Donald Trump is bad for consumers. Here’s why.

By | May 8th, 2017

If you’re a right-leaning reader or a fan of the current presidential administration, you probably won’t make it past the headline of this story. And if you do, it will only be for the purposes of scrolling down to leave an angry comment at the end of the article.

But if by chance you made it this far, please remember last week’s column on how the Trump administration could help consumers. And also, that there are at least two sides to every story — especially this one.

You don’t have to look far for evidence that the Trump administration will harm consumers. From its pledge to deregulate American businesses to its actions to dismantle the Consumer Financial Protection Bureau, to its clumsy attempt to eviscerate the Patient Protection and Affordable Care Act, it’s hard to know where to begin a column like this.

Perhaps here: Even the administration’s most full-throated cheerleaders would have some trouble making the case that Trump has been good for consumers. Take the promise of deregulation lowering prices, discussed at length last week.

“I have yet to see an example of consumer prices going down and market competition increasing after deregulation of a U.S. industry,” says Prabir Chetia, head of business research and advisory for Aranca Research, a global research, analytics and advisory firm.

That might come eventually. If taxes on airline tickets are lowered, or “burdensome” regulations are lifted, those savings could be passed along to consumers. Or not. It’s difficult to say, since consumers hold far more pricing power than one or two regulations in the airline industry — but we’ll have to wait and see.

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“Consumers may win with lower prices in the near term as a result of deregulation because businesses can improve margins and pass the savings along to shoppers,” says Jonas Sickler, marketing director for ConsumerSafety.org. “But, in the long run, I see the potential for consumers to take a hit from degrading safety standards on everything from food to products.”

Sickler makes a valid point. Regulations exist to protect consumers, not companies. And if consumers feel safer, they’re more likely to trust a brand and spend more money. So the argument about less regulation being better for everyone doesn’t necessarily hold true.

“When consumers feel at risk,” he adds, “everyone loses.”


But that isn’t the only way the Trump administration has hurt consumers. Last week, I discussed some of the less obvious ways the government’s “laissez faire” approach to regulation had changed how consumers feel about the government and business, and how that change is good.

But in other ways, Trump is hurting us. Badly.

Consumers are assuming the worst — even when they shouldn’t.

Too many consumers are telling me that they believe companies are out to get them. And while that may be true for some companies, it certainly isn’t true for all of them. The shift in the balance of power, with companies now holding the upper hand when it comes to regulation, is worrisome to consumers. It’s manifesting itself as a deep distrust of corporations. Problem is, there are lots of companies that still do right by their customers. Helping you find them — well, that’s what I do.

Related story:   Is it time to regulate frequent flier programs?

Consumers think the government is actively working against their interests.

It’s one thing to be skeptical, but quite another to be paranoid. Unfortunately, many consumers say they believe, based on the current appointees to federal agencies and actions taken by the federal government, that the administration is out to get ’em. While it may be true at a higher level — that the political appointees think consumers are there to be fleeced by the free market — it isn’t universally true. I personally know people at the regulator level who care about consumers and want to protect them. The Trump administration has a word for these resisters: Deep Staters.

Consumers believe they can’t win.

That is perhaps the worst fallacy of all. Many consumers are telling me the deck is so perfectly stacked against them that they can’t win. Companies hire the best lawyers, their contracts favor them, and now so do the very people who are supposed to protect us. This morale problem is pervasive. Evidence of it can be seen in almost every consumer complaint we receive, and I try hard every day to counter that misconception with words and deeds. Consumers can win. Pay no heed to the thoughtless tweets and the rhetoric carelessly tossed out in impromptu press conferences — the truth is, consumers may be more powerful than they realize.

Trump is bad for consumers, not necessarily in what he’s doing now, but in how he’s affecting the morale and psychology of the American customer. Too much paranoia and a can’t-win attitude will only serve the profit goals of the big corporations that love the “anything goes” economy this administration has promised them.

Related story:   Should Republicans blame the TSA for their loss?

We can’t let that happen.



  • Alan Gore

    Regulations can be suborned for the benefit of well-connected businesses also, in a process that economists call regulatory capture or ‘rent seeking’. Pharma companies claim to love capitalism, but whenever any talk of chucking the FDA regulations that give them the iron control of the drug market, even for compounds that have gone off patent, comes up, their lobbyists crush it before we can even discuss the issue.

    I’ll believe in Trump as a populist when he controls medical costs by introducing the capitalist idea of competition to the field.

  • cscasi

    I thought competition was one of the corner legs for his plan to stand upon. Having said that, I also know that the House and Senate have to come up with a plan they can both agree upon and pass to get to Trump’s desk. So, I ma not certain he will get what he has promised the people or not, but at least he has made it a priority. All I can say is that when there are 535 people working on and voting on the plan, who knows what it will look like, if it is ever passed. So, I cannot put all the blame on the President as all he can do is try to influence the legislation and if it is not what he wants, he can veto it.

  • pauletteb

    Thank you, Chris!

  • Patrica

    ditto!

  • BubbaJoe123

    “I thought competition was one of the corner legs for his plan to stand upon”

    “His plan”? What plan is this of which you speak? He’s never articulated a vaguely comprehensible plan for health care reform (an area which he’s apparently recently discovered is “hard”).

  • James

    One of (many) requirements of a free market is availability of flow of information. Here we see it with questions of whether or not or how businesses disclose the myriad of terms they require on contracts — are they properly disclosed so a reasonable person would be aware of the terms?

    Second, you may want to regulate resources that are limited, such as gates or take off slots at airports. When airlines get the monopolies on slots at airports, it adversely effects consumer prices.

    Third (related/similar) issue is eliminating/reducing artificial barriers to entry. One way the free market works is competitors can be created and can compete on an even playing field. There will always be some barriers to entry, but the creation of artificial barriers stifles innovation and competition.

  • cscasi

    Competition across state lines; for one. And, no matter what, the insurance companies will still have to “compete” for business, if they want to stay in business.

  • Éamon deValera

    My stocks are up 9.03 % since elcetion day. I am a consumer. I think that is pretty good.

  • greg watson

    Interesting comments. Please let us know if any actual, in force now, Acts or regulations have been changed to negatively affect us consumers. Speculation is one thing, but factual information can be acted on. Let us know the facts when that happens. Good job Chris.

  • John McDonald

    is this statement a joke ? It’s not 1 April.

    “I have yet to see an example of consumer prices going down and market competition increasing after deregulation of a U.S. industry,” says Prabir Chetia, head of business research and advisory for Aranca Research, a global research, analytics and advisory firm.”
    Prabir is obviously in Colorado smoking the “good stuff”. Airfares dramatically reduced following deregulation, in USA around 1978 I think it was & in Australia around 1990 & not sure when it happened in Europe. Thank you Ryanair for giving us cheaper European fares.

  • Harvey-6-3.5

    The Trump administration has delayed the “Fiduciary Rule” (see, e.g., http://www.insurancejournal.com/news/national/2017/04/06/447107.htm). That rule would require investment advisors to advise customers with a duty to the customer’s best interest, rather than simply permitting them to advise “suitable” investments that may line the advisor’s pockets with commission fees. The opposition as argued is that it would reduce the availability of advice, but I would contend that reducing biased, bad advice might be a benefit, not a cost.

  • michael anthony

    Anyone in favor of the health care bill hasn’t read it, just like those who passed it. I have a pre-existing condition and work with a broker to get the best price and coverage. He said if that bill became law, I’d expect a 5 to 10k RISE a year in premium. AND if I wanted to move, cross off at least half the states. AND WE KNOW, Trump will sign whatever they give him so he can say how good he did.

    Pre-existing conditions exclusions are a joke. No erectile dysfunction on it. Viagra has been on patent about 20 years. Why?

    And the carriers met with him a few weeks ago. They want no regulation and stop the mideast carrier expansion. Last week, Emirates cut some US service. They say because of the electronics ban. Sure, I believe that.

  • michael anthony

    There has never been proof that competition across state lines will result in lower costs. Insurers won’t have to offer it and as we know, they’ll just have tweak their own state law to reject all pre-existing condition applicants.

    It’s the same as giving tax credits. Most people who can’t afford to get insurance make to little to file taxes and/or use deductions. Tax credits only favor the higher earner.

  • wilcoxon

    This is one of the big fallacies of the Trump/Ryan plan. Insurance companies will not compete across state lines. There are currently some states that allow cross-state health insurance competition yet there are exactly ZERO cases of ANY health insurance company actually doing so (all health insurance companies have also said they do not want to do so). Competing in a new state is extremely expensive and difficult for a health insurance company (developing new network of providers, working with providers to make processing claims “easy”, etc).

  • wilcoxon

    Except airfares have gone up significantly (in recent years) due to all of the fees. Also, for anyone at all outside of the norm physically, costs have gone up massively (reduced seat width means more people are required to buy multiple seats and reduced leg room means that taller people are forced to buy business class (or at least premium economy if that provides enough)).

  • John McDonald

    seat width hasn’t changed at all on worlds narrow body fleet (B737/757; A318/19/20/21). Have fares really gone up much at all ? If you average fares, including LCC’s & ULCC’s they have probably dropped. (you don’t have to pay most fees unless you want all the extras)

  • wilcoxon

    There are many articles documenting the narrowing over time (though it is much less of a change than seat pitch).

    I found three articles giving these numbers for the major US carriers:
    AA: 19-20″ (1985-1991), 17.2-18.5″ (2000 and later)
    DL: 19-20″ (1985-1989), 18.5-20″ (1991), 17-18″ (2000-2002), 17.2-18.3″ (2014)
    UA: 19.5-20″ (1985), 19-20″ (1989-1991), 17-18″ (2000-2002), 17-18.3″ (2014)
    SW: 19″ (1985-1989), 19-19.5″ (1991), 17″ (2014)

    Looking at the numbers, I am surprised that they haven’t narrowed more than that. However, that likely isn’t the whole picture as I found a few articles saying that the average seat width across carriers is 17.2″ (not sure if that is just domestic or foreign as well).

    However, the leg room decrease is more significant and is FAR more important to me (since I’m not that wide but am 6’4″).

  • John McDonald

    you didn’t read my comment. I said narrow body fleet. All these aircraft have always been 6 across in economy(3-3) except for a very brief time, when Boeing I think it was proposed 5 across, but don’t think any airlines went with 5 across. So repeating seat width on the world narrow body fleet hasn’t changed 1 mm. It may have actually increased, due to narrower armrests. (the aisle width hasn’t changed-nor have the aircraft hull width).

    THE GREAT LEGROOM CONFUSION !!!
    You can actually increase legroom, when you decrease seat pitch. How ? By replacing old seats with thick backs, with new thinner backed seats. Even if only 2 inches thinner, you can reduce seat pitch by 1 inch, which means you increase legroom by one inch. Many old seats had very thick seat backs, so increase in legroom, could be more, even though you decrease seat pitch.

  • wilcoxon

    Actually, it has. Those numbers are for all aircraft. Given that seat width was 19-20″ in 1985 and 17-18″ in 2014, it clearly has decreased on all aircraft types (including narrow body) by at least 1″.

    I have yet to find any airline that has changed to narrow backed seats that has increased leg room significantly (eg I didn’t fit in thick back seats on the airline after they greatly decreased space and I still don’t fit after they go to narrow back seats). That’s not saying that there isn’t one where they increased leg room enough with narrow back seats that I will fit (I certainly haven’t tried all airlines) but none I’ve been on so far. There are some airlines where I don’t even fit in premium economy (because they’ve stolen so much room from regular economy that the extra they “give” to premium economy is still too small for me). My father (even taller at 6’6″ and 2″ longer inseam) used to fit (though not comfortably) in almost all economy seats – now I doubt he could even sit down in most of them.

  • John McDonald

    just for a second, think about how silly your statement that seat width has changed on narrow body aircraft. Hull width same. Aisle width the same. The only way seats can be narrower, is if armrests are significantly wider & in many cases they are narrower, meaning seats are marginally wider.
    You are obviously getting confused with some wide body aircraft, where some airlines put 9 across on an A330 (most have 8 across in economy) & 10 across in a B777 (most have 9 across). Jetstar(large Australian LCC owned 100% by Qantas, announced this week, that they are adding an extra row ie. 6 seats, without decreasing legroom. So for every 30 or 31 aircraft, with 6 extra seats, that’s the same as another expensive aircraft, without the huge capital outlays.
    The shrinking seat is one huge myth.

  • wilcoxon

    Look at the numbers. Those are across ALL aircraft types – not just wide body. Tell me again how seats have not gotten narrower? It’s impossible given the seat width numbers over the years.

    Leg room has absolutely shrunk over the years (not seat pitch – actual leg room).

    Tell me again how seats are not shrinking. You clearly want to ignore evidence gathered by many sources in favor of your personal opinion.

  • John McDonald

    now you’re just be ridiculous !!! Are you seriously suggesting that airlines now put gaps between their seats, to make seats narrower ? Are you in Colorado, the weed state ?
    I’ll state it again …
    Seats on narrow body aircraft like B737/757, A318/19/20/21 have not got narrower. This is a fact which can’t be denied.
    1) hull width has not changed on these aircraft
    2) aisle width has not changed on these aircraft
    3) armrests may have become narrower, meaning wider seats, not narrower seats
    Whatever dodgy figures you must have, must be averages including some wide body aircraft.

  • wilcoxon

    Really? I’ve given you evidence posted by multiple sources (and those figures were based on CRTL and SeatGuru (from 2001 on) data). You say it is a “fact which can not be denied” but you have provided absolutely no sources for your statements (so it absolutely can be denied). For starters, B737 width absolutely changed between the 500 and 600 models (decrease from 12’4″ to 11’7″) so that is probably where the narrower seats came in. It’s surprisingly hard to find dimensions for the various models (for instance, the A320 family just says “max width 3.7m” but doesn’t say if it varies by model (A318/A319/A321) or in any other way).

    I posted the RANGES (not averages) for seat widths above in certain years by airline. Those figures include narrow and wide body aircraft. Given that in 1985, the range was 19-20″ and the current range on major US airlines is (mostly) 17-18.3″, please explain how it is possible that the seats are not narrower on narrow body aircraft.

    Leg room has declined by 3-6″ since the 1960s (I couldn’t find a reference to actual leg room comparing newer than that). Most articles and stats do give seat pitch so there are a lot fewer reference points for actual leg room (because seat construction does affect leg room which is not accounted for with pitch).

    I’m done discussing this with you until you provide actual sources and data for your assertions (which you have not done at all up to this point).

  • John McDonald

    you are completely wrong on all front, but you won’t seem to listen to common sense. Don’t think hull width has changed ever on the B737.
    You imply that seats are narrower, so where has the space gone ? Are you saying the aisles are wider ? Don’t think so.

  • Barry

    The country voted for him and so far as a consumer he hasn’t scared me. i am actually rather relieved to no longer have to worry about erosion of morality and religious rights.

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