In these last weeks before the midterms, Democratic candidates have been gaining ground by talking about two things: the affordability crisis and political corruption.
If Democrats regain control of Congress and genuinely want to respond to affordability, they’ll need to do everything possible to root out the corruption.
The two are inseparable. In large part, prices are rising faster than paychecks because so much of the economy has become subject to political bribery, Trump Republican pay-to-play schemes, and kickbacks to Trump and his cronies.
1. Trump’s war and the corruption underlying it
Trump’s war on Iran is causing Americans to spend almost 50 percent more on gas than before the war, on average. And the diesel fuel needed to transport almost everything else we buy now averages more than $6.00 a gallon, which is also being passed on to consumers.
These price increases due to Trump’s war tell only half the story. The other half is the political corruption at the root of the war — enriching Trump’s friends and family.
The war has been a huge windfall for Big Tech supplying the military — such as Palantir, a core artificial intelligence and data-integration partner for the U.S. Department of Defense, founded by Trump and JD Vance’s buddy Peter Thiel, and Elon Musk.
Musk’s SpaceX reportedly quintupled its connection fees for the Pentagon, from $5,000 per terminal to $25,000 per terminal for terminals integrated into U.S. “kamikaze” (LUCAS) drones deployed in the conflict.
Not incidentally, Musk has quietly funneled more than $275 million to Republican candidates in the midterms, making him by far the largest single donor to either party.
Meanwhile, investment companies backed by Donald Trump Jr. and Eric Trump have accumulated billions in Pentagon contracts and future contract options, according to the government’s official contract reporting. (Congressional Democrats that the Pentagon’s inspector general investigate the approved deals.)
2. Trump’s tariffs and the corruption beneath them
Trump’s tariffs offer another example of higher prices connected to corruption. The tariffs are import taxes that have increased annual household costs by an estimated $1,100, according to The Budget Lab at Yale.
Again, though, the price increases tell only half the story.
Trump’s tariffs have enabled Trump to give out tariff waivers and carve-outs to industries and companies that do him favors.
After Tim Cook, Apple’s CEO, donated $1 million to Trump’s inauguration and promised major domestic investments, Apple got tariff exemptions for imported smartphones, computers, semiconductors, and flat panel displays, all of which saved Apple huge amounts of money.
After Elon Musk sank a quarter of a billion dollars into Trump’s 2024 campaign, Tesla got a tariff exemption for electronics.
Reyes Holdings, a bottler that ranks among the largest privately held companies in the U.S. and is owned by brothers who have donated millions to Republicans, got a tariff exemption for polyethylene terephthalate, used to make plastic bottles. And so on.
3. Trump’s promotion of AI and the corruption underlying it
A third example linking higher prices to corruption is artificial intelligence. Together with the costs of Trump’s war in Iran, AI’s borrowing of over $500 billion so far this year has contributed to sky-high interest rates on mortgages, auto loans, and credit-card overdrafts. And AI data centers are raising electricity prices in areas where data centers are sucking up energy.
As with the war and the tariffs, Trump’s support for AI is tied to political payoffs. Tech companies and their executives donated over $300 million to support Trump’s 2024 reelection efforts and MAGA Inc, the political action committee aligned with Trump. (This doesn’t include Musk’s more than a quarter billion dollars in donations to Republicans.)
According to a CNBC analysis of FEC records, megadonor contributions from AI, crypto, and online gambling executives have overwhelmingly favored Republicans, with 14 of the 20 largest donor groups nearly exclusively backing GOP candidates or outside groups.
To see how Trump’s war, his tariffs, and his support for AI interact on prices, consider housing affordability, which is among voters’ top concerns.
While Trump’s war and encouragement of AI have contributed to the average 30-year fixed mortgage rate rising to over 7 percent, Trump’s tariffs have caused the prices of lumber and building materials to soar. The National Association of Home Builders estimates that tariffs on lumber and building materials have added $10,900 to the cost of constructing a new U.S. single-family home.
The price of copper, a key material for electrical wiring in residential and commercial construction, has risen 40 percent in the past year due to Trump’s tariffs and the demands of data centers — adding even more cost to building a typical home, which requires hundreds of pounds of copper.
4. Trump’s giant tax cut for the rich and the corruption it rests on
A final illustration of the close connection between rising prices and corruption is Trump’s tax cuts. Trump’s megadonors in the 2024 campaign demanded another big tax cut as a condition for their investments, which came in the form of Trump’s “Big Beautiful” (Big Ugly) bill.
But the tax cuts have come at the expense of healthcare for average Americans.
To pay for the tax cuts demanded by their largest donors, Trump and congressional Republicans have slashed Medicaid and failed to renew healthcare tax credits. As a result, millions of Americans are now forced to spend far more for health insurance coverage or do without it altogether.
5. The Democrats’ agenda if they retake control of Congress
If Democrats regain control of Congress, they will need to focus not only on alleviating high prices but also on eliminating the causes of those high prices. It will be impossible to do the former without attacking the latter.
In addition to ending Trump’s war and his arbitrary tariffs, they must reform campaign financing, and help reduce the influence of big money in politics. One method would be to match public financing with small-dollar donations.
They’ll also need to resurrect the systems of accountability Trump has dismantled —the independent civil service, independent inspectors general, the Office of Government Ethics, and the Federal Election Commission.
Under Trump and his Republican enablers, the richest Americans and biggest corporations have made out like bandits. Average working Americans are paying dearly for what the bandits have stolen. The grift and the graft must end.
Robert Reich is a professor of public policy at Berkeley and former secretary of labor. His writings can be found at https://robertreich.substack.com/.