Scant economic joy in mudville
The American people have been ordered to celebrate the 10-year anniversary of the economic recovery. Note the lack of balloons, however, and that the marching bands have their feet up.
President Donald Trump, of course, is a brass section unto himself. He’s been trumpeting the “Trump economy,” even though nearly eight of those 10 years were under Barack Obama.
Consider this recent presidential tweet: “More people are working today in the United States, 158,000,000, than at any time in our Country’s history. That is a Big Deal!”
That is a good thing, but a big deal? No. First off, there are more people in the U.S. than ever before. More to the point, only 20,000 nonfarm payrolls were added last month. That prompted this sober headline from CNBC: “Job creation grinds to a near-halt in February.”
Stock investors have enjoyed a very nice run (as they did in the Obama years). But down in the trenches of blue-collar America, things aren’t nearly as hot. Factory workers are finding plenty of jobs, and their wages are creeping up. But solidly middle-class paychecks, once the pride of our manufacturing economy, have not returned.
The happy message clashes with reports that a record number of Americans died in 2017 from alcohol, drugs and suicide. These largely self-inflicted tragedies have been called “deaths of despair.”
Of course, it’s not only about money. The loss of strong families has left many troubled people bereft of help, love and solace when hopelessness takes over.
But add in threats to the government benefits important to working Americans, and you have major-league anxiety. Of special concern is the Affordable Care Act, which the Trump administration is doing its best to dismantle. For many families facing health crises, medical coverage is all that stands between making do and destitution.
Candidate Trump played the self-made billionaire, promising to do for struggling Americans what he did for himself. (Actually, his father gave him $413 million in today’s dollars.) Upon being elected, he continued to do for himself, while delivering daily pep talks to working folk.
His tax cut sent nearly all the benefits to the top incomes. The savings for the lower incomes were meager and designed to expire shortly.
It can’t be said that the tax cuts did nothing to goose the larger economy. They did, but that magic is about to expire. And by the way, it was all done with borrowed money.
The trade war spectacle has taken a bite out of the economy’s animal spirits. The marquee event is the battle with China. One hopes that Trump will succeed in stopping China’s very unfair trading practices: illegal government subsidies, biased regulations and theft of intellectual property.
But his announcement that China may guarantee purchases of U.S. soybeans sets off a long yawn. The Chinese were importing enormous shiploads of soybeans before Trump launched the trade war.
As a commodity trader told Bloomberg News, “The markets are a little tired of some of the ups and downs and the eight or 12-hour news cycle of tweets.” Oh, yes, the trade deficit — a Trumpian obsession — is now the highest in 10 years.
Trump routinely deafened Twitter with his promise of 4 percent growth in the economy. The gross domestic product hasn’t even passed 3 percent for any year. Better times, meanwhile, are not yet to come.
Economists see the economy softening, and the manufacturing sector seems to know it. “SC businesses brace for eventual recession,” says a pessimistic headline in The (Charleston, South Carolina) Post and Courier.
When the downturn does come — and the exploding deficits start biting — Republicans will almost surely call for cuts in benefits that working people rely on. Mudville, be fair warned.
Follow Froma Harrop on Twitter @FromaHarrop.