Nostalgia has a way of distorting reality. Many Americans look back fondly on an era when small-town main streets thrived, and business owners knew customers by name. In today’s economy, where families struggle with rising rents, childcare costs, and the challenge of maintaining work-life balance, it’s understandable to yearn for simpler times. But the truth is more complex. While some costs have risen sharply, others have declined. The lesson for policymakers is clear: addressing the cost-of-living crisis requires targeted, fact-based solutions—not sweeping industrial or foreign policy interventions that could make matters worse.
For years, headlines have warned that millennials will be the first generation to fare worse than their parents. While some data support this claim, the full picture is more nuanced. Despite concerns over stagnant wages, the Federal Reserve reports that real median household income has increased by more than a third between 1984 and 2023. Research out of Cambridge suggests that the real issue is growing inequality within the millennial generation—while some have prospered, others have fallen further behind. This disparity requires precise policy interventions, not a broad-brush approach that ignores economic realities.
Unfortunately, the current administration has leaned into protectionist policies—namely tariffs—as a response to economic anxiety. Yet research from the New York Federal Reserve, shows that tariffs raise prices across the board, making everyday goods less affordable. Higher import costs allow domestic producers to increase prices without fear of losing customers, and the added cost of manufacturing inputs further drives up prices. Rather than using trade policy as a blunt instrument, lawmakers should focus on the sectors where costs are rising most dramatically.
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Tirzah Duren is the President of the American Consumer Institute, a nonprofit education and research organization. For more information about the Institute, follow us on Twitter @ConsumerPal.