The Trump Economy May Cost Him the Election
Like everything else Trump sells, appearances mask huge problems.
We hear it time and again, “it is tough to beat an incumbent president in a good economy,” and the assumption is that Trump sits atop a strong economy. The assumption is wrong, according to a Nobel Economist in an excerpted interview in Rawstory. Yes, the Dow is high, and so is the GDP, but neither measure is an appropriate indicator of an economy’s strength, especially as experienced by the typical voter.
The entire point in attempting to measure the economy is to evaluate the health and happiness of the citizenry, citizens should be living longer and healthier lives.
But among developed countries, the United States is coming in … last, by this , anyway. US life expectancy, which had already been low by first world standards, fell in the first two years of Trump’s presidency, and midlife mortality reached its highest rates since WW II.
This should surprise no one, because Trump set about to undo every Obama accomplishment, the biggest being Obamacare. No president ever worked harder to get Americans off health insurance and away from medical care. Millions lost coverage, and the uninsured rate went from 10% to 13% in just two years under Trump.
Moreover, working harder to make more, just to cover the rising cost of health insurance doesn’t equate to economic growth. Such work only shovels wealth upward toward the 1%. a 1% that is richer than its ever been.
Getting back to healthcare and quality of life:
One reason for declining life expectancy in America is what Anne Case and Nobel laureate economist Angus Deaton call deaths of despair, caused by alcohol, drug overdoses, and suicide. In 2017 (the most recent year for which good data are available), such deaths stood at almost four times their 1999 level.
The only time I have seen anything like these declines in health—outside of war or epidemics—was when I was chief economist of the World Bank and found out that mortality and morbidity data confirmed what our economic indicators suggested about the dismal state of the post-Soviet Russian economy.
The blog generally takes on an irreverent and humorous tone, but there is nothing humorous about increased suicide and overdose deaths, the hallmarks of the Trump economy. Indeed, while the Trump economy has been good, very good, if you are among that top 1%, and especially that top .1%, it has taken a terrible toll on the poor and low middle class.
The tax cuts were supposed to unleash government cash into citizens’ pockets but instead resulted in nothing more than aggregation of wealth in the richest bank accounts. With respect to the middle class, the results were dismal:
For example, the median wage of a full-time male worker (and those with full-time jobs are the lucky ones) is still more than 3% below what it was 40 years ago. Nor has there been much progress on reducing racial disparities: in the third quarter of 2019, median weekly earnings for black men working full-time were less than three-quarters the level for white men.
Another element not generally factored into the public’s view of the economy is the economic damage done to the planet – some of it irreversible. Under Trump the water is less drinkable, the air less breathable, and the planet much hotter. All of it takes its toll in the cost and quality of life, much more so than that presumed by the average Trump voter. Some economists believe the U.S. has suffered a -1.5% GDP since 2017 due to environmental factors alone.
Tax cuts were supposed to fuel new hiring and infrastructure development, instead they resulted in record stock-buy backs, increasing the wealth of those who held a large volume of shares. Not a dime went into the pockets of the employees. In the same way, trade wars were supposed to reduce the U.S. trade deficit but ultimately had the opposite effect, increasing our deficit from 2016 to 2018. The improvements made to the trade agreements finalized – such as the USMCA came about largely due to negotiations with Democrats who got almost exactly what they wanted, which resulted in marginally better trade agreements.
Last, the employment rate, rather than the unemployment rate, is the key indicator as to the nation’s economic health, and the employment rate has grown much slower under Trump than under Obama.
It is certainly true that the economy could be much worse, indeed, the economy is fair, despite it all. We are lucky that the economy has managed to bumble through much of the unpredictable Trump presidency. But the economy is not near as healthy as Trump would like the nation to believe. When one looks closely at the average Trump voter household, the inescapable conclusion is that the family’s economic fortune is largely unchanged – at best, worse, when health costs are factored-in.
The old axiom that it is tough to beat an incumbent president in a good economy is surely as sound as ever. The question going forward is whether this economy is as sound as Trump would like voters to believe. Like many things Trump sells, his statements about the economy paint a pretty coat over a rusting base.
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