Rural Economies & Old Manufacturing Towns Need Bold New Ideas…The reverberations keep resonating around here in northeast Ohio over the announced closing of the GM Lordstown plant.  As devastating as this is, taking a step back we can see it was a business decision, as the Chevy Cruze & compact cars in general weren’t selling well.  There are a few articles about that news further below.  We may not be able to save these factory jobs, but private-public interests should be obligated to team up & be far more proactive in finding real solutions for reviving the economic vitality of these struggling factory towns & rural economies.  We need to save whatever factory jobs we can, but we can’t go back to the 1950’s as Trump seems inclined to do.  Compared to that manufacturing heyday, most of the auto, steel & coal jobs will never come back.  As a nation we need a much more concerted effort to provide the proper training for the jobs of today & tomorrow, particularly for those not predisposed towards college.  And we need to invent more productive/modern jobs.

Strong Economy?

I keep saying it ain’t so great.  Low unemployment with decent GDP & job growth numbers are not the be-all & end-all of a good economy.  In fact, with our unique circumstances of the modern-day global economy with workers still getting shortchanged & wage/wealth gaps escalating, those other strong metrics can actually be misleading.  With Trump & the GOP touting this so-called booming economy for political purposes, they tend to be resting on their laurels while not engaging in the big/creative thinking it’s really going to take for making our economy great again.  There are just way too many ongoing structural problems with this current economy, plus it’s being artificially propped up with deficit spending.  The whole article from the-american-dream-in-crisis-a-nation-held-hostage-to-debt is seen here, a frightening portrayal of how we’re mortgaging our future, leaving a huge trail of red ink for our children & grandchildren:

I often ask myself whether we are doing enough to be good stewards for America’s future. How will future generations be impacted by the actions that our nation’s leaders and its citizens are taking today? The Congressional Budget Office (CBO) report on the Budget and Economic Outlook for 2018 makes it clear that we are not doing enough. In fact, we are failing. We are leaving our children and grandchildren a financial burden that may soon become untenable. The CBO’s glimpse of America’s fiscal future is dismal: a national debt that balloons to $29 trillion by 2028, and that exceeds our nation’s gross domestic product (GDP) over the same period. The CBO also projects a return to trillion-dollar annual budgeted deficits as the new normal. When one compares future annual defense spending with annual interest payments over the next 10 years, America’s future gets eroded even further. Given the recent actions of Congress, and the years of prior inaction in correcting our nation’s fiscal path, the U.S. government’s annual interest payment will supersede annual defense spending in only five years. By 2023, annual interest costs on the U.S. national debt will spike to $702 billion, while annual defense spending will reach $679 billion. To put that into perspective, in the 2017 fiscal year, the U.S. government paid $263 billion in interest payments and spent $590 billion in defense.

 

Of course, there is a stark difference between interest and defense costs. Interest payments do not strengthen our national security; they do not pay our soldiers, and they do not lay the groundwork for the military technology of the future. In fact, interest costs indirectly do the opposite. The increase in interest costs for federal spending over the next decade could dramatically squeeze the funds that our national government has available for discretionary spending on important government programs. The key point here is that discretionary spending is already squeezed to less than a third of the budget by spending on mandatory entitlement programs. And, it is defense spending that accounts for more than half of discretionary spending. Since interest also acts as a mandatory expense and must be paid currently, unless we begin to reform entitlement spending or increase taxes over the next 10 years, discretionary spending will increasingly become a hostage to rising interest costs on the national debt, including defense spending and the funds that we need for homeland security.

 

On our current path, one can almost guarantee that sometime in the next 15 years, the U.S. government will need to “write a check” for $1 trillion solely for the annual interest payment on our national debt. What will that mean for Americans who will have to face that reality, and for future leaders who will be tasked with solving such a burdensome financial reckoning? At its core, the issues facing Americans go beyond the growing national debt and how our nation can contain interest costs for the near future. The public needs to recognize that the accumulated annual budget deficits of our federal government, resulting from the lack of will to balance our revenues and expenses, represent a claim on the future standard of living of the American people. Future generations face the unfair prospect of being chained to the repayment of the public debt, plus interest, racked up by their predecessors. For our children and grandchildren, that may mean the end of the American dream — a dream of economic opportunity, homeownership, job security, and family well-being. If we fail them, history surely will not judge us kindly.

Health Care & Millennials 

Let’s see, on the health front we find Americans’ life expectancies are declining (thanks in large part to inequality: life-expectancy-us-income-inequality & opioids), & the number of uninsured kids is rising (thanks in large part to Trump’s assault on Obamacare): lower-life-expectancy-health-care-system.  As for certain industries being pared back or destroyed based on millennials’ spending patterns, much of that has to do with those young people not having the money (millennials-debt-economy-spending-federal-reserve), as seen in this posting to begin the article from millennials-kill-industries-because-poor-fed-report:

Millennials have been blamed for killing plenty of industries. But according to a Federal Reserve study, it’s not their fault. “Millennials, long presumed to have less interest in the nonstop consumption of goods that underpins the American economy, might not be that different after all, a new study from the Federal Reserve says,” Bloomberg’s Luke Kawa and Jeremy Herron reported on Thursday. They added: “Their spending habits are a lot like the generations that came before them, they just have less money at this point in their lives, the Fed study found. The group born between 1981 and 1997 has fallen behind because many of them came of age during the financial crisis.” Differences in spending between millennials and past generations, the Fed study argues, are not primarily due to “unique tastes and preferences.” Instead, its authors, Christopher Kurz, Geng Li, and Daniel J. Vine, point to general technological changes, ongoing demographic evolution, and economic cycles. Most significantly, most millennials came of age during the Great Recession, kneecapping their financial well-being in their early years of adulthood.

Rural Struggles

The rural economies are still not showing signs of making America great again, with Trump’s policies being completely inadequate & off the mark: left-behind-by-trump-s-boom-the-rural-americans-who-elected-him.  Farmers in the upper Midwest are also facing desperate times: trump-trade-war-farmers-upper-midwest-bankruptcy.  I’ve never been a big fan of the Dem’s big government/big spending ways, but maybe it’s time to give them a shot.  An excellent explanation for the reasons of the dire plight in rural economies can be found inside democrats-win-rural-america-but-what-broke-it, with their conclusion posted here revealing the extent how much small town & rural economies have been exploited by multinationals:

At the root of rural America’s angst is a fairly simple story that many rural voters recognize. Over the course of a generation, major sectors of the rural economy have been rolled up and are now controlled by a handful of predatory, extractive multinational corporations. As a result, manufacturing and farming jobs have left the area, and opportunities — to change jobs, start your own business, fund good schools, and build communities where your kids can thrive and start their own families — are the exception, not the rule. It is no surprise that many of those who remain in these communities have lost any sense of respect, dignity, and self-determination. Instead of fighting this concentrated corporate power, many leading Democrats embraced and continue to embrace an economic ideology centered on efficiency that paved the way for the merger mania and manufacturing exodus that have been at the root of rural America’s economic undoing. Former secretary of agriculture Tom Vilsack, for example, recently called out Democrats for lacking a vision for rural America, and although Vilsack put forward a laundry list of ideas, none of them address the root of the problem — perhaps because Vilsack now lobbies for a dairy export organization whose members admitted to driving down milk prices for thousands of farmers.

To regain trust, Democrats will have to do far more than boost ethanol production, job training, and broadband. They need to show they are willing to take on the faraway monopoly bosses who are carving up rural communities, shutting down competition, and gaming international trade to get even farther ahead, while corrupting the political process with lobbyists and dark money all along the way. The House could start by investigating America’s chicken industry, which has turned family farmers into something akin to impoverished sharecroppers through powerful, exploitative monopolies. Big poultry slaughterers like Tyson and Brazilian-owned JBS require farmers to use their chicks and feed, dictate the price once the birds are ready to be processed, and engage in anti-competitive and punitive behavior if farmers speak out or step out of line. More than 7 out of 10 poultry farmers live below the poverty line, while the CEO of Tyson brought in nearly $9 million last year.

That’s far from the only example of corporate power directly harming rural communities. Airline consolidation and deregulation have cut off the heartland from affordable air travel; not only do children from rural America move to big cities to pursue better opportunities, but they can’t even afford to fly home anymore for the holidays (we speak from experience). Drug store monopolies like CVS and Walgreens have put community pharmacies out of business and hiked the prices of commonly prescribed drugs to more than nine times higher than their independent counterparts. The pharmaceutical monopolies at the heart of the opioid crisis have quite literally gotten away with mass murder in pursuit of profits. And overall, big-box stores — and now Amazon — have laid waste to Main Street commerce, littering communities with empty storefronts, broken up by the occasional dollar store. A new Open Markets Institute report sheds light on the extent of this problem for the first time in decades. Two companies now account for 47% of all pet-store sales, and three companies account for 75% of all craft-store sales. And Amazon’s e-commerce market share is 42 points higher than its closest competitor, with the gap growing every year.

With the prevalence of diabetes almost 20% higher in rural America than in urban areas, insulin cartels also warrant investigation, and taking them on would be meaningful to many people who suffer from this disease. The three largest firms — Novo Nordisk, Eli Lilly, and Sanofi — have raised insulin prices in near lockstep for years by shadowing each other’s prices. Eli Lilly, for one, launched its insulin two decades ago with a sticker price of $21 a vial and now sells it for $255. Democracy is built on checks and balances of power, as Nancy Pelosi recently reminded us in her victory speech. We used to apply this same line of thinking to corporate power, but that thinking largely went out the window. Democrats need to bring it back. If they want a shot to compete against Republicans in rural America, they can start by standing up for the right of rural Americans to compete against the corporate monopolies that have been left free to loot and plunder our communities.

MAGA & Tax Bill turned out to be a Big Bust

In my previous message from part 3, I mentioned a provision in the tax bill that encourages companies to shift factory jobs to other countries.  Inside this link that point is brought out: trump-didnt-know-gop-tax-bill-incentivizes-business-to-offshore-jobs.  See this picture on the cover mocking Trump: donald-trump-drives-off-cliff.  Then we see in these opening excerpts from maga-trump-manufacturing how MAGA was all bluster without substance:

Let’s face it: Make America Great Again was a brilliant political slogan. Why? Because it could mean different things to different people. For many supporters of Donald Trump, MAGA was basically a promise to return to the good old days of raw racism and sexism. And Trump is delivering on that promise. But for at least some Trump voters, it was a promise to restore the kind of economy we had 40 or 50 years ago — an economy that still offered lots of manly jobs in manufacturing and mining. Unfortunately for those who trusted Mr. Art of the Deal, Trump never had any idea how to deliver on that promise. And even if he had a clue about policymaking, he couldn’t have changed the long-term trajectory of our economy, which is moving steadily away from making physical stuff and toward providing services. As a result, Trump, who cares above all about image, is now getting headlines that make a mockery of his campaign posturing — headlines about closing auto plants and lost jobs. Now, autos are a special case; overall manufacturing employment is still rising, although not especially fast. But relative to his grand promises, what’s happening is an embarrassing bust. Why was the vision of revived manufacturing nonsense? Talking about what Donald Trump doesn’t know is, of course, a vast task, since his ignorance is both broad and deep. But he seems to have misunderstood three specific things about manufacturing.

Trade & Tariffs

To save face, Trump lies about the new car plants in America: trump-china-trade-war-tweet-about-general-motors-and-us-autos, lies about the effects of tariffs: trump-china-tariffs-xi-g20-trade-war, & doesn’t appear to be making much progress in negotiations with China: trump-xi-jinping-china-g20-trade-war.  There’s still hope Trump’s hardball tactics with China will work to give us more equitable trade deals, but let’s hope it happens soon.  At G-20 it looks like the prez finally settled on a new NAFTA deal, not much different from the old NAFTA: trump-mexico-trade-deal-nafta-workers-labor.

Lordstown

As we’ve often seen when rural economies go bad, losing a major employer can actually destroy a town’s spirit: when-gm-closes-a-plant-workers-lose-their-jobs-but-the-city-loses-its-spirit.  With the auto workers from Lordstown, Ohio & their families, what is happening to them is inhumane: gm-worker-layoffs-reaction.  For the entire Youngstown-Warren area around here in northeast Ohio, a region devastated by four decades of factory closings, this comes as one of the biggest blows of all: apnews.com/e9131ccc045a45be8c4738486f48581b.  If anything, Trump is guilty of false promises as lives are disrupted & relationships are torn apart: laid-off-gm-worker-blames-trump-for-losing-her-job.  Rural economies don’t need bluster, they need good ideas & a determination by leaders to bring back good jobs.  The U.S. House rep for that Lordstown area is Tim Ryan, who discusses options inside tim-ryan-hurting-gm-is-not-part-of-the-path-forward & here is the letter he released:

Folks:

This week, General Motors announced they are halting production at five North American plants, including GM Lordstown in our district. GM is eliminating over 1,600 jobs in Lordstown as of March 2019, and approximately 14,000 jobs nationwide. This announcement comes after GM eliminated approximately 3,000 jobs at the Lordstown plant over the last two years. This is our generation’s “Black Monday.” I am heartbroken for the workers and their families — and enraged at the heartlessness of GM and the short-sighted policymakers who got us here.

     

For decades, workers have devoted their lives to produce some of the finest cars in the country for GM. We fought together to keep GM afloat and the American taxpayers bailed them out when they were on the verge of bankruptcy. Thousands of families have sacrificed to build GM into what it is today. And in return, GM has turned its back on us when we need them the most. This is a bad combination of greedy corporations and policymakers with no understanding of economic development. We joined with Republicans and Democrats to implore President Donald Trump to keep his word when he came to the Mahoning Valley last year and promised jobs were “all coming back. They’re all coming back. Don’t move. Don’t sell your house.” So far, President Trump has been asleep at the switch and he owes this community an explanation.

      

The Mahoning Valley and the whole Midwest has been yearning for the Trump Administration to come here, roll up their sleeves and help us fight for this recovery. What we’ve gotten instead are broken promises and petty tweets. Big corporations like General Motors and the President himself are the only ones who are benefiting from this economy — an economy rigged against workers who are playing by the rules but still not getting ahead. As always, my team and I are standing by to assist all those who are impacted by this closure. Our community has always banded together in difficult times, and this will be no different.

— Tim

In Other News…

In Alaska, this was a strong quake: magnitude-7-0-earthquake-shakes-alaska-tsunami-warning-in-effect.  In the near future we’re hearing of threats for a government shutdown.  Trump talks of a shutdown if he doesn’t get funding for the wall, only because he wants to show his base he’s still fighting for them, even if it’s only for show.  Pelosi & others threaten a shutdown if there’s no bill to protect Mueller, but even if Mueller doesn’t get fired, the bigger concern is the way Whitaker could defund, hide or otherwise sabotage the investigation.  Meanwhile, Trump tends to sulk when he goes to these international summits, as we’re seeing with the current G-20 in Buenos Aires.  On another topic, here’s a rather unique perspective on what ails us, seen here in the last part of the article from american-economy-working-class:

And yet are we happy? About 60 percent of Americans are dissatisfied with the way things are going in this country. Researchers with the Gallup-Sharecare Well-Being Index interviewed 160,000 adults in 2017 to ask about their financial security, social relationships, sense of purpose and connectedness to community. Last year turned out to be the worst year for well-being of any since the study began 10 years ago. As the recovery has advanced, people’s faith in capitalism has actually declined, especially among the young. Only 45 percent of those between 18 and 29 see capitalism positively, a lower rate than in 2010, when the country was climbing out of the Great Recession. So why the long faces? Part of the problem is Donald Trump. People can’t feel good about things when they think the country is disastrously led. Part of it, as Noah Smith of Bloomberg theorizes, may be disappointment among the well-educated young. They graduated from college, saddled with debt, and naturally expected the world to embrace them as their parents and schools had done. Instead, many entered into the gig economy, where a lot of work is temporary and insecure. Normal professions for liberal arts grads, like the law, are drying up. How many unpaid internships can you endure before you lose faith in the system?

But the biggest factor is the crisis of connection. People, especially in the middle- and working-class slices of society, are less likely to volunteer in their community, less likely to go to church, less likely to know their neighbors, less likely to be married than they were at any time over the past several decades. In short, they have fewer resources to help them ride the creative destruction that is ever-present in a market economy. And they are dying. On Thursday, the Centers for Disease Control and Prevention reported that life expectancy in the United States declined for the third straight year. This is an absolutely stunning trend. In affluent, well-connected societies, life expectancies rise almost as a matter of course. The last time the American mortality rate fell for three straight years was 1915-1918, during World War I and the flu pandemic, which took 675,000 American lives. And yet here we are — a straight-up social catastrophe. Economic anxiety is now downstream from and merged with sociological, psychological and spiritual decay. There are thousands of employers looking for workers and unable to find any. Many young people do not have the support structures they need to persevere in school and get skills.

Many working-class men have not been raised in those relationships that inculcate the so-called soft skills. A 2018 LinkedIn survey of 4,000 professionals found that training for those soft skills — leadership, communication and collaboration — was the respondents’ highest priority. They valued these flexible skills more than specific technical ones, and find them in short supply. There’s an interesting debate going on in conservative circles over whether we have overvalued total G.D.P. growth in our economic policy and undervalued programs that specifically foster dignity-enhancing work. The way I see it is this: It’s nonsense to have an economic policy — or any policy — that doesn’t account for and address the social catastrophe happening all around us. Every single other issue exists under the shadow of this one. Conservatives were wrong to think that economic growth would lead to healthy families and communities all by itself. Moderate Democrats were wrong to think it was sufficient to maximize growth and then address inequalities with transfer payments. The progressives are wrong to think life would be better if we just made our political economy look more like Denmark’s. The Danes and the Swedes take for granted a cohesive social fabric that simply does not exist here. To make the crucial differences, economic policymakers are going to have to get out of the silos of their economic training and figure out how economic levers can have moral, communal and sociological effect. Oren Cass’s book “The Once and Future Worker” begins this exploration, as do Isabelle Sawhill’s “The Forgotten Americans” and Nebraska Senator Ben Sasse’s “Them: Why We Hate Each Other — and How to Heal.” It’s not jobs, jobs, jobs anymore. It’s relationships, relationships, relationships.

+40

The final tally in the House shows the Dems won a net gain of 40 seats: with-one-last-democratic-victory-in-california-midterms-end.  Is the GOP ever going to learn?  Apparently not yet: trump-cost-gop-midterms.  For all of us rational, more reform-minded conservatives who are now on the outside looking in, keep the faith.  The GOP may shun us for now, but this radicalized far-right version now controlled by Trump is destined to crumble, disintegrating under the weight of their own dishonesty, divisiveness, corruption & an agenda that’s not viable.  We can just bide our time in the hopes the GOP becomes sane again, the sooner the better: the-hard-road-to-conservative-reform.  Unfortunately, at least for now, the party still kowtows to the cult of Trump: if-only-republicans-werent-such-cowards.

From Russia With Love

With the new revelations this week from the Cohen & Manafort headlines, it’s becoming more & more clear why the Trump campaign was in regular contact with lots of Russians, & why Trump defers to Putin.  There was lots of shady business going on!  We have two songs about all this capitulation & love to Russia, the original version & a modern version.  The modern version has a subtitle, It’s Mueller Time!!!:

https://www.youtube.com/watch?v=wS2zQOG1jlE

https://www.youtube.com/watch?v=hEG41O5Y9-k