Peter Phelps

"Independent senator Fatima Payman claims Prime Minister Anthony Albanese offered her additional staff in exchange for her vote during contentious Senate negotiations in the last term of parliament." Absolutely shameful stuff. smh.com.au/politics/federal/…

Republicans got blown out because of the tariffs. People will make a million other excuses, but it was, in fact, the tariffs.

Given how many Australians are interested in my take on yesterday's electoral tsunami, a rare long form post from me here, but the explanation is remarkably simple. Trump was elected in 2024 promising to cut taxes and make life affordable again after the disastrous Biden presidency. His campaign offered no ambiguity. The Republican platform pledged “large tax cuts for workers.” Trump promised to extend his 2017 tax cuts, eliminate taxes on tips, overtime and Social Security benefits, and cut taxes on American manufacturers. Voters who had endured years of inflation were promised relief. This was the centerpiece of his campaign, and exit polling confirmed it was a key reason for his victory. Initially, Republicans in Congress, under the adept leadership of Speaker Johnson, Steve Scalise and others, focused on this, delivering and expanding tax relief through the extension of the Tax Cuts and Jobs Act. However, completely undercutting these achievements, and against all economic and political logic, President Trump then embarked on a massive tax increase on American consumers, manufacturers and businesses. Make no mistake: tariffs are taxes imposed on Americans. Paid initially by American importers, they are passed on to consumers through higher prices or absorbed by businesses through lower profits. The administration insisted foreigners would foot the bill. The evidence proves this was a lie. A leading “intellectual” champion of this was Oren Cass, founder of American Compass, a former Romney staffer who styles himself an “economist”. The funding behind this supposedly conservative movement is particularly revealing. American Compass received approximately $2.4 million in identifiable grants from the radical left-wing Hewlett Foundation and $875,000 from the Omidyar Network Fund between 2020 and 2024. Hewlett has openly described its support for American Compass as an effort to move conservative thinking in a more “worker-friendly direction.” (See Michael Watson's extensive research on this.) Wealthy progressive foundations must have thought Christmas had come early, finding willing snake oil salesmen to help discredit free markets and replace them with state-directed economics. Cass and his band of “postliberals” were fawned over by the left-wing press, even as Republican poll numbers collapsed under the weight of their advice. When Trump announced his “Liberation Day” tariff fiasco, Cass hailed the direction as “exactly what we wanted to see.” But the economic consequences were predictable, and are now measurable. Research found that 92 percent of the 2025 tariff increase was passed through to prices paid by American importers. Federal Reserve economists estimated tariffs had raised core-goods consumer prices by 3.1 percent by February 2026. The Tax Foundation estimated the average household's tariff burden increased by roughly $1,000 in 2025. So much for making life affordable. Manufacturers were also hammered. Factories importing steel, machinery or components faced higher costs even when every finished product was assembled in America. A New York Fed survey found roughly 80 percent of affected goods-producing and retail firms passed on some tariff costs, while around 60 percent absorbed some themselves. The U.S. International Trade Commission found Trump's earlier steel and aluminum tariffs reduced output in downstream American industries by $3.5 billion in 2021. Other research found that higher input costs and foreign retaliation outweighed the employment benefits of protection in affected manufacturing industries. Worse was the contempt with which the administration and its allies answered consumers and workers struggling with the pain tariffs caused. Trump suggested children might have two dolls instead of 30, and that the two would cost more. Stephen Miller lectured parents about paying extra for an American-made doll rather than a cheaper Chinese alternative. J.D. Vance dismissed cheap imported toasters as an inadequate justification for sacrificing manufacturing jobs. Online protectionists informed Americans that they did not actually need a new phone, iPad or games console. People who had just elected a president to restore affordability were being told that wanting affordable goods was the problem. I have the pleasure of working for one of the sharpest political strategists in the US, and Grover has spent decades warning Republicans against precisely this betrayal of their political identity. George H. W. Bush broke his no-new-taxes pledge in 1990 and lost in 1992. The 1994 Contract with America helped reestablish Republicans as the party of lower taxes. But historically, it goes deeper. As Johan Norberg pointed out on Twitter, the McKinley tariff preceded the Republican rout of 1890, while Smoot-Hawley preceded the Democratic victories of 1930 and 1932. Higher taxes have political consequences, whatever label politicians put on them. And the timing of Trump's political collapse is particularly damning. His popularity began plummeting almost immediately after his April 2, 2025, Liberation Day announcement. By April 14, polling analyst G. Elliott Morris found that 13 polls conducted entirely after the announcement showed an average six-point deterioration in Trump's net approval. By May 8, the Cook Political Report recorded a nearly seven-point collapse since April 15, including almost eight points among independents, explicitly identifying tariffs as the principal driver. This was ten months before Trump attacked Iran. His political troubles were already well underway before the war, with its disastrous consequences, could possibly be blamed. By yesterday's midterms, the public verdict was unmistakable. Exit polling found 65 percent believed tariffs hurt the national economy, against a paltry 22 percent who thought they helped. Another 65 percent said Trump's policies had worsened the economy, versus 27 percent who thought they improved it. Three-quarters rated the economy poorly. The economy was voters' number-one issue. Of course, the debacle of attacking Iran, its disastrous effects, and concerns about corruption contributed to the Republican defeat. But they do not explain away the administration's central economic failure, which had begun a year earlier. Voters wanted lower prices, and Republicans gave them a government policy designed to raise them. Democrats took both houses of Congress and made extraordinary gains elsewhere. Yet voters also supported conservative tax limits by whopping margins in states such as North Carolina, where nearly 62 percent backed a constitutional income-tax cap while electing a Democratic senator. Even in California, a proposed billionaire wealth tax was trailing badly. The US midterms were not a mandate for socialism. They were a rejection of a Republican administration that had abandoned one of its most recognizable commitments. Trump won promising tax cuts. He then delivered tariff-driven tax increases, defended by grifters and charlatans who treated the cost of living as a trivial concern, and mocked those of us who spoke out against them. Well, the public paid the price, and Republicans paid at the ballot box. Before the midterms, Trump repeatedly urged everyone to vote as if he were on the ballot. Well, they did, and Grover's rule is as true today as it always was: Americans don't vote for Republicans who hike their taxes. If Republicans want to win again in 2028, they need to reject the failed policies of big government, embrace a positive vision rooted in traditional conservatism, optimism and free markets, and consign the peddlers of the cancerous high-tax agenda that sought to work its way into the Republican Party to the dustbin of history, where they belong.