Is This Real Growth?

 Financial FAQs

“Real gross domestic product (GDP) increased at an annual rate of 1.6 percent in the first quarter of 2026 (January, February, and March), according to the second estimate released today by the U.S. Bureau of Economic Analysis. Real GDP was revised down 0.4 percentage point from the advance estimate, primarily reflecting downward revisions to investment and consumer spending.” BEA.gov

FRED/Q1gdp

Economic growth this year is improving because corporations are making record profits—up 17 percent annually in Q1 2026 from an average 13 percent since the COVID-19 pandemic.

But it looks like much of the growth may be part of the tech bubble—such as massive overinvestments in chips and artificial intelligence (AI)—creating a bubble which by definition and past history will eventually deflate.

Why the sudden jump in corporate profits to 17 percent? It’s mostly from investing in the massive buildout of artificial intelligence centers and the infrastructure. How long can such GDP growth continue, especially if those future investments, such as in AI programs or the chips that power AI, may take years to turn a profit?

Republicans’ Big Beautiful Tax Cut Bill encouraged corporations to invest as much as possible this year because they could write it off in the same year, and those investments are generating serious profits in the buildout of AI data centers, for starters.

But the Biden administration’s $5trillion in investments to modernize the American economy—the CHIPS, Infrastructure, and Inflation Reduction Acts—are also contributing to the surge in growth.

Yet largely because of the Trump Administration’s mismanagement; even attempts to cancel or impede many of the Biden administration programs that would actually improve inflation, healthcare, environmental protection, and bring the manufacture of computer chips home; we are seeing those profits going into irrationally exuberant, overinvestment in future technologies with uncertain futures instead that is pushing major stocks and market indexes to record highs.

The announcements on the possibilities of AI are mind boggling. Zack Kass, Open AI pioneer and author of bestseller, The Next RENAISSANCE: AI and the Expansion of Human Potential, has said:

“If directed wisely, it will secure our needs, accelerate discoveries that serve human flourishing and unlike the products that commoditize our attention today, free us to invest in connections creativity and love.”

It will free whom, and what will they do then? It is causing massive layoffs at the likes of Amazon (30,000 employees to date) who hope that programs like Claude and ChatGPT can do much of the thinking and future planning for these corporations.

Consumers aren’t doing so well that actually make up most of the GDP growth equation. Their so-called Disposable Income (an economic term) declined to “slightly less than -0.1%” in April.

It resulted in a lowering of the personal savings rate to almost 2%, one-half of its more normal 3-4 percent rate in recent years. Consumers are stretched in other words; more than half of their incomes are now spent on the soaring costs of gasoline/energy products, household necessities, and food. This is another reason we may see slowing GDP growth ahead.

There is no question that AI has enormous potential for good, in what British economist JM Keynes made in a famous prediction in 1930, should there not be too many bumps in the promised road to a greater freedom from work:

“Thus for the first time since his creation man will be faced with his real, his permanent problem-how to use his freedom from pressing economic cares, how to occupy the leisure, which science and compound interest will have won for him, to live wisely and agreeably and well.” JM Keynes

But Keynes said this in 1930. How long has it been since then?

Harlan Green © 2026

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

Does Inflation Ever Come Down?

Popular Economics Weekly

“From the preceding month, the PCE price index for March increased 0.7 percent. From the same month one year ago, the PCE price index for March increased 3.5 percent.” BEA.gov

FREDpce

Inflation is rising again, to no one’s surprise, from its low of 2.3 percent in April 2025 when Trump first announced his worldwide tariff hikes, to 3.5 percent in March this year. The reasons are clear, inflation is rising on Trump’s watch, not Biden’s.

And inflation almost never comes down without another recession. This is verified in the above graph of Federal Reserve’s preferred Personal Consumption Expenditure price index from 1980. The gray bars are the five recessions since 1980, and each clearly shows the beginning of the sharp downward move of prices in the PCE index

The only time prices have come down without a recession since then was during President Biden’s term—from its high in June 2022 to slightly above 3 percent at the end of his term.

Biden could do this because the Fed used its best tool to combat inflation; raising interest rates at the same time as Biden succeeded in lowering the federal debt by raising corporate taxes to counter the huge influx of government money injected into the economy ($5 trillion) from Biden’s bipartisan Infrastructure, Inflation Reduction and CHIPS Acts.

The bills were passed to inaugurate the biggest modernization of the U.S. economy since the Great Depression that employed a record number of workers.

So it is possible to bring down inflation without a recession. And there is substantial harm, especially to working Americans who face higher prices for basic necessities, such as gas and healthcare, for prolonging this inflation surge.

What had caused the five recessions since 1980? Republican administrations cut taxes without paying for them, ballooning the federal debt instead of reducing it. Recessions (gray bars) occurred in 1980, 1981, 1990, 2008-09, all during Republican administrations. The short 2000 recession happened because of the COVID-19 pandemic.

This is an unnecessary inflation surge, in other words. It’s because of multiple wars being fought and a Republican congress that will not curb a president who doesn’t care about the costs and harm he is doing to Americans and the American economy.

Harlan Green © 2026

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

A Better Unemployment Report?

 Financial FAQs

“Total nonfarm payroll employment rose by 130,000 in January, and the unemployment rate changed little at 4.3 percent, the U.S. Bureau of Labor Statistics reported today. Job gains occurred in health care, social assistance, and construction, while federal government and financial activities lost jobs.” BLS

FREDpayrolls

The Whitehouse is touting the January jump in nonfarm payrolls, which it claims is evidence Trump’s economic policies are beginning to work. But that ain’t so by a long shot.

It is not a sign of successful policies when this was the first jump from close to zero new hires in a year per the FRED graph of new payroll jobs.

Annual revisions to last year’s payrolls showed just 181,000 new jobs were created in 2025, down from an earlier estimate of 584,000. That means the monthly average job growth in 2025 was only 15,000.

Whereas the Biden economy added 237,000 jobs in December 2024 alone and 1.495 million in all of 2024. So whose economic policies worked better?

The Biden administration had passed almost $5 trillion in new bipartisan legislation that was modernizing the American economy for the first time in 70 years, passing the Infrastructure, Inflation Reduction and CHIPS Acts as well as increasing electric vehicle puirchase incentives,.

And they had even brought down inflation from the 9 percent high incurred during the COVID-19 pandemic to 3 percent where it has been ever since. But it seems enough Americans believed Trump’s lie that he could bring down inflation on “Day one” when it had already happened.

From Trump’s return to power, however, rather than continue to carry out the bipartisan agreements that would prepare our economy for the next century, his obsession to concentrate as much power unto himself and his Billionaire supporters has led him to destroy as much of those bipartisan agreements as possible that would grow the American economy into the next century.

The result is his return to policies of the last century’s Gilded Age of Robber Barons and corruption has been the opposite of what was promised—rising prices, falling employment and increased pollution.

The higher tariffs are the main reason there was such a loss of jobs last year. Employers couldn’t predict the cost of their imported goods because of Trump’s petty spites and mostly illegal executive actions, so they didn’t expand their businesses and hire additional employees.

And health care is now the main sector hiring new workers, not only because of America’s aging population but because Trump’s policies are making Americans sicker. There have been so many cuts to our healthcare grants and loss of medical experts in the CDC and elsewhere that even measles outbreaks are becoming a problem.

As has been the case for more than a year, health care accounted for more than half of job gains in January, adding 82,000 positions. Construction gained 33,000 jobs, but most other sectors were flat, and the federal government shed another 35,000 positions.

But lastly will be the toll that Trump’s indiscriminate roundup of undocumented immigrants will do to our food supply. I mentioned recently that according to a Michigan State study cited by The Idaho Capital Sun, more than half of surveyed farmers said in 2021 that they were experiencing some sort of worker shortage, It found that when domestic farm employment declines by 10%, food prices of labor-intensive crops increase by around 3%

The number of private payroll jobs will continue to shrink and who really believes that AI, or Chat GDP, or robots can replace real workers anytime in the near future?

Harlan Green © 2026

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

The Too Dumb to Fail Party

 Financial FAQs

“In November 2021, (President Biden) signed a $1 trillion infrastructure bill. Then, in August 2022, he signed the CHIPS bill, which invests $280 billion in semiconductor manufacturing. Days later, he signed the Inflation Reduction Act, which invests $370 billion in clean energy and related infrastructure, along with provisions designed to reduce health care costs.” Washington Monthly

perseusbooks.com

How sad it is that the Republican Party, the party of Lincoln and the Emancipation Proclamation that abolished slavery, has become the party of a wannabe dictator Too Dumb to Fail in the words of author and journalist Matt Lewis, that imprisons immigrants of the wrong race and color.

It is a party that has enabled Donald Trump to rely on mostly illegal executive orders, including the tariffs, instead of working with congress as did President Biden to pass his very successful ‘New, New Deal’ legislation that is modernizing the American economy for many years to come.

Trump’s inability to negotiate with congress had as much to do with the Republican Party that had already become the party of the wealthy who owned or stewarded America’s biggest businesses.

“In the run-up to the 2016 election, Trump listed his top 10 legislative priorities as part of his “Contract with the American Voter”, continued the Washington Monthly, which included repeal of the Affordable Care Act, infrastructure investment, harsher prison sentences for immigration violations, and full funding of a border wall to be reimbursed by Mexico. None of that reached his desk.”

That is because the Republican Party learned early they could only hold power if they succeeded in dumbing down their electorate; even before Ronald Reagan’s ‘trickle-down” economic schemes in 1980 that cut the taxes of the wealthiest and social benefits for the rest of Americans to pay for the budget deficits incurred by his tax cuts.

Journalist Matt Lewis said it in his 2016 best-seller, Too Dumb to Fail: “Somewhere between Ronald Reagan’s “A Time for Choosing” speech in support of Barry Goldwater in 1964 and the most recent government shutdown, the conservative movement became neither conservative nor a movement. Hijacked by the divisive and the dumb, it now finds itself hostage to emotions and irrational thinking.

“It became more personal and less principled — more flippant and less thoughtful. It became mean. It became lazy. It became its own worst enemy. Where once the movement drew strength from its desire to win the philosophical argument over its adversaries, it now wears its lost causes as badges of honor — expected, like Coriolanus, to show these battle scars as a means of vote mongering.”

I said in a 2015 Huffington Post blog that the result of one political party’s choice to replace scientific facts with conspiracy theories had begun to permeate the American educational system as well.

According to the National Research Council, only 28 percent of high school science teachers consistently follow the National Research Council guidelines on teaching evolution, and 13 percent of those teachers explicitly advocate creationism or “intelligent design,” said Psychology Today in a very damning 2014 article entitled, Anti-Intellectualism and the Dumbing Down of America:

“After leading the world for decades in 25-34 year olds with university degrees, the U.S. is now in 12th place,” said Psychology Today. “The World Economic Forum ranked the U.S. at 52nd among 139 nations in the quality of its university math and science instruction in 2010. Nearly 50 percent of all graduate students in the sciences in the U.S. are foreigners, most of whom are returning to their home countries.”

Even in 2015 Republican candidates were echoing the Republican platform that advocated the deportation of all illegal aliens, would abolish or cripple whole government agencies (including the Environmental Protection Agency and CDC), shut down the federal government over Planned Parenthood funding, and maintain that a fertilized egg is a viable human being that can’t be aborted.

Nothing has changed, in other words, except Republicans elected Donald Trump, a man who would be a king, who has suffered from what psychologists and psychiatrists have called a Narcissistic Personality Disorder his whole life, whose father had given him more than $400 million over the years to support his various business ventures, according to the NYTimes.

The results of his father’s wealth are well documented in the book titled, “Lucky Loser: How Donald Trump Squandered His Father’s Fortune and Created the Illusion of Success,” written by NYTimes reporters Susanne Craig and Russ Buettner. Such largesse resulted in a string of business failures and seven bankruptcies.

Now Donald Trump and the Republican Party that supports him have taken the dumbing down of Americans to a whole new level by firing the best and brightest public officials and cutting their research budgets that protect Americans from future pestilences and environmental disasters.

History says the truth will out, eventually. A man and party that is too dumb to fail, that can only rule with lies and deception, must eventually fail. But when, and at what cost to Americans’ health and safety?

Harlan Green © 2025

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

Wh Needs a Tax Cut?

 Popular Economics Weekly

“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,” Rex Nutting

Huffington Post

I wrote this Huffington Post piece in 2017 during President Trump’s first term when he passed the Tax Cuts and Jobs Act (TCJA) that is set to expire but is being renewed if Republicans succeed in passing their new fiscal budget.

But in seeking to repeat Trump’s first term, Trump and his Republicans are regressing to an economic model that existed more than 100 years ago, and that is completely out of touch with the modern world.

His tax cut helped very few income earners, i.e., ordinary working folk. 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 therefore want the huge tax cuts Congress and the Trump administration are proposing.

The TCJA renewal in 2025 will add at least $3 trillion to our federal debt in the next 10 years, according to the Congressional Budget Office, and raise our federal debt from 120 percent to as much as 130 to 150 percent of GDP because Republicans have no mechanism to pay for it, except higher import taxes from the tariffs and cuts to health care services such as Medicaid.

Hence the just announced sovereign debt downgrade of Moody’s AAA to Aaa, the last debt rating agency that held a AAA rating on U.S. Treasury debt, which will raise the cost of U.S, Treasury securities.

The tariff war that Trump illegally initiated with the dubious rationale that it will bring back a bygone era of manufacturing (Congress has the power to regulate tariffs during wartime emergencies but they have since allowed presidents to enact them during peacetime), will cause another period of stagflation as happened in the 1970s that took 10 years and double-digit interest rates to cure.

How soon voters and investors have forgotten what stagflation was like! The Federal Reserve under Chairman Paul Volcker raised its Fed Funds rate to 20 percent in the 1980s because inflation had risen to 14 percent rate and resulted in two back-to-back recessions under President Reagan.

“Top this off with another record for corporate profits, up 7.4 percent in a year, and there is no reason to be cutting their taxes,” I said in 2017. “They haven’t been using their profits for productive purposes, so what’s needed is for them to pay higher taxes so government can use that money to invest productively in the $2 trillion plus in outmoded infrastructure that badly needs replacement,”

And that’s precisely what the Biden administration did, pass bipartisan legislation that invested $2 trillion in the Infrastructure, CHIPs and Science, and Inflation Acts to modernize the U.S. economy.

Yet voters re-elected a man in Trump 2.0 that is returning the budget and tax cut debate to an earlier historical period. President Trump is now touting the need for another Gilded Age that prevailed in 1900 when tariffs protected fledgling industries.

Tariffs became less important with the introduction of income taxes in 1913 to support government services, and the trend since then has been downward to the very low rates that prevailed until now.

Then why have so many Americans re-elected someone who is only interested in reducing taxes to enrich himself and his Oligarchs; who has shown an almost total ignorance of basic economics (in maintaining a tariff isn’t an import tax) with a history of countless business failures, and that is causing investors to flee the US economy and impoverish the rest of us?

Will it take another recession to convince voters once again that One-man rule doesn’t work if Americans still want to live and prosper in a democracy?

Harlan Green © 2025

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

Whose Economy Is It Now?

 Popular Economics Weekly

“Total nonfarm payroll employment increased by 177,000 in April, and the unemployment rate was unchanged at 4.2 percent, the U.S. Bureau of Labor Statistics reported today. Employment continued to trend up in health care, transportation and warehousing, financial activities, and social assistance. Federal government employment declined.”

MarketWatch

Even though the U.S. economy contracted in the first quarter of 2025 for the first time in three years, nonfarm payroll jobs increased 177,000 in April, as employers aren’t yet ready to cut their workforce in the beginning of the second quarter, even though many businesses have stopped ordering from foreign suppliers for the holidays because no tariff agreements have been made or are even in negotiation, especially with China.

The universal April 2 tariff announcements on all 180 countries in the world have already begun to hurt manufacturing, as the manufacturing sector lost 1,000 jobs. Reuters reports the Institute for Supply Management’s manufacturing PMI dropped to a five-month low of 48.7 last month, as tariffs are already raising prices on strained supply chains, keeping prices at the factory gate elevated and encouraging some firms to lay off workers.

Gene Seroka, executive director of the Port of Los Angeles, said Tuesday on CNBC’s “Squawk Box” that he expects incoming cargo volume to slide by more than a third next week compared with the same period in 2024, especially with China that makes of 45 percent of Los Angeles Port imports.

“According to our own port optimizer, which measures the loadings in Asia, we’ll be down just a little bit over 35% next week compared to last year. And it’s a precipitous drop in volume with a number of major American retailers stopping all shipments from China based on the tariffs,” Seroka said.

But the Education/Health sector added 70,000 jobs, Transporting/warehouse added 29,000 jobs, so the service sector is still healthy. There seems to the hope that Trump will have some kind of tariff agreements in 90 days, but with whom and when means domestic production will be affected, since so many US businesses import parts as well as iPhones.

So looking ahead, the employment picture won’t look so good. Reuters also reported that the Labor Department report showed initial claims for state unemployment benefits jumped 18,000 to a seasonally adjusted 241,000 for the week ended April 26. The number of people receiving benefits after an initial week of aid soared 83,000 to a seasonally adjusted 1.916 million during the week ending April 19. Global outplacement firm Challenger, Gray & Christmas said that planned job cuts fell 62 percent to 105,441 last month. Layoffs were, however, 63 percent higher.

It looks like the April unemployment report is a picture of what was, not what is to come. Consumers are also eating out less.

The NYTimes reports McDonald’s among other large food vendors have reported weaker sales in the first three months of the year.

“PepsiCo cut its full-year guidance outlook assuming that demand for its beverages and snacks will soften. Chipotle, the burrito giant, reported that its same-store sales fell for the first time since 2020 in the most recent quarter. Both companies attributed the results to customers’ feeling apprehensive about the economy.”

It will become more difficult to hide the wholesale destruction the Trump administration is about to wreak on the U.S. economy, not only due to the tariffs, but because Trump and Republicans have weakened most of the laws and congressional mandates that affect economic growth, such as by cutting much of the funding for President Biden’s New, New Deal, so that all now depends on the gut instincts of one man who believes he can run the country and the world.

Harlan Green © 2025

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

It's Trump's Economy Now

 Popular Economics Weekly

“Real gross domestic product (GDP) decreased at an annual rate of -0.3 percent in the first quarter of 2025 (January, February, and March), according to the advance estimate released by the U.S. Bureau of Economic Analysis. In the fourth quarter of 2024, real GDP increased 2.4 percent.”

BEA.gov

It’s President Trump’s economy now after the first 100 days of his second term.

The U.S. economy contracted in the first quarter of 2025 for the first time in three years, reflecting a surge in imports ahead of President Donald Trump’s tariffs and a slowdown in consumer spending.

The BEA graph of economic growth from Q4 2023 tells us all we need to know to compare President Biden’s economic record and Trump’s misrepresentations and lies of his economic record as president. Biden had an average growth rate of +3.2 percent over his term vs. Trump’s -0.3 percent contraction in the first quarter 2025. And it can’t get much better, because worldwide tariff wars take a long time to settle.

Is this what Americans wanted in re-electing Donald Trump, who has proven once again after failed casinos, Trump University, and countless lawsuits, he has never been a successful businessman?

The real question is how could so many Americans been fooled into thinking Trump knew what he was doing?

Some supporters believed that because economic growth was positive in Trump’s first term he could repeat his performance. But in fact, it followed President Obama’s eight years of investments that boosted the recovery from the 2008 Great Recession, the worst recession since the Great Depression.

How could it have been different, since Trump based his whole economic policy on his most blatant lie, that tariffs were not a tax on imports that would be paid by American importers and consumers, hence were not inflationary when he promised to bring down the price of groceries on ‘Day 1’.

Americans can now look behind Trump’s curtain of lies with the first actual reading on Trump’s economic record. Joe Biden’s economy was one of the strongest since World War Two, aided by the passing of bipartisan legislation that renewed our infrastructure, mitigated climate change and strengthened our social safety net, legislation that was equivalent to Roosevelt’s New Deal.

We can also see clearly that Elon Musk’s DOGE is attempting to tear all of this down by illegally firing the government employees and cutting the funds that congress appropriated to implement Biden’s New, New Deal

The American public can also see Republicans’ real goal in the current budget negotiations—continuing to grow the wealth of its Oligarchs by cutting taxes, while taking away the services that benefit all Americans.

Economic growth will continue to shrink, in other words. The ADP National Employment Report of private job creation just out for April shrank to 62,000 from 147,000 jobs in March, presaging what will happen with the upcoming official U.S. unemployment report for April.

Consumers have also pulled back their spending, a sure indicator of a possible recession. And the Conference Board just reported another record drop in consumer confidence.

“Consumer confidence declined for a fifth consecutive month in April, falling to levels not seen since the onset of the COVID pandemic,” said Stephanie Guichard, Senior Economist, Global Indicators at The Conference Board. “The decline was largely driven by consumers’ expectations. The three expectation components—business conditions, employment prospects, and future income—all deteriorated sharply, reflecting pervasive pessimism about the future.”

We must now face the fact that President Trump has already damaged the most powerful economy and country in the world with his lies and incompetence.

What’s next? He answered in an interview with The Atlantic,“The first time, I had two things to do — run the country and survive; I had all these crooked guys,” Trump said. “And the second time, I run the country and the world.”

Really? The American public is already answering President Reagan’s famous dictum, “Are you better off today than you were four years ago.” with a resounding NO!

Harlan Green © 2025

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

Who Wants to Know?

 Financial FAQs

“Fewer than a quarter of Americans (23%) currently rate the country’s economic conditions as excellent or good, while 36% say they are poor and about four-in-ten (41%) view conditions as “only fair,” PEW Research

PEWResearch

Why do so many Americans doubt the strength of the American economy that is the fastest growing in the developed world since the COVID-19 pandemic? It depends on their politial leanings, according to the latest PEW Research poll.

PEW Research has been measuring political attitudess for decades. As many as 81 percent of Republicans had positive views of the nation’s economy during Trump’s first presidency, whereas a higher percentage of Democrats were positive during President Biden’s term, per the PEW graph.

It is a condemnation of the lack of economic literacy among American voters, and I maintain largely a reflection of its lack in our educational system.

This is also a reflection of the fact that economic science is still in its infancy. In fact, Adam Smith, who wrote the first treatise on economic theory, The Wealth of Nations, was a Scottish Professor of Moral Philosophy who was the first to show that a successful economy was based on its citizenry guided by an invisible hand to make the right moral choices (honesty, good character).

And economies went awry when those in charge didn’t follow the rules of good character, which have always been autocratic rulers out to serve themselves rather than their citizens, such as in China and Russia. And why is that possible?

A large fraction of voters do suffer from economic illiteracy. Indeed, it is fair to say that an ample majority do not understand the basics of how markets work. They are especially confused about labor and international markets. Voters also have severe misconceptions about how government spends their tax dollars, and are extraordinarily pessimistic about long-run economic conditions,” says Professor Bryan Caplan of George Mason University, citing a recent Washington Post/ Henry J. Kaiser Family Foundation/ Harvard University Survey Project.

Most voters lack even an elementary understanding of economics. When prices change, vague conspiracy theories - not supply-and-demand - are their default explanation, says Professor Caplan.

One survey item that captured the public's anti-market bias is the question asking why the price of gasoline rose back in 1996. Is the reason the "normal law of supply and demand," or is it instead "oil companies trying to increase profits"? An overwhelming majority of economists - 89% - point to supply and demand. An almost equally lopsided fraction of the public - 74% - say the opposite.

Why so much ignorance of financial markets and basic economic conditions that everyone should know to make accurate decisions about their financial future? An economic education was not a high priority for Americans during more prosperous times, a time of a growing middle class after the Great Depression and World War Two.

According to the Council for Economic Education’s latest biennial Survey of the States, a nonpartisan education organisation, just 28 states required K-12 students to take an economics course to graduate, until the COVID-19 pandemic and world-side economic shutdown.

But since the pandemic more than two-thirds of all states are now requiring personal finance classes for high school graduation.

The 2024 Survey found that 35 states now require students to take a course in personal finance to graduate. The new regulations in those dozen states will lead to over 10 million additional K–12 students – 21 percent of current students – gaining guaranteed access to this knowledge, the Survey notes.

The picture isn’t much better in higher education. Only 3.3 percent of colleges required students to take a basic economics course, according to a 2014 study by the American Council of Trustees and Alumni, titled "What Will They Learn?"

ACTA looked at 1,098 colleges and universities. The organization found 3.3 percent require an economics class, 18.3 percent require a U.S. government or history class, and 37 percent make students take a literature course.

There is one additional reason for Americans’ economic illiteracy. It is the well-studied phenomena of herd behavior that was called irrational exuberance by former Fed Chairman Alan Greenspan in an earlier decade.

Nobel Laureate Robert Shiller attributed it to a mental laziness that caused the housing bubble. People tend to listen to hearsay and word of mouth rather than rely on their own judgements to make financial decisions.

“It was, and is, about how errors of human judgment can infect even the smartest people, thanks to overconfidence, lack of attention to details, and excessive trust in the judgments of others, stemming from a failure to understand that others are not making independent judgments but are themselves following still others—the blind leading the blind,” said Dr. Shiller.

It is a sorry picture of our economic illiteracy, and the reason so many citizens are easily fooled by leaders without the requisite character traits, such as good morals and character, that Adam Smith said were required to run a successful economy and government that is for all the people.

Harlan Green © 2024

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

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

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

Why the Inflation Problem?

 Financial FAQs

Most of us remember when a gallon of gas was less the $2, or a quart of milk less than $1, or housing was last affordable in the 1970s. I remember the inflation surges in housing. What happened?

Shouldn’t we as voters understand inflation if a majority of voters were so angry about the soaring price of everything that the majority would find somebody to blame (President Biden), and elect somebody else (Donald Trump) who said he will make everything better, even though that didn’t happen during his first term?

It is a peculiar form of American amnesia that caused so many to vote against their own interests—in this case a majority of white women to vote for a sexual predator and abortion opponent, young working class males to support a con-artist who had stiffed or defrauded his own workers and filed bankruptcy multiple times to avoid paying them.

It has to be because everything is happening too fast in our high-Tech driven economy and culture (Internet?) that has left so many people still wanting to live in a world they remember or imagine.

This happened at least once before and signaled how difficult it is for Americans to face forward rather than look backward to a time that never was, even though they crave change. It was first noticed in Thomas Frank’s 2005 best-seller: What’s the Matter With Kansas; How Conservatives Won the Heart of American?

Such nostalgia enabled GW Bush to win a second term, although he started his wars on terror by lying about weapons of mass destruction after failing to anticipate 9/11.

To understand what happened with Trump’s false economic narrative—that Americans were better off financially in his first term—we should understand the complexity of our own economy.

The main priority of Republicans—tax cuts that Bush and Trump Republicans enacted were a giant scam that actually transferred more wealth to their supporters and imp0verished more working Americans, while adding $trillions to the national debt.

But enough Americans remembered an earlier, whiter America that had experienced a victorious, post-World War Two prosperity—until the 1970s and school integration, minorities wanting more rights (including women), the killings of the Kennedy brothers and Martin Luther King, Jr., and a Vietnam War tore our country apart.

It’s hard to imagine such a tumultuous history today several generations later.

Republicans have always favored tax cuts that enriched themselves, but not better healthcare for Americans—especially women and children.

CBPP.org

So how should voters understand the American economy? Firstly, we have been living in what has been called the second Gilded Age that has favored the wealthiest since the 1970s, and not ordinary workers whose household incomes have stagnated since then.

But most Americans probably understand it’s most basic tenet: The Law of Supply and Demand. It’s an economic term, but based on commone sense. The price of things depends on the supply of things. And when there is an abrupt shortage, such as oil and gas because of the Arab oil embargo that cut off OPEC (The Organization of Oil Exporting Countries) oil imports in the 1970s, gas prices soared. And that began the upward cycle of price fluctuations.

Meanwhile, more than 80 million baby boomers became consumers at the same time who wanted more of everything. And the housing industry couldn’t build enough dwellings to satisfy the increased demand.

This is as good a common sense explanation as any to understand inflation. Prices go up or down when they aren’t in equilibrium—i.e., too much supply lowers prices, while too much demand from consumers and businesses raises them.

The same thing happened with the COVID-19 pandemic that killed one million Americans. The worldwide shutdowns and shelter-in-place requirements to keep it from spreading caused massive shortages of everything, which caused the price hikes that infuriated so many.

Consumers couldn’t very well blame COVID-19, a virus like the flu though much more virulent, but they could blame who was supposed to protect Americans from it.

What is most remarkable is that prices had been rising rapidly since the 1970s, but Americans hadn’t reacted as angrily as they did after the COVID-19 pandemic—maybe because of the trauma from so many lives lost—whole families in some cases.

Inflation is like the frog in water that has been slowly coming to a boil. For whatever reason, we have only noticed it since the water (meaning our economy) has come to a boil from the pandemic’s aftereffects that have most hurt our working class, many of whom had lost jobs as globalization moved good paying manufacturing jobs overseas in the name of making everything cheaper.

Most of us remember when a gallon of gas was less the $2, or a quart of milk less than $1, or housing prices were last affordable in the 1970s, as I said. But there was no quick cure. The OPEC oil embargo jump-started the decade-long inflation surge in the 1970s, for instance.

What can be done to cure the current inflation surge? Republicans and Trump’s “Drill Baby Drill” promise can’t do much to lower oil prices because the U.S. already produces more oil than it uses, while adding more CO2 to the atmosphere that is accelerating global warming, that endangers whole parts of the country.

And higher proposed tariffs won’t increase the supply of anything and might lower demand, since it makes imports more expensive because it is a tax on imported goods.

There are two solutions that the Biden administration have implemented, but Republicans don’t like—federal funds to make construction of affordable housing cheaper, and the elimination of loopholes that encourage the profit-taking by cartel-size pharmaceutical corporations that took advantage of the pandemic shortages and continue to raise their prices.

And lastly, we need more comprehensive healthcare legislation that would increase productivity of our workforce because they become healthier. But Republicans have historically opposed that as well, having attempted to repeal Obamacare, the Affordable Care Act, more than 30 times. It is the only private health insurance that insures more than 30 million Americans against preexisting conditions.

Republicans are even talking about downsizing Medicaid and Medicare in the name of increasing efficiency. That will also increase inflation, because M & M keep overall costs of healthcare lower with their power to control treatment and drug prices.

So it’s difficult to know if it was ideology and conspiracy theories triumphing common sense economics that enabled Republicans to win this election.

Inflation has returned to its historic norm, and the American economy is fully employed so everyone’s job is safe. Many voters want someone to blame for their myriad anxieties, as Kansans had done two decades earlier.

We will now have to worry if this Gilded Age will end as did the last one. So much wealth had been accumulated in too few hands that it caused the Great Depression and led to World War Two.

Harlan Green © 2024

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

Bidenomics Is Working!

 Financial FAQs

Brad Delong

Why are Republicans denigrating Biodenomics, the economic policies passed by a bipartisan congress since 2021 that is causing 3 percent GDP growth and 4.0 percent unemployment, with 8 million job vacancies looking for workers, and inflation back to COVID-19 pre-pandemic levels?

Republicans are playing politics in this election year, of course, but Senator McConnell has touted President Biden for rebuilding some major bridges in Kentucky with the Infrastructure Act.

In fact, the U.S. has far outdistanced other developed countries in recovering from the COVID-19. Why? Because President Biden has pulled off a great renaissance of public-private investments with said bipartisan congress, the largest investments in renewing the U.S. economy since Roosevelt pulled off the New Deal during the Great Depression..

Time Magazine described what it is meant to do: “Bidenomics argues that a large and thriving middle class is the primary cause of economic growth. “When the middle class does well, everybody does well,” the President has repeatedly explained. This is the core proposition of Bidenomics: that prosperity grows from the bottom up and the middle out.”

Vice President Harris has echoed that slogan in her campaign, because very few Americans seem to understand Bidenomics at all. A major reason is that four decades of its predecessor; Reaganomics, or Trickle-down economic policies; have badly damaged the middle class, followed by the double-whammy of COVID-19,

A Monmouth University Poll finds that just under half the public gives President Joe Biden credit for this upturn, for instance, but few say his policies are helping the middle class, especially compared to his predecessor.

“The president has been touting ‘Bidenomics,’ but the needle of public opinion has not really moved. Americans are just not giving him a lot of credit when it comes to the economy,” said Patrick Murray, director of the independent Monmouth University Polling Institute.

The poll also finds that disapproval of Congress has hit a nominal record for the past decade.

Time Magazine cites a major reason for the pessimism in a new working paper by Carter C. Price and Kathryn Edwards of the RAND Corporation—the record inequality of the past four decades:

“…had the more equitable income distributions of the three decades following World War II (1945 through 1974) merely held steady, the aggregate annual income of Americans earning below the 90th percentile would have been $2.5 trillion higher in the year 2018 alone. “

The authors assert that since the 1970s, some $50 trillion in wealth has been transferred from workers to owners of capital with the massive deregulation of whole industries, including banking, the passing of anti-labor legislation that weakened union collective bargaining, and massive tax cuts for the wealthiest that practically halved the maximum income tax rate from 50 percent in 1980 to 28 percent today.

So, it is no wonder that workers in the Rust Belt Midwest want to return to the ‘good old days’ of post WWII, when income distribution was more equal (but with fewer Black and women’s rights)?

The problem is that has never been Republicans’ agenda, especially MAGA Republicans, still the party of the wealthy attempting to sell their credo that lower taxes and fewer government benefits will benefit all Americans.

Europeans love Bidenomics, however. “With a fast-growing economy, a strong labour market and falling inflation, the US has outpaced its counterparts in Europe and elsewhere, says a recent BBC article. That put the US at 2.5% over the course of the year, outpacing all other advanced economies and on track to do so again in 2024.”

What will it take for Americans to know and value what we have?

Harlan Green © 2024

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

More Lawlessness--Republicans' Climate Denial

 Answering Kennedy’s Call

NYTimes

One year ago, on August 16, 2022, President Biden signed the Inflation Reduction Act into law – the largest investment in clean energy and climate action ever.

“The Inflation Reduction Act is a transformative law that is helping the United States meet its climate goals and strengthen energy security, investing in America to create good-paying jobs, reducing energy and health care costs for families, and making the tax code fairer,” the White House said in its latest update.

Whereas at the top of the Republican’s MAGA list in its 2024 platform is weaken as many environmental laws as possible in order to return fossil fuels and the non-renewable, most pollution intensive industries to dominance.

Trump’s acceptance speech said as much: “…And next we will add the actual and incredible waste of taxpayer dollars that is fueling the inflation crisis. They spent trillions of dollars on things doing with the green new scam. It’s a scam…We will not allow it to be spent on meaningless green new scam ideas.”

“And I will end the electric vehicle mandate on day one, thereby saving the US auto industry from complete obliteration, which is happening right now. And remember we have liquid gold under our feet, more than any other country by far. We are a nation that has the opportunity to make an absolute fortune with its energy. We have it and China doesn’t.”

This is after the last Trump administration spent four years dismantling major climate policies and rolling back many more rules governing clean air, water, wildlife and toxic chemicals.

In all, a New York Times analysis, based on research from Harvard Law School, Columbia Law School and other sources, counts nearly 100 environmental rules officially reversed, revoked or otherwise rolled back under Mr. Trump. More than a dozen other potential rollbacks remained in progress by the end but were not finalized by the end of the administration’s term.

President Biden’s four years have reversed such climate change denial. Just twelve months after the law was signed, the Inflation Reduction Act is already having a significant impact on American workers and families and “is delivering for underserved communities and those that have been too often left behind,” said the White House.

“Outside groups estimate the Inflation Reduction Act’s clean energy and climate provisions have created more than 170,000 clean energy jobs already, companies have announced over $110 billion in clean energy manufacturing investments in the last year alone, the law is delivering billions of dollars to protect communities from the impacts of climate change, and millions of seniors are saving money because their insulin is capped at $35 per month,” said the White House in its update.

The Republican Party’s attack on environmental regulations has been unrelenting in its support of the fossil fuel industry.

But in the early 1970s when I joined the U.S. Environmental Protection Agency, the Clean Air Act, the Clean Water Act, and the Endangered Species Act were all passed with broad bipartisan support and signed by Republican President Richard Nixon.

What happened? The 1973 Arab oil embargo shut off OPEC supplies and led to long car lines waiting at gas stations to fill their tanks, for those that remember.

It was a very traumatic decade of soaring inflation that caused Big Business to bankroll lobbyists to support Big Oil producers, which set the environmental movement back. Oil production became a national security priority; fracking was developed to make the US the largest oil producer in the world.

The result of that decade was the beginning of what became Reaganomics, or trickle-down economics. It wasn’t even an economic theory—just make the one precent wealthier and enough will trickle down to the other 99 percent to lift all boats.

Worldwide temperatures have been increasing ever since; tornadoes and hurricanes more frequent and damaging, wildfires and floods as well. Even the Pentagon has jumped on the environmental bandwagon with its reports that have said global warming now endangers our national security.

Even the Big Oil industry has admitted the danger in many studies. But not the Republican Party, apparently, which makes its climate denial platform a national security threat as well.

Harlan Green © 2024

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

The Irrelevance of MAGA Republicans

 Answering Kennedy’s Call

This is another Huffington Post column I wrote in 2017 at the beginning of the Trump presidency. It’s about the irrelevance of his policies for most Americans that another Trump presidency would repeat, as well as further damaging our health and the environment, while making the world less safe.

“It’s sad that the President of the United States has become irrelevant to most of the problems facing Americans and the world. In choosing to return to a 1950’s that never was—the brief emergence of a white middle class—MAGA Trump is choosing to isolate himself and his constituency from the real world. Do we need a better definition of President Trump’s irrelevance?

Let’s start with his fiasco of an Asian trip, where he fawned over foreign leaders who gave him massive pageants, but no trade concessions, while abandoning the Trans- Pacific Partnership.

The remaining 11 countries, including Japan, Australia, Mexico and Malaysia, said they had revived the Trans-Pacific Partnership (TPP) deal, a multilateral agreement championed under the Obama administration.

The Guardian reported Ministers meeting in Danang, Vietnam agreed on the “core elements” of what was now called the comprehensive and progressive agreement for Trans-Pacific Partnership, a joint statement read.

And “American leaders from state capitals, city halls and businesses across the country have shown up in force” in Bonn, Germany, to discuss carrying out the 2015 Paris climate agreement,” said California Governor Jerry Brown and Michael Bloomberg in the New York Times.

This is when President Trump announced at the beginning of his Presidency that he was abandoning the Paris Accord in favor of supporting a return to coal and oil energy. But that isn’t happening for the rest of America, as some 50 percent of U.S. states and cities are represented in Bonn.

“California just extended its cap-and-trade emission program through 2030 and has adopted incentives that will help put 1.5 million electric vehicles on the road by 2025,’ said Jerry Brown, Governor of the sixth largest economy in the world.

Huffington Post

And the U.S. just released its latest congressionally mandated Climate Science Special Report that says 2017 wreaked the most catastrophic destruction in 90 years with an estimated $175 billion in property damage. Only the San Francisco Earthquake (1906), Chicago Fire (1871), and Great Flood (1927) caused more destruction.

What is Trump afraid of, that he fawns over Chinese and Russian leaders, while extracting no concessions from them? He was seen to spend more time with Vladimir Putin at the Asia-Pacific Economic Cooperation summit in Vietnam than any other leader.

Even his support of Republicans’ so-call tax reform bills is irrelevant, as he wants Republicans once again to attempt to repeal the Obamacare mandate, when more than 50 percent of Americans now support Obamacare, according to the latest Kaiser Family Foundations Health Tracking Poll.

That is irrelevance of the highest order, and as many pundits have noted, it is also the definition of insanity: Republicans attempting to repeal Obamacare more than 30 times and expecting a different result.

Another feature of the tax reform bill is that it requires taking away approximately $1.5 trillion in Medicare and Medicaid benefits to give the wealthiest an unnecessary tax cut. Therefore, it won’t help the shrinking middle class, or any income class, except to top 1 percent.

Harold Myerson voiced recently in The American Prospect, “The United States now has the highest percentage of low-wage workers – that is workers who make less than two-thirds of the median wage- of any developed nation. Fully 25 percent of all American workers make no more than $17, 576 a year.”

The irrelevance of this President is therefore a real danger to our health and standard of living in so many ways.

Harlan Green © 2024

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

To A Better State of the Union

 Financial FAQs

Reuters

Reuters just reported that U.S. Treasury Secretary Janet Yellen on Monday said she saw a path for avoiding a U.S. recession, with inflation coming down significantly and the economy remaining strong, given the strength of the U.S. labor market.

"You don't have a recession when you have 500,000 jobs and the lowest unemployment rate in more than 50 years," Yellen told ABC's Good Morning America program.

Why is she being optimistic about a so-called soft landing for our economy? It would raise the importance of our annual State of the Union report that President Biden will present to Congress and Americans on Tuesday.

It’s not only the incredibly strong unemployment report, but service sector businesses that employ most Americans as measured by the Institute for Supply Management (ISM) Non-manufacturing Index soared in January from its December lows; another huge surprise.

It’s as if Americans have changed their minds en masse about the possibility of a recession in January. And that could mean a much better performing ‘state of the union’ this year.

“Ten industries reported growth in January,” said Anthony Nieves, Chair of the Institute for Supply Management®, “according to the Services PMI^®, which was in expansion territory after a single month of contraction and the prior 30-month period of growth. The composite index has indicated expansion for all but three of the previous 155 months.”

And former Treasury Secretary Larry Summers is also tapering his hawkishness and seeing the possibility of a better future for the U.S. economy.

Summers said on Fareed Zakaria’s GPS Sunday that it “looks more possible that we’ll have a soft landing than it did a few months ago,” but he has continued fears about inflation indicators that have come back to earth, but are still too high for his liking.

“They’re still unimaginably high from the perspective of two or three years ago, and that getting the rest of the way back to target inflation may still prove to be quite difficult,” Summers said.

The manufacturing sector hasn’t done so well per the ISM Manufacturing Index. Economic activity in the manufacturing sector contracted in January for the third consecutive month following a 28-month period of growth, say the nation's supply executives in the latest Manufacturing ISM^® Report On Business^®.

The report was issued today by Timothy R. Fiore, Chair of the Institute for Supply Management^® (ISM^®) Manufacturing Business Survey Committee:

“The January Manufacturing PMI^® registered 47.4 percent, 1 percentage point lower than the seasonally adjusted 48.4 percent recorded in December. Regarding the overall economy, this figure indicates a second month of contraction after a 30-month period of expansion.”

Why has manufacturing activity contracted? It seems to have been most affected by higher prices for raw materials, or, “due to buyer and supplier disagreements regarding price levels,” in Fiore’s words.

So more economists are lining up behind the inflation doves, who see inflation as a temporary phenomenon, with consumers’ longer term inflation expectations continuing to be “well-anchored” around 3 percent.

Maybe that’s why the Fed raised the overnight interest rate it charges banks just a quarter-percent to 4.5 percent, and why it bespeaks a better state of our union.

Harlan Green © 2023

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

Why Weak Jobs Report?

 Popular Economics Weekly

NPR.org

Is hiring cooling off with the cooler weather? We really don’t know, in spite of the punk employment number. Economists don’t agree on why employers added just 194,000 jobs in September, according to the Labor Department’s unemployment report. There is too much mystery in the jobs number.

The NY times’ Ben Casselman posits, “The pandemic’s resurgence delayed office reopenings, disrupted the start of the school year and made some people reluctant to accept jobs requiring face-to-face interaction. At the same time, preliminary evidence suggests that the cutoff in unemployment benefits has done little to push people back to work.”

Also, figures are seasonally adjusted, which means that although government payrolls shrank by -123,000 jobs on an unadjusted basis, mostly in education, federal, state and local government employment actually grew by close to 900,000 workers in September. Because that’s fewer than in a typical September, the seasonal adjustment formula interprets it as a loss in jobs.

Schools are just now re-opening and not yet hiring enough teachers and staff; which has kept more mothers at home; and the Delta variant has cut back on leisure and hospitality services.

And Most people (7 in 8) who lost federal aid in June were not reemployed by early August, according to a paper authored by researchers at Columbia University, Harvard University, the University of Massachusetts Amherst and the University of Toronto last month, cited by CNN.

Census surveys show the number of people who aren't working because they have kids at home has dropped from nearly 8 million in midsummer to about 5 million today.

That's far below the hiring rate earlier in the summer when employers were adding around a million jobs a month, says NPR. And their graph shows we are still five million jobs below the job level at the start of the pandemic in February 2020.

The endurance of the pandemic is still the elephant in the room. A full recovery depends on it being vanquished. The U.S. has been slow to institute vaccine mandates, whereas Canadian federal employees will be required to declare their full vaccination status through an online portal by Oct. 29.

"These travel measures, along with mandatory vaccination for federal employees, are some of the strongest in the world," Canadian Prime Minister Trudeau told reporters recently. "If you've done the right thing and gotten vaccinated, you deserve the freedom to be safe from COVID."

And Canada is back to pre-pandemic employment levels in September, writes David Rosenberg of Rosenberg Research, because 90 percent of eligible Canadians have at least one shot and 82 percent are fully vaccinated.

CDC.gov

The CDC reports the current 7-day moving average of daily new cases (95,448) decreased 11.6 percent compared with the previous 7-day moving average (107,953). A total of 43,997,504 COVID-19 cases have been reported as of October 6, 2021.

The bottom line is that a full jobs recovery and success of President Biden’s Build Back Better agenda now hinge on a full recovery from COVID-19.

 

Harlan Green © 2021

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