Pain in Trump-a-Nomics Land

 “In less than two years my administration has accomplished more than

almost any administration in the history of our country”

Donald Trump’s U.N. speech on September 25^th 

‘There was a smattering of audible laughter from the assembled diplomats, representing 193 countries.’ AOL.com

The President is a master of hyperbole, assigning blame to foes and taking credit either for what has not occurred or what was truly based on the efforts of others  Almost without exception, you can figure that just about anything Donald Trump proposes for the economy is going to hurt the middle and lower segments of our economy the hardest. If there are any beneficiaries at all, it will almost always be the higher reaches of wealth and power. Sometimes, the purported “beneficiaries” just exist in some never-to-be-real mythical place – mostly in the minds of Donald Trump and his ardent followers or in such a tiny minority to be of almost no serious off-setting economic value compared to the pain and displacement faced by the vast majority of Americans.

Tax Cut. Token and temporary cuts to a few middle-class earners, increase in taxes for people earning wages and salaries who live in states with high property and/or income taxes, huge tax cut to wealthiest (folks who own corporations) but huge deficit burden on absolutely all taxpayers.

Deregulation. Removing massive protections for consumers dealing with big corporate entities, allowing businesses to raise prices in once heavily regulated industries, allowing level of pollution and environmental toxicity to rise negatively impacting the health and life expectancy of millions, huge savings to corporations no longer held to sufficient financial, social or environmental responsibility.

Healthcare. Reduction in the quality and coverage of many health insurance policies (especially in allowing “skinny bundles” that do not cover big medical issues or pre-existing conditions), significant resulting increase in premiums, deductibles and co-pays for most remaining policies, no reduction in the cost of prescription drugs, massive and significant savings for companies that were required to provide such benefits.

Immigration. Impact on low-crime-rate immigrants, undocumented or fully legal, being pushed out of the country. Reduction in their contribution to the economy. Higher costs for most Americans as lower-cost jobs often go unfulfilled (e.g., stoop labor on farms) at any wage, unharvested crops rotting in the fields, and general higher food and construction costs. Job-creating high-tech immigrants denied visas, forcing them to work in countries building a work force to compete with us.

Government Austerity in Government Investment in Human Capital. Reductions began in state budgets, mostly in red states, long before Trump assumed power, but accelerated once he took office. Thank you Education Secretary Betsy “billionaire who hate public education” DeVos. A study published in the Lancet on September 4^th, based on data gathered by the Institute for Health Metrics and Evaluation at the University of Washington noted that how much education a person receives and how many years of their life they can effectively contribute to working, materially impacts a country’s economic success. “Human capital.” Likewise, reductions in education and healthcare impair economic success.

According to that study, as reported in U.S. News and World Report (9/24): “Among the world's biggest economies during that time, the U.S. fell from sixth place to 27th in investing in human capital while China rose from 69th to 44th. Other economic powerhouses including Japan, Germany, the U.K. and France all stayed within four spots of their original rank…

“Investment in [healthcare and education] is directly tied to a country's ability to grow its economy, the study finds. A lack of advances in education is the main cause of America's lagging position, according to the study's authors…

“News reports in recent years have documented the U.S. government's flagging investments in education, which dropped 3 percent for elementary and high schools between 2010 and 2014, while other global economic powerhouses increased education spending by 5 percent on average.”

Tariff Wars. Aside from a most basic principle that no one ever wins a trade war, Donald Trump is convinced that he can provide an exception to the centuries-old economic reality. Sure, there are few steel and aluminum workers with jobs that they wouldn’t have without huge tariffs on imports of such metals, but just about anything you buy made of those metals, and any form of construction, has seen prices increasing in double digits, way, way beyond any gain in these token job increases.

Likewise, as the agricultural subsidies from Trump’s farmer bailout (because other countries retaliated against Trump tariffs against them and tariffed U.S. farm goods) become exhausted, U.S. farmers will face economic catastrophe. Small businesses are also about to give consumers the bad news, resulting in fewer sales, fewer jobs and economic contraction everywhere. And the latest trade war rates with China will slam consumers and small businesses the most. The September 24^th Los Angeles Times explains:

“Small businesses around the country said they are bracing for the latest round of tariffs, which could cut into already thin profits and leave them with little choice but to pass additional costs along to customers beginning this holiday season.

“And though larger retailers such as Walmart, JC Penney and Amazon say they have already locked in low-priced inventory for the holidays, independent retailers tend to rely on third-party suppliers to import products for them, giving them little control over where their goods come from or how much they cost.

“‘Larger retailers may be able to find alternative sources or be able to absorb a price increase without passing the cost on to their customers,’ said David French, senior vice president of government relations for the National Retail Federation… ‘But the smaller you are, the more vulnerable you are to the impact,’ French said.

“Analysts say the tariffs — which began Monday at 10% and will rise Jan. 1 to 25% — are likely to trickle down to retailers and consumers in the coming weeks and months, raising the prices of everyday household goods.

“Nearly 6,000 types of products, including seafood, suitcases and ski gloves, will be affected, and industry leaders say big-ticket items such as consumer electronics, appliances and furniture will be among the hardest hit.

“‘A 25% bump at the wholesale level could end up being a 40% or 50% increase by the time something gets to the sales floor,’ said Adam Rossi, owner of Adam Solar Rides, which sells electric bicycles, skateboards and hoverboards in Pittsburgh… ‘The American consumer just isn’t willing to pay that much more,’ Rossi said.

“Ken Kieran, owner of Union Farm Equipment in Union, Maine, said inventory costs have already risen substantially in recent months following a 25% tariff on steel imports…

“Vivian Sayward, who manufactures athletic clothing in San Diego, says she is expecting prices to rise on a number of materials, including a polyester-Spandex blend fabric she uses frequently… She said that she is looking into finding new suppliers that aren’t based in China, but that the process could take months or years… ‘This tariff was supposed to help American manufacturers, but truthfully, we may have to start manufacturing outside the U.S.,’ said Sayward, who founded Vivacity Sportswear six years ago… ‘I’m not quite sure, to be honest, how my business can survive long-term,’ she said.”

In the world of economic growth, Donald Trump touted that he broke an all-time record with a single-quarter (2^nd quarter of 2019) 4.1% GDP growth rate. Not exactly, aside from the fact that the economy was already in high-rate GDP growth during the last few years of the Obama Administration, the United States has seen quarters at this rate or higher 117 times before, 4 times during the Obama years. Simply put, Trump is coasting on Obama’s coattails – as to GDP, stock market and job growth – and claiming success based on what was very much already in place when he took office. For most Americans, 70% to be more precise, our economic well-being is either unchanged or worse from what it was 40 years ago.

I’m Peter Dekom, and if we last that long, a post-Trump administration will have to work overtime to undo the damage Trump has inflicted on this country to Make America Great Again.