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

No Art of the Deal

 ANSWERING KENNEDY’S CALL

“After all, it is mathematically impossible to cut taxes for corporations and billionaires, sustain basic programs like defense and Social Security, and lower the deficit simultaneously:” Nobel Laureate Joseph Stiglitz.

Huffington Post

Historians will puzzle over the results of our latest presidential election for decades. A majority of Americans have just voted in a con artist and sexual predator for the second time who has failed in most of his business ventures and left investors holding the tab.

One conclusion will be that identity politics won, after all. Enough white women chose Donald Trump over the East-Asian/Black Kamala Harris who advocated more rights for women, while enough Hispanic and Black males put their faith in a misogynist who has sexually assaulted women.

Identity politics has moved much of the Democratic Party to the left with the Black Lives Matter and LBDGQ movements. But most exit polls said it was the economy that decided the vote—everything became too expensive after COVID-19.

My conclusion is that it has taken very special presidents to lead such a diverse populace that will defend the constitution. In modern times it was Roosevelt creating the New Deal to bring America out of the Great Depression and win World War 2.

But post-WWII generations eventually forgot what the New Deal had accomplished and voted in a Republican Party that by 1980 had begun to drain the federal budget by continually cutting taxes for their wealthy supporters creating massive federal deficits; Reagan (-$400 billion), GW Bush (-$1 trillion), and Donald Trump (-$5 trillion).

Democratic presidents wanted government programs that benefited more Americans, so President Clinton created actual budget surpluses in his last four years, President Obama brought America out of the Great Recession spawned by the GW Bush administration’s fiscal mismanagement and created Obamacare.

President Biden created a second New, New Deal to bail us out of the COVID-19 pandemic and begin to pay down Trump’s massive deficits, thereby creating the fastest economic recovery from the pandemic among developed countries. It is designed to protect Americans from climate change and modernize the economy for decades to come.

And now a peculiar American form of amnesia has set in once again; a majority of Americans have voted in Donald Trump for a repeat performance with the hope he will cure their economic malaise, even with his record of multiple bankruptcies. And Republicans will surely run up massive deficits in their quest to siphon even more of the federal budget as they did in his first term.

His stated policies will also endanger us because Trump not only wants to weaken America militarily by weakening military alliances such as NATO, but weaken environment protections as well by gutting the U.S. Environmental Protection Agency once again for the fossil fuel industry in the face of more frequent and greater hurricanes, tornadoes, and wildfires.

We know this because one of Trump’s first actions when elected in 2017 was to leave the Paris Accord. He has called climate change a hoax.

We currently have the second highest carbon emissions per capita after China, but would become the highest emitter among developed countries if Republicans succeed in rolling back 30 years of environmental regulation.

Why did he leave the Paris Accord I in 2017 when it is a voluntary accord to reduce carbon emissions? It was to help the coal industry, where Commerce Secretary Wilbur Ross is heavily invested in coal and has already made $millions with the 50 percent bump up in coal stocks since Trump took office.

And the Koch Brothers $millions that were spent to elect Tea Party candidates paid off as Trump initiated an immediate review of President Obama/s Clean Power Plan, which restricts greenhouse gas emissions at coal-fired power plants.

Surrounded by coal miners at the time, the president described the Paris Accord as a “crushing attack” on workers and vowed to nix “job-killing regulations. “We’re going to have safety, we’re going to have clean water, we’re going to have clean air, but so many [regulations] are unnecessary, so many are job-killing,” he said.

And Trump now says he wants Elon Musk to become the efficiency czar, which will cause even more economic damage, since Musk has promised to cut as much as $2 trillion “of waste”—the amount of the current budget deficit—from the next federal budget, at the same time that Trump and Republicans have promised more tax cuts for their wealthy supporters.

But in the words of Nobel Laureate Joseph Stiglitz in Project-Syndicate, “After all, it is mathematically impossible to cut taxes for corporations and billionaires, sustain basic programs like defense and Social Security, and lower the deficit simultaneously.”

The next four years of Republican rule will be a measure of how much many Americans have fooled themselves once again, as they did in 2017. For a second time Americans will have the chance to learn from that experience, especially the young who may not have been of voting age, to see how Trump and the Republicans mishandled the economy that mostly profited themselves.

And it will be another bitter lesson for our women, minorities, the poor and even many in the middle class, as well as those that will suffer from the effects of a warming atmosphere.

Harlan Green © 2024

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

What's Next, Republicans?

 Financial FAQs

“What if conservatives succeeded in repealing Obamacare? “Republicans' Obamacare repeal bill would leave 17 million more people uninsured next year, and 32 million more in 2026, the Congressional Budget Office said in an estimate Wednesday. It also said premiums would double by 2026. …By 2026, three quarters of the population would live in areas with no insurers participating in the non-group market, due to upward pressure on premiums and downward pressure on enrollment, the report found.”

I wrote a Huffington Post piece in July 2017 during President Trump’s first term that could predict what we might look forward to with Republicans, and Donald Trump’s healthcare policy in his second go-around as president.

Huffington Post

The result for working Americans of Republicans’ repeated attempts to repeal Obama that I wrote about then is shown in the above graph. It compares the soaring death rates of 45-54 white American males with other developed countries (red USW line). Obamacare is the only American universal healthcare plan that covers workers with pre-existing conditions if no employer healthcare, and yet Republicans can be expected to again attempt to replace it with a “concept” in Trump’s words.

Americans had just avoided another health care disaster in voting down the Senate’s ‘skinny’ Obamacare Repeal and Replace bill in 2017. Even though maintaining most of the taxes to pay for the Medicaid portion, it would have made insurance coverage prohibitively expensive for those older and sicker users with the removal of the private and employer mandate requirements that would cause younger and healthier people to leave the insurance markets.

This is just the latest precipice that’s been avoided. Americans already have the worst health outcomes in the developed world, precisely because America is the only developed country—in fact, even of undeveloped countries—that doesn’t have universal coverage.

The result is one of the highest birth death rates, as well as diabetes, heart and other infectious disease rates—which are diseases usually associated with poorer, undeveloped countries.

The last time Republicans swept the presidential election in 2017, it was the very white, male Tea Party reacting to our first Black President. But they didn’t replace it with something new. They went back to their base of wealthy Oligarchs formed during the Reagan era, still fighting labor unions and resisting more social programs to help the less fortunate, as Trump’s MAGA nation has promised to do.

Trump’s electorate has been good at wanting to tear down the old institutions, but not good at replacing them with a newer, better system. And if Elon Musk becomes the efficiency czar in Trump’s new administration, and he continues to brag he can cut $2 trillion in waste from the federal budget, we know social programs and maybe much more will suffer in the name of reducing the national debt.

There is another, better way to replace what hasn’t worked for working Americans; but that must be based on science and new technologies that can come from our educated elite (rather than our political and wealthy elite).

If Republicans want to be part of that future, they can’t follow a con artist who doesn’t believe in the future, only the past.

Harlan Green © 2024

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

Why Does Bidenomics Work?

 Financial FAQs

FREDrealgdp

Elon Musk told a cheering crowd at Sunday’s MAGA rally in New York that if Donald Trump puts him in charge of government efficiency, as planned, he can cut “at least $2 trillion” from the current federal budget.

This would cause an almost immediate recession. Such is the blindness of the world’s richest Oligarch, who has made no bones about his dislike of government regulations and taxes in the way of his dream of reaching Mars.

MarketWatch’s Brent Arends tells us what would happen. “Either Donald Trump and Elon Musk are planning to cut 85% of all spending on highways, disaster relief, federal bank-deposit insurance and the departments of Agriculture, Homeland Security and Justice; close all U.S. embassies; and abolish the Environmental Protection Agency, the Small Business Administration, NASA and nearly all welfare, income-support, food-stamp and childhood-nutrition programs.”

“Or, they are planning on cutting Social Security and Medicare — despite Donald Trump’s protests to the contrary,” said Arends

That is what is behind Republicans’ dislike of Democrats economic policies since President Biden’s election that has created more than 15 million jobs and 3 percent economic growth as we recovered from the COVID-19 pandemic.

It takes government investments to spur private investments; not just in new technologies (the CHIPS Act) but healthcare and the environment (Inflation Reduction Act), and in modernizing our infrastructure (Infrastructure Act) so that Americans will feel more secure from hurricanes and illness and therefore produce more.

That is the real definition of efficiency, not cutting benefits so that Billionaires can keep more of their wealth.

President Obama was the first to turn the tide on President Reagan’s 40- years of trickle-down economic policies after the Great Recession (2008-09) that had transferred $50 trillion in wealth from working Americans to the owners of capital living off their corporate profits, according to a RAND Corporation working paper.

He did it by creating Obamacare (the Affordable Care Act) and making government the protector of people, not of profits, as President Reagan had done. This resulted in economic growth accelerating to 4 percent during the Obama years continuing into Trump’s years, even with a Republican-engineered shutdown. It was the longest economic recovery since World War Two, and the reason Trump could brag that growth has been so good just prior to COVID-19.

The economy unfortunately shrank -7.5 percent in 2020 as businesses shut down due to the pandemic. It roared back to life in the second quarter of 2021 as congress acted quickly to put money back into Americans’ pockets.

In fact, the U.S. economy will continue to provide most of the thrust for global growth through the balance of this year and in 2025, led by robust consumer spending “that has held up through a wrenching bout of inflation and the high interest rates used to tame it,” the International Monetary Fund said on Tuesday.

Such economic policies requiring government investments have worked before. It was Roosevelt’s New Deal that employed more than 8 million people, built 650,00 miles of roads, 120,000 bridges, created the minimum age, 8-hour workdays and started up social security.

Now more than half of the living US recipients of the Nobel Prize for economics signed a letter that called Vice President Kamala Harris’ economic agenda “vastly superior” to the plans laid out by former President Donald Trump.

“While each of us has different views on the particulars of various economic policies, we believe that, overall, Harris’ economic agenda will improve our nation’s health, investment, sustainability, resilience, employment opportunities, and fairness and be vastly superior to the counterproductive economic agenda of Donald Trump,” the economists write in the letter obtained by CNN.

Top this off consumers are now joining the Harris economic bandwagon. The Conference Board’s latest consumer confidence survey surged to 108.7 in October from a revised 99.2 reading in the prior month,the Conference Board said Tuesday.  This is highest level of confidence since January.

“Consumer confidence recorded the strongest monthly gain since March 2021, but still did not break free of the narrow range that has prevailed over the past two years,” said Dana M. Peterson, Chief Economist at The Conference Board. “In October’s reading, all five components of the Index improved. Consumers’ assessments of current business conditions turned positive. Views on the current availability of jobs rebounded after several months of weakness, potentially reflecting better labor market data.” 

Is Bidenomics finally catching on with ordinary Americans, not just economists?

Harlan Green © 2024

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

The Tariff Bomb

 Financial FAQs

Getty

Now that Elon Musk, the world’s richest man, is doing all he can to elect Donald Trump the next American President with his $Billions; because there are too many regulations (read environmental), which means he might never otherwise get to Mars; it’s time to ask what a Trumpian economy would look like if Elon succeeds in his quest.

It would be a big win for wealthy oligarchs such as Musk.

Trump’s biggest lie is that a 20 percent tariff on almost all imports is a tax paid by the exporter, not American users of those imports. Common sense tells us that we can only tax foreign products after they arrive on our soil, not in the country of origin.

Any tax on imports arriving in the U.S. is therefore an American tax, so that the product’s final price charged to American consumers includes the import tax added to whatever the exporter is charging for said product, a price increase.

The results would do horrendous damage to our economy just out of the worst pandemic in 100 years that killed one million Americans. In fact, it would precipitate another recession because past history has shown Americans the damage wrought by high inflation on the working classes that pay taxes on a larger proportion of their income, than the one percent of earners and corporations.

A recent report by the Peterson Institute for International Economics, a serious non-partisan think tank, asserted that the labor shortages and higher tariffs on imports Trump proposes would return inflation to pandemic levels of 6 to 9 percent, not to mention the damage to employment and the USDollar if Trump exceeded in deporting immigrants, or hamstringing the Federal Reserve in its inflation fight.

“We find that all the policies examined could cause a loss of production and employment, especially in trade-exposed sectors such as manufacturing and agriculture.”

CPI consumer inflation rate reached the astronomical height of 14.6 percent during the 1981 and 1982 recessions, 5.5 percent during the Great Recession (2008-09), and rose as high as 9 percent in 2022 during the COVID-19 pandemic.

Trump’s tariff lie exposes an even larger lie beneath it. He can only pay for the tax cuts, such as were enacted in his Tax Cuts and Lobs Act (TCLA) on wealthy individuals and corporations, with a consumption tax that all Americans pay.

It lets corporations and the wealthiest off the hook on paying for the necessary programs that fund Medicare, Medicaid, and defense, which is what the TCLA did that is about to expire and was the only major legislation during his four years in office.

A Brookings Institute analysis of his TCLA was even more damaging, and he intends to renew it if elected: “The new law will reduce federal revenues by significant amounts, even after allowing for the impact on economic growth. It will make the distribution of after-tax income more unequal. If it is not financed with concurrent spending cuts or other tax increases, TCJA will raise federal debt and impose burdens on future generations.”

So, it’s also time to ask exactly what policies have made the U.S. economy the stronger than any other developed countries since the COVID-19 pandemic. Is it by Republicans or Democrats, since it’s become and election issue?

Former president Obama claimed in a recent Detroit campaign speech that it was his eight years—2008-2016, during the recovery from the Great Recession—that his administration was responsible for creating what became almost 11 years of positive GDP growth, longer even than President Clinton’s record recovery streak of 10 years.

That recovery continued into the Trump administration from 2016-2020 and the onset of the COVID-19 pandemic that briefly stopped all growth, but recovered quickly due to the government aid that flooded into the economy (before the supply-chains recovered) and inflation skyrocketed.

The Fed has finally tamed inflation and even more importantly, job growth returned to pre-pandemic unemployment levels. And that was due to President Biden’s Bidenomics policies that are modernizing the American economy for future generations.

Yet Trump has said climate change is hoax; so the increasingly frequent hurricanes and tornadoes must also be illusions. He has also said that he wants to eviscerate many of President Biden’s spending programs and policies, in the name of cutting the budget deficit, as well as once again attempt to repeal Obamacare, if elected.

It is what very wealthy oligarchs such as Elon Musk also say that they want.

Harlan Green © 2024

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

Why Is This Election Still a Tossup?

 Answering Kennedy’s Call

What is the reason Republicans have become the party of anti-intellectuals? The danger is that it may drown out any intelligent discourse about the most important issues of our day. It's driving at least one of our political parties into insanely ridiculous positions.

Barack and Michelle Obama warned last night at the Democratic Convention that it will still be an uphill slog to beat Donald Trump and his Republican Party. “Make no mistake, it will still be a fight,” said President Obama last night, even though Trump is now a convicted felon, and showing visible signs of mental deterioration.

This has become blatantly obvious now that a younger and vibrant Kamala Harris has replaced President Biden as his opponent, and Trump is no longer leading in the polls.

But it is still a contest for the same reason Trump won in 2016; when I first wrote about the presidential debates; he is leading a party that has intentionally been dumbed down since the 1970s, at least. And nothing has changed for them.

Huffington Post

We saw in the 2016 CNN Republican candidate debate the results of what seems to be a prolonged campaign to discount almost all scientific facts, as well as intelligent discussion of the most important issues of the day.

Especially scary was Donald Trump saying if we build up our military enough, we won't have to negotiate with anybody. Or Marco Rubio, the seemingly most moderate Republican, endorsing a 1,900 mile fence along our entire border with Mexico (or double fence, says Dr. Ben Carson) over mountains and rivers, or Carli Fiorina saying that Planned Parenthood was aborting live babies to harvest their organs.

Global warming is one of the most important issues today, since there is almost unanimous agreement among scientists that it is man-made and rising alarmingly. Hence the record heatwaves, cold spells and catastrophic storms the world has been experiencing recently. Yet thanks to the funding of multi-billionaires like the Koch Brothers, none of the Republican Presidential candidates said they believe global warming is man-made, or even real.

What is the reason Republicans have become the party of anti-intellectuals--some members even want to abolish the Department of Education, and otherwise defund public education? Journalist Chris Hedges said in a PBS interview President Clinton in coopting moderate Republican positions, such as deregulation of the financial industry, putting 100,000 more cops on the street, and 'reforming' welfare, had driven the Republican Party to "insanity"

But the anti-intellectual, anti-science bias goes much further and deeper. It is in fact an almost totally American phenomenon that Republicans have taken advantage of, dumbing down the electorate to levels that would even deny evolution. Why would anyone not want to support public education, when it educates more than 80 percent of our students? The result is that higher education is also falling behind.

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"

Republican candidates were echoing the Republican platform that advocated the deportation of all illegal aliens, that would abolish or cripple whole government agencies (including the Environmental Protection Agency), 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.

Pundits give other reasons for such a dumbing down of a segment of the electorate--such as social media and television replacing literacy, or education that no longer teaches math and science or even history. Maybe that has enabled the Donald Trumps of the world to shout louder.

The danger is that it may drown out any intelligent discourse. It's driving at least one of our political parties into insanely ridiculous positions.

Harlan Green © 2024

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

Why Has U.S. Made Such a Mess of It?

Popular Economics Weekly

Wrightson.com

Private sector employment decreased by - 2,760,000 jobs from April to May according to the May ADP National Employment Report®, much less than the original estimate of –8 million jobs. It precedes Friday’s official government unemployment report for May.

Should we be thankful it wasn’t worse when the U.S. recovery from COVID-19 has been more damaging than in most other developed countries?

From Japan to Australia to Germany, the April unemployment rates were no more than 6.2 percent in April vs. our 14.8 percent, because they hadn’t mishandled the pandemic as had the U.S. Friday’s unemployment report is predicted to show the U.S. May unemployment rate rising from 14.8 percent to about 19 percent.

We weren’t prepared, in other words, and with the George Floyd killing and protests, there will be even more chaos as angry protestors precipitate higher COVID-19 infection rates and shut down businesses that are just opening.

It didn’t have to be this way. President Obama had set up a commission to study police violence and policing policies, but the Trump administration abolished it as they abolished the National Security Council commission that advised the White House on how to prepare US for pandemics.

Nothing was done to prepare Americans for either of the long predicted events, in other words. It was more important for President Trump to want to abolish President Obama’s accomplishments, rather than build on them.

Such is the cost of one political party’s single-minded focus on maintaining power and what amounts to an apartheid policy—discriminating against darker-skinned people, including immigrants—that Republicans risk taking down American democracy itself.

Nobel Laureate economist Paul Krugman lamented this in a recent opinion column.

“Every day, it seems, brings another indicator of our decline: the can-do nation has become a land that can’t deal with a pandemic, the leader of the free world has become a destroyer of international institutions, the birthplace of modern democracy is ruled by would-be authoritarians. How can everything be going so wrong, so fast?”

“Well, we know the answer,” he said. “As Joe Biden put it, “the original sin of slavery stains our country today.”

What have most other developed countries done to control COVID-19? They were prepared. Australian Prime Minister Scott Morrison, a staunch conservative, listened to the scientists that predicted the oncoming pandemic early.

According to the NYTimes,“Scientists, whom Mr. Morrison’s party has derided for over a decade, were respectfully asked for their views about the novel coronavirus and, more remarkable still, these views were acted on and amplified. Mr. Morrison dismissed the idea of trying to build herd immunity among the population, calling it a “death sentence.”

Angela Merkel, Germany’s Prime Minister had a scientific background as a former research scientist with a doctorate in quantum chemistry who once co-authored a paper on the “influence of spatial correlations on the rate of chemical reactions”, according to the Guardian.
She was able to explain why abandoning the lockdown early was so dangerous to Germans, as did New York Governor Andrew Cuomo at his daily briefings.

“If the reproduction number (infection rate) of one were to go up to 1.1, Merkel explained, the German health system could be overwhelmed by October. If it were to go up to 1.2, hospitals could reach a crisis point in July, and if it went up to 1.3 the crisis point would come in June.”

Why would Republicans discount science and scientists such as Dr. Fauci, director of the Institute of Allergies and Infectious Diseases, and demote Dr, Rick Bright, former director of the Biomedical Advanced Research and Development Authority (BARDA) at HHS?

It’s very sad to see one of our two political parties be so oblivious to what has happened and is about to happen.

Prime Minister Morrison, as much an ideological opportunist as Trump, was smart enough to listen to his scientists. “That’s the advice we have taken.” Mr. Morrison went so far as to declare: “Today is not about ideologies. We checked those at the door.”

But I see hope.  The Republicans’ modern history of denigrating anything scientific that doesn’t preserve the status quo or forward their ideological agenda to maintain power is their vain attempt to defeat Mother Nature, and it won’t work. 

Harlan Green © 2020

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

Mr. President, Please Don’t Shoot Anyone!

Financial FAQs

Mother Jones/Wikipedia

Where is President Obama and other national leaders when we need them? Where is someone to refute the neo-Nazi lies of President Donald Trump, who no longer has to brag that he can shoot someone on Fifth Avenue, because his followers and those who believe his lies of Jewish conspiracies and immigrant invasions are carrying out the mass shootings and violence for him; with the Pittsburgh Tree of Life Synagogue shooter and Florida bomber the latest examples?

Any national leader’s voice will do, as this is happening because Donald Trump has been inciting his followers to avoid impeachment from a Democratic-elected congress in the upcoming November election.

Are there not even voices from his own Republican Party who will stand up to his relentless incitements of age-old fears?

It will take a clarion call from a moral national leader to refute the lies that there is an “invasion” of several thousand Central Americans seeking asylum from their own country’s violence, and who are about to overwhelm 325 million American citizens. There is no invasion of immigrants, as even a Fox News host has said.

The number of mass shootings around the country in 2018 continues to climb.  According to data from the Gun Violence Archive, a total of 293 mass shooting incidents have occurred as of October 27.

Saturday's mass shooting at a synagogue in Pittsburgh, with 'multiple casualties' and multiple officers injured, marks the 294th mass shooting. In 2017, the U.S. saw a total of 346 mass shootings. 

Where are our national leaders, including past presidents, who still believe in the rule of law and want to stop this President’s call to violence, a man who will do and say anything to stay in power?

Harlan Green © 2018

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

The Real Donald Trump—Part II

Popular Economics Weekly

President-elect Donald Trump is about to move into the White House. This is the man who has become a case-study and text book model of Narcissism for Psychotherapists. Narcissistic personality disorder (NPD) as defined by Wikipedia, ‘is a long-term pattern of abnormal behavior characterized by exaggerated feelings of self-importance, an excessive need for admiration, and a lack of understanding of others' feelings.”

 Or, a Narcissist can also be defined as one who has to believe he cannot do wrong, cannot admit he has ever been wrong or apologized for any of his failings. So it could be helpful to understand President-elect Trump’s failings, in order to understand and perhaps influence (as President Obama says he wants to attempt), just how he might behave as ‘our’ next President.

In fact, that is why Trump doubles down on any who would question him, accusing the accuser of the same misdeeds. Maria Konnikova implied that Trump was a classic Con Artist in her now famous New Yorker article: “A grifter takes advantage of a person’s confidence for his own specific ends—ends that are often unknowable to the victim and unrelated to the business at hand. He willfully deceives a mark into handing over his trust under false pretenses. He has a plan.”

That has to be why Trump maintained during the campaign that he would convene a special prosecutor to prosecute and jail Hillary Clinton for her “crimes”, when in fact Trump himself has been prosecuted for outright criminal behavior, such as the three Trump University lawsuits that he had to settle. Whereas, Hillary was cleared of all criminal charges for use of a private email server by FBI Director Comey.  We need need not compare their Trusts, as the Trump Family Foundation has just admitted to the IRS that it was ‘self-serving”, meaning it it broke IRS regulations that govern a foundation.

Or, he accused President Obama of not being born in the US for six years, in the face of overwhelming evidence to the contrary. Was Trump being stupid? No, he was currying favor with the birther movement to gain their support; mainly white male, racist Tea Partiers still fighting the Civil War who wanted to cast doubt on Obama’s legitimacy as the first African American President.

“What ultimately sets con artists apart is their intent,” says Konnikova. “To figure out if someone is a con artist, one needs to ask two questions. First, is their deception knowing, malicious, and directed, ultimately, toward their own personal gain? Second, is the con a means to an end unrelated to the substance of the scheme itself?”

It is the classic definition of a con game. Distract from the actual behavior by misdirecting our attention elsewhere—preferably to something even more sensational. Mitt Romney, Senators Marco Rubio, Ted Cruz and many others have called him a classic con-man.

But no one seems to be asking why he has had to perpetuate so many cons, broken so many contracts, filed multiple bankruptcies, and been involved in so many lawsuits—some 4,000 at last count—on his way to become the celebrity billionaire? The toll on supporters—even his family—must be devastating to maintain that image of success with overwhelming evidence to the contrary.

A major reason has to be his very short attention span. Tony Schwartz, ghost writer of Trump’s “The Art of The Deal”, has described him best: “Trump has been written about a thousand ways from Sunday, but this fundamental aspect of who he is doesn’t seem to be fully understood,” Schwartz told Jane Mayer, author of a New Yorker article. “It’s implicit in a lot of what people write, but it’s never explicit—or, at least, I haven’t seen it. And that is that it’s impossible to keep him focussed on any topic, other than his own self-aggrandizement, for more than a few minutes, and even then . . . If he had to be briefed on a crisis in the Situation Room, it’s impossible to imagine him paying attention over a long period of time,” said Schwartz

Trump in fact may only be able to focus on what is in front of him at the moment, hence his need for advisors more capable than he to pay attention, to analyze and make intelligent decisions. It has to be why he has lost so much money in his various ventures (such as the Trump Casinos), stiffed so many investors, walked away from so many debts, so that all the major banks now shun him.

We can now know the reason for his admiration of Vladimir Putin, for instance, who Trump has been trying to cultivate since his 1980 Miss Universe contest held in Moscow. It was really an attempt to buy a Moscow hotel. He has had to turn to Russian oligarchs and Mafia figures in order to fund many of his real estate ventures. How’s that for a classic conflict-of-interest as President?

So the question: if once a con-artist, always a con-artist? He’s 70 years old, and one doesn’t change their behavior at that age. But can he use such talents for the good of US, as he has promised; or once again, for his own self-aggrandizement and wealth?

Harlan Green © 2016

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

The Clinton Growth Presidency

Popular Economics Weekly

It’s remarkable. Donald Trump chose Detroit to make his economic speech, where he accused the Clintons of causing Detroit’s employment problems with their trade policies.

Is he kidding? The Detroit Big Three automakers didn’t lose jobs because of trade pacts, but because of the Great Recession. They built the wrong size gas guzzling hogs at a time that consumers wanted smaller cars, so it was a government bailout that saved them. Trade pacts have hurt some workers, but benefited many more by bringing in new export-oriented, high tech jobs.

He is shooting at the wrong targets. He wants to bring back the old economy via a trade war with China, abolishing the minimum wage, suspending government regulations, and lowering tax rates; even the inheritance tax that only affects those with $5 million plus to pass on. But he says nothing about income inequality or the budget deficit, which can only be cured by concentrating on developing a new economy that brings in new jobs based on new technologies and a new environmental awareness.

It won’t do any good to accuse Obama of “failed economic policies” because those blue collar workers lost their jobs in the Midwest rust-belt states. Some 10,800,000 million jobs have been created during the Obama recovery years. President Obama is now in third place (purple line in graph) behind President Reagan in second (per yellow line) with 14,735,000 jobs created, and President Clinton (blue line) in first place with 21,000,000 jobs created during his 8 years.

Graph: Calculated Risk

Trump also proposed lowering the maximum corporate tax rate to 15 percent that he said would boost jobs and investments. Problem is, corporations have already hoarded some $4.5 trillion in cash and cash equivalent securities from their record profits they aren’t spending on anything but higher CEO salaries and stock buybacks that enrich corporate execs and their stockholders even more.

What about the slow economic recovery? It’s mostly due to poor economic conditions worldwide, such as caution due to Britain’s Brexit withdrawal, China’s slowdown, and plunging commodity prices that have hurt developing countries. But it’s also due to misplaced austerity policies that have restricted new investment in favor of cutting public spending in Europe and the U.S. because of the fear of ballooning budget deficits, when just the opposite is needed—investments that will increase jobs, and so tax revenues to pay down those deficits.

We really have only one model of successful deficit reduction since WWII—Bill Clinton’s. That is why Hillary has mentioned Bill’s record of record growth that created the most jobs of any presidency since WWII, and 4 years of actual budget surpluses. It was due primarily to defense spending cuts as the Soviet Union collapsed and a higher maximum tax rate (40 percent). The economy grew for 10 years—from 1991 to 2001, before the do-com bust and short recession that ended on November 2001, just 2 months after 9/11.

So Hillary proposes to equalize income inequality with a higher minimum tax rate of at least $12 per hour, and would support $15 per hour in higher priced regions, while raising taxes and closing tax loopholes of the wealthiest to pay for tuition-free public colleges, universal health care and paid maternity leave—something that the developed countries and most developing countries already have.

Hillary’s economic platform should enable US to catch up with what the rest of the world provides for their citizens, in other words.

Harlan Green © 2016

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

Housing Now Leading Economic Recovery

Popular Economics Weekly

Harvard economist and GW Bush chief economic advisor Greg Mankiw’s recent New York Times Upshot column attempts to explain why US growth is so slow. “Here is the sad fact,” he says: “Over the last decade, the growth rate of real G.D.P. per person has averaged just 0.44 percent per year, compared with the historical norm of 2.0 percent. At a rate of 2.0 percent, incomes double every 35 years. At a rate of 0.44 percent, it takes about 160 years to double.”

And Mankiw blames it on policy missteps. E.g., when Barack Obama took office in 2009, the economy was in the midst of the Great Recession, and President Obama’s advisers relied on standard Keynesian theory when they proposed a large increase in government spending to energize the economy.  But it wasn't enough.

Instead of waiting for the stimulus spending to take effect, Obama listened to conservative economists (such as G Mankiw) and supported tax increases too soon in an attempt to pay down the debt accumulated during the Bush administration. The economy hadn’t yet recovered from a very Great Recession. President Roosevelt made the same mistake in 1937 when he also raised tax rates with a Republican Congress, which shrank growth so much that it prolonged the Great Depression.

We do have more signs of improved growth led by housing sales, which may offset some of the policy missteps--due in large part to misjudging the depth of the Great Recession. Sales of previously owned homes increased in May to the highest level in nearly a decade, reports the National Association of Realtors, another sign of durable demand in the housing market despite ongoing headwinds. And a recovering housing market has historically been a leading economic indicator of healthier consumers, hence future growth.

Graph: Calculated Risk

Existing-home sales rose 1.8 percent to a seasonally adjusted annual rate of 5.53 million, the National Association of Realtors said Wednesday. That was 4.5 percent higher compared to a year ago and the highest pace since February 2007 during the housing bubble.

Lawrence Yun, NAR chief economist, says existing sales continue to hum along, rising in May for the third consecutive month. "This spring's sustained period of ultra-low mortgage rates has certainly been a worthy incentive to buy a home, but the primary driver in the increase in sales is more homeowners realizing the equity they've accumulated in recent years and finally deciding to trade-up or downsize," he said. "With first-time buyers still struggling to enter the market, repeat buyers using the proceeds from the sale of their previous home as their down payment are making up the bulk of home purchases right now."

Any recovery depends on boosting aggregate demand—the demand for goods and services from all sectors of the economy, including governments. And to date the Obama administration has been too lax in encouraging both private and public investment that would expand capacity, and so productive jobs.

This is particularly true of government jobs. State and local government employment has been the largest drag on job growth. State and local governments lost 129,000 jobs in 2009, 262,000 in 2010, 247,000 in 2011, and 29,000 in 2012, for a total of 669,000 jobs lost due to the Great Recession. 

Through November 2015, reports Calculated Risk, state and local employment is up a net 70,000.   So, in the aggregate, state and local government layoffs are over.  However state and local government employment is still 561,000 below the pre-recession peak.  It is public sector jobs that have suffered the largest decline due to the Great Recession, in other words. Here is the comparison during presidential terms of government job creation.

Graph: Calculated Risk

The public sector grew during Mr. Carter's term (up 1,304,000), during Mr. Reagan's terms (up 1,414,000), during Mr. G.H.W. Bush's term (up 1,127,000), during Mr. Clinton's terms (up 1,934,000), and during Mr. G.W. Bush's terms (up 1,744,000 jobs).

However public sector declined significantly since Mr. Obama took office (down 638,000 jobs in 2015). These job losses have mostly been at the state and local level, but more recently at the Federal level.  This has been a significant drag on overall employment, needless to say.

How does one boost additional growth with a no-compromise Republican Congress that resists any and all Obama initiatives? (Yet he was able to pass Obamacare, but unable to defend it, resulting in the all-Repub 2014 Congress!).

So public employment is as important as private sector jobs. Not only does this put more people to work, but it provides the necessary energy-transportation-communication networks without which private industry cannot operate.

Harlan Green © 2016

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Middle Class Finally Gets A Raise

Popular Economics Weekly

A new rule announced by the Obama administration will, effective December 1, double the overtime-pay salary threshold and set it to automatically increase every three years. It’s about time. The salary of employees has been diminishing since the 1970s, as a share of the economic pie, believe it or not. While the profits of businesses are at record highs, as a percentage of GDP.

The high point of employee earnings was 50.1 percent of Gross Domestic Income in 1970, a proxy for Gross Domestic Product, and the current low point is 42.5 percent.  Why the discrepancy? It’s complicated, but has resulted in the decline of middle class wealth—and so of the middle class itself. The Obama administration, thanks to Labor Secretary Thomas Perez, is set to correct the deficiency.

The Labor Department says about 4.2 million workers will gain overtime benefits as a result of the rule, though the labor think tank Economic Policy Institute, which has argued strongly in favor of the rule, says this is a major undercount. Up to 13.5 million employees could be affected.

Americans’ paychecks have not kept pace with their productivity in part because millions of lower-middle-class and even middle-class workers are working overtime but not getting paid for it. President Obama directed the Labor Department to modernize the rules that require employers to pay workers time-and-a-half if they work overtime. The department issued a proposed rule to raise the overtime threshold from $455 per week, or $23,660 per year, to a “standard salary level equal to the 40th percentile of earnings for full-time salaried workers,” which is $921 per week in 2013 dollars, or $933 per week adjusted to 2014 dollars.

Salaried workers whose earnings are $933 per week or more can be exempted from the right to receive overtime if they fall into one of three categories: professionals, administrators, and executives. Each of these exempt categories is defined by a set of duties showing that the exempt employee is skilled and exercises independent judgment, or is a boss with a department and employees to supervise.

Unfortunately this rule was ignored by the Bush administration when the overtime pay rule was last adjusted.

The threshold was kept at $23,660 per year, and even those workers were required to work overtime, even though they had little or no management duties.

The result has been record corporate profits, and very low productivity improvements with little incentive for businesses to raise workers’ wages or make investments that would create more jobs.Why does private business have so little incentive to put some of their record profits to productive use? Nobelist Joe Stiglitz and other economists have labeled it “Monopoly’s New Era”.

“Capitalists are rewarded for saving rather than consuming – for their abstinence, in the words of Nassau Senior, one of my predecessors in the Drummond Professorship of Political Economy at Oxford (in order to pass their wealth on to succeeding generations)…The second school of thought takes as its starting point “power,” including the ability to exercise monopoly control or, in labor markets, to assert authority over workers.”

 In other words, Big Business in particular has since the 1970s focused on maximizing profits, not to create even more wealth for their employees or communities, but to pass it on to future generations. Economist Thomas Piketty has labeled it a return to Europe’s Gilded Age when most of the wealth was inherited.

US President Barack Obama’s Council of Economic Advisers, led by Jason Furman, has attempted to tally the extent of the increase in market concentration and some of its implications, says Stiglitz. In most industries, according to the CEA, standard metrics show large – and in some cases, dramatic – increases in market concentration. The top ten banks’ share of the deposit market, for example, increased from about 20 percent to 50 percent in just 30 years, from 1980 to 2010. Hence the need for Dodd Frank to avoid any more ‘too big to fail’ scenarios.

And the result is our middle class is shrinking, the economic class that is the most productive in our society. After more than four decades of serving as the nation’s economic majority, the American middle class is now matched in number by those in the economic tiers above and below it, reports a recent PEW Research study.

In early 2015, 120.8 million adults were in middle-income households, compared with 121.3 million in lower- and upper-income households combined, a demographic shift that could signal a tipping point, according to a new Pew Research Center analysis of government data.

Over the same period, however, the nation’s aggregate household income has substantially shifted from middle-income to upper-income households, driven by the growing size of the upper-income tier and more rapid gains in income at the top. Fully 49 percent of U.S. aggregate income went to upper-income households in 2014, up from 29 percent in 1970. The share accruing to middle-income households was 43 percent in 2014, down substantially from 62 percent in 1970.

So it’s no surprise that economic growth has slowed. There are fewer households that tend to spend their earnings into the economy, which would generate the jobs and future economic growth. This is something the wealthiest do not do—they tend to save most of their wealth for other uses.

Harlan Green © 2016

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

April Private Payrolls Increase 171,000

Popular Economics Weekly

 

But government payrolls lost 11,000 jobs, so total nonfarm payroll employment increased just 160,000 in April. Over the prior 12 months, employment growth had averaged 232,000 per month.

The April jobs report was well below Wall Street’s expectations. But that is partly because we are nearing full employment, and 14.5 million jobs have been added during President Obama’s term already, third best behind Presidents Clinton and Reagan, and Obama still has 7 month left in his term.

But what is really full employment when the number of persons employed part time for economic reasons (also referred to as involuntary part-time workers) was unchanged in April at 6.0 million and has shown little movement since November? These individuals, who would have preferred full-time employment, were working part time because their hours had been cut back or because they were unable to find a full-time job.

And 1.7 million persons were marginally attached to the labor force, said the BLS, down by 400,000 from a year earlier. (The data are not seasonally adjusted.) These

Individuals were not in the labor force, wanted and were available for work, and had looked for a job sometime in the prior 12 months.

The unemployment rate, meanwhile, was flat at 5 percent. More people dropped out of the labor force and the so-called participation rate fell for the first time in seven months. That could mean people find it a bit harder to get a job. In April, employment gains occurred in professional and business services, health care, and financial activities, while mining continued to lose jobs.

Graph: Marketwatch

The increase in hiring last month was the smallest since September. Job creation slowed to an average of 200,000 in the last three months from a five-year high of 282,000 a month in the fourth quarter. Still, the soft employment report could reduce the odds of the Federal Reserve raising interest rates in June, say pundits.

The disappointing April employment report, however, might be a blip. Job openings sit near a record high and a sharp rebound in auto sales in April suggest consumers are still fairly confident, said MarketWatch. Businesses are unlikely to hold the line on hiring if sales continue to rise.

There are also signs of record consumer spending, as consumer credit levels rose to the highest level in 15 years.  Outstanding consumer credit, a measure of non-real estate debt, rose by a seasonally adjusted $29.67 billion in March from the prior month, the Federal Reserve said Friday. The 10.0 percent seasonally adjusted annual growth rate was the fastest growth pace since November 2001.

            Of particular note was that revolving credit (ie, credit cards) rose 14.2 percent after remaining in the low single digits since at least 2011.  So consumers must finally be confident enough to use their plastic money.

            That’s why this shows the possibility to higher growth ahead.  In both 2014 and 2015, the economy rebounded smartly in the spring after growth sagged in the first quarter. Many economists expect a repeat this year.  In April, professional-oriented companies, health care providers and financial firms added the most new workers. White-collar businesses added 65,000 employees, health-care firms created 44,000 jobs, and banks and insurance companies padded payrolls by 20,000.

Yet retailers cut 3,000 jobs to mark the first drop since the end of 2014. The mining sector, hurt by cheap oil prices, eliminated another 8,000 jobs to bring total cuts to nearly 200,000 in the past few years.

Employment gains for March and February, meanwhile, were reduced by a combined 19,000. The government said 208,000 new jobs were created in March instead of 215,000. February’s gain was trimmed to 233,000 from 245,000.

Harlan Green © 2016

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

It’s Time For the 30-hour Week

Popular Economics Weekly

Don’t look now, but we should soon have the 30-hour work week as the standard, instead of the 40-hour work week last enshrined during FDR’s New Deal. Why, when Americans now work more hours than any other developed country?

There are a number of good reasons, and they have little to do with the ACA, or Obamacare, which has decreed that 30 hours per week is considered to be full time employment for large businesses that are required to offer insurance coverage to their employees.

But it has a lot to do with the labor slack in our job market that Fed Chair Yellen has been talking so much about, and the declining health and welfare of American workers. Thanks to the tech revolution and huge productivity gains of those past 30 years, fewer workers are needed to do the same amount of work in the digital world. So if fewer workers are needed to do the same work, then why are more employees working overtime?

Maybe because no one in America has thought through the consequences. What would it mean to share the workload with more people? The Germans certainly have done something about it. Rather than fire employees when times were tough in Germany’s last recession, firms hit hardest by the reduction in demand reduced their employees’ working hours to spread the pain.

And, the four-day workweek is nearly standard in the Netherlands, especially among working moms, according to a CNN Money article. Overall, the entire workforce averages around 29 hours a week -- the lowest of any industrialized nation, according to the OECD.

Some 86 percent of employed mothers worked 34 hours or less each week last year, according to Dutch government statistics, as reported by CNN. Among fathers, about 12 percent also worked a shortened workweek. Denmark is close behind with a 33 hour average work week and five weeks of paid vacation.

“Dutch laws promote a work-life balance and protect part-time workers,” said the report. All workers there are entitled to fully paid vacation days, maternity and paternity leave. A law passed in 2000 also gives workers the right to reduce their hours to a part-time schedule, while keeping their job, hourly pay, health care and pro-rated benefits.

Whereas in a U.S., a Gallup survey last summer found that the average for full-time employees was actually 47 hours—or 46 if you isolate those workers with just one job. Either way, that's almost the equivalent of an extra business day on top of the usual five-day workweek. And it’s affecting our health and longevity.

Of the more than 1,200 adults surveyed by Gallup, 21 percent said they worked 50 to 59 hours while 18 percent said they worked 60 or more. Another 11 percent estimated 41 to 49 hours. It is an insanity that American workers have become such workaholics at the expense of their health, their families, and their own sanity.

The Centers for Disease Control and Prevention cites studies that found "a pattern of deteriorating performance on psycho physiological tests as well as injuries while working long hours."

It also cited four studies that found "that the 9th to 12th hours of work were associated with feelings of decreased alertness and increased fatigue, lower cognitive function, [and] declines in vigilance on task measures."

Wouldn’t this be the least painless way for workers to catch up to the incomes of their bosses that now earn on average 303 times their average employees’ income, according to a recent EPI study? Where have most of the productivity profits since the late 1970s gone, as illustrated by the BLS graph? To those executives and their stockholders, as this graph illustrates.

It’s no longer a secret that America is the most over-worked country in the developed world, according to the Center For American Progress, a progressive think tank. It is the only developed country with no mandated vacation, sick leave or parental work leave allowances, which even many third world countries like Afghanistan and Ethiopia have.

In fact, it is already beginning to happen among high tech firms that allow flex hours and even work at home. A 4-day -- or compressed -- workweek is offered as an option to at least some employees at 43 percent of companies, according to the Society for Human Resource Management. But only 10 percent of those companies make it available to all or most of their employees.

And there are roughly two dozen local union contracts that include a compressed workweek option for public-service employees working in municipalities, universities and institutions such as prisons, according to the American Federation of State, County and Municipal Employees.

So there is no good reason America, the richest country in the world, should remain an underdeveloped, overworked country anymore.

Harlan Green © 2015

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