The Age of Narcissism Is Ending

 Answering the Kennedys’ Call

PEWResearch

The election of President Biden is bringing an end to the age of narcissism, or as Tom Wolfe titled it in 1976, “The ‘Me’ Decade”? Only 30 percent of adult Americans say they still approve of our former Narcissist-in-Chief in the latest polls since Donald Trump’s defeat in November.

Donald Trump epitomized what psychologists have described as a Narcissistic Personality Disorder (NPR). Psychologists Jean Twenge and W. Keith Campbell described in their 2009 book, “The Narcissism Epidemic”, the destructive effects of narcissistic behavior: the breakdown of institutions that bind families and communities, thus encouraging divisive and antisocial, short-term behaviors over long-term, collective decision-making.

There is much more to the definition, of course, but psychologists are in general agreement a person with NPR, such as former President Trump, has sociopathic behavior with an almost complete lack of empathy, or regard for others.

Dennis Shen, in a London School of Economics article maintains narcissistic behavior became prevalent in baby boomers and millennials, the Gen X and Y’ers born approximately between 1946 to 1980, as they focused on their own needs rather than the needs of others.

It was a sharp divergence from the post-Depression and World War II generations, when a rare consensus within America emerged, the result of existential crises in the form of the World War and looming Cold War.

“This post-war era of togetherness saw unprecedented economic stability and trust in the state as the steward of the people,” said Shen., “The nation backed global reciprocity, exemplified during the founding of the United Nations, Bretton Woods institutions and Marshall Plan.”

We now have a president who is explicitly restarting global reciprocity by rejoining alliances such as the Paris Accord on climate change, and restoring economic stability with a ‘new’ New Deal of Rooseveltian proportions—more than $6 trillion in government spending to ‘build back’ American institutions and programs designed to heal communities and families.

We also have a younger generation facing serious existential crises—diminished economic and educational opportunities, a deteriorating physical environment and polarized political environment that has endangered our constitutional-based democratic system.

And they don’t like what America has become.  Gen Zer’s (born between 1981-96) are more progressive and pro-government, most see the country’s growing racial and ethnic diversity as a good thing, and they’re less likely than older generations to see the United States as superior to other nations, said a recent PEW survey.

A look at how Gen Z voters view the Trump presidency provides further insight into their political beliefs. A Pew Research Center survey conducted in January of last year (2020) found that about a quarter of registered voters ages 18 to 23 (22%) approved of how Donald Trump is handling his job as president, while about three-quarters disapproved (77%).

"Millennial voters were only slightly more likely to approve of Trump (32%) while 42% of Gen X voters, 48% of Baby Boomers and 57% of those in the Silent Generation approved of the job he is doing as president."

So Americans are coming together again with the election of President Biden, who has asked “that we all do our part”—the younger generations in particular, who are reacting as did those of the Great Depression and World II when faced with existential threats.

Harlan Green © 2021

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

Americans Get a New Deal

 Popular Economics Weekly

BEA.gov

President Biden announced in his first ‘non-State of the Union’ address that “America is on the move again,” saying in effect that government isn’t the problem but the solution to today’s problems, including the horrific events of the past year.

We are seeing the effects of those solutions in today’s first estimate of Q1 Gross Domestic Product growth: Real gross domestic product (GDP) increased at an annual rate of 6.4 percent in the first quarter of 2021, said the BEA, reflecting the continued economic recovery, reopening of establishments, and continued government response related to the COVID-19 pandemic.

All sectors expanded, with consumer spending surging 10.7 percent, the economy adding`1.5 million new jobs. business investment jumped up 10 percent and housing investments up 11 percent in the ongoing housing boom.

Much of this is possible because of the still record low interest rates that the Fed has promised to maintain al least through next year. But consumers have benefited the most with the assistance payments, of course, so much so that disposable personal income increased $2.36 trillion, or 67.0 percent, in the first quarter, compared with a decrease of $402.1 billion, or 8.8 percent, in the fourth quarter.

And personal saving was $4.12 trillion in the first quarter, compared with $2.25 trillion in the fourth quarter, which has boosted the personal saving rate—personal saving as a percentage of disposable personal income—to a huge 21.0 percent in the first quarter, compared with 13.0 percent in the fourth quarter, and 3-5 percent historically.

Consumers with more money in their pockets means the economic recovery has just begun and businesses will be playing catchup to the increased demand for the rest of this year, further boosting economic growth.

The American public seems to like governmental solutions to our problems, says Gallup’s Frank Newport:

“The latest update (of polling data) shows that 54% of Americans say the government should do more to solve our country's problems, while 41% say the government is trying to do too many things that should be left to individuals and businesses. This is the highest percentage choosing the "government should do more" option since Gallup began asking the question in 1992.”

But will the rising sentiment for big government continue as President Biden asks for more spending?

President Biden outlined his American Families Plan at last night’s address that is summarized by the White House:

“The American Families Plan is an investment in our children and our families—helping families cover the basic expenses that so many struggle with now, lowering health insurance premiums, and continuing the American Rescue Plan’s historic reductions in child poverty. Together, these plans reinvest in the future of the American economy and American workers and will help us out-compete China and other countries around the world.”

It is a ‘new’ New Deal that brings us out of this pandemic and the deterioration of American education, infrastructure, research & development, and environmental protection that is despoiling the planet and our ability to survive as a democracy.

“History shows that Americans tend to adopt big government initiatives when there are big problems facing the nation,” Gallup’s Newport continued. “including COVID-19, the Great Recession, 9/11, World War II and the Great Depression.”

But there has been too little agreement on how we should be paying for future generations since World War II, I said in my last column.

Let us hope we are willing to pay enough forward to win this world war against COVID-19 that is also a battle to save the liberal democracy our constitution has envisioned.

Harlan Green © 2021

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

A Better Use of Economic Growth

 Popular Economics Weekly

AtlantaFed

The Atlanta Federal Reserve Bank puts out a GDP now forecast of upcoming monthly GDP growth, and its latest estimate puts growth at the highest level since the 1980s, as we recover from the COVID-19 pandemic.

“The GDPNow model estimate for real GDP growth (seasonally adjusted annual rate) in the first quarter of 2021 is 8.3 percent on April 16, unchanged from April 15 after rounding,” said the Atlanta Fed. “After this morning's housing starts report (last week) from the U.S. Census Bureau, the nowcast of first-quarter real residential investment growth decreased from 10.6 percent to 10.2 percent."

However, new-home sales’ figures Friday showed even faster residential investment growth ahead, reports the US Census Bureau. 

Sales of new single-family houses in March 2021 were at a seasonally adjusted annual rate of 1,021,000, according to estimates released jointly today by the U.S. Census Bureau and the Department of Housing and Urban Development. This is 20.7 percent (±23.7 percent) above the revised February rate of 846,000 and is 66.8 percent (±36.7 percent) above the March 2020 estimate of 612,000.

The problem is not finding more ways to boost GDP growth, per se, but how it will be utilized. Since the 1980s, a growing percentage of the Gross National Income derived from GDP growth has gone to ‘rentiers’, i.e., people that receive  income from their assets rather than wages.

That is in part due to the huge decline in personal and corporate taxation of said wealth that has allowed rentiers to accumulate more private wealth, rather than investing in productive enterprises.

What creates GDP? The aggregate, or effective demand of all goods and services produced domestically. Economists have broken it into four components, of which consumer spending is the largest portion. The rest is made up of net exports, government expenditures, and investments.

Consumers spend on private consumer goods, so it is up to investment and government spending to build for future growth. That has not happened because corporations haven’t been maintaining a decent level of capital expenditures and government investments in infrastructure, education, R&D, and our social safety net that would keep workers healthy enough to be more productive has been cut sharply since the 1970s.

GDP growth has been paying too little for future generations since then, in other words, so taxing some of the wealth accumulated since 1980 is needed to pay it forward.

President Biden’s $2.3 trillion American Jobs Plan is meant to correct the underinvestment in the public good. He is calling for more than $1 trillion to be invested just in the various components of infrastructure, including better roads, bridges, public transportation, expanding broadband and electric grids, as well as electric vehicle use.

He is also calling for more spending on health care and the national housing shortage—some $213 billion to “build, preserve and retrofit more than 2 million homes and commercial buildings to address the affordable housing crisis,” $100 billion to modernize public schools and early learning facilities, and $180 billion in research and development of future technologies, and more.

This supports much more than infrastructure, as it fulfills every person’s basic need of food, shelter, and security.

The initial first quarter GDP estimate comes out Thursday, and consensus predictions are for 7 percent growth. Whatever it will be, it is important that it be used in productive ways, and the just-passed American Recovery Act and upcoming American Jobs Plan begin that process of utilizing America’s economic growth to support a better future for all Americans.

Harlan Green © 2021

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

Debt-Fueled Recovery Needed

 Popular Economics Weekly

To: Barron’s Letters

Published: April 19, 2021

Barron’s Lisa Beilfuss cites David Rosenberg’s worries about hyperinflation (because of the Federal Reserve’s inability to keep inflation within acceptable rates), as the reason to worry about a sustainable “debt-fueled” recovery.

But rather than compare the current economic recovery from the COVID-19 pandemic to the ‘roaring 20’s’ recovery from the Spanish flu pandemic, why not compare it to our recovery from World War Two?  Fighting that war required record debt-to-GDP levels that were brought down by record growth and consumer prosperity after the war, because there was agreement that high government and private spending geared to future growth was necessary with the building of American modern infrastructure and higher education system.

Our capitalist system has always required debt to leverage higher growth and the result has been accelerated growth to reduce said debt to the historical level.  Even the CBO in a recent report stated that “Between 1946 and 2019, the deficit as a share of GDP has been larger than that (3.0 %) only twice.”

A major goal of the Biden spending bills is to reverse the record income inequality that has reduced consumers’ ability to spend without higher debt levels since 1980.  The COVID-19 pandemic has cost more lives than World War Two and devastated economic growth worldwide.  So President Biden’s focus on not only rebuilding infrastructure, but improving our social safety net and reducing the record income inequality of working families will create a more sustainable recovery. 

Harlan Green © 2021

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

Strong Retail Sales Continue 2020's Recovery

 Financial FAQs

FREDretailsales

Sales at U.S. retailers rose 9.8 percent in March, the government said Thursday, in part because of the additional $1,400 stimulus checks for consumers from the federal government that is accelerating economic growth.

This confirms the 2020’s economic recovery has begun, as more businesses open and consumers grow confident that the worst of the pandemic is over. The sales gain was the second largest on record, exceeded only by an 18 percent spike last May when the U.S. lockdown was first lifted.

Stock market indexes also reached new highs, which does bring back hints of the original roaring 1920’s—excessive exuberance in the financial markets and eight years of prosperity—but then came the 1930s when outmoded economic verities (and few regulations) turned it into the Great Depression.

However, I would compare this recovery to that after World War Two, which necessitated programs enabling government to invest heavily in the future—in infrastructure, education, and housing, as is being proposed today.

We achieved much higher annual GDP growth rates post-WWII, as high as 14 percent (see below graph dating from 1948), which can happen again with the right public and private investments.

FREDgdpgrowth

Retail sales revved up 15 percent in March at car dealers even as automakers struggled to procure enough computer chips to maintain production, per MarketWatch’s Jeffry Bartash. Auto sales account for about 20 percent of all retail sales.

Sales at gas stations also rose nearly 11 percent, reflecting rising oil prices and more Americans taking to the road as government coronavirus restrictions are lifted. If autos and gas are set aside, retail sales still jumped 8.2 percent.

Almost every major retail group shared in the benefits of the federal aid payments. Receipts leaped 13.4 percent for bars and restaurants, 18 percent for clothing stores, 23.5 percent for sporting goods and other recreational items.

What about COVID-19 and future viruses that must be vanquished to continue this recovery? Better public health care spending is also needed and is contained in the just passed American Jobs Act. Hospitalization rates have plateaued at too high a level. The current 7-day average is 36,941, up from 36,257 reported yesterday, and well above the post-summer surge low of 23,000.

So we do need post-WWII-size investments in the future to create a real recovery.

Harlan Green © 2021

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

Equitable Wealth = Equitable Growth

 Answering the Kennedys’ Call

Equitablegrowth.com

We must cure the record income inequality if we are to re-unite the United States into a country that serves Americans in both red and blue states.

The current disunity is a result of whole swaths of the country losing out on economic opportunity. Our modern, tech-based capitalism has raced ahead, rewarding those that can keep up.

The wealth is distributed in a highly unequal fashion, says the Center for Equitable Growth, a progressive think tank, with the wealthiest 1 percent of families in the United States holding about 40 percent of all wealth and the bottom 90 percent of families holding less than one-quarter of all wealth.

The result has been that the top 20 percent of America’s educated class are winning the race with educational opportunities that have enabled them to take advantage of modern technologies.

And what happens to people who feel left behind—in education, good jobs, and adequate housing? They find a way to protest, and Donald Trump became their voice of protest.

They protest against immigrants because they believe their jobs have been stolen. They protest against open borders because they see those jobs fleeing to other countries with cheaper wages.

They are so angry they will believe any theory confirming their suspicions that the educated elites with the best jobs are abridging their freedoms.

That is why President Biden’s plan to return US to full employment by the end of 2022 is so important.

The just passed $1.9 trillion American Rescue Plan will boost benefits of lower and middle income consumers, raising incomes for the poorest 20 percent of families by an average of 20 percent, according to the Tax Policy Center's analysis, and create 7 million jobs by the end of 2021 while top earners would see their income rise less than 1 percent, according to the CBO.

The proposed $2 trillion plus infrastructure bill will create more good jobs by requiring the development of universal broadband, such as 5G networks that China is already building on a grand scale, a major issue in rural communities.

Documents suggest it will also include nearly $1 trillion in spending on the construction of roads, bridges, rail lines, ports, electric vehicle charging stations, and improvements to the electric grid and other parts of the power sector, all requiring higher paying jobs.

“I think a package that consists of investments in people, investments in infrastructure, will help to create good jobs in the American economy,” testified Treasury Secretary Janet Yellen in congressional hearings recently, “and changes in the tax structure will help to pay for those programs (and also reduce income inequality).”

The investments in people is even more important to lift the spirits of the 13 million that still have no jobs or would like full time jobs, including greater access to Obamacare and Medicaid, aid that the Trump administration had been drastically reducing.

Bringing back trust in government will do the most to boost public spirits. And that means spending on programs that make life easier for most Americans.

There is no easy path to a greater equality of opportunity in the richest country in the world, because we must first restore our faith in each other with programs that benefit all Americans.

Harlan Green © 2021

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

March Employment Augers Roaring 2020's

Popular Economics Weekly

MarketWatch.com

It may be difficult for the naysayers that believe too much aid is going into social programs to find fault with the March unemployment report that added 916,000 new nonfarm payroll jobs. It looks like March economic data augers a recovery that may lead to a decade of robust growth in the overall economy.

Companies are already hiring en masse, in spite of a winter that froze Texas and the record floods and tornadoes that have devastated much of the south.

Almost all business sectors are hiring, including a huge jump in the U.S. ISM’s Manufacturing Index to a 38-year high of 64.7, which means some 65 percent of manufacturing businesses surveyed were expanding.

Much of the hiring has come because happy consumers with an additional $1400 checks in their pockets are dining out and traveling more, but also because the housing market is booming—prompting 110,000 new construction hires in March.

The 916,000 new payroll jobs are just the beginning of this hiring boom that must bring back 10 million jobs to return to pre-pandemic levels. That is why Biden’s $3 trillion infrastructure spending will be needed as well.

So thank goodness for the $5 trillion in recovery aid already raised by congress that is encouraging even restaurants and other leisure servicers to hire 280,000 new workers, Education and Health 101,000, and Government 136,000 workers that is just the beginning of what is needed to make this decade this into a roaring 2020's decade.

The official unemployment rate, meanwhile, slipped to 6 percent from 6.2 percent, the Labor Department said Friday. Yet the official rate doesn’t capture nearly 4 million people who lost their jobs last year and weren’t counted in the numbers because they left the labor force.

It is also why Consumer confidence surged in March to a one-year high as more Americans were vaccinated and states began to open up for business. The index of consumer confidence shot up to 109.7 this month from a revised 90.4 in February, the Conference Board said Tuesday.

Confidence may be rising because some 3 million vaccines now administered per day may have 70 percent of American adults vaccinated by July, say the experts.

But new variants of COVID-19 are beginning to pop up, which has epidemiologists worried because it’s causing a plateauing of the infection rates at an unacceptably high level, according to the CDC.

According to the CDC, 153.6 million doses have been administered. 21.7 percent of the population over 18 is fully vaccinated, and 38.4 percent of the population over 18 has had at least one dose (99.6 million people have had at least one dose).

COVID.CDC.gov

Infection rates have plateaued because too many variants Of COVID-19 are popping up in some states. Winning the race between the spreading variants and administering enough vaccinations to stop their spread is the key to a robust recovery.

“I think a package that consists of investments in people, investments in infrastructure, will help to create good jobs in the American economy,” testified Treasury Secretary Janet Yellen in congressional hearings last week, “and changes in the tax structure will help to pay for those programs.”

Yellen and Fed Chair Jerome Powell said there was no problem with any inflationary bulges that might occur with so much spending because it was spending that would boost productivity as well as employment, generating even more growth.

Harlan Green © 2021

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