The Weakest Economy with the Best Statistics

To listen to Donald Trump and the GOP, you’d think the economy is the “best ever.” Even people whose own economic lives are not great read those numbers and think, “Well, at least most of America is doing better even if I am not.” But most of America is hardly doing well. Those wonderful numbers are based on averages and looking at the economy as a whole. But it doesn’t take a rocket-scientist to understand that the wealthiest segment of our economy is making so much more money that they pull the averages way up and make the economy as a whole look great.

But this is not true for most Americans. Most of us do not make our living trading on the stock market. And the unemployment numbers are so empty that if you have a low-paying, part-time job or ply the gig economy without benefits, you count as employed. Even as 70% of Americans make no more in real buying power than they did 40 years ago. For more, see my August 14^th blog, Real Dollars: Stagnation!. We even have a new category of employment now, the “working poor.”

Medical costs (thanks to Trump’s chiseling away at the Affordable Care Act – see my August 29^th blog, The Explosive Legacy of O’Bomb-a-Care), the prices of food, housing and fuel are soaring. We have the greatest income inequality in the entire developed world, and all those wonderful statistics are a reflection of that anomaly, not of a great economy shared by all.

Indeed, for most Americans, even a small unexpected bill, just a few hundred dollars, can collapse their ability to pay bills. Martin Mavis, speaking on talknetwork.com (10/25/17) explains: “[Most – 80% of] Americans are living paycheck to paycheck. This is understandable when you’re young. You’re just starting out. You got a lot of debt. You don’t have much in the way of assets or savings. But these days even people in their 40s, 50s, and 60s, and in retirement are living paycheck to paycheck. Often just living off their retirement funds, their Social Security check and other similar fixed income revenue sources…

“The big deal is major financial disruptions are coming. For example, let me give you a very concrete example. We know that pension funds are going broke nationwide and that’s because almost every state has promised far too much in terms of payouts to retirees. So, they have these obligations to retirees and the obligations cannot be met. The obligations were based on wildly optimistic assumptions of stock market’s going up forever. They did not take into account any downturns, market crashes or corrections.” Even Social Security is running out of money as a Republican-dominated Congress is trying to figure out how to cut both Medicare and Social Security benefits… all at a time when most Americans have little or no retirement savings. 

Nothing brings home how tough our economy is like looking beyond the below 70% earnings number. “Despite a strong economy, about 40% of U.S. families struggled to meet at least one of their basic needs last year, including paying for food, healthcare, housing or utilities.

“That’s according to an Urban Institute survey of nearly 7,600 adults that found that the difficulties were most prevalent among adults with lower incomes or health issues. But it also revealed that people from all walks of life were running into similar hardships.

“The findings issued Tuesday [8/28] by the nonprofit research organization highlight the financial strains experienced by many Americans in an otherwise strong economy.

“The average unemployment rate for 2017 was 4.4%, a low that followed years of declines. But having a job doesn’t ensure families will be able to meet their basic needs, said Michael Karpman, one of the study’s authors. Among the households with at least one working adult, more than 30% reported hardship.

“‘Economic growth and low unemployment alone do not ensure everyone can meet their basic needs,’ the authors wrote.

“Food insecurity was the most common challenge: More than 23% of households struggled to feed their family at some point during the year. That was followed by problems paying a family medical bill, reported by about 18%. A similar percentage didn’t seek medical care for a need because of the cost.

“Roughly 13% of families missed a utility bill payment at some point during the year. And 10% of families either didn’t pay the full amount of their rent or mortgage, or paid it late.” Los Angeles Times, August 29^th.

Our economy isn’t bad; it’s a disaster for everyone below the top income levels. That massive tax cut didn’t create new and better jobs! It funneled hefty dividends and stock buy-backs to the richest in the land. And it exploded the national debt which is “everyone” obligation! Meanwhile, our infrastructure is crumbling, and Trump seems to be moving in the direction of privatizing infrastructure, so average Americans will start having to pay the rich owners for the right to use it!

The future doesn’t hold any golden promises either. Artificial intelligence-driven automation is taking the majority of those “re-shored” manufacturing jobs, and Trump’s inane trade war is going to cost most of us a whole pile of money as prices skyrocket. We’re not going to reignite the coal industry, and while a tiny number of workers will get their jobs back in steel and aluminum manufacturing, the offsetting higher costs to the rest of us are nothing short of staggering.

“A 2017 McKinsey Global Institute study of 800 occupations across 46 countries found that by 2030, 800 million people will lose their jobs to automation. That’s one-fifth of the global workforce. A further one-third of the global workforce will need to retrain if they want to keep their current jobs as well. And looking at the effects of automation on American jobs alone, researchers from Oxford University found that ‘47 percent of U.S. workers have a high probability of seeing their jobs automated over the next 20 years.’” FastCompany.com, August 30^th.

With a very few exceptions, one of the hardest hit groups is Trump’s base. They are getting killed economically, but they keep citing the glowing economic statistics that somehow seldom apply to them. They are a captive force, dedicated to voting against their own self-interest. And if you think a nation can continue and survive on this basis, you are going to be in for a very, very rude shock!

I’m Peter Dekom, and what is it about obvious that isn’t?