By Nick Gier
Trump’s apparent economic success to date mostly reflects fortunate timing.
—The Economist 11/18/17
In a letter to the Moscow newspaper last month, Bill Tozer offered some “good news” about the Trump presidency, and I would like to response to some of his points. It is always questionable for any president to make any claims solely for himself, but for the sake of argument, let’s just say that Obama is responsible for his eight years just as Trump is for his 11 months.
A Soaring Stock Market Does Not Help the Little Guy
Tozer offers the “soaring” stock market as his first brief, but as WSU professor Mark Kuzyk wrote recently: “The market did hit an all-time high, but the rate of increase is the same now as it had been over the previous two years. Trump’s presidency has not accelerated growth in the markets.”
This bull market, which began under Obama, is the longest ever, and it is not helping ordinary Americans much, unless they are in public employee pensions plans. It certainly will not pay down the national debt, as a clueless Trump told Fox News’ Sean Hannity. This could actually make some sense, but the corporate tax has just been slashed by 15 percent, which means far less revenue and higher deficits.
In 2013, according to the Federal Reserve, the median age couple had saved only $5,000 for retirement. A 2015 analysis by the Government Accountability office revealed that Americans between the ages of 55 and 64 had an average of $104,000 in retirement accounts. The effect of the stock market for these people is miniscule, especially for those who have no retirement savings at all.
Obama’s Wall Street Record will be Hard to Beat
When Obama took office in 2009, the S&P 500 had dropped to 805, and at the end of 2016 it was at 2,274, a whopping 182 percent increase. The Dow Jones was at 7,949, but then more than doubled to 18,576 on August 12, 2016. The tech-heavy Nasdaq went from 1,484 to 5,190, an incredible 250 percent. Conservatives commentators brushed these gains aside, saying that “socialist” Obama could not possibly be the reason, and they also added that it meant little to ordinary Americans (which of course is true).
One financial commentator wrote: “If you had invested in an index fund on Obama’s first inauguration day, you would now have tripled your money.” It is doubtful, especially since many experts believe that stocks are now overvalued, that Trump will ever best Obama’s record.
American businesses made record profits all throughout the Obama presidency, and instead of investing in new equipment and factories, they mostly paid higher dividends to their investors or bought back their own stock. A survey of CEOs by the Atlanta Federal Reserve Bank about the tax bill found that only 8 percent would increase hiring “significantly.”
Obama Reduced the Annual Deficit from 10 to 3.2 Percent
It is significant to note that Obama reduced the annual deficit from 10 to 3.2 percent. Under Trump it has risen to 3.5 percent and will no doubt climb higher with the new tax cuts. GOP leaders are delusional in thinking that the economy will grow enough to make up for that deficit. Obama is blamed for the dramatic increase in the national debt, but the Bush tax cuts and his wars in Iraq and Afghanistan, not the stimulus or Obamacare, are the main reasons for that.
Trump Has Inherited Low Unemployment from Obama
Tozer notes that “unemployment is at its lowest rate in 17 years,” which is now at 4.1 percent. But Obama brought it down from a high of 10 percent at the end of 2009 to 4.7 percent at the beginning of this year. Obama was criticized for a record number of those (especially males) no longer seeking employment, but the number is even higher under Trump. Ironically, the highest labor participation rate is among our hard-working Hispanics.
Obama, even in the depths of the Great Recession, was able to create an average of 187,000 jobs per month, which resulted in a total of nearly 18 million new positions. Trump promised that he would create 25 million new jobs, but the economy would have to average 260,000 per month to achieve that goal. The historical record shows that—just as it does for lower deficits and lower spending—Democrats create more jobs. Republicans have averaged a 1.04 percent increase per year since Warren Harding versus 2.82 percent for Democrats since FDR.
Worker Pay Catching Up, but It Started with Obama
During the Great Recession, workers’ pay stagnated for five years, but started to pick up in 2015, when it rose by 5.2 percent, and then another 3.2 percent in 2016. It has now gone up 4 percent, a boost that Trump may want to claim. A writer for the free market The Economist counters: “A more probable explanation is that Trump came to office just as America [with falling unemployment] began to run out of willing workers to fill all of its job vacancies.” The writer continues: “Trump’s apparent economic success to date mostly reflects fortunate timing.”
45,000 Coal Jobs in PA Turn Out to be 70 Instead
In July Trump boasted that he has created 45,000 new coal jobs, and people were scratching their heads (as they usually are) about where he got this figure. He appeared to be talking about a mine that had just reopened in Pennsylvania, but the new jobs there amounted to 44,930 fewer than Trump claimed, namely 70.
Fact finders did discover that at mid-year there were 41,500 new jobs in logging and mining, but only 1,000 were in mining. The most dramatic increase in the energy industry jobs was of course in the wind and solar industry. Jobs here are being created at a rate 12 times that of the rest of the economy, and this will continue even if all subsidies are eliminated by the GOP.
Here are the facts about coal jobs. They increased by 1,600, from 50,300 when Trump took office to 51,900 in October. (During the last 6 months of the Obama administration, 1,300 miners were added.) With safety reductions by ordered by Trump, however, mine deaths doubled, from 7 last year to 14 this year. This is a high price to pay for so few new jobs.
Increase in Manufacturing: Small and Spotty
Tozer claims that “manufacturing is on the rise,” but the increase of 125,000 jobs is small and is due to three factors: higher oil prices, lower productivity (taking more workers to do the same work), and a weak dollar. Trump would certainly not acknowledge the last two facts, especially the 9 percent drop in the value of the greenback since he took office. Trump probably does not know that a weak dollar increases the demand for our goods. It also reduces the trade deficit, but not in the way that Trump would wish, because a Great America would always have to have a strong dollar.
Tozer is correct that productivity is up overall, but in manufacturing, according to The Economist, “output per hour worked is just 0.1 percent higher than a year ago.” The Center for Economic and Policy Research puts it bluntly: “So, there we have it, extraordinarily weak productivity has translated into 125,000 new manufacturing jobs under Trump.”
The growth in manufacturing jobs is not only slow, but spotty. Mike Pence loves to boast about what he did for Indiana as governor, but that state has lost 5,000 manufacturing jobs since he became vice-president. According to Good Jobs Nation, the economy has lost 93,000 jobs due to foreign competition since Trump’s election. This is a little more than Obama’s losses because of trade: 87,500 per annum over his last five years.
One year ago, at a Carrier furnace plant in Indiana, candidate Trump promised that “companies are not going to leave the United States anymore without consequences. Not going to happen.” Carrier kept the plant in the U.S., but it still laid off 500 of its 1,400 employees there.
The loss of jobs overseas is actually occurring at a faster rate than under Obama. For example, last year big federal contractors contributed 11 percent of the layoffs due to trade over the past year, but it was 4 percent during Obama’s last five years. Total manufacturing job losses during Obama’s entire term (foreign competition or not) averaged 41,250 per year. The trade deficit, which Trump hates, is at a 9-month high. He also curses foreigners holding our debt, but it is up to $6.23 trillion from the $5.95 trillion that Obama left him.
Isn’t it Better to Have Food Stamps than to Starve?
Tozer writes that “the welfare state, which grew by almost 20 percent during the last administration, is turning around.” One would expect that in an economy that suffered the worst recession since the Great Depression, many more people would be in legitimate need. One would also think that it is a good thing that people were able to buy groceries rather than go hungry. Already in 2014, with declining unemployment, the number of Americans on food stamps started going down, so Trump is not necessarily responsible for the continued decline this last year.
ISIS Was on the Run Two Years Before Trump
I was very disappointed with Obama’s last State of the Union address, because instead of boasting about reduced deficits and unemployment, he spent most of the time talking about how important it was for all of us to work together. (Hostile Republicans, of course, would have none of it.) He should have also announced the large number of terrorist leaders killed and ISIS’s already large territorial losses.
Contrary to Tozer, Obama’s “Mideastern ISIS team” was anything but “JV.” He increased drone strikes ten-fold, and while Osama bin Laden slipped out of Bush’s incompetent hands, Obama nailed him. Even Obama’s micromanaging to avoid civilian casualties did not prevent them, but now that Trump has given more discretion to his military commanders, they are way up. These acts will increase terrorist recruitment, and along with Trump’s Muslim Ban, will put Americans and Europeans in even more danger.
Obama Stopped Iran’s Nukes, but Trump May Reverse That
Tozer praises Trump for “confronting North Korean and Iranian nuclear weapons ambitions.” Now that Trump has decided not to certify the Iran nuclear deal, the danger is that the Iranians will back out and return to producing their first weapons.
Under the Clinton administration, some progress had been made in reducing North Korea’s nuclear capacities. Bush and Cheney, however, decided that Clinton’s policy was too soft, and the result was that their hard line made North Korea double down on its nuclear program.
Obama managed to stop Iranian nukes, but it is now too late for North Korea. Thanks to Republican administrations we now have to somehow contain a new unrestrained nuclear power in Northeast Asia. Trump’s threat to destroy Kim Jung Un and his people now puts millions of South Koreans, Japanese, and possibly Americans at extreme risk. Trump is just as much a danger to the world as Kim.
Conservatives are also Swimming in Tozer’s “Cesspool”
Tozer’s charges about the Hollywood “cesspool” and its “Hillary-supporting power brokers” is as incoherent as it is one-sided. The conservatives have just as many villains and nasties: Roger Ailes, Bill O’Reilly, Donald Trump, Roy Moore, and a long list of Republican congressmen gone bad. The most recent were Representatives Blake Farenthold, Joe Barton, Trent Franks, Tim Murphy, and four state lawmakers from Kentucky.
Trump: Swamp Creature in Chief
Tozer writes: “With some recent indictments Special Prosecutor Robert Mueller is helping Donald Trump drain the swamp.” It’s telling that, instead of federal bureaucrats and lobbyists (the usual suspects), Tozer identifies the swamp creatures as Trump’s own campaign director (notorious for his role in electing a Russian-backed dictator in Ukraine) and advisers, such as Michael Flynn and George Papadopolous.
Trump called Flynn “an incredible guy” and “very good person,” and he continued to praise him after his indictment. Trump called Papadopolous “an excellent guy” and listened with interest to his pitch for contacting the Russians. A campaign staffer at the meeting reported that Trump “didn’t say yes, and didn’t say no” to the idea. From Tozer’s premises, I draw this conclusion: Trump himself is Swamp Creature in Chief. Already in its first year the Trump administration is on track to be the most corrupt since Ronald Reagan’s Iran-Contra debacle.
Conservatives are Harassers and Rapists, Too
Although the pussy-grabbing Trump claims that his accusers are liars, Tozer gives credibility to the women who now “speak up and get out from under the thumbs of abusers.” He must know that there are hundreds (if not thousands) women who have identified conservative Christian men as harassers and rapists. (Read my own column on this topic at www.nickgier.com/EvangelicalSexAbuse.pdf.) Inspired by the hashtag “MeToo,” there is now “ChurchToo,” and hundreds of women are telling their stories there.
Tozer is paranoid to believe that unidentified forces (led no doubt by Hillary and her Muslim sidekick Barack) have attempted to “ban Jesus from the public square, our schools and our personal lives.” Please don’t worry, Mr. Tozer, Jesus is safe in your heart and Christian schools, but Thomas Jefferson was right to insist on the strict separation of church and state.
Evangelical Christians who voted for this morally corrupt man are the greatest threat to the religion that calls itself Christian. They will come to regret they voted for a man who admits that he has never asked God for forgiveness, and a person who lies practically every time he opens his mouth. As the Christian writer Rachel Held Evans explains: “Donald Trump hasn’t been born again. The Religious Right has simply sold out.”
Nick Gier of Moscow taught philosophy at the University of Idaho for 31 years. Read all of his columns on the 2016 election at www.nickgier.com/election2016.pdf.