Justin Wolfers: Uncertainty Is an Economic Shock--And Tariffs Create It - Justin Wolfers

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How do you lower prices without pretending the problem doesn’t exist?

Affordability requires policies that reduce costs—not rhetoric about how great everything is. Inflation remains a real challenge for households, unemployment has been drifting up, and workers are nervous about AI’s impact on jobs. Ignoring those realities doesn’t fix them.

The quickest way to make life more expensive is to add new tariffs. Tariffs are effectively a consumer tax that shows up in higher store prices. When tariff announcements turn into confusion—10% one day, 15% the next, unclear in practice—the uncertainty itself becomes part of the economic damage.

Meanwhile, some of the most practical affordability tools are straightforward: keep health insurance subsidies that save families over $1,000 a year, and build more housing to bring down rents and home prices. And if the goal is to help the middle class, budgets that massively redistribute from poor to rich push the wrong direction.

The stakes are personal: these choices can change your monthly bills, your job security, and whether the economy feels like it’s working for you. - 02/25/2026.

Topics covered:
Why messaging about the economy often fails on affordability
How inflation affects households even after it cools
Why unemployment drifting up matters
How AI disruptions shape economic anxiety
Why tariffs raise consumer prices
How policy uncertainty hurts investment
The impact of Obamacare subsidies on family budgets
Housing supply and affordability
Redistribution in the Trump budget

Contents:
0:00 The affordability mandate
1:50 What the data says vs. what’s being claimed
3:25 Real risks: jobs, AI, and inflation
4:45 Tariffs and price hikes
6:15 Uncertainty and chaos in policy
7:05 Health insurance subsidies
8:10 Housing affordability: build more
9:15 Redistribution and who benefits
10:10 The fastest steps to lower costs

🎯 Key takeaway: Real affordability comes from lowering tariff pressure, protecting health subsidies, and expanding housing supply.