s that markets and households depend on trustworthy data to make decisions. If they stop believing the official numbers, they’ll assume the worst. And expectations themselves can drive inflation higher: if people expect prices to rise, they’ll demand higher wages, and businesses will preemptively raise prices.

Why this time could be worse
 

In the 1970s, policymakers at least recognized that inflation was real. They may have floundered in their response, but the data itself wasn’t in question. Today, we face the prospect of policy actively creating stagflationary pressures while the administration tries to cover up the consequences. That’s not just bad economics; it’s corrosive to democracy itself.

What to watch
 

So how do we track the economy if the official numbers are no longer reliable?

• Market signals: Bond yields, inflation-protected securities, and commodity prices are harder to fake.
• Private-sector surveys: Institutions like the Conference Board and University of Michigan may become even more important if government surveys are censored.
• State-level data: Some statistics are gathered independently by states, and those could provide a reality check.
• International benchmarks: U.S. trading partners have every incentive to monitor what’s really happening in our economy, and their numbers can act as an indirect gauge.
   

The bottom line

We’ve managed to avoid serious stagflation for four decades, not because it was impossible but because, for the most part, we avoided policies that made it likely. That may no longer be true. With tariffs, deportations, and attacks on institutions, Trumponomics is steering us straight toward the shoals. And unlike the oil shocks of the 1970s, this time the crisis would be entirely self-inflicted.