No, Donald Trump, the economy is not “absolutely booming” when nearly 80% of workers live paycheck to paycheck – hoping that they don’t get sick or that their car doesn’t break down. It’s not the “greatest” economy in “the history of America” when 43% of households can’t afford to pay for housing, food, childcare, healthcare, transportation and a cellphone without going into debt. The economy is not “booming” when Americans are reaching retirement age in worse financial shape than their parents and when about half of older Americans have no retirement savings and no idea how they will be able to retire in dignity. It’s not the “strongest” economy “we’ve ever had” when hundreds of thousands of young people are unable to go to college because of the cost, over 30 million Americans have no health insurance, one out of fiveAmericans can’t afford the medicine prescribed by their doctors and over 40 million Americans are living in poverty.
This is not an economy we should be proud of when we have the highest childhood poverty rate in the developed world and life expectancy in the US has gone down for the third year in a row. While working families continue to struggle, the US now has more income and wealth inequality than at any time since the 1920s. Since the Wall Street crash, 46% of all new income that has been created in the US has gone to the top 1%. Corporate CEOs have seen their incomes go up by 937% over the past 40 years and now make over 360 times more than their average workers. While corporate profits are near an all-time high, wages as a percentage of the economy are near an all-time low. The most important economic reality of our time is that over the past 40 years there has been an enormous transfer of income and wealth from the middle class to the wealthiest people in America. Since 1979, the bottom 90% of Americans have seen their share of national income decline from 58 % to just 46% costing them nearly $11,000 per household.
As bad as income inequality is, the inequality in wealth is even worse. In America today, the top 0.1% owns almost as much wealth as the bottom 90%. The three wealthiest people in this country own more wealth than the bottom half of Americans – 160 million people. Meanwhile, the median household in America has less wealth today than it did 35 years ago after adjusting for inflation, and the average wealth of those in the bottom 40% is virtually zero. While low-income workers at Walmart are forced to rely on food stamps, Medicaid and public housing to survive, the Walton family is now worth nearly $170bn. Shockingly, the wealth gap between white Americans and African Americans has more than tripled over the past 50 years. Today, the median white family has almost 10 times as much wealth as the median black family. At a time of massive income and wealth inequality, Trump’s policies are moving this country in exactly the wrong direction. Over 83% of the benefits of Trump’s tax plan is going to the top 1%. The morally bankrupt budget Trump released last year would have made massive cuts to programs desperately needed by working families, the elderly, the sick, the children and the poor.
Let’s Aggressively Seek Out Good Ideas
It shouldn’t matter whether they originate from conservatives or progressives, a good idea is a good idea. We can get creative with the tax code to provide the right incentives, rather than a blanket tax cut for the rich hoping it can somehow magically trickle down. Since redistribution is chiefly a self-defeating strategy for addressing income inequality, this article proposes an interesting idea about doing a predistribution. Perhaps we can find a way to build in incentives into our tax code, holding out a carrot to corporate execs & shareholders, where their tax rates can be directly tied in with the wages they pay their employees. The higher the wages go up for their workers, the more favorable the tax rates for themselves. See that innovative idea inside alexandria-ocasio-
According to Bloomberg’s Stephen Gandel, however, the tax cuts have saved the companies in the S&P 500 at least $600 billion more in taxes than expected, which is also how much more the cuts will add to the national debt over the next decade. The total corporate savings under the tax law — just by the companies in the S&P 500 — will reach close to $2 trillion, according to the analysis. Not only is the tax cut larger than even Republicans expected, it has also not resulted in the gains that were predicted by proponents of the bill. Companies in the S&P 500 saw profits rise 24 percent in the first year of the tax law, the biggest increase in nearly a decade, but half of that growth came from lower tax bills. Bloomberg reports that analysts predicted the lower taxes would only amount to a third of the projected growth.
According to the report, companies in the S&P 500 paid an average effective corporate tax rate of 19 percent in the first three quarters of 2018, compared to 28 percent in 2017. In total, the companies saved $395 million in taxes every single day of last year. As expected, the tax law has been good news for the largest corporations in the U.S., which saw share prices increase even more than projected before the law was passed. But the law hasn’t helped companies increase earnings. Gandel notes that when the effect from lower tax bills is excluded, the S&P 500 actually earned less last year than they were projected to before President Trump was elected. Gandel points out that the shortfalls may not be the result of the law itself. If the tax cuts were working as they should, he wrote, the S&P 500 companies would be worth $2.2 trillion more than they are today. Instead, he writes, the “Trump Slump is erasing the bump the stock market received from the tax cuts.”
The “evidence is mounting that the promised economic boost isn’t materializing,” Gandel wrote. “The administration’s signature political achievement is being eclipsed by disarray over trade, immigration and a government shutdown.” Gandel added that at least some of the shortfall can be blamed on the “Trump Discount — the amount Trump’s actions, from his trade war with China to his more recent eagerness to shut down the government have hurt the value of the market and the investment accounts of many Americans. The tax cuts provided a short-term boost, but given how large the Trump Discount has swelled, it is harder and harder for investors to notice.”
The latest figures come from the Institute of International Finance (IIF), an industry research and advocacy group. It reports that in September, worldwide debt totaled $244 trillion, or almost a record 318 percent of world gross domestic product. That figure covers all government, household and nonfinancial business borrowing. (World GDP means total global output.) Here’s a detailed breakdown. Government debt has tripled from $20 trillion in 2000 to $65 trillion in 2018, rising as a share of GDP from 55 percent to 87 percent. Household debt has increased over the same years, from $17 trillion to $46 trillion (from 44 percent to 60 percent of GDP). Finally, nonfinancial corporate debt rose from $24 trillion to $73 trillion (71 percent of GDP to 92 percent). “Debt has fueled a good deal of economic growth,” says economist Sonja Gibbs of the IIF. Higher borrowing is widespread, though countries borrow differently. Government debt, for example, is highest among mature economies, such as the United States and France. By contrast, business borrowing has been more common in “emerging-market” countries (China, India, Mexico).
There are no universal rules on how much debt is too much. A lot depends on investor psychology — that is, confidence or fear. Behavior can be self-fulfilling. If banks and bondholders believe debts will be repaid, then they will be, because borrowers will raise new loans to replace the old. Similarly, if lenders fear debts won’t be repaid, they may withhold new loans. For the moment, confidence seems to be holding. One reason may be low interest rates, which make it easier for borrowers to carry large debts. Still, the debt buildup poses dangers. The first — and maybe the most likely — is that both borrowers and lenders become more cautious. Lenders fear defaults and delinquencies; corporate borrowers worry that they won’t be able to “roll over” existing loans, while household borrowers fear losing their homes or cars.
If economic growth slows, then servicing outstanding debts becomes harder. “The risk is not [an economic] blowout but a slow slog — slower growth,” Gibbs says. “As debt service gets bigger, it takes away from what you can do with more borrowing. It diverts from more productive uses.” Another risk is that over-indebted businesses in emerging-market countries trigger some sort of financial crisis. Loan losses force some banks to close or stop lending. The circumstances are particular to individual countries or industries, but if too many local crises occur, the global economy could lose steam. Finally, there’s “rollover risk” — the possibility that borrowers won’t be able to renew existing loans. That prospect seems particularly strong among emerging-market borrowers. According to the data from the IIF, emerging-market borrowers face $2 trillion of maturing debt in 2019, with about a quarter of those loans made in dollars (most of the rest are in local currency). To avoid default, borrowers must somehow raise those dollars, either from a new loan or from other sources. When it comes to global debt, we may be in unexplored territory. The only certainty, as the IIF’s Dylan Riddle puts it, is that “there’s been a breathtaking accumulation of debt in the last decade or so.”
Make no mistake: The core of Trump’s electoral strength remains unchanged — voters drawn to his divisive hatred, culture warfare and xenophobia. But among a smaller, but still significant, slice of Trump’s support — those who like his promise to stand with working people on economic issues — this will be the year when cracks in Trump’s backing finally emerge. Trump’s economic populism was never the central force behind his election — that was his angry cleaving of America along social, cultural and racial lines. But in 2016, there were some voters who picked Trump because he espoused working-class economics: a massive infrastructure package, a minimum-wage hike, closing the “carried interest” loophole, tough action against drug companies and anti-outsourcing policies. Invoking “The Usual Suspects,” CNN’s Chris Cillizza recently called Trump’s success in courting working voters on his economic message “the greatest trick Donald Trump ever pulled.”
For his opponents, the idea that Trump was a true champion of the economic interests of working people always seemed absurd. But a combination of savvy positioning, a willingness to abandon GOP orthodoxy on trade, some tough-on-Wall-Street rhetoric and unfair (but effective) misrepresentation of Hillary Clinton’s record helped Trump claim this mantle. And his early moves after the election — such as intervening to preserve jobs at a Carrier plant in Indianapolis — reinforced this posture. But two years into Trump’s presidency, the reality of his economic policies — massively favoring big corporations and the wealthiest Americans — is laying bare the campaign rhetoric. Trump still hasn’t sent bills to Congress to fund infrastructure, limit outsourcing or raise the minimum wage; his signature piece of legislation — the 2017 Tax Act — slashed taxes for big corporations and did virtually nothing for the middle class. His tough talk aimed at drug companies hasn’t been followed by any serious action.
This stripping away of Trump’s economic populist veneer is accelerating. He lost a midterm election when Democrats found their voice on the Affordable Care Act, arguing that Trump put the interests of insurance companies ahead of people with preexisting conditions. His last-minute, election-eve promise to cut middle-class taxes only exposed how little his vaunted “tax reform” had done for those families in the first place. Now his unpopular partial government shutdown — hurting hundreds of thousands of workers and the local businesses they patronize — is the latest straw on the camel’s back.
That may be because Trump’s negotiating style at a base level contradicts all the best practices generally agreed on by experts in negotiation. “The way he negotiates directly challenges what is almost a half-century of tools and principles and methods that have emerged in the field,” said Joel Cutcher-Gershenfeld, a professor in the Heller School for Social Policy and Management at Brandeis University, who is the editor of the Journal. To start, Trump claims to use a zero-sum strategy in which he wins and the other side loses. The win-lose equation is considered out of date, ineffective and generally counterproductive among those who study negotiation.
Win-lose dealmaking is a tough sell in a democracy or anytime you’re trying to reach an agreement with a powerful counterparty who has enough leverage to withstand the demands of the bully across the table, like Speaker of the House Nancy Pelosi (D-Calif.) fresh off her party’s electoral victory in the 2018 elections. In such cases, you’re not likely going to get exactly what you want. So a good negotiator has to think empathetically about what the other side wants and then sell them a deal that could be viewed as a so-called “win-win.” Trump isn’t known for empathy.
Still, this isn’t complicated. “All the other presidents knew how to make deals,” said Carrie Menkel-Meadow, a professor of Law at the University of California Irvine Law School and a co-editor on the special issue. “Trump doesn’t understand the basic principle: To get what you want, you have to give other people what they want,” said Menkel-Meadow, who was at Georgetown Law during the Clinton-era shutdown and trained negotiators at the Department of Justice. A solid deal-maker also doesn’t make an enemy out of his counterparty. Ideally in politics or diplomacy, he’s built up some goodwill with them. Trump, on the other hand, demonizes and belittles his political opponents (and sometimes his allies).
Running America into the Ground like His Bankrupt Casino
Many people voted for Trump based on the idea they wanted the government run like a business. What they didn’t bargain for was Trump running DC like he ranhis business. Unbeknownst to most voters, he ran his enterprise as a con man, seen from these excerpts inside donald-trump-is-
It’s sadly no surprise that Trump is willing to force so many people to work without pay. Getting people to work for him and refusing to pay them was a major component of Trump’s business operations. As USA Today documented during the 2016 campaign, literally hundreds of contractors had horror stories about Trump stiffing them, in some cases so badly that it ruined their businesses. He hired contractors to do expensive work and then refused to pay them, usually using some BS excuse that the work was somehow flawed, knowing that most of them simply couldn’t afford the legal fees that would be required to force him to pay up what he owed in court. He also, as the same story reported, had been cited 24 times by the federal government since 2005 for failure to pay employees overtime or minimum wage.
Trump himself has bragged about how he swindles contractors, saying, “I fight like hell to pay as little as possible,” and portraying it as a smart business practice — which is dubious, as he’s also spent a fortune on lawyers to get out of paying contractors. Instead, the practice likely speaks to Trump’s well-documented love of bullying and his sense of entitlement, in this case to extract quality work from contractors without paying for it. As president, Trump now has a power he never had as a grifting real estate developer: The ability to force people to work for him for free. No tricks or expensive lawyers are necessary. Trump ran for president by promising voters he would run the government like he ran his business. Problem is, the voters who bought that line either didn’t know the truth or didn’t want to believe it: Trump ran his business operations into the ground repeatedly, as evidenced by his at least six bankruptcies. Now he is doing the same thing to the federal government.
Of course, that’s not how any of this works. For better or worse, banks and investors used to give Trump money because they believed they’d get a decent return on it. When it became clear that they were better off setting the money on fire, they stopped financing him altogether. Trump can make no convincing argument that the wall is an “investment” that will yield returns for our government — much less Mexico’s government. He’s trying to claim that, of course, spinning out silly tales about how the wall “pays for itself,” which no one seems particularly interested in buying. Conservative chatter about running government “like a business” has always been ridiculous. Government is not a profit-making enterprise and cannot effectively be run like one. But even if it were like a business, Trump was always the wrong kind of businessman to run it. He’s a fraud, a swindler, a liar and incompetent to boot. And now he’s in way over his head, just as he was with every casino and hotel he ran into bankruptcy.
Misc Issues
Representation for the Rich by the Rich
A big problem with our current day politics is that it’s pay-to-play. Small business owners & workers are barely represented. No wonder DC is so elitist & out of touch! That sad reality is seen in excerpts from its-way-too-hard-working-
This is the reality of American politics today: We are governed chiefly by wealthy people. Very few candidates come from the ranks of the vast working class and poor. This disconnect drives policy discussion and alienates the people from politics who need responsive government the most. The outgoing 115th Congress was startlingly affluent. The median net worth of all members of the House and Senate was $511,000, quintupling that of the typical American household. Multimillionaires populated both sides of the aisle. While the wealthiest member of Congress, Rep. Darrell Issa (R-Calif.), did not seek reelection, many of his moneyed colleagues remain, including Republican Greg Gianforte of Montana, worth $136 million, and Democratic Sen. Mark R. Warner of Virginia, worth $90 million.
The average age of members of the House and Senate in the 115th Congress was 57.8 years and 61.8 years respectively, among the oldest ever, according to the Congressional Research Office. Apart from “public service” and “politics,” the most dominant professions were in lucrative fields such as business and law. Even if running for Congress is fast becoming a million-dollar proposition, ever lengthening campaign cycles mean that once you run, you end up running full-time. Ocasio-Cortez, for example, quit her job as a server in a restaurant in February 2018, almost nine months ahead of Election Day. For most Americans with even less in savings, a lower education level, or a precarious employment situation, taking the step of quitting a job to run for office is unfathomable. Even if they somehow overcome those hurdles, they will lack the connections and social capital to raise the money required to run competitively.
Broken Government Lacking Leadership
Through his unbridled incompetence, Trump is the gift that keeps on giving for the Dem party, just having won the House & seeking to soon take back the White House & Senate. Meanwhile, neutered GOP leadership stay compliant with their unpredictable/unfocused/
Trump’s failure is that he hasn’t forged a governing party that can unite the country, pass legislation and address the United States’ problems. He has succeeded in creating an insurgency that has toppled the traditional Republican establishment and intimidated GOP members of Congress into stunned, appalled silence. But with the exception of the 2017 tax cut, in which wealthier people reap the biggest benefits, he has failed utterly to enact significant domestic policies. The border-wall tantrum and government shutdown show how Trump has squandered the opportunity that his populist campaign offered. If he had broadened his coalition — using the “art of the deal” he touts but doesn’t seem to understand — he would have presented a more formidable and lasting challenge to the Democratic Party. But the president’s insecure, all-or-nothing politics has prevented the compromises and horse-trading that might resolve festering problems and, forgive the phrase, make America great again. Instead, we have a paralyzed, dysfunctional government that even Trump enthusiasts must know is bad for our national health. Every additional day Trump sulks in the White House, his failure is more obvious.
Stop GOP Flop
John Kasich is doing his part to push back against corrupt demagoguery while trying to save his party: what-kasich-can-do-help
In 2017, the Republican Congress passed, and Trump signed, a massive tax cut that delivered a sugar high to the economy that is already wearing off (2018 was the worst year for the stock market in a decade) while bequeathing debt that could take generations to pay off. As Bloomberg News notes: “Total public debt outstanding has jumped . . . by $1.9 trillion since President Donald Trump took office,” or “roughly the size of Brazil’s gross domestic product.” The GOP’s proclivity for using government shutdowns to force through its agenda is another example of its drunken frat-boy antics. The three longest government shutdowns in U.S. history were all caused by Republican temper tantrums. In 1995-1996, Republicans led by House Speaker Newt Gingrich (Ga.) shut down the government for 21 days to force President Bill Clinton, who was committed to a balanced budget, to accept steeper cuts in domestic spending than he wanted. That was a public-relations debacle that contributed to Gingrich’s downfall. In 2013, Sen. Ted Cruz (R.-Tex.) and his tea party allies forced a 17-day shutdown in a futile attempt to defund the Affordable Care Act. In both cases, Republicans were willing to halt the vital operations of the government and risk the creditworthiness of the United States to try to shove their ideological demands down the throat of a president who disagreed with them.
The current, partial shutdown — the longest on record at more than three weeks and counting — is even more reckless and ill-advised, having begun on Dec. 22 when Republicans still controlled both ends of Pennsylvania Avenue. The “border emergency” used to justify the funding stoppage is a figment of the xenophobic imaginations of Ann Coulter, Rush Limbaugh and Donald Trump. The number of apprehensions at the southern border declined 75 percent in the past two decades — from 1.6 million in 2000 to 397,000 last year. The number of undocumented immigrants in the United States is at a 15-year low. Immigrants, both legal and illegal, commit fewer crimes than the native-born. And there has never been a terrorist attack in the United States carried out by terrorists who entered the United States from Mexico. There is, to be sure, a long-standing problem with undocumented immigrants and drugs entering the United States, but spending, as Trump proposes, $5.7 billion to build an extra 200 miles of wall along a 2,000-mile border will not solve anything. Most drugs and roughly half of all undocumented immigrants arrive through legal ports of entry.
Trump has conjured an illusory solution to an imaginary crisis. But, having taken the country hostage, he and his Republican allies are inflicting real suffering on 800,000 federal workers and real danger on 325 million Americans. FBI agents, Transportation Security Administration officers, air traffic controllers and Coast Guard members are working without pay — or, as with a growing number of airport screeners, not working. Morale is plunging and financial worries rising among the men and women charged with keeping us safe. A party that felt an iota of responsibility to the country would be alarmed by these developments and would reopen the government even if it meant overriding the president’s veto. But for the drunken frat-boy party, the damage inflicted by its ideological bender is no reason to sober up. Indeed, for the most antigovernment Republicans, the shutdown is a feature, not a bug, because it is shrinking, at least for a few weeks, the size of the government. The Republicans of yesteryear would send today’s Republicans to their rooms without any supper.
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