Part Three – Strong Economy Under Trump?

Economy Section

The data paints a strong economy with the lowest unemployment rates in memory, but it is not all it’s cracked up to be.  Every month with the jobs reports, we are not seeing the trending improvements in wages or participation rates.  The basic problem still persists, that of not nearly enough jobs that pay a livable wage.  There are multiple reasons for this, including global competition, outsourcing, lopsided trade deals, automation/robotics, skills mismatch, education & training deficiencies, consolidation in many industry sectors, multinational conglomerates, failing to raise the federal minimum wage, declining membership/influence of unions, escalating college costs, more of a high-tech/fast-changing economy, foreign nations built new modern factories years following the devastation of WWII, & various other contributing factors. And last but not least, the lack of ideas, determination, commitment & bipartisanship among our governing leadership, have made politicians derelict in their duties for fixing this continuing entrenched issue.

Taking just one aspect of improvements that could/should be made to help the American economy, let’s look at apprenticeships.  Germany has a far more robust program for apprenticeships which is used very successfully, a private-public partnership where companies pick up the bulk of the tab, yet is proving to be a very valuable & cost-effective investment.  It’s a win-win-win for companies, government & employees where workers are directly trained for better-paying jobs that are in demand.  Overall the trouble of roughly half the American population struggling/living paycheck-to-paycheck is a BIG problem requiring BIG remedies.  Our society just doesn’t do a very good job of lifting up those who are down & out.  And I’m not referring to handouts, but rather providing real opportunities to help them help themselves.  It will take putting lots of thought behind a comprehensive approach with various initiatives working together in concert, so the pendulum can start to turn in favor of the working class, entrepreneurs & small business.  Our leadership has been doing basically nothing to address this for far too long, with the people doing a lousy job holding them accountable.  It manifested itself in the energy & anger we saw in the presidential campaigns of Trump & Bernie, except we need to do a much better job of finding competent leaders with plausible policies, without being taken in by grandiose promises lacking real solutions.

The economy under Trump offers strong enough data to provide him some talking points to brag about, but there isn’t much that was done in 2017 to have made much of a positive difference.  Some decision makers in the business world were revved up over deregulations &/or tax cuts, making decisions to expand/invest that contributed to GDP & job creation based on that feel-good optimism.  But sustained, long-term gains would require making fundamental changes correcting the core problems.  We continue to see trends where far too many workers are falling through the cracks.  From the newsfeeds, see a link taking us to these cogent thoughts from Warren Buffett, where his statements include views on the U.S. having one of the highest levels of income inequality in the world:

The wealth of the top 400 richest Americans has increased 29-fold since 1982, from $93 billion to $2.7 trillion, according to the Forbes 400. Meanwhile, the wealth of “many millions of hardworking citizens remained stuck on an economic treadmill,” Buffett says. The billionaire investor and chairman of Berkshire Hathaway (BRK)  wrote an opinion piece in Time magazine explaining what’s wrong with America’s economic system. “During this period, the tsunami of wealth didn’t trickle down,” he wrote. “It surged upward.” The richest 0.1% of Americans own as much as the entire bottom 90%, and the wealthiest 10% own nearly 90% of stocks, according to data from DB Global Markets Research and the World Wealth and Income Database.

 

© Provided by Dow Jones & Company, Inc.

 

“The market system, however, has also left many people hopelessly behind, particularly as it has become ever more specialized,” Buffett wrote in the Time magazine piece, noting how technology has made some people enormously wealthy, while putting others out of jobs. 

 

‘Between the first computation in 1982 and today, the wealth of the 400 increased 29-fold — from $93 billion to $2.7 trillion — while many millions of hardworking citizens remained stuck on an economic treadmill. During this period, the tsunami of wealth didn’t trickle down. It surged upward.’ — Warren Buffett

From the next link new-year-same-college-graduate-skills-gap, what’s even more discouraging about this excerpt is non-graduates or high-school graduates face an even far more difficult hurdle in finding a bright future than college graduates:

Even though the overall U.S. job market is growing at a fair pace, we still see persistent trends of millennials struggling to find a job after college; living with their parents far more and for far longer; and generally being more risk-averse than previous generations. Two disconcerting statistics dubbed by A.T. Kearney the “millennial double whammy” — steadily increasing student loan debt and stagnant wage growth — paint the concerning picture of the present state of the macroeconomic impact of higher education.

The article titled future-work-independent-contractors-alternative-work-arrangements, the so-called “gig economy,” is a rather long report featuring the main theme in these 4 paragraphs, seeing yet another disturbing trend where so many in the working class continue to lose influence, pay & benefits:

Around Washington, politicians often talk about this shift in terms of the so-called gig economy. But those startling numbers have little to do with the rise of Uber, TaskRabbit and other “disruptive” new-economy startups. Such firms actually make up a small share of the contingent workforce. The shift that came for Borland is part of something much deeper and longer, touching everything from janitors and housekeepers to lawyers and professors.

 

The repercussions go far beyond the wages and hours of individuals. In America, more than any other developed country, jobs are the basis for a whole suite of social guarantees meant to ensure a stable life. Workplace protections like the minimum wage and overtime, as well as key benefits like health insurance and pensions, are built on the basic assumption of a full-time job with an employer. As that relationship crumbles, millions of hardworking Americans find themselves ejected from that implicit pact. For many employees, their new status as “independent contractor” gives them no guarantee of earning the minimum wage or health insurance. For Borland, a new full-time job left her in the same chair but without a livable income.

 

In Washington, especially on Capitol Hill, there’s not much talk about this shift in the labor market, much less movement toward solutions. Lawmakers attend conference after conference on the “Future of Work” at which Republicans praise new companies like Uber and TaskRabbit for giving workers more flexibility in their jobs, and Democrats argue that those companies are simply finding new ways to skirt federal labor law. They all warn about automation and worry that robots could replace humans in the workplace. But there’s actually not much evidence that the future of work is going to be jobless. Instead, it’s likely to look like a new labor market in which millions of Americans have lost their job security and most of the benefits that accompanied work in the 20th century, with nothing to replace them.

 

The scale of the change, for many economists, clearly suggests that it’s time for Congress to rethink the social contract around work, updating it for the new relationship between employers and workers in the 21st century. Letting it slide further risks hamstringing the country with an outdated system that hurts both middle-class workers and, experts fear, the economy that depends on them. The shift is already well underway. What’s far less clear is whether Washington is paying any attention.

And the recently passed tax cuts fall markedly short in addressing our challenges, which is why it’s so unpopular with the public & could cause more problems than it solves like higher deficits, as this excerpt describes from the link even-republicans-want-a-fairer-tax-deal-for-america:

The American Republican party is about to pass a massive tax bill that almost no one — including their own voters — really wants. While many people like the idea of paying lower taxes, remarkably few favor the kind of tax bill proposed. We do not yet know the exact shape of the final bill, but three things are certain. Corporations and wealthy individuals will get a big tax cut. Middle-class Americans will get a small tax cut. And the government will borrow approximately US$1,500,000,000,000 (yes, that’s what 1.5 trillion looks like) to pay for those cuts.

And thanks to none other than Fox News for providing this chart, showing Trump’s first year in office saw the slowest average monthly jobs gained of any of the previous 6 years:   

Then inside the link donald-trump-has-not-made-the-economy-great-again, we see this little blurb on wage growth:

Meanwhile, the tightening labor market still isn’t leading to much faster wage growth. Average hourly earnings for all workers rose 2.5 percent in 2017, compared to almost 2.9 percent in 2016. Once you take inflation (last recorded for November) into account, average pay has barely jumped at all.

In the link toward the bottom on trump-tweets-turning-conservative-liberal, these 2 paragraphs are just part of the story, being symbolic of the reasons why so many of us pragmatic, center-right conservatives have become so horrified by the extremist, far-right, tribalistic, nihilistic, counterproductive, disingenuous, unprincipled direction the GOP has taken.  For now it’s far more constructive, ethical & intellectually consistent to be supportive of the Dems or independent candidates, at least for as long as it might take to break this moral-rot fever that Trump & the echo have made today’s conservatism into:

The Republican Party, moreover, is deeply compromised. It can no longer claim to be the party of family values because Trump’s immigration policies are ripping families apart. It can no longer claim to be the party of fiscal responsibility because the GOP’s tax overhaul adds trillions to the country’s $20 trillion in debt. It can no longer claim to be the party of state’s rights because that law punishes blue states for voting Democratic. It can’t be the party of constitutional conservatism because the GOP enables Trump’s assault on checks and balances, the Bill of Rights and the rule of law.

 

All of this has led conservative intellectuals to rethink their past positions, among them Jennifer Rubin of the Washington Post, Max Boot of Foreign Policy and David Frum of The Atlantic. Their rethinking of conservatism is a microcosmic form of a macrocosmic pattern in which conservatism’s sphere of influence is shrinking. As Frum put it, “The project of defending [Trump] against his coming political travails—or at least of assailing those who doubt and oppose him—is already changing what it means to be a conservative.”

So overall the economy under Trump looks like an extension of the Obama economy, plodding along looking kind of blah.  Beyond various economic issues, the links also address immigration & DACA.  Trump also wants $18B as part of the deal for the wall, which he kept promising Mexico would pay for it.  There are also articles about disbanding the voter fraud commission sham, & the last group we have to wonder whether either party can really do any good.

This protest march was appropriate & hilarious

Being fans for the past 2 decades watching the most incompetent franchise in the history of sports play out, we can only hope the parade serves as a wake-up call to ownership & management that we’ve had enough of this debacle.  The NFL is actually designed for parity & bad teams becoming contenders in short order, but the Clowns (Cleveland Browns) never got that memo.  The PSL’s I bought 2 decades ago to help fund the new stadium are now worthless, since fans have grown tired of watching this running joke & don’t care about going to the games to watch yet another loss.  In those 2 decades since the stadium was built, the Clowns have played in one playoff game (15 years ago) & have no playoff wins.  The QB with the most wins in the history of our stadium isn’t even a Browns QB, but a Steelers QB who plays here only once a year.  We actually did win a game (yes, just one win Christmas eve 2016) in our last 35 games played.

Our team has been through 28 different starting QB’s since 1999 & we’re still looking (while also going through several owners, GM’s & coaches).  In the last 2 years after trading out of the spots where other teams drafted franchise QB’s Carson Wentz & Deshaun Watson, this year the Clowns have the #1 & #4 picks in the draft.  Rosen & Darnold are projected to be the top 2 picks, with possibly 4 or 5 QB’s going in the top 10.  As fans we’re all asking the obvious question, how are they going to screw it up this time?  The Clowns’ drafting this past decade has been demonstrably the worst in NFL history & we have no real competition for that honor.  I even saw a video of a scientific experiment where 3 barnyard chickens were placed in a box to pick out pieces of paper with the names of players chosen in the first round, & all 3 animals “with brains the size of a pea” chose better players than picked by Browns’ management.  We were so excited when the team started fresh in 1999 with new ownership, figuring nothing could possibly be worse than Art Modell.  What we’ve gotten is the sports world version of an unmitigated disaster.

Regular Season                Playoffs

2017        0        16            .000       HOORAY!!!

And life is worth living again….

I was reminded about these lyrics from a song when I read a similar line from the Fire & Fury book attributed to Trump, but the comment from our prez if true is simply reprehensible.  If he really did say that, it’s hard to know the context, for he may have been saying it in jest or actually recollecting true actions he pursued as a vice.  From what we know of Trump’s background & moral values, it’s not unreasonable to believe he would commit such deplorable sins while defiling the trust of friends.  Remember, it’s always all about him & he holds no remorse about using others in horrible ways for his own gratification.  Our prez is certainly one in a million.  I kind of feel bad even associating such a beautiful/sentimental love song with such an atrocious comment as this….

(Click above photo for video)