SIDEBAR
»
S
I
D
E
B
A
R
«
Reconciling Trump’s Incompetency With Economic Success
May 7th, 2018 by Admin Mugsy

Share
 


During the 1980 presidential race, GOP candidate Ronald Reagan attacked President Carter for allowing the National Debt to “skyrocket” from just $700 Billion to $900 Billion, a nearly 25% increase in the National Debt in just four years, implying “stunning fiscal irresponsibility” on Carter’s behalf. of course, what Reagan innocently forgot to mention was that all those loans to pay for the Vietnam War started to come due in 1976 (the year before Carter took office) and drove up the Debt, not because of any “fiscal irresponsibility” on Carter’s behalf. Then Reagan went on to become president, slashed taxes on the wealthy, and TRIPLED the National Debt in just eight years. But Republicans adored Reagan… and still do to this day… for producing a “fantastic” economy (actually, the Reagan economy was less successful Bill Clinton’s. And Carter did FAR better in his four years than Reagan did in his first four.) Reagan traded the short-term gain of tax cuts to rescue a struggling economy in the 80’s for a 300% increase in the National Debt that we’ll be paying off for generations. Short-term gain in exchange for delayed long-term pain. Republicans have a well-documented history (something I document here weekly) of ignoring the future consequences of decisions they make today in exchange for short-term gain.

I remember a few years back listening to a debate over whether or not “nuclear energy” should be included in any discussion of “Green Energy”. The short-term gainers argued that “anything that helps us get off fossil fuels that doesn’t produce CO2” should be considered “Green Energy”. One man pointed out that “If the ancient Egyptians had nuclear reactors and used them to power their cities 5-10 thousand years ago, we would STILL be stuck having to store their nuclear waste today.” That’s an amazing thought. Short-term gain in exchange for long-term pain.

We see this repeatedly among Republicans. “Damn the consequences! Full speed ahead… into Iraq… or exploding the Deficit with tax cuts that aren’t paid for… or rolling back regulations of coal mining (and not just “pollution” regulations either. West Virginia’s GOP Senate primary is being led by none other than Bill Blankenship, owner of the “Massey Energy Coal Mine” who went to prison after ordering supervisors to ignore coal mine safety regulations, resulting in the deaths of 29 coal miners in 2010. (But hey, they all had jobs!). Cutting taxes without regard for the Debt (until a Democrat becomes president)? That’s GOP-101.

Republicans hate “government regulations” the way children hate being told to eat their peas. Those “regulations”… like those mine safety regulations Blankenship ignored… were put in place for a reason. Rolling back regulations might help a few companies save a few bucks today and perhaps create a few more jobs… until one of the reasons those regulations were enacted in the first place comes back to bite them in the ass and ends up costing people a lot of money (or worse.) The consequences of many decisions might not be felt for years, but they always come. How many people predicted we’d still be at war in the Middle-East FIFTEEN YEARS after the invasion of Iraq (which was sold on the promise of an “Arab Spring” where the successful Democratization of Iraq would spread throughout the Middle-East as “dictatorships fall like dominoes?”)

So last week, unemployment fell to an amazing 3.9%… technically “full employment” (ie: if you don’t have a job, you probably don’t need one)… a low not seen since Bill Clinton’s second term. Add to that, the “meteoric” rise in the Stock Market after Trump was elected (the DOW closed at a record high of 26,616.71 on January 26th of this year… an increase of 25.5% since Obama left office. All very good news for the economy, and both are indexes I used to judge the strength/weakness of the economy under both Obama & Bush. And this far into Trump’s second year, he does deserve the majority of the credit for these good numbers (as much as it pains me to say it) because a year of unpopular economic decisions would just as easily have driven those numbers back up.
 

Unemployment rate since Bush's final year

 

Trump nearly derailed his own economy when he threatened to impose blanket indiscriminate tariffs on imported steel & aluminum without regard for country of origin, which threatened to spark a global trade war, first resulting in the DOW losing over a thousand points in one week, then losing a thousand points in one day the following Monday. So current numbers ARE a reflection of current policies.

Under Obama during the 2016 campaign, when unemployment fell from 4.9% to 4.6% on November 1st… three points in just one month… Trump called the numbers “fake” and an attempt by the Bureau of Labor Statistics to help Hillary Clinton. Now the numbers are totally accurate and proof his economic policies are working.

At the risk of sounding like a partisan pessimist unwilling to admit “success” under a Republican president, I’m seeing the same trends we saw under George W. Bush when he slashed interest rates NINE TIMES in 2001 (and don’t blame 9/11. Only TWO of those cuts came after 9/11) to get the economy moving again in his first term (if you have been paying attention this week, the last time unemployment fell to 3.9% was December of 2000JUST as the Republican candidates started talking down the economy as they started their run for president (again, trading short-term gain without regard for the consequences.) Interest rates near zero have left the Federal Reserve with no place to go but up… which we have been putting off ever since. When exploding gasoline prices (thanks to deregulated Commodity Traders) sucked TRILLIONS out of the economy by 2008, “cutting interest rates to kickstart the economy” was no longer an option. Global economic disaster ensued, forcing newly elected President Obama to borrow hundreds of Billions for his “Stimulus”.

Trump’s MASSIVE corporate tax cuts… permanent for the rich but temporary for everyone else… spurred enormous investment in the stock market (almost without regard for profits) because it meant corporations were going to be able to keep more of their profits. Many stocks are likely over-inflated, not justified by their sales figures, which makes them ripe for a crash. Trump is creating a bubble that will make The Crash of 2008 look like “The Good Old Days”. We can’t cut taxes to zero and still fund the government, so the days of goosing investment in the Stock Market with the promise of additional tax cuts are over. Once again, there’s no place for them to go but up. The flood of investors pouring money into stocks to take advantage of larger profit margins seemed to push the DOW to new record highs week-after-week for months. Those record highs stopped with that January 26th record close mentioned above. The DOW has not hit another record high since. By last Wednesday, the DOW was down more than 10% off that record high just three months earlier (though gaining a nice 300+ point bounce Friday thanks to the good jobs numbers for April.) And much of this has to do with an increase in Consumer spending thanks to those (temporary) tax cuts (that will blow a hole in the Deficit for the next guy to worry about.) Yes, those tax cuts for the Poor & Middle Class will come to an end over the next few years, but the Republican philosophy is that in a few years, with the economy growing, consumers won’t need those tax cuts anymore (but then watch how hard Republicans fight a few years from now to keep those tax cuts on the grounds ending them will hurt the economy. This is EXACTLY what Republicans did regarding “The Bush Tax Cuts” that were set to end under Obama.)

Okay, we’ve spurred the economy with tax cuts and deregulation. Now what? How do we keep the momentum going? Trust me. They got nothin’.

Tax cuts alone don’t drive economic growth. And thanks to Trump’s massive tax cut blowing a hole in the Deficit, they are going to HAVE TO raise interest rates (already a growing concern) to fund the government. That will suck Billions out of the economy, slow growth, and cause another Recession. Then Trump’s low-end tax cuts will expire, making the problem even worse (which as I note above, will be the excuse for extending those tax cuts even longer) and make an already bad problem even worse.

Gas prices are also on the rise. Republicans LOVE “Big Oil” and want unrestricted drilling EVERYWHERE. “Wanna drill for oil in the middle of a National Park? Go for it! So with all this additional drilling, why are oil/gas prices going up? The national average price of gasoline is now $0.55/gal higher today than when Obama left office. Oil… $52.42/barrel when Obama left office… is racing towards $70/barrel today. Why? Because the GOP’s love of “Big Oil” isn’t out of a desire to see cheap gas, it’s out of a desire to make oil company executives rich. Enjoy the “good times” while you can, folks!

There are plenty of movie & TV examples of “good intentions gone wrong”. But one of my favorites was a 2002 episode of “The Outer Limits” called “The New Breed” (44 minutes) about a brilliant scientist with a massive ego who invented microscopic “nanobots” that could repair damaged cells on a molecular level to cure everything. At first, the nanobots are a huge success. But then they start misinterpreting normal flaws as “mistakes” that need to be “fixed” (one example: giving the doctor “gills” because he kept testing to see how long he could hold his breath under water.) By the end, the brilliant scientist was begging for death.

And that’s how I feel every time I hear Republicans promising the moon today if we just jeopardize our future. “Too many regulations!” “Fighting Climate Change is costing us jobs!” “Corporations will regulate themselves if they wish to stay in business!” “Ice Cream & candy for dinner! We’ll worry about the tummy ache and cavities tomorrow!” They’ve done it time & time again.

A month ago, I wrote about my concern regarding a possible increasing willingness to overlook Trump’s crimes & disastrous policies should his economic policies turn out to be successful. How much is your soul worth? In exchange for short term economic growth, Reagan’s policies exploded the Debt, made “deregulation” a GOP mantra, and unleashed the Military Industrial Complex. Trump whined bitterly of the Mueller/Russia investigation last week, saying, “The country is running so smoothly”, suggesting the investigation into his campaign’s frequent and unresolved contacts with a hostile foreign power… (“meddling” that even Trump himself now concedes happened)… is just sour grapes by “losers” trying to derail his presidency before his “success” costs them the next election.

The cause for alarm here is that Trump is implementing every economic “trick” in the book… (tax cuts, “deregulation”, low interest rates) usually reserved for emergencies… all at once to goose the economy. The danger is that if things go bad, you’re left with no way to counter the damage and rescue the economy.

It drives me crazy that people can’t see that he’s a conman. PT Barnum in a cheap suit. Trump is (or was before the election) broke, pretending to be a billionaire. His entire shtick has been coning people into believing he must know what he’s talking about because he’s a billionaire. “Trump University”, “Trump Airways”, “Trump Vodka” (not wine but Russian vodka), “Trump Mail-Order Steaks” (I always wondered just how much money someone who made million dollar real estate deals thought he’d make selling steaks by mail?), presidential candidate, and now he’s selling the snake oil of “Trickle-Down” voodoo economics all over again.

And (for now), people are buying it. Lord help us all.
 


Writers Wanted Got something to say? Mugsy’s Rap Sheet is always looking for article submissions to focus on the stories we may miss each week. To volunteer your own Op/Ed for inclusion here, send us an email with an example of your writing skills & choice of topic, and maybe we’ll put you online!

RSS Please REGISTER to be notified by e-mail every time this Blog is updated! Firefox/IE users can use RSS for a browser link that lists the latest posts! RSS


 

Share

Comments
SIDEBAR
»
S
I
D
E
B
A
R
«
»  Substance:WordPress   »  Style:Ahren Ahimsa