Real Dollars: Stagnation!

Inflation, political braggadocio, lying with statistics and thinking that “averages” tell us anything at all about “average Americans.” These “tools” are how we are made to think that we have a well-performing economy, even when for most of us… it simply isn’t. Just the notion of gross domestic product, where aberrantly high performance at the loftiest and wealthiest segments of our nation makes the “entirety” look spectacular, while most folks are either making the same (or less) in real buying power than they were forty years ago.

While most elected incumbents manipulate numbers to make their “achievements” look better, the master liar-in-chief, Donald Trump, just makes stuff up… and his base – folks that are struggling with healthcare and watching those high-paying blue-collar jobs just vaporize in favor of automation, marginal pay and the gig economy – are actually telling themselves that Trump has made them better off. But they’re not! In states with lower state income tax, they ignore how much more expensive basics are and pretend that the minor tax cut that a few of them got makes them better off. Trump cannot function without a totally gullible base!

Lies? Like this excerpt from my August 3^rd blog, Real Numbers vs Selective Statistics, addressing Trump’s recent statement that 4.1% growth in our second quarter in 2018 was a record-breaker, never before evidence of his economic policy expertise: “Well aside from the fact that the number itself reflects how the ‘rich get richer’ top-heavy average makes the whole look great when most of us don’t get that benefit, that 4.1% number reflected only the performance of a single quarter, not the year. And no Donald Trump, you did not, as you tweeted, break any records. There have been such aberrantly-high quarterly numbers even during the administration you love to trash the most. You see that there were four higher quarters during the Obama years: 4.5% Q4 2009, 4.7% in Q4 2011, 5.1% in Q2 2014, and 4.9% in Q3 2014.” Trump’s base actually accepted that no American president had ever achieved such a quarterly result before Donald Trump!

But even if you use current numbers generated by an executive agency within the Trump administration itself, life isn’t so economically rosy for most Americans. Most of us are not earning enough to cause us to rise even slightly above the buying power we had four decades ago: “U.S. workers’ paychecks are worth less than they were a year ago, the Labor Department reported Friday, as modest wage gains have not kept pace with inflation.

“Prices rose 2.9% from July 2017 to July 2018, the Labor Department said, while average hourly pay increased 2.7% in the same period… The lack of real wage gains comes despite a strong economy, with sustained growth and an unemployment rate of 3.9% — one of the lowest levels in decades.

“The Labor Department tracks average hourly pay adjusted for inflation, which is known as the ‘real wage.’ According to the federal government, the real average hourly wage was $10.78 in July 2017 and $10.76 in July 2018. Real wages have been on a sharp decline since the start of the year… ‘Despite the strong labor market, wage growth has lagged economists’ expectations, Pew Research said in a report this week. ‘In fact, despite some ups and downs over the past several decades, today’s real average wage has about the same purchasing power it did 40 years ago.’

“Since 2000, only the top quarter of wage earners have seen any true increase in their pay once you account for inflation, Pew reported. For the middle class, it’s been years of stagnation, and the latest trends aren’t encouraging.

“Gas prices, housing and transportation costs have all jumped in the last year, taking a bigger bite out of paychecks. The price of gas has risen 50 cents a gallon in the last year, according to the AAA tracker of the average national price of gas. Used-car prices and rent are also up substantially from a year ago.

“When inflation rises faster than wages, workers fall behind. They have to cut costs from their budgets, take on debt or put in more hours to try to live the same lifestyle they had enjoyed a year ago.

“The Labor Department reported that Americans are putting in more time on the job this summer versus last summer, which is helping to keep family earnings about the same for now.” Los Angeles Times, August 11^th.

For the vast majority of “us,” pitting higher costs of living across the board against the inflationary income increases (that make us think we are earning more), even factoring in a tiny tax cut for a few of middle class, the American economy – in real buying power – is truly stagnant and has been stagnant for almost four decades. Add the new trade war, erosion of the Affordable Care Act, and the need to pay for the massive tax cut to the wealthiest segment of America, and the economic picture gets worse. Throw in the Trump/GOP commitment to reexamine Medicare and Social Security (as “too generous”) plus the expected job loss as artificial intelligence expands, and the future looks even more bleak.

That so many people are voting because the President tells them they are so much better off, even when the government’s own numbers prove otherwise for 70% of us, makes their voting in elections downright scary. They’re literally voting based on believing the lies and specifically rejecting facts. Hmmmm?

I’m Peter Dekom, and while I’d like to say that those misled voters are getting what they so richly deserve… except their votes are negatively impacting the lives of people who see the real world with extreme clarity as well.