To be fair, Lombardo didn’t run for governor as a champion of broadly shared prosperity fighting to tear down systemic economic barriers that make life harder for people than it needs to be. He ran as a cop. (Photo: Jeniffer Solis/Nevada Current)
Nevada Republican Gov. Joe Lombardo Wednesday shared some opinions on the economy, via his reelection campaign account on Elon Musk’s website.
“Not only will President Trump bring down the rising costs of housing, groceries and gas…”
Yeah, gonna stop you right there, governor.
Lombardo’s congratulatory mash note to the president-elect, while ample in obeisance, was lacking in clarity.
When the governor says Trump will “bring down the rising costs” of things, does Lombardo mean costs are going to be lower than what people are paying today?
Because next year, when Lombardo’s already-underway reelection effort is officially in full swing, the cost of the vast majority of things will almost certainly not be lower than they are now. Lombardo might even be asked to explain why his trust in Trump was – gasp! – misplaced.
Or, alternatively, maybe when Lombardo says “bring down the rising costs” he’s referring to curbing inflation, that is, the rate at which costs are rising.
But that’d be redundant. Disinflation has already occurred to a remarkable degree, the inflation rate currently being within a tenth of a percentage point of the Fed’s 2% target.
And Trump’s policies, if implemented as promised during the campaign, will reignite inflation.
To be fair (part 1), economic policy is not Lombardo’s forte.
Lombardo didn’t run for governor as a champion of broadly shared prosperity fighting to tear down systemic economic barriers that make life harder for people than it needs to be.
The former sheriff ran for governor billing himself as a tough-as-nails honest-as-the-day-is-long lawman. (And yet a docile Lombardo Wednesday gushed that he is “proud to support” a man with 34 felony convictions and not an ounce of remorse.)
The most prominent and arguably only significant state-level initiative that was economy-related (using that phrase generously) proposed by Lombardo as governor has been a gasoline tax holiday in 2023.
People who study such things tend to view gas tax holidays as daft public policy that benefits everyone else in the gasoline market first and customers last and least, while diverting public funding from infrastructure and other public spending needs.
Lombardo’s gas tax folly would have cost the state $250 million, and even under the most generous assumptions, would have saved the average Nevada driver of a vehicle powered by a combustion engine less than $10 a month. It wasn’t a serious proposal designed to provide relief to striving households. It was a political gimmick. Fortunately, it never went anywhere.
Lombardo’s other big economic idea – yes, there’s just the one – isn’t even state-level policy over which he might conceivably have some influence.
Rather, it’s an initiative by which Lombardo repeatedly issues press releases masquerading as letters asking the federal government to put federal land in the hands of Nevada’s unchecked urban sprawl industry (of which Lombardo’s wife is a member in good standing).
The ridiculous premise – ridiculously echoed by some Nevada congressional Democrats, and parroted by Trump – is that giving land to the growth industry on the cheap will somehow, some way, some day lead to the development of more affordable housing.
To be fair (part 2), there’s nothing unique about Nevada governors held captive to a faith-based conviction that government’s highest priority is to help business, accompanied by assertions that prosperity will ripple through the economy and reach working households.
Nevada governors and legislators of both parties have tried this time and again.
The rippling part never really works.
Yes, Nevada governors occasionally exhibit some business chops – or bowing-to-business chops, to be precise.
But economic chops? Not so much.
So inasmuch as Lombardo deserves a break, it’s because his conventional dullness in the field is not the exception, but the norm.
Drill baby … oh, wait
Trump has some economic policies. Or economic sayings, anyway.
For instance, Trump contends the surefire way he’ll lower consumer prices across the board is by “unleashing” the oil industry. He contends that “drill drill drill” will slash the price of energy in half within 12 months, and all the other prices will follow.
As many presidents have learned, to their dismay as well as that of their constituents, presidents can’t and don’t control energy prices.
But let’s say Trump, purported possessor of magical powers or whatever, did cut energy prices in half within a year. How would that work?
Lately the price of oil has been around $72 a barrel.
The low-ball break-even price for oil production from existing wells in already-developed fields is $30.
But whether by fracking or by more traditional production methods, the break-even per-barrel price for drilling new wells is in the $60’s.
If Trump halves the price of energy from what it is now, oil would be selling for $36 a barrel.
Neither oil company executives nor their investors want anything to do with drilling news wells if the drilling cost is higher than the selling price.
Unless Trump is planning on nationalizing the petroleum industry and having government set gas prices in a command and control economy, his grand plan to bring down prices by “drill drill drill” is unworkable.
When you wish upon a star…
Of course the featured component of Trump’s economic agenda, or sayings, is imposing massive tariffs – taxes on goods imported to the U.S. – which will raise prices for U.S. consumers and businesses alike.
And the centerpiece promise of Trump’s campaign is mass deportation. That would not only inflict heartbreaking pain and suffering on Nevada working families. It would also have devastating effects on the economy and – you guessed it – raise prices.
When Lombardo ran for governor in 2022, the star he hitched his wagon to was the badge on his uniform.
As he seeks reelection, that star will be Trump. Whether Lombardo likes it or not.
Lombardo got lucky – Trump wasn’t president the first time he ran for governor, and Lombardo tried not to get too much Trump on him. Assisted by his opponent inexplicably failing to tie Lombardo to Trump, Lombardo managed to keep Trump more or less at arm’s length.
Lombardo won’t be allowed that luxury in his reelection bid.
Hopefully, Trump’s tariff and deportation plans won’t be implemented, or at least not on anywhere near the scale he described during the campaign, and it’ll turn out his campaign promises weren’t serious policy proposals, just rally blather, like the Arnold Palmer thing.
The more likely scenario, sadly, is that Nevadans, who in the current century have arguably taken more and more severe economic hits than the residents of any other state, are going to get hammered hard economically yet again.
And not that it will matter much to the vast majority of Nevadans one way or the other – bigger fish to fry, etc. – but if past performance is any indication of future results, Lombardo will still be “proud to support” Trump.
A couple passages in this column originally appeared in the Daily Current newsletter, which is free and which you can subscribe to here.