Welcome to the Cato podcast.

I'm Ryan Bourne, Cato's R. Evan Scharf Chair for the Public Understanding of Economics.

2026 has been dubbed the Year of Affordability, and it's not hard to see why.

Consumer prices have jumped 28% in just the past six years.

And last week, the Iran-war-driven gas price spike gave us the highest monthly inflation reading since 2022.

Grocery and electricity prices are up more than 30% since 2020,

and borrowing costs on mortgages,

car loans and credit cards have jumped as well. Now increasingly, the public sees the price level,

that's everything costing more as a result of inflation, as synonymous with the bad economy.

But one of the central arguments of our new Cato Handbook on Affordability released today

is that Washington keeps treating this affordability discontent as one issue when really it isn't.

What people call an affordability crisis is really a bundle of different frustrations.

Sticker shock from higher prices after that inflation surge, expensive credit,

ways that Donald Trump era policies like tariffs and the war are pushing up certain prices in particular,

and structural price pain from long-standing dysfunction in markets like housing, childcare, healthcare and energy.

These distinctions matter because different problems require different answers.

If the problem is economy-wide inflation, that's money losing its purchasing power,

that's a macroeconomic issue.

If the problem is the price of essentials arising faster than everything else,

then that's often a supply and competition problem,

typically underpinned by some bad public policy.

Yet instead of really addressing this rigorously, politicians here in Washington,

...