Bidenomics Caused Recovery

Financial FAQs

“Real gross domestic product (GDP) increased at an annual rate of 3.1 percent in the third quarter of 2024, according to the "third" estimate. In the second quarter, real GDP increased 3.0 percent. The increase in the third quarter primarily reflected increases in consumer spending, exports, business investment, and federal government spending.”

BEA.gov

It might not seem fair to compare the Biden and Trump administrations, economically. The Biden administration will have created almost 16 million payroll jobs in four years, whereas Trump had created 6.7 million jobs until the 2000 pandemic, but lost -2.7 million jobs overall during his term because of its severity.

Though COVID-19 was made worse by Trump’s misinformation campaign that cast doubt on many of the actions needed to limit its damage, such as wearing masks in crowds and advocating chlorine injections.

But the increase in the 3^rd (and final) revision to third quarter economic growth when many thought a recession was immanent this year gives testament to the strength of the economic recovery under President Biden. The U.S. economy has now expanded by at least 3% in each of the past two quarters. What’s more, the most recent estimates suggest GDP will top 3% in the fourth quarter, as well.

The result has been surging growth and full employment with declining inflation, refuting the misinformation barrage that elected Trump for a second term. The Fed’s preferred Personal Consumption Expenditure (PCE) inflation measure even came in below expectations, up just 0.1 percent in November, 2.4% annually.

FREDpce

But it still hasn’t answered the question of many voters:Why haven’t prices come down for the things that consumers use daily?

The simplest answer is that most consumers are flush with rising wages and leftover savings that have boosted retail sales and leisure activities. The big driver of economic growth has been consumer spending. Household spending increased to a 3.7% annual pace in the third quarter, from 3.5%. Prices would come down if consumers wanted to spend less—maybe because they had lost confidence in future growth and feared for their jobs October

But that hasn’t been the case. Consumer confidence surveys, such as by the Conference Board, are showing they aren’t that worried or unhappy about their jobs.

“Consumer confidence continued to improve in November and reached the top of the range that has prevailed over the past two years,” said Dana M. Peterson, Chief Economist at The Conference Board. “November’s increase was mainly driven by more positive consumer assessments of the present situation, particularly regarding the labor market.”

Another index by the Conference Board, it’s Index of leading Economic Indicator (LEI) that attempts to predict future growth has also turned positive. It rose for the first time since February 2022.

“A rebound in building permits, continued support from equities, improvement in average hours worked in manufacturing, and fewer initial unemployment claims boosted the LEI in November,” said Senior Manager Justyna Zabinska-La Monica.

Even Fed Chairman Powell is now saying they might have fewer rate cuts next year if such strong growth continues.

And that will hurt the anemic housing market, which just last Thursday announced the largest rise in existing-home sales in a year, all because of a slight (and temporary?) drop in mortgage rates.

The National Association of Realtors announced that total existing-home sales – completed transactions that include single-family homes, townhomes, condominiums and co-ops – improved 4.8% from October to a seasonally adjusted annual rate of 4.15 million in November. Year-over-year, sales bounced 6.1% (up from 3.91 million in November 2023).

“Home sales momentum is building,” said NAR Chief Economist Lawrence Yun. “More buyers have entered the market as the economy continues to add jobs, housing inventory grows compared to a year ago, and consumers get used to a new normal of mortgage rates between 6% and 7%.”

So even the housing market is telling us that Bidenomics has been a success. And Republicans will now be taking credit for it over the next four years, so I think they won’t dare cut those programs in the name of greater efficiency that have made President Biden’s investments in future growth so successful.

Harlan Green © 2024

Follow Harlan Green on Twitter: https://twitter.com/HarlanGreen

Even More Debt

 ANSWERING KENNEDY’S CALL

 “In the recent (2020) GOP primary presidential debate, former United Nations Ambassador Nikki Haley claimed that President Trump added $8 trillion to the national debt while Florida Governor Ron DeSantis said that President Trump added $7.8 trillion to the debt. These statements are true, depending on how you measure additions to the debt. We estimate the ten-year cost of the legislation and executive actions President Trump signed into law was about $8.4 trillion, with interest.” January 2024, Committee for a Responsible Federal Debt.

FactCheck.org

Donald Trump and the Republicans’ most significant legacy will be the huge budget deficits they are projected to leave behind. It will mainly be due to present and upcoming tax cuts they promise to enact without any way to pay for them, except shrinking the social safety net.

And adding higher tariffs to the mix will raise the cost of everything and perhaps cause the Federal Reserve to pause outright in further rate cuts.

Takashito Ito, a former Japanese Deputy Prime Minister of Finance has predicted what will be the result.

“Beyond alienating friends and partners, Trump’s tariffs will probably fail to advance his apparent goal of reducing the U.S. trade deficit. If other countries adopt retaliatory tariffs, total exports from the U.S. — and global trade overall — may well decline. Moreover, high U.S. tariffs would fuel domestic inflation, forcing the U.S. Federal Reserve to raise interest rates, which would probably cause the U.S. dollar to appreciate, causing exports to fall and imports to rise.”

In fact, Nikki Haley was right in their 2020 primary debate: Of the $8.4 trillion President Trump added to the debt, $3.6 trillion came from COVID relief laws and executive orders, $2.5 trillion from tax cut laws, and $2.3 trillion from spending increases, with the remaining executive orders having costs and savings that largely offset each other, said the Committee for a Responsible Federal Debt.

Republicans inflated the budget deficit once before during the GW Bush presidency when they had the chance to almost eliminate it. President Clinton and VP Gore had engineered budget surpluses—yes surpluses—as high as +$236 billion, from 1996-2000 in their last four years that was mainly designed to strengthen social security and Medicare.

Bush’s first Treasury Secretary had also recommended it, but VP Cheney fired him after his first year in office for being such a spending scrooge. Bush had campaigned on returning some of the surplus to taxpayers via tax cuts, because 60 percent of the public in surveys favored tax cuts. But just 12 percent of the tax savings went to the middle class while the wealthiest garnered 79 percent of the tax cut benefits, according to PEW Research.

The Bush administration ended with the first $1 trillion federal budget deficit because of the $trillion spent on the invasion and occupation of Iraq and Afghanistan. Rising budget deficits have been the case ever since with Republican administrations.

It is why we will probably see even more federal debt in Trump’s next four years. It looks like a repeat performance as he is again nominating those most loyal and most incompetent for some of his cabinet picks, such as Pete Hegseth for Defense Secretary, Tulsi Gabbard for the Department of National Intelligence, and Robert Kennedy, Jr. for Health and Human Services.

He has again been using the same bullying tactics to attempt to get his cabinet picks through the Senate without background checks or security clearances. How easily Americans have forgotten that he has used such tactics his whole life to intimidate, once again highlighting his own incompetence to be POTUS.

Harlan Green © 2024

Follow Harlan Green on Twitter: https://twitter.com/HarlanGreen

Higher Economic Growth Ahead?

 Popular Economics Weekly

The GDPNow model estimate for real GDP growth (seasonally adjusted annual rate) in the fourth quarter of 2024 is 3.3 percent on December 9, unchanged from December 5 after rounding. After recent releases from the US Census Bureau and the US Bureau of Labor Statistics, a decrease in the nowcast of fourth-quarter real personal consumption expenditures growth was offset by increases in the nowcasts of fourth-quarter real gross private domestic investment growth and fourth-quarter real government spending growth.

BEA.gov

Almost everyone is currently predicting good fourth quarter (GDP) growth. Bank of America and Goldman Sachs are predicting it stays in the 2 percent range of past quarters. The Atlanta Fed GDPNow estimate for Q4 is an outlier, predicting 3.3 percent growth.

Why the seeming growth pickup? Consumer confidence has improved, for starters, as consumers earned enough and have enough savings to keep buying for the holidays. Next week’s retail sales figures will tell us more. Dow Jones is predicting sales could increase as much as +0.6 percent in November, up from +0.4 percent in October.

The Conference Board reported “Consumer confidence continued to improve in November and reached the top of the range that has prevailed over the past two years,” said Dana M. Peterson, Chief Economist at The Conference Board. “November’s increase was mainly driven by more positive consumer assessments of the present situation, particularly regarding the labor market. Compared to October, consumers were also substantially more optimistic about future job availability, which reached its highest level in almost three years.

This is confirmed by the recent JOLTS survey from the Labor Department that reported there were still more than 7 million job openings, and 5.3 million hires in October.

AtlantaFedGDPNow

The Atlanta Fed based its higher GDP growth estimate on increased government spending, such as the $2 billion investment for Intel’s new chip factory in Arizona (part of the CHIPS Act), and higher private capital expenditures. Much of the capex spending is in the expansion of AI production, like NVIDIA’s, the leading AI chip manufacturer that has become the darling of Wall Street.

Donald Trump’s re-election might also be an ingredient, as he has been named Time Magazine’s Person of the Year for a second time. There is no question that he is dominating our national psyche.

“Since he began running for President in 2015, perhaps no single individual has played a larger role in changing the course of politics and history than Trump,” said Time Magazine’s announcement.

The question is will it mean better times for most Americans?

Harlan Green © 2024

Follow Harlan Green on Twitter: https://twitter.com/HarlanGreen

Was Inflation the Problem?

 Popular Economics Weekly

“The West Wing may believe Bidenomics is working because the macroeconomic gurus at the Federal Reserve are telling the White House it’s working. But Bidenomics has failed to create sufficient tangible improvement in the lives of most voters in a world in which groceries still cost more than they did a year ago, average rent and mortgage rates have spiked and health and child care grow ever more unaffordable. Mr. Biden cannot win in 2024 unless he speaks to the economy as it is, not as he wishes it was,”Karen Petrou, NYTimes.

FREDcpi

The Consumer Price Index for All Urban Consumers (CPI-U) increased 0.3 percent on a seasonally adjusted basis in November, after rising 0.2 percent in each of the previous 4 months, the U.S. Bureau of Labor Statistics reported today. Over the last 12 months, the all items index increased 2.7 percent before seasonal adjustment.

As shown in the FRED cpi graph dating from 2000, the last inflation surge began in 2020 during the Biden administration and the COVID-19 pandemic. A majority of voters in the presidential election decided prices and inflation had been too high for too long, therefore President Biden was blamed for it.

But no, it was the pandemic’s sudden supply shortages that caused the surge, not Biden’s Bidenomics’ legislation that enabled the quickest recovery in the developed world. Yet it took 3.5 years for inflation to return to today’s 2.7 percent annual rate, still above the Fed’s 2 percent target goal.

There was another reason for the anger over such high and prolonged inflation. The incomes of half of U.S. households could not keep up with the inflation surge. Most of the increase in household income was achieved in the period from 1970 to 2000. In these three decades, the median income increased by 41%, to $70,800, at an annual average rate of 1.2%, says PEW Research.

The warning shot about the discontent of American workers was written in 2023 by Karen Petrou, a NYTimes guest columnist, in which she said that “ 64 percent of households live paycheck to paycheck from time to time, according to a March consumer survey. These families are barely making it through the week, let alone accumulating the wealth essential for financial resilience and, over time, financial security.’

Why such an increase in income inequality? A series of recessions (gray bars in the FRED graph) occurred during tempestuous times—the Gulf War, the various wars on terror in Iraq and Afghanistan, the Great Recession, and busted housing bubble.

The median household income in 2015 – $70,200 – was no higher than its level in 2000, marking a 15-year period of stagnation, an episode of unprecedented duration in the past five decades.

The unemployment rate rose from 4.2 percent to 5.7 percent during the shorter-lived 2001 recession (and 9/11 Twin-towers attack). It rose from 5 percent to 10 percent during the Great Recession that ended in 2009. And those in the lower ‘income brackets suffered the most financial damage, as is always the case.

And the reason for those recessions was in large part because “it is like a poker game where the chips have become concentrated in fewer and fewer hands,” again quoting Roosevelt’s Federal Reserve Chairman at the time.

Ms. Petrou concluded, “Listening to advisers — not voters — is a fatal campaign error, one that Hillary Clinton made in 2016. Mr. Biden only narrowly pulled out a win in 2020 because Mr. Trump wasn’t listening to voters when it came to Covid. Now they’re tuned in to Mr. Trump’s perspective on the economy because he is, in his way, listening to them.”

The irony is that it is just those Bidenomics’ programs that are funding factories in many of the red states that can help to ease the inequality that has affected so many working folk, and that is the source of most of the discontent.

Harlan Green © 2024

Follow Harlan Green on Twitter: https://twitter.com/HarlanGreen

Why Another Gilded Age?

 Financial FAQs

"I remember '29 very well ... the drugged and happy faces of people who built paper fortunes on stocks they couldn't possibly have paid for. ... In our little town bank presidents and track workers rushed to pay phones to call brokers. Everyone was a broker, more or less. At lunch hour, store clerks and stenographers munched sandwiches while they watched stock boards and calculated their pyramiding fortunes. Their eyes had the look you see around a roulette wheel ...but despondency, not prosperity was just around the corner.”—John Steinbeck

Graph: Last Tech Age

This is what happened in the 1920s that led to the Great Depression and Roosevelt’s New Deal.

Marriner Eccles, Rooselvelt’s New Deal Federal Reserve Chairman was one of the first to characterize the cause of the Great Depression, when he said in testimony before congress that it was the record income inequality of that time:

“The United States economy is like a poker game where the chips have become concentrated in fewer and fewer hands, and where the other fellows can stay in the game only by borrowing. When their credit runs out the game will stop—Mariner Eccles, Federal Reserve Chairman during the Great Depression.”

The current Gilded Age began in earnest with the election of President Ronald Reagan and his credo that “government is the problem.” It has resulted in the huge transfer of wealth from workers to the owners of capital—as much as $1trillion, according to some economists—by cutting their taxes and deregulation of whole industries.

Laws were also enacted to weaken labor unions and monoply laws were not enforced so that corporations could transfer their factories overseas where labor was cheaper, basically gutting America’s middle class industrial base that has been the cause of so much anger and despair of America’s workers.

The U.S. is in 106th place of the 149 countries in income inequality as ranked by the CIA’s World Factbook; with a Gini inequality index of developing countries like Peru and Cameroon. Whereas Finland and the Scandinavian countries are at the top of equality rankings, Germany and France are 12th and 20th, respectively, as I’ve highlighted in past columns. The higher the index, the greater the gap between wealthy and poorer citizens of a country’s population.

It’s had to believe that we have reached that point once again, a time when today’s wealthiest exceed the wealth of the Vanderbilt’s, Rockefeller’s and Morgan’s tenfold that built those massive 5^th Avenue mansions at the turn of the 20^th Century to show off their wealth, before there was an income tax or Federal Reserve.

It was spawned by an economy fueled by oil, railroads, and a banking system that enabled so many consumers to go into debt, until the stock market crashed on Black Friday of 1929.

History is repeating itself with $Trillioners instead of the $Billionaires (and $Millionaires) of that era because of Sillicon Valley and the Internet that have made an Elon Musk, now the richest person in the world.

But it is at the cost of a greater concentration of wealth than ever. Today’s moguls duplicate the 20^th Century robber barons in wanting to share as little of their wealth as possible—instead, they use their wealth to elect conservative policies that lower tax rates and cut government benefits that protect the other 99 percent of Americans.

Is President Biden’s Bidenomics’s spending of $trillions to modernize America’s industrial base, infrastructure, and mitigate disasters caused by a changing climate the last gasp of Roosevelt’s New Deal programs that protect ordinary Americans?

The incoming Trump administration has tasked the richest man in the world to set up a “Department of Government Efficiency”, they say, to downsize or eliminate some of those programs to eliminate waste, but really to shrink or eliminate the health and safety programs; such as the US Environmental Protection Agency, Health and Education department, and even shrink the IRS once again to enable the $Trillionaires to better evade taxes.

Trump is clear about his intentions. He intends to pick a cabinet based on their loyalty to him as he did in his first term. Many have no qualifications; most were lobbyists with blatant conflicts of interest which resulted in many having to resign when their corruption was uncovered.

Such dysfunctional behavoir was a reason President Trump lost the House of Represetatives to Nancy Pelosi and the Democrats in 2018, and Trump lost to President Biden in 2020.

Sadly, the incoming all-Republican congress will probably give him the tax cuts, inflationary tariffs and the mass deportation of undocumented immigrants that will also be a repeat of Trump’s first term.

And many in the working class who voted for him will suffer again, and as they have throughout Trump’s working life; thanks in large part to the Elon Musk’s of the world that don’t believe in sharing their wealth.

Harlan Green © 2024

Follow Harlan Green on Twitter: https://twitter.com/HarlanGreen

Job Market Still Booming

 Popular Economics Weekly

Total nonfarm payroll employment rose by 227,000 in November, and the unemployment rate changed little at 4.2 percent, the U.S. Bureau of Labor Statistics reported today. Employment trended up in health care, leisure and hospitality, government, and social assistance. Retail trade lost jobs.

FREDunemploymentrate

It looks like the American economy that so many voters thought was not working for them has now brought the unemployment rate down to 4.2 percent from its 14.8 percent high in April 2020 (peak of red line in graph) during the COVID-19 pandemic.

This is despite the labor strikes by Boeing employees, East Coast dockworkers, railroad workers and several hurricanes that devastated parts of the south.

President Biden touted the results in the next to last unemployment report of his administration. It took much longer to get there after the Great Recession (large gray bar) in the FRED graph dating from 2010 that included the Obama and first Trump administrations.

"America’s comeback continues," he said in a statement. "Today’s report shows that the economy created 227,000 jobs in November, as Boeing machinists returned to work with record wage gains and hurricane recovery continued. Unemployment of 4.2% is in the same low range of the past seven months. This has been a hard-fought recovery, but we are making progress for working families."

Hurricanes Milton and Helene prevented more than a half million people from going to work in October, said MarketWatch’s Jeffry Bartash, but most of them were back on the job last month. The number of people who said they could not work because of bad weather in November fell to just 62,000 from 512,000 in the prior month.

Almost all sectors showed job increases: Education/Health +79,000, Leisure/hospitality +53,000, Government +33,000, and manufacturing + 22,000 in payroll jobs.

This could not have happened without the various policies enacted over the past four years of the Biden Administration when more than 15 million jobs were created that brought the American economy out of the COVID-19 pandemic, the worst natural disaster in more than 100 years.

The truth is that it could have been much worse if the pandemic recovery hadn’t been a public/private collaboration. The $5 trillion in the various Bidenomics’ legislation enacted by a bipartisan congress put those investments into productive enterprises, such as modernizing our infrastructure and manufacturing base, as well as mitigating the results of global warming by investing in alternative energies like solar, EVs and wind generation.

Many Americans have suffered horrendously from the hurricanes and record number of tornadoes that have devastated parts of the south and Midwest. Climate change has not proven to be a ‘hoax’, so I am hopeful that the upcoming Republican administration in their drive for more efficiency will not eliminate those programs that have helped these regions to recover. Many of the worst-hit areas are in Republican-run red states.

All eyes are now riveted on whether the Federal Reserve will drop interest rates another 0.25 percent in its December FOMC meeting, which will boost growth further.

Prominent economist Mohamed El-Erian has described today's jobs release as "a somewhat strong report, but not consistently strong," adding that it should pave the way for an interest-rate cut by the Federal Reserve later this month.

"It is strong on the earnings side. It is strong on the labor participation coming down side -- less supply -- and is also strong on a small beat," he told Bloomberg TV. "But the fact that the unemployment rate went up means that the Fed will be comfortable cutting by 25 basis points, means that the market will increase the probability of this happening. So on the policy front, this did not complicate what would have been a messy situation."

I am also hopeful after COVID-19 that the next administration will know enough not to cut too much meat off the government’s bone that’s managing our healthcare system when another natural disaster might loom, such as a bird-flu pandemic that scientists are now saying is a possibility.

Harlan Green © 2024

Follow Harlan Green on Twitter: https://twitter.com/HarlanGreen

Will Job Market Recover?

 The Mortgage Corner

The number of job openings was little changed at 7.7 million on the last business day of October, the U.S. Bureau of Labor Statistics reported today. Over the month, hires changed little at 5.3 million. The number of total separations was little changed at 5.3 million. Within separations, quits (3.3 million) increased, but layoffs and discharges (1.6 million) changed little.

Calculated Risk

The above graph of job openings (black line), hires (dark blue), Layoff, Discharges and other (red column), and Quits (light blue column) from the JOLTS report show normal job growth, according to the Bureau of Labor Statistics. But will it recover from the Boeing and east coast strikes that laid off so many workers?

The JOLTS report doesn’t give much encouragement to Friday’s unemployment report for November, as the number of hires equaled the number of separations. The difference usually tells us the total number of job creations.

It’s hard to know what this means for the Trump administration’s next four years. Chairman Powell is still sounding dovish about another -0.25 percent rate cut in December, which will be helpful. But credit card rates are still as high as 30 percent, which is an insane borrowing rate for those using credit cards.

“The Fed’s goal all along has been to bring down inflation without a “painful rise in unemployment,” Powell said in remarks at the annual meeting of the National Association for Business Economics in Nashville,” per MarketWatch. “While the task is not complete, we have made a good deal of progress toward that outcome,” he said.

The Institute for Supply Management (ISM) surveys of both the service and manufacturing sectors were also static, with manufacturing not expanding at all and the service sector barely above its 50-point breakeven level.

“Demand remains weak, said Timothy R. Fiore, CPSM, C.P.M., Chair of the Institute for Supply Management® (ISM®), “as companies prepare plans for 2025 with the benefit of the election cycle ending. Production execution eased in November, consistent with demand sluggishness and weak backlogs. Suppliers continue to have capacity, with lead times improving but some product shortages reappearing. Sixty-six percent of manufacturing gross domestic product (GDP) contracted in November, up from 63 percent in October.”

This is what happens between election cycles. Will the Trump administration carry out on its threats of giant tariffs, or deporting millions of undocumented immigrants who are employed in the service sector that includes professional services and construction? Construction is booming as the CHIPS and Infrastructure Acts pour $Trillions into mostly red state projects such as new computer chip manufacturing factories.

The service sector that also includes leisure activities such as dining and travel will wind down after the holidays. But the financial markets are still rallying on the hopes that further tax cuts will boost both bond and stock prices.

It’s a difficult time to predict what comes next. Further Fed rate cuts are desperately needed to revive the housing market, for instance.

Pending home sales ascended in October – the third consecutive month of increases – according to the National Association of REALTORS®. All four major U.S. regions experienced month-over-month gains in transactions, with the Northeast leading the way. Year-over-year, contract signings increased in all four U.S. regions, led by the West.

"Homebuying momentum is building after nearly two years of suppressed home sales." said NAR Chief Economist Lawrence Yun. "Even with mortgage rates modestly rising despite the Federal Reserve's decision to cut the short-term interbank lending rate in September, continuous job additions and more housing inventory are bringing more consumers to the market."

That gives homebuyers a ray of hope that interest rates will continue to decline, as well as for credit card users.

Harlan Green © 2024

Follow Harlan Green on Twitter: https://twitter.com/HarlanGreen

Trumponomics 2.0--What To Expect?

 Financial FAQs

George Will, the conservative pundit, gave the best description of Trump’s incoherence in a Washington Post Op-ed: “It is urgent for Americans to think and speak clearly about President Trump’s inability to do either. This seems to be not a mere disinclination but a disability. It is not merely result of intellectual sloth but of an untrained mind bereft of information and married to stratospheric self-confidence.”

This was a leading conservative writer’s prediction of what did happen in President Trump’s first term as President—chaos. Trump’s second term should be a rerun if he succeeds in getting most of his initial cabinet picks confirmed by (or rammed through) the U.S. Senate.

Huffington Post

Many have no qualifications for those jobs, just as in Trump’s first term when most were lobbyists with blatant conflicts of interest, which resulted in many having to resign when their corruption was uncovered. Such dysfunctional behavior was a reason President Trump lost the House of Representatives to Nancy Pelosi and the Democrats in 2018, and Trump lost to President Biden in 2020.

Sadly, the incoming all-Republican congress will probably give him the tax cuts, inflationary tariffs and the mass deportation of undocumented immigrants that will be a repeat of Trump’s first term. And many in the working class who voted for him will suffer again, and as they have throughout Trump’s working life.

A 2016 USA TODAY article catalogued more than 3,500 lawsuits filed by or against Donald Trump over his business career. Many were filed by small businesspeople and firms that Trump refused to pay for work done on his various real estate holdings.

“Donald Trump often portrays himself as a savior of the working class who will "protect your job." But the USA TODAY NETWORK analysis found he has been involved in more than 3,500 lawsuits over the past three decades -- and a large number of those involve ordinary Americans, like the Friels, who say Trump, or his companies have refused to pay them."

The Friel's family cabinetry business, founded in the 1940s by Edward's father, finished its work in 1984 and submitted its final bill to the general contractor for the Trump Organization, the resort's builder, said USA TODAY.

Edward's son, Paul, who was the firm's accountant, still remembers the amount of that bill more than 30 years later: $83,600. The reason: the money never came. "That began the demise of the Edward J. Friel Company... which has been around since my grandfather," he said.

I wrote then, “The greatest nightmare of 2017 may be the record income inequity that was exemplified in the just-passed tax cuts that are to be paid for with up to $3 trillion in added federal debt plus spending cuts to Medicare and Medicaid over the next ten years, which will impoverish the poorest among us.

Professors Thomas Piketty and Emmanuel Saez were the first to examine 100 years of income tax returns that highlighted the wide swings in income inequality. They found that income inequality rose substantially between 1979 and 2002 because the top 10 percent of the income distribution took 91 percent of the income growth during that period. As the real incomes of the top 10 percent soared, the incomes of the bottom 90 percent stagnated..

With nothing to replace the economic destruction that will follow Trump’s policies, other than the “Drill baby Drill” for more fossil fuels, we will be poorer with predictions for an additional $5 trillion added to the national debt. As in his first term, I do not foresee a happy two years ahead, at the least.

It turns out very few of us need a tax cut. MarketWatch economist Rex Nutting calculated that those in the 60 percent middle-income brackets—from $32,000 to $140,000 per year—pay just an average 2.5 percent in income taxes. It’s only the richest 0.1 to 1 percent income earners that pay more, and so want the huge tax cuts congress and the Trump administration are proposing.

“A bill that cuts federal income taxes for middle-class families makes absolutely no sense, except as a sad way of camouflaging the real intent of the bill: Giving millions of dollars to the very wealthy, who happen to be the only people who are really benefiting from our uneven economic growth,” said Nutting.

It was Trump and his family that profited most from his first term in retaining ownership of his assets rather than either divesting or putting them in a blind trust, blatantly ignoring the emoluments clause of the constitution that forbid profiting from foreign governments seeking his favor.

Donald Trump suffered no consequences for his lawless behavior as has former Brazilian President Jair Bolsonaro, who is banned from running again until 2030 for casting doubt on Brazil’s 2022 election outcome that voted him out of office.

The greatest chaos may come from his pick of Pam Bondi for Attorney General, who is replacing Matt Gaetz. She has sworn revenge for perceived weaponization of the Justice Department by weaponizing it even more to persecute his perceived enemies.

“When will the 2017 nightmare end?” I wrote in 2017. “Maybe in 2018, if most Americans realize the fantasy world the current administration and congress has created is not theirs. Americans desire a world in which life, liberty and the pursuit of happiness is available to all, not just the few.”

That is what happened in Trump’s first term. Must it get even worse before it gets better?

Harlan Green © 2024

Follow Harlan Green on Twitter: https://twitter.com/HarlanGreen