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Some of you more perceptive political wonks will recognize the title. The following is from Wikipedia…
“It’s the economy, stupid” is a slight variation of the phrase “The economy, stupid“, which James Carville had coined as a campaign strategist of Bill Clinton’s successful 1992 presidential campaign against sitting president George H. W. Bush.
Carville’s original phrase was meant for the internal audience of Clinton’s campaign workers as one of the three messages to focus on, the other two messages being “Change vs. more of the same” and “Don’t forget health care.”
Clinton’s campaign advantageously used the then-prevailing recession in the United States as one of the campaign’s means to successfully unseat George H. W. Bush. In March 1991, days after the ground invasion of Iraq, 90% of polled Americans approved of President Bush’s job performance.[1] Later the next year, Americans’ opinions had turned sharply; 64% of polled Americans disapproved of Bush’s job performance in August 1992.
In order to keep the campaign on message, Carville hung a sign in Bill Clinton’s Little Rock campaign headquarters that read:
- Change vs. more of the same. That slogan was later recycled during the United States presidential election, 2008 campaign
- The economy, stupid
- Don’t forget health care.[3]
Although the sign was intended for an internal audience of campaign workers, the phrase became a slogan for the Clinton campaign.
The phrase has become a snow-clone repeated often in American political culture, usually starting with the word “it’s” and with commentators sometimes using a different word in place of “economy.” Examples include “It’s the deficit, stupid!” “It’s the corporation, stupid!” , “It’s the math, stupid!”and “It’s the voters, stupid!”.
Ok.. history lesson over.
Anyway, my variant of the title is aimed smack at those Trump supporters (and any others) who are raging about “all the good that Trump is doing” with the economy. There’s no question that any presidential administration pretty much does not shy away from taking a measure of credit if the economy is doing well under their watch. It tends to be a little more ridiculous when someone like Trump starts doing it only a year or so into his term because, the truth is, it generally isn’t valid as most economic changes are slow-moving and are dependent on a wealth of influences. In Trump’s case, just signing some trade decrees, a tax cut, removing environmental controls to presumably let loose manufacturing, and tinkering with Obamacare just to say he’s done something,doesn’t have an overnight effect.
When It Comes To Economic Theory Most Americans Are Fairly…. Is ‘”Stupid” The Word?
I actually include myself. While I consider myself an educated capitalist I am by no means some market genius nor any sort of an economic guru in even an amateur sense. Throw up those employment tables and GNP trend projections.. and mix into that, stock market predictions.. I get damned confused simply because I’ve been far too busy contributing to the market in my own way as an entrepreneur businessman. Balance sheets and P&L’s are my thing. You could say I am similar to Trump.. except I didn’t have the millions to start out from daddy as seed money. But that’s where the similarity ends. Yet I know enough about economic theory to prefer to gather some insight from those who are more professional in dabbling in it and drawing conclusions from it.
I said economics is theory.. and that’s the critical part in all this. It’s like pizza… it’s rare when you find more than one who agree what’s good; or it’s like lawyers.. no two come up with the same strategy to agree upon. In spite of the fact that numbers don’t lie, it’s the interpretation of numbers that can sway any truth.
Recently I ran across a very succinct breakdown on a number of economic elements with some intelligent revelations supported by the government’s own numbers. That’s what I prefer.. not emotional, political driven conjecture. Here is an article on CNN’s site that pretty much works for me.. because it makes sense.. and they are using the government’s own numbers.
The link to the entire article is HERE, but I’ll save you some time. Here are the true facts regarding Trump’s influence in the economy that he claims was his achievement, submitted by various reporters.
Annual GDP Growth
By Lydia DePillis
Trump has been touting that economic growth will continue to be strong throughout his presidency.
“We are on track to meet the highest annual growth rate in over 13 years. During each of the two previous administrations, we averaged just over 1.8% GDP growth. By contrast, we are now on track to hit an average GDP annual growth of over 3%, and it could be substantially over 3%.”
Related: How the US economy is doing now — in four charts
The average of the annual real growth rates of the past two administrations was 1.9%. That included several years that covered the worst economic downturn since the Great Depression. It is true that many economists are projecting the economy will grow by 3% in 2018. That would be the highest since 2005, when the economy grew by 3.5%.
Unemployment
By Lydia DePillis
Trump claimed that unemployment has reached record lows for black, Hispanic and Asian Americans and for Americans with disabilities. He also said that the unemployment rate for women is the lowest in 65 years, and that veteran unemployment is the lowest in 18 years.
Those numbers are all correct. But they have been falling fairly consistently since 2010. Also, there weren’t many women out looking for jobs in 1953, the last time unemployment for women was 3.6%, as it was in May.
More broadly, unemployment and economic growth are not the only ways to measure the well-being of households. Another important element, worker pay, has been flat over the past year by some measures, such as real average hourly wages for rank-and-file workers. By others, such as Sentier Research’s median household income index, which takes into account all forms of income such as dividends and Social Security payments, it has risen.
Job Creation
By Katie Lobosco
Trump touted the number of jobs created since he won the presidency.
“We have added 3.7 million new jobs since the election. A number that is unthinkable if you go back to the campaign. Nobody would have said it. Nobody would have even in an optimistic way projected it. We are in the midst of the longest positive job growth streak in history.”
The economy has indeed added 3.7 million jobs since November 2016. June was the 93rd straight month of gains, which is the longest on record.
But the economy is cranking out jobs at a slower pace than it was before Trump was elected.
The United States added 2.7 million jobs in 2015 and 2.3 million in 2016. It added 2.2 million last year and is on pace for 2.6 million this year.
Food Stamp Enrollment
By Tami Luhby
Trump touted that his economic turnaround has helped millions of people leave the food stamp program.
“More than 3.5 million Americans have been lifted off food stamps, something that you haven’t seen in decades,” Trump said, noting that before he took office, more than 10 million Americans had signed up. “That’s because they are able to go out and get a job.”
It’s true that the food stamp program’s numbers ballooned in the wake of the Great Recession. Enrollment peaked at 47.6 million in 2013, up from 28.2 million in 2008.
Since Trump’s inauguration in January 2017, the rolls have shrunk by just over 3 million, according to US Department of Agriculture data. Some 39.6 million Americans received food stamps as of April, the latest figures available.
But the decline predated Trump’s presidency. Enrollment dropped by 3.5 million between 2013 and 2016.
Certainly, the strong job market has helped more people become self-sufficient. But policy changes have also contributed.
Related: States aren’t waiting for Washington to require poor residents to work
Adults ages 18 to 49 whoaren’t disabled and don’t have dependent children can only receive food stamps for three months unless they work at least 20 hours a week. Many states waived this provision during the economic downturn, but started reimposing it in recent years as the job market improved.
This change may have forced up to 1 million people off the rolls in 2016, according to an estimate at the time by the Center on Budget and Policy Priorities, a left-leaning group. More states, including Kentucky, West Virginia and Tennessee, have reinstated the time limit in some or all of their counties since Trump took office.
The State of Obamacare
By Tami Luhby
Trump took the opportunity to blast Obamacare during his speech on the economy.
“We have also liberated millions of Americans from the crushing burdens of Obamacare,” he said. “The cruel individual mandate penalty is gone … And Obamacare is now on its last legs, fortunately.”
Not quite.
Congress did eliminate the penalty associated with the individual mandate, which requires nearly all Americans to have health insurance, as part of its 2017 tax reform bill.
But that doesn’t take effect until next year. The Congressional Budget Office estimates that the number of uninsured will rise by 3 million in 2019 because of this provision.
Meanwhile, enrollment in Affordable Care Act plans has remained fairly steady. The number of people signing up for 2019 plans during open enrollment dipped 3.8% to nearly 11.8 million, according to the Centers for Medicare & Medicaid Services.
But the number of people who actually enrolled — meaning they paid their first month’s premium — rose by about 3% to 10.6 million, as of mid-March, the agency said.
Related: Insurers aren’t running scared from Obamacare anymore
Also, Obamacare is enjoying a resurgence among insurers for 2019. Carriers are entering or returning to at least a dozen states, while others are expanding their presence in the states in which they operate.
This is quite a turnaround from a year ago, when insurers were fleeing the Affordable Care Act exchanges, worried about the law’s uncertain future with Republicans in control of the White House and Congress.
Related: Obamacare sign ups remain strong in 2018, but next year remains uncertain
Net Worth
By Tami Luhby
The nation has gotten richer since Trump took office, a point he noted in his speech Friday.
“Since I was elected we’ve created approximately $7 trillion of new wealth,” he said.
It’s true the nation’s net worth has grown by about that amount, according to the Federal Reserve. It rose to $101 trillion in the first quarter, up from $94 trillion in the same period a year earlier, when Trump took office.
(The gain shrinks to just under $5 trillion if you adjust the figures for inflation.)
However, the country was getting wealthier long before Trump’s presidency. After taking a beating during the Great Recession, net worth rocketed back. It rose by nearly $40 trillion during the eight years of Barack Obama’s presidency, or $31 trillion when adjusted for inflation.
Related: Millions of Americans can’t feel the stock market boom
The booming stock market and rising real estate values contributed to the growth in wealth for both Obama’s and Trump’s presidencies.
Not everyone is sharing in the wealth boom, however. Only 54% of Americans have money invested in the stock market, according a Gallup survey from the spring of 2017.
Business Investment
By Lydia DePillis
Trump says it’s booming.
“The year before I came into office, private business investment grew at only 1.8%. Last year it jumped to 6.3%. This year it’s growing at 9.4%. That’s a very tremendous increase. There hasn’t been an increase like that in many many years, decades.”
Trump appears to be referring to real private non-residential investment — the money that businesses spend on things like commercial construction, tools and machinery.
His advisers have called this a key goal of the tax cuts. When businesses upgrade their equipment, they say, they can raise worker productivity and justify paying more.
The White House’s Council of Economic Advisers published a brief walking through the numbers. Weak investment in 2016 mostly had to do with an enormous drop in oil and gas drilling, and the rebound in 2017 came mostly because of that sector’s recovery.
But you don’t have to go back very far to get a similar growth rate. Real non-residential fixed investment grew by 9.5% in 2012 from the previous year.
The Republican Tax Cut
By Katie Lobosco
Trump praised Republicans in Congress for cutting taxes. As a result, he said, “six million Americans are now enjoying new bonuses, better jobs and far bigger paychecks.”
Hundreds of companies cited the tax cuts when they announced bonuses, wage increases and new employee perks this year. Walmart, Bank of America, and American Airlines were among the companies that handed out bonuses.
Still, six million employees represents less than 5% of the private sector work force. And for most of those workers, the benefit will be short-lived because it came as a one-time bonus or additional contribution to 401(k) plans.
Shareholders have received a much bigger benefit from the new tax law. Companies have announced hundreds of billions of dollars in stock buybacks since their taxes were cut.
Trade Deficit
By Tami Luhby
Trump boasted about the decline in the trade deficit in the most recent quarter.
“Perhaps one of the biggest wins in the report, and it is indeed a big one, is that the trade deficit — very dear to my heart because we’ve been ripped off by the world — has dropped by more than $50 billion. $52 billion to be exact,” he said. “That’s a tremendous drop. We haven’t had a drop like that in a long time.”
Yes, the trade deficit narrowed from $902 billion in the first quarter of 2018 to $850 billion in the second quarter. But the deficit in the first quarter was also the largest it’s been since 2006, according to the Bureau of Economic Analysis.
Even now, the trade deficit remains slightly higher than it was when Trump took office. It came in at $845.5 billion in the first quarter of last year.
In Summary –
Bottom line, all this great economic change he is taking credit for was already in motion during and before the Obama years. Sorry to burst your bubble, Conservatives. If anything, the economy is doing great IN SPITE of what Trump has done.
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My other sites… if you’re interested…
FreeStatesman.us
DougLite.com
The ‘view from over here’ is that most of the figures are more or less right, and that the US economy is ‘holding up well’ at a time when many countries are struggling. However, it has all the hallmarks of a ‘boom and bust’ system, still heavily dependent on foreign trade, and the economy of foreign countries. The loss of a few major markets could well see boom change to bust, in a very short time.
It seems unlikely that an isolationist policy that would require Americans to buy American exclusively is going to work in the long-term.
Best wishes, Pete.
Good point, Pete. No way in hell Americans will tolerate only purchasing American. If that were the case two thirds of merchandise in Walmart would be gone with nothing to fill the void.
And it’s absolutely VITAL to point to that self-harming behaviour and call it a “self-fulfilling prophecy”.
Everyone keeps chasing “deals” to save a few bucks by buying shit made in China and SURPRISE!!! when everyone’s jobs move to China. THAT’S how economies work! Now your jobless asses no longer have a choice BUT to buy cheap shit at China-mart which results in even more job losses. It’s a downward spiral, an “economic limbo”, that keeps going lower and doesn’t reverse itself without major -and often painful- changes.
But nobody wants to recognize the consequences of their actions, especially when their actions make them feel good in the short-term.
It’s all about supply and demand… not-my-country-or-your-country. global markets, my friend.
Exactly. “Global markets” (or Free Trade ideology in general) are the creation of 1%-ers who wanted to completely detach their fates from the undeserving lessors surrounding them who handcuff their greatness under the (mildly) democratic rule of governments. If given the chance, they knew we would eagerly shoot ourselves in the balls in exchange for slightly cheaper shit.
So yeah. We’ve been “demanding” to be un/under- employed for the last few decades now and they’ve been giddily “supplying” that demand, getting even filthier rich and contributing increasingly less to society…because they are beyond the nation-state.
Mission Accomplished everyone!
I’d not forget the political advantage.. a global market makes countries happy and less impulsive.
The problem I had was when he said the the GDP was good…it is but his example is not accurate….he said that one point of GDP equals $3 trillion of activity and 10 million jobs……and I believe that those totals are accurate but for a 4% growth over ten years nit with every point of GDP rise.
Our DEar Leader is doing what all presidents do….take credit whether theirs of not……but my favorite is “change”….we never get change just “reform” which is easily to remove when needed. chuq
I’m afraid you are correct… change is all to transitory to the moment… or rather, to whatever current administration.
Doug,
There is another mdasure not mentioned in the article which is the simplest to understand how the USA economy will fare.
That being the amount of dollars flowing back into the US from foreign investors.
How does that compare to Obama vs Trump?
In other words follow the money, and you will always know what is really going on.
Regards and good will blogging.
Trump and his minions have an affinity to globalization so it appears this has influenced the encouragement in foreign investment under the Trump administration.
Here’s a Washington Times article on just that. https://www.washingtontimes.com/news/2018/may/25/dhs-cancel-foreign-investor-immigration-program/
A bit more on the investment thing….chuq
https://www.foreignaffairs.com/articles/united-states/2018-07-23/how-trump-repelling-foreign-investment?cid=nlc-fa_fatoday-20180723
Great article, chug. I think the take-away here is (take your choice), a) Trump is a bombastic fool because his claims are shallow, and, 2) His base doesn’t give a damn, and, c) Both.
It only takes a single misrepresentation of a truth in a published article to render the entire article useless. Pelosi’s statement seems to infer that American Workers are so far more worse off than they were under anybody else and a noted political fact finder (politifact} sets the lie onto her statement and reveals another failed attempt at a Liberal to skew the truth so they can make Trump look bad. –(” Our ruling
Pelosi said, “Even with full control of the House, Senate and White House, Republicans have still failed to deliver on their promise of higher wages for working families.”
The two best statistics for judging this assertion both show wage growth. One of them, however, shows growth that’s barely above inflation, meaning that Americans wouldn’t necessarily keep any more of their income in their pocket. We rate her statement Mostly False.”).
Once I read that there was no reason to read any further into this article.
Well, John.. sadly… Trump just makes himself look bad.. and badder.. each and every day.
Hiding your head in the sand won’t change a thing.
(Just a side note.. the sooner Pelosi is out of the picture, the better.)
(Note: I struggled like hell to keep this shorter than War & Peace)
People today have NO fucking clue how the economy works. Actually, “functions” is a better word because it no longer works. Well, unless you’re in the Top 5-ish% Then it works great…for you. Not so much for others. A few points:
1) I’ll never forget the day the head economist for one of Canada’s largest banks told me & a room full of people that “economists are little more than readers of chicken entrails”. They live in a theoretical world that doesn’t exist and suggest policies that only work in that theoretical world of “enlightened self-interest” where everyone acts in their long term best interest and with the good of overall society in mind. Complete fiction!!! Reality and non-economic factors (ie environment) are called irrelevant “externalities” not to be seriously considered. Yet, economists are treated like Holy men, or wizards.
2) Politicians (especially today’s bought-&-paid-for ones) have minimal influence over the economy…and they want even less. They collect bribes to step aside and let corporations do whatever the fuck they want. In fact, its standard practice now for governments to offer massive bribes to corporations to locate in their jurisdictions. (See: Amazon) Awful Free-Trade deals, tax cuts and outright bribes to companies are virtually the only “acceptable roles” for politicians now. This is the REAL reason Trump is getting so much heat for re-introducing the word “tariff” to the American public. Hey, remember when AT&T was broken up for being too big & powerful? If you do, it’s a one way ticket to Gitmo for you! That kind of government interference ist verboten.
3) Things can’t change within a year. Economies are like ocean liners. It takes forever for them to turn around. However, fatal crashes CAN occur in a year (See 2008). Even GREAT policy takes years to see results from. Yet everybody wants to take/give instant credit/blame because we are stupid monkeys who just want to throw our dung at each other. (See: The Interwebs)
4) GDP is no longer a useful indicator of the health of an economy. Unless there’s a HUGE swing, it barely matters at all. All it does is measure the pie. Unfortunately, more & more of the pie is going to the fattest people in the room. It does nothing to indicate if people are getting enough to live on. Growth obsession is unsustainable and unhealthy anyway. When’s the last time your DR said, “Look at the growth on your liver. That’s great news!”
5) Similarly, Unemployment Rates might be the most USELESS economic stat of all because it only measures the number of people who try, fail, but still keep trying anyway. If more people stopped trying, the numbers will look better and vice-versa. And Job Creation ain’t that much better. “We’ve lost 1 million unionized, full-time, manufacturing jobs with benefits at $25/hr. But we’ve gained 1.5 million non-unionized, part-time, minimum wage, jobs with no benefits cleaning toilets in bus stations. Things are looking up, America!”
I am not in a position of knowledge to doubt anything you’ve mentioned. But therein is a lot of the issue.. economics is a theory, hence everyone sounds like they know what they are talking about. I think it all boils down to consumer confidence… which is not always about how cheap something is.
Yeah, confidence. Like how American students are at, or near, the bottom in every category in international educational rankings…but are a runaway #1 in “confidence”! Confidence and violence is all that’s keeping you guys afloat anymore. He-he. (The laughter holds back the tears.)
But we certainly do live in a “confidence society” now….a society now run by confidence men! It’s absolutely NO coincidence that a member of the Confidence Men Hall of Fame is in the White House. No coincidence at all.
hehe… yeah, well, he’s a black hole getting ready to collapse within himself.