More than any other factor, high prices for consumer goods shifted the country to the right and delivered the presidency to Donald Trump.
Yes, prices are not right for most Americans—they are just too high. Paying for groceries has become a huge burden on the pocketbooks of working-class America, but Vice President Kamala Harris simply never put forward a clear and compelling message on the issue. Not only did she fail to explain how she would fight inflation, but she failed to articulate forcefully how Trump's policies would reignite it.
How could an administration that presided over both a global post-pandemic price surge, and inflation's precipitous decline almost to the Federal Reserve-targeted 2 percent level, not use the slogan "We fight it, Trump will ignite it"?
Now that the election is over, we will see how Trump's planned tax cuts, deportation of immigrants, and attempts to diminish the independence of the Fed will affect interest rates and inflation. However, I think there is a more effective way to deal with the clear burden and anxiety that consumers feel when it comes to groceries, gasoline, drug prices, and other must-have consumer items—regardless of who they voted for.
I am always bewildered to see gas stations no more than a block apart with substantial differences in the price of a gallon of gas. I regularly see signs in my neighborhood for gasoline at $3.79, and right down the street another service station offering the same amount for $3.09. For a 20 gallon fill up that is a $12.00 difference each time, probably $600 more over the course of a year. Yet I see little indication that the cheaper gas station has more business than the more expensive one, nor do I find that being a loyal buyer of cheaper gas has any negative impact on how my car runs.
This is hard to explain. It cannot be argued that there is a lack of transparency on the relative prices: huge red neon signs make clear what the gasoline costs. This kind of transparency isn't always the case for other kinds of consumer goods. It is time for that to be remedied.
Bringing this back to the politics of high prices, there are few specific actions a president can take to reduce the price of consumer goods. Harris' proposed remedy—to go after corporate "price gouging"—is rarely the answer to the problem of high-priced consumer goods, except in some extreme circumstances. Supply and demand and market competition define the price of goods. However, most consumers are simply not aware of the lowest-priced options for an array of necessities.
Take drug prices, for example. Few consumers take advantage of services comparing costs, such as GoodRX. The app gives anyone a list of pharmacies and supermarket prescription counters where they can find their particular medicine at the lowest possible price. It cost nothing to use, and you get answers in seconds. And unbeknownst to most consumers, these prices are often lower—sometimes considerably lower—than what employer insurance or Medicare Part D offer. Millions have learned to shop in bulk at Costco or Sam's Club, but many are unaware or simply do not take advantage of an array of discounts, coupons and sale offers that are offered at the likes of CVS, Walgreen's, supermarkets like Stop and Shop and Safeway, and general merchandise retailers like Target and Wal-Mart. Knowing about these offers often still requires reading a newspaper insert which is about as common behavior today as using the Yellow Pages.
Another way consumers can save money is by using coupons available through a Walgreens or CVS, that can range from 40 percent off an entire purchase, to two for one specials on any number of items that effectively reduce unit costs by 50 percent. Like GoodRX these discounts are available without having to pay anything to get these benefits—just by signing up to participate. The breakage—the number of consumers who do not take advantage of couponing or reward dollars offered - is enormous, meaning the opportunity to substantially reduce shopping costs in these stores is often ignored.
Millions have learned to shop in bulk at Costco or Sam's Club, but many are unaware at any given time the substantial sales on an array of items in any given week for things they might regularly buy at a local supermarket. For example, cereals have gotten much more expensive over the last few years but there are regularly discounts and special offers—the problem is like with so many of these discount opportunities, consumers are simply unaware when these sales are happening, unless you are a real student of supermarket newspaper inserts. That's about as common today as using the Yellow Pages—meaning no one does it.
So, how do we solve this?
Rather than Elon Musk weighing in on why the Federal Reserve should not be independent, here is where his claimed expertise in artificial intelligence could deliver on the Trump promise to lower prices. I am imagining an AI powered system into which all of the nation's supermarkets would supply pricing on individual items, including all relevant special offers and discounts, so that the consumer can make an informed choice. Add pharmacy prices as well. Gas is easy, so throw that in along with an array of consumer goods.
Imagine you could then put your shopping list into the app, which would then guide you to the locations near you with the best prices.
The app would be instantly updated as prices change. It could even be tied to a variety of shopping services, like Instacart, allowing you to get the best deal without leaving your house.
This need not be government operated, like the medical insurance exchanges under Obamacare; but if Trump wants to jawbone companies into responding to consumer interests, getting them to provide this information to everyone in a way they can actually use it would be a tremendous public policy accomplishment.
Some might suggest that making discounts more available to consumers would substantially reduce breakage on those discount deals causing them to be offered far less often. I believe that the price transparency created here would exert a further downward pressure on consumer prices through competition.
Now, some may ignore the many ways one can help their household budget by having a totally transparent consumer price system, just like so many people ignore big red signs in clear view telling drivers how to get cheaper gas. But at least voters would not have an excuse to express their frustration and displeasure that prices are too high. If they're not taking the modest self-help step of using an AI-generated discount shopping appthen do not blame the president of the United States for high prices.
I think for an enormous number of consumers this would go a long way in creating a sentiment that prices are finally right.
Tom Rogers is executive chairman of Oorbit Gaming and Entertainment, an editor-at-large for Newsweek, the founder of CNBC and a CNBC contributor. He also established MSNBC, is the former CEO of TiVo, a member of Keep Our Republic (an organization dedicated to preserving the nation's democracy). He is also a member of the American Bar Association Task Force on Democracy.
The views expressed in this article are the writer's own.
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