The 2020s so far have been one long and often painful lesson in what happens when politicians tell economists to shut up and go away.
From the Covid-19 pandemic and Bidenflation to the Trump 2.0 trade wars, every successive administration that has occupied the White House during this decade has made the critical mistake of thinking it can ignore economic principles or simply replace them with a different set of core assumptions. Yes, these mistakes were made in different ways and for different reasons, but they have one common characteristic: the belief that economics is optional and that trade-offs can be eliminated if your motives are in the right place.
But this is not true, as circumstances show again and again.
Let's start with COVID, which is undoubtedly the defining story of the first half of the 2020s. When the Trump administration and scores of state and local officials imposed lockdowns in March 2020 under the promise of “15 days to slow the spread,” it was largely at the direction of public health advisers.
The dominant attitude driving lockdown policies that closed schools, businesses, churches, playgrounds and more was well stated by John Alsop V Colombia Journalism Reviewnewsletter. “It is impossible to choose between public health and a healthy economy because public health is an essential prerequisite for a healthy economy,” he wrote in an April 2020 statement. debate over “opening” was ongoing.
This all-or-nothing approach reveals how little economists were involved in early COVID decisions. “There are no solutions, only compromises,” says as Thomas Sowell once saidbut in the early months of the pandemic, solutions were over-promised and compromises were usually ignored. It was a huge mistake.
“Essentially, economics is the analysis of choices made under constraints. Politicians and government agencies made a wide range of public health decisions last year that violated principles that good economists take for granted.” wrote Ryan Bourne, an economist at the Cato Institute, in a review of early COVID policies in 2021. “These decisions have made the impact of the pandemic on public health and economic well-being worse than it should have been. In this sense, the poor response to COVID-19 represents a failure to think economically.”
As the pandemic subsided, the Biden administration repeated that mistake.
Shortly after taking office, President Joe Biden's team advocated “run it hot“approach to economic policy and openly rejected fears of rising inflation. This came to fruition through the American Rescue Plan, a $1.9 trillion spending package that included $1,400. stimulus checks households earning up to $160,000 in gross income.
Larry Summers, a Harvard economist and Biden administration veteran, warned in a report. Washington Post article that the American Rescue Plan “will create inflationary pressures like we haven't seen in a generation.” Other leading economists, including the former chairman of the International Monetary Fund, offered similar warnings.
Biden and Democrats in Congress didn't listen. result? Inflation like America hasn't seen in a generation. The annual inflation rate reached 9.1 percent in June 2022 and has yet to return to the 2 percent annual rate that the Federal Reserve considers its goal.
Indeed, inflation has in some ways supplanted COVID as the dominant political ideology of the 2020s. Although the current inflation rate (2.7 percent annualized) well below the 2022 peak, but significantly higher than anything Americans experienced during the first two decades of the 21st century. No wonder everyone seems to be angry about how much things cost.
The Biden administration's hot economic policies had consequences, and ignoring economists has not reversed those trade-offs.
The same can now be said about President Donald Trump's tariffs, which his administration imposed over the objections of many economists. Vice President J.D. Vance went to X in July to announce that “economists don’t fully understand tariffs.”
In reality, tariffs represent a huge tax increase. largest tax hike in more than three decadesaccording to the Tax Foundation—and the tradeoff is pretty much what you'd expect to see after a big tax hike: more government revenue (though not as much as Trump usually claims), And decline in private sector productivity.
Trump and his allies promised that tariffs would usher in a “golden age” of American manufacturing. Instead, economists have warned that tariffs would hurt rather than help U.S. manufacturing companies because most of all imports are raw materials and intermediate goods that go into making other products.
The proof is in the pudding. Higher taxes on these resources led to a recession in the manufacturing sector in 2025, and this sector was job cuts. Trade deficit continues to grow. Meanwhile, tariffs are also raised prices higher.
Economists can irritate advisers during the policy-making process. The rush to point out the inevitable trade-offs in any policy can make it seem as if their sole purpose is to poke holes in the noble plans of the country's elected officials. But throwing them out of the room doesn't make stupid ideas any better. Six years of ignoring economic reality have not brought us utopia.
If our elected officials are looking for a handy New Year's resolution for 2026, here's an idea: Start listening to economists again.
Fast Big lesson of the 2020s? Don't ignore economists. first appeared on reason.com.
