Quote of the Day: Trump’s Economy vs. The Economy Most of Us Live In

robert reich

As White House economic adviser Larry Kudlow recently put it, “The single biggest story this year is an economic boom that is durable and lasting.”

Really? Look closely at the living standards of most Americans, and you get a very different picture.

Yes, the stock market has boomed since Trump became president. But it’s looking increasingly wobbly as Trump’s trade wars take a toll.

Over 80 percent of the stock market is owned by the richest 10 percent of Americans anyway, so most Americans never got much out of Trump’s market boom to begin with.

The trade wars are about to take a toll on ordinary workers. Trump’s steel tariffs have cost Ford $1 billion so far, for example, forcing the automaker to plan mass layoffs.

What about economic growth? Data from the Commerce Department shows the economy at full speed, 4.2 percent growth for the second quarter.

But very little of that growth is trickling down to average Americans. Adjusted for inflation, hourly wages aren’t much higher now than they were forty years ago.

Trump slashed taxes on the wealthy and promised everyone else a $4,000 wage boost. But the boost never happened. That’s a big reason why Republicans aren’t campaigning on their tax cut, which is just about their only legislative accomplishment.

Trump and congressional Republicans refuse to raise the minimum wage, stuck at $7.25 an hour. Trump’s Labor Department is also repealing a rule that increased the number of workers entitled to time-and-a-half for overtime.

Yes, unemployment is down to 3.7 percent. But jobs are less secure than ever. Contract workers – who aren’t eligible for family or medical leave, unemployment insurance, the minimum wage, or worker’s compensation – are now doing one out of every five jobs in America.

Trump’s Labor Department has invited more companies to reclassify employees as contract workers. Its new rule undoes the California Supreme Court’s recent decision requiring that most workers be presumed employees unless proven otherwise. (Given California’s size, that decision had nationwide effect.)

Meanwhile, housing costs are skyrocketing, with Americans now paying a third or more of their paychecks in rent or mortgages.

Trump’s response? Drastic cuts in low-income housing. His Secretary of Housing and Urban Development also wants to triple the rent paid by poor households in subsidized housing.

Healthcare costs continues to rise faster than inflation. Trump’s response? Undermine the Affordable Care Act. Over the past two years, some 4 million people have lost healthcare coverage, according to a survey by the Commonwealth Fund.

Pharmaceutical costs are also out of control. Trump’s response? Allow the biggest pharmacist, CVS, to merge with the one of the biggest health insurers, Aetna — creating a behemoth with the power to raise prices even further.

The cost of college continues to soar. Trump’s response? Make it easier for for-profit colleges to defraud students. His Secretary of Education, Betsy DeVos, is eliminating regulations that had required for-profit colleges to prove they provide gainful employment to the students they enroll.

Commuting to and from work is becoming harder, as roads and bridges become more congested, and subways and trains older and less reliable. Trump’s response? Nothing. Although he promised to spend $1.5 trillion to repair America’s crumbling infrastructure, his $1.5 trillion tax cut for big corporations and the wealthy used up the money.

Climate change is undermining the standard of living of ordinary Americans, as more are hit with floods, mudslides, tornados, draughts, and wildfires. Even those who have so far avoided direct hits will be paying more for insurance – or having a harder time getting it. People living on flood plains, or in trailers, or without home insurance, are paying the highest price.

Trump’s response? Allow more carbon into the atmosphere and make climate change even worse.

Too often, discussions about “the economy” focus on overall statistics about growth, the stock market, and unemployment.

But most Americans don’t live in that economy. They live in a personal economy that has more to do with wages, job security, commutes to and from work, and the costs of housing, healthcare, drugs, education, and home insurance.

These are the things that hit closest home. They comprise the typical American’s standard of living.

— Robert Reich, Alternet, Here’s the Truth About Trump’s ‘Great Economy’, October 21, 2018

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3 Comments

  1. GeoffT

    It’s interesting how tax rebates can be worded to sound somehow more benign than they actually are, and it has to be borne in mind that tax cuts are only beneficial if you pay tax. To non-taxpayers they are a burden. Tax cuts should be called what they actually are, which is “government spending”; but of course, Trump promised to reduce government spending.

    As for tariffs, it’s unbelievable. Trade wars were found in the eighteenth and nineteenth centuries to be totally self defeating after any length of time, which is when it was discovered that the best way of protecting economies and jobs was via efficiency. One can only hope that the mid-term elections move toward a Democrat congress, and that with Trump soon having to start looking to the next presidential election, that he can effectively be neutralised so as to minimise intermediate damage to the economy. Surely American voters aren’t crazy enough to elect him for a second term….don’t answer!

    Reply
  2. That Other Jean

    Hear, hear! Trump’s promises to the least wealthy of his voters were empty air. He has done nothing except appeal to voters’ worst instincts, prejudices, and fears. As president of all Americans, except the wealthiest, he is an abject failure. What he has done has been done for himself, his family, and his cronies–made them wealthier at everyone else’s expense.

    Reply
  3. ObstacleChick

    I work in the fragrance industry where a large number of materials are made in China. The industry was already hurting after a major fire at Germany’s BASF plant in October followed by a major fire at India’s Privi Organics plant and shutdowns by China of many fragrance material factories for environmental concerns. Pricing rose 30% on average this year. Trump’s tariffs will raise pricing further. Container costs and ink costs increased drastically. Plus, the tariff list includes everything from raw materials to foodstuffs. Every good that consumers purchase is going to increase in price or decrease in quality. American factories do not manufacture many of these raw materials. Period. Europe either. It could be great news for India and southeast Asia that have cheap labor to increase production but that takes time and resources. It won’t help American manufacturing and wint suddenly make America great again.

    Reply

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