It’s (still) the economy, stupid

Good morning. It is Monday, November 2, 2020. The morning before the most awaited election day since…2008? Which seems weird to say now that record numbers of Americans, including Julie, me, our kids and so many of my family and friends, have already cast our ballots. Some of us, weeks ago. Our anticipation is no longer set for the actual voting, but rather, the results.

And, although many of you reading this have voted as well, I still find it necessary to write about the issues in this election as I see them.

And, knowing that many of you are working from home, if you’re working, maybe you can find 10 minutes to spend with your coffee reading a little of what I have to say before logging on to work. After all, you’ve got all that time back from commuting…you lucky dogs.

I want to follow up my “State of Our Union” post with a some focus on the economy. Why? Because polls show it is the one issue that folks, especially Republicans, give Trump his highest favorable marks. When asked, it is often a Trump supporter’s sole reason for voting for Trump, again. Even if they dislike his character, his lack of empathy, sincerity, handling of the virus, divisiveness, etc, supporters still believe he has delivered on the economy, therefore, done well by them. They take his word on that mark. They hear him claim that he’s a great businessman and a dealmaking savant, and they believe that they, and the country, are financially better off in 2020 than in 2016. And, until COVID19, they weren’t wrong in that sense because the economy has been steadily improving…SINCE 2009! The wrong is in Trump’s claim that HE took a disastrous economy and made it into the “greatest economy ever.”

“The United States is in the midst of an economic boom the likes of which the world has never seen before,” according to The Washington Post. Not so fast my friend. It is not true.

Forbes points out that “Trump continually says that, “the U.S. is experiencing the best economy ever.” This is obvious gaslighting since the new results show that President Trump’s best year of job growth was 2.314 million in 2018 (the first year of the tax cut) but it falls short of any of Obama’s last three years. His boasts also don’t stand up when you peel the onion on GDP growth and realize that the Federal deficits during his Presidency will exceed any that were not impacted by a recession.”

Based on the real measurements of our economy, at best, give Trump credit for not blowing the growth track started under Barack Obama and Joe Biden. He certainly doesn’t deserve his own self-praise that he created “the greatest economy ever.” He, once again, was ‘born on third and thought he hit a triple.’

Somehow, Republicans over the last half century have been able to continue to push a false narrative that they know better what is best for the country’s economy and jobs. And their policies to accomplish this are: 

  • Cut taxes…especially for the wealthiest of Americans and corporations.
  • Let the free market rule…never mind that the capitalists constantly choose making a dollar over our climate, our health, our healthcare. 
  • Cut (and now gut) federal business regulations put into place to protect our health, healthcare, water, air, public lands, jobs, pay and as small businesses. 
  • Reduce the size of a wasteful government…but never doing so while in office.
  • And, smoke screen it all by branding Democrats as “tax and spend” legislators who want big, wasteful government and taxpayer expense.

Curious, I have been reviewing the actual results of the GOP approach and branding to examine if that strategy works for most of Americans. And, if the GOP does have real ownership and bragging rights about the effects their presidents and legislators had on the economy. And, conversely, if the Democratic platform of paying attention to the needs of Americans from healthcare to education to equal rights to supporting small business costs hardworking people their salaries. 

Looking back in time, Democrats actually have done very good things for the economy while doing well for and by the people. It’s a GOP myth that conservative politicians actually put actions into place that indeed stimulate the economy, reduce the budget, the budget deficit and the nation’s public debt. It’s a platform to running for re-election. It sounds good to say, “I’m about cutting taxes and governmental over-reach and cutting the deficit.” But, it has proven very difficult to do. Reagan passed the sweeping tax reform that greatly lowered the revenue while he added to the military budget, thereby blowing up the deficit.

Look at the chart below marking by years, dating back to 1990, the federal deficit and surplus. Red from 1990-1993 is GHW, blue from 1994-2001, is Clinton and the other red is GW years.

The economic statistics dating back to pre Clinton, Clinton, GW Bush, Obama and, now, Trump reveals the opposite proves true. In fact, the Clinton years saw the growth of a robust economic expansion after real financial reform and strategies to reign in the national deficit, improve job growth, lower finance rates and taxes for workers. Even with Newt and gang trying to hold Clinton back, his plan ultimately produced successful efforts to restore the economy drained by the 12 years of GOP presidencies: Reagan/Bush, and Bush/Quayle. Under the GOP administrations, the country’s budget deficit quadrupled. Reagan cut taxes and then funded the military to the degree that began a major budget deficit and then a recession. 

Clinton put his plan into operation and cut it the deficit in half and, in his last years in office, oversaw a surplus of revenue. That surplus made the country’s balance sheet healthier and provided dollars to improve the lives of Americans. 

Post Clinton, GW Bush quickly reversed that course as his administration and Congress passed a historic tax cut for the wealthiest Americans, dramatically cutting back the revenue and increasing the deficit. That and launching the war in the Middle East played a role in creating the Great Recession. 

So, which party takes better care of your money, your healthcare and the health of your country? But wait, there’s more…

Let’s talk Trade Wars and Tariffs

Trump Isn’t Delivering On Reducing The Trade Deficit – Forbes –   President Trump campaigned on reducing if not eliminating the U.S. trade deficit. He has failed to deliver on this as the trade deficits in 2018, 2019 and based on the current pace for 2020 they will be the largest since 2008, before President Obama took office.

While trade does negatively impact sectors of the economy and the jobs associated with them, overall it tends to be a net benefit to the economy. Consumers receive lower prices and/or a wider range of goods and companies gain access to additional markets. Unfortunately, Trump’s lack of understanding of trade’s benefits has overwhelmed his desire to see it reduced, if not eliminated. [Forbes}

Bottomline on the Trump Economy

The bottom line is that, the three years pre-COVID of the Trump economy, at best, continued the run of the Obama/Biden economy.  Trump’s job growth is actually less, not more, than his predecessor’s. And, his tough talk “deal making” that begot a highly destructive trade war with China devastating American farmers to bourbon distillers, has given us the largest trade deficits since 2008. And, the new deal with China is, according to Forbes, “woefully behind on where it should be. While the coronavirus does have a lot to do with this, even before it hit exports to China lagged and had goals that were going to be very hard to achieve.”

And, do not forget the billions of dollars Trump has had pour into subsidizing the farming industry due to his trade war. He claims China is paying for that. It isn’t. We are. And Trump’s relief to farmers came at election time. Hmmm. What timing.

I ask you, how is that building a successful economy, yet alone the “most robust ever”? How is that, in and of itself, worth voting for? It isn’t.

No one in our time has so unashamedly made the most outrageous claims as to his own success as President Trump. His modus operandi is to slap his brand “Trump” on something, praise it over and over and over again until he believes it, and then, until his followers believe it. He has just mastered the art, not of the deal, but the art of gaslighting his backers.

And just a footnote because I found this fascinating as I have been digging deeper into various key issues…remember Trump’s campaigning on how terrible NAFTA, the international trade agreement between the U.S., Canada and Mexico, and how devastating it has been for the U.S. 

Here’s a quote from an interview in which Trump claims, “NAFTA was signed by Bill Clinton. NAFTA has been a catastrophe, an absolute catastrophe for our country.”

Trump blamed President Clinton for it over and over and over again. He used it to vilify the Democrats for our loss of jobs to other countries and claimed he would unravel and put a stop to it.

Well, get ready…NAFTA was sponsored and signed by President George H. W. Bush and more Republicans voted for it than did Democrats. You want to talk about “fake news,” how about “fake history.” He either doesn’t know the history of the treaty…or…he does know and changed the narrative to suit the picture he wants to paint. In other words, he lied.

While true that Clinton supported NAFTA and oversaw the ratification of the treaty during his administration, it was a Republican sponsored effort from the beginning. Clinton didn’t bring it up for ratification until more protections for workers were added into the treaty.

And, what has President Trump really done to “fix” what he calls a “catastrophe”? Put a new name on it and tout it as the greatest new trade deal ever.

As the New York Times put it: “However much he wants to dismantle it, Mr. Trump is still operating within the framework that Mr. Bush helped establish. While he disparaged NAFTA, Mr. Trump ultimately accepted Mr. Bush’s fundamental concept of knitting together the three great nations of North America in a single, integrated trade bloc. The alliances that Mr. Bush built and bolstered remain in place, however frayed. And a host of civil rights, environmental and other Bush-era laws still govern America.”  

So, I realize that this is simplistic, but our president is pretty simplistic.

His economic policies haven’t done what he claimed in his campaigning for office and, now, for re-election. And, what he claimed as the condition of the country wasn’t true to begin with in 2015/2016 when he was running. He inherited seven years of economic growth that brought us out of the Great Recession. He made the Obama economy into the boogeyman, claiming, “Obama was a complete failure.” And, Trump’s economy has yet to do better. 

If you want to go deeper, read this article written by economist and former Duke Professor John Komlos in which he says that Reaganomics started laying the planks in the economy that led to Donald Trump. So, you could say that Ronald led to Donald. 

You could say that Ronald led to Donald.

He (Komlos) cited a three-decade process that started with Reaganomics and its tax cuts, which he says favored the rich by increasing their wealth and political clout. In tax year 1985, for example, he said the top 1 percent gained a $350,000 windfall while the typical household received $3,500, and the poor received a couple of hundred dollars (all in today’s dollars).

Reaganomics also hurt the middle class by crushing unions, he says.

Continuing the argument of whether Reaganomics helped or hurt, read this analysis from archives of NYT printed in 1983, three years into Reagan’s first term. 

In the beginning of his term, Mr. Reagan promised year after year of strong and healthy growth. Instead, the nation has suffered through the longest recession and the highest levels of unemployment since the Great Depression. Early in 1981, the White House figured it could add 13 million jobs to the economy by 1986; the record shows that 1 million jobs were added in 1981 and 900,000 lost in 1982, a net gain of 100,000.

The article goes on to describe how the effects of the new policies in tax breaks started a recession.

“The bitter recession, the most striking failure of Reaganomics, can be laid to the collision of the Administration’s policy of trying to revive the economy through tax cuts with the Federal Reserve Board’s attempts to choke off inflation through credit restraints. As the Fed tightened the screws and interest rates soared to postwar highs, the economy ground to a near halt.”

Have you had enough? I hope so. I certainly have. Let’s give the Democrats another shot to grow our country’s economy and the health of our people.

I’m working on my next posts…COVID19 and Climate Crisis. I know that you can’t wait. 

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