Working Americans Are Worse off Under Trump

Apologists for white working class Trump voters have continued to cling to the false meme that "economic anxiety" drove them to vote for rump rather than admit that it was Trump's calls for open racism against non-whites and Hispanics that proved to be the true motivation.  Yet, if one believes the myth put out by apologists, then economic anxiety should now be driving these voters away from Trump.  Why, because real earnings have fallen during the first 18 months of Trump/Pence's tenure whereas they rose during the last 18 months of the Obama administration.  Thus, what we have witnessed is what the Republican Party has used as its mode of operation for years: getting white voters to vote against their own best economic interests by playing to bigotry and racism.  A column in the Washington Post looks at the fall of earnings adjusted for inflation and how the Trump/Pence regime has been deceptively reporting wage earnings.  Here are highlights:

Despite robust economic numbers during the Trump presidency, the American public has seemed curiously unmoved by such good news as the lowest U.S. unemployment level in nearly half a century. Its enthusiasm might have been dampened by this underappreciated economic reality: The typical working American's earnings, when properly measured, have declined during the Trump administration.

As any White House would, the president's economic team touts positive earnings data from the Bureau of Labor Statistics that suggest rising wages and salaries. But the figures are misleading. They focus not on how much an average working person earns but on the "average earnings" of all employed people. In times of rising inequality, employees at the top pull up "average" earnings. . . . Another catch: The data used by the White House doesn't account for inflation. Adjust the median earnings data for inflation, and the illusion of progress evaporates.

The Bureau of Labor Statistics has a different database for that view, and its quarter-by-quarter numbers show a very different picture. Median weekly earnings of all workers rose from $865 in the first quarter of 2017 to $876 in the quarter ending June 30, 2018. The typical working American's earnings increased $11 weekly over 18 months, barely more than one-quarter of the economic progress touted by the White House.

Even that modest gain is not very meaningful. The significance of what people earn lies in what they can do with their earnings, and inflation eats away at what any of us can purchase or save. As a result, serious earnings analysis is always framed in inflation-adjusted, or "real," terms. From January 2017 to June 2018, inflation totaled 3.77 percent, while the $11 increase in unadjusted weekly earnings over those 18 months represented gains of 1.27 percent.

The result: $876 in June 2018 had the same value as $848.20 in January 2017. In real terms, the weekly earnings of a typical working American fell $16.80, or 1.9 percent, during Donald Trump's first 18 months as president. . . . Using the same measure, real median weekly earnings increased substantially during Barack Obama's final 18 months as president.

In real terms, the weekly earnings of a typical employed American increased $35.82, or 4.5 percent, over Obama's last 18 months in office, growing from $803 in the third quarter of 2015 to $838.82 in the fourth quarter of 2016.

In Ronald Reagan's succinct terms, average working Americans are worse off under the Trump presidency than they were under Obama's. Yes, low unemployment is something to applaud, but there might be a good reason that so many who have jobs aren't clapping.

The Trump Wage Slump - Big Business is Part of the the Problem

Following up on the previous post, two columns in the New York Times look at the problem facing far too many Americans: stagnant wage grow coupled with rising prices that combined put them in a worse financial situation with each passing month and year. The Trump/GOP tax cut did little for most working Americans and the pro-big business policies of Congressional Republicans and Trump/Pence offer no relief in sight. The first column looks at the wage stagnation problem. Here are excerpts:

Paul Ryan tried to brag about the economy last week, and it didn’t go so well. . . . If the Trump economy were so wonderful, why would the speaker of the House feel the need to traffic in disingenuousness? Because the Trump economy isn’t actually so wonderful. For most Americans, it is downright mediocre, and it has deteriorated somewhat since President Trump took office, despite the healthy G.D.P. and unemployment statistics. . . . hourly wages are suffering through a Trump slump.

[Trump] deserves some blame for it. Worst of all, he is doing virtually nothing improve the situation, instead enacting policies that will ultimately hurt workers’ ability to earn a decent paycheck.

[N]ominal wages — that is, the numbers people see in their paychecks, before taking inflation into account — are growing. . . . Over the past year, the average hourly nominal wage has risen 2.7 percent.

There are two problems, though. First, 2.7 percent isn’t a great growth rate for nominal wages. It was rarely so slow in the entire second half of the 20th century, for example. These days, though, most workers don’t receive their fair share of economic output. An outsize share instead flows to corporate profits and the rich.

Second, nominal wages by themselves can’t buy a higher standard of living. Prices matter, too. When the prices of good and services are rising faster than nominal wages, people end up with less buying power. And that is exactly what’s happening now.Add it all up — faster inflation plus mediocre nominal-wage growth — and you get a stagnation in real wages. Welcome to the Trump wage slump.

[T]here is no reason to think that most Americans are on the cusp of truly healthy pay increases. They face too many obstacles: Companies that are larger and more powerful than they used to be; unions that are weaker; and, thanks in large part to Trump, a federal government that keeps siding against workers, be it on overtime pay, work rules, health care costs, for-profit-college scams or tax cuts.

Right now, Trump is presiding over precisely the wage growth that he deserves: zero.

The second column looks at the growing flirtation with socialism by some who have been left behind by the GOP/Trump give all the gifts to the rich and big business agenda.  If big business finds such flirtation disturbing, they need to look in the mirror as to a good part of the cause.  Here are excerpts:

I’ve been fretting lately about the state of mind of America’s capitalists. All these socialists coming out of the woodwork must have them in quite a lather. So I write today with some friendly advice for the capitalist class about said socialists.

You want fewer socialists? Easy. Stop creating them.

Every once in a while in history, cause and effect smack us in the face. The conditions under which the czars forced Russians to live gave rise to Bolshevism. The terms imposed at Versailles fueled Hitler’s ascent. The failures of Keynesianism in the 1970s smoothed the path for supply-side economics.

And so it is here. As I noted recently in The Daily Beast, the kind of capitalism that has been practiced in this country over the last few decades has made socialism look far more appealing, especially to young people. Ask yourself: If you’re 28 like Alexandria Ocasio-Cortez, the New York congressional candidate who describes herself as a democratic socialist, what have you seen during your sentient life?

You’ve seen the United States go from being a country that your parents — or if you’re 28, more likely your grandparents — described as a place where life got better for every succeeding generation to a place where for millions of people, quite possibly including you, that’s no longer true.

As that happened, you’ve seen the rich get richer, and you’ve perhaps noticed that the government’s main response to this has been to keep cutting their taxes . . . . You witnessed the financial meltdown of 2008, caused by big banks betting against themselves. Capitalists might want to consider how all that looked to a young person who came from a working-class family and who probably knows someone who lost a job or even his house, while some of the bankers who helped create the mess walked away with golden parachutes, like that of Countrywide Financial’s Angelo Mozilo, which The Times valued at $88 million. . . . .You’ve watched corporations horde profits, buy back their stock and not reinvest in their workers the way they once did as they move jobs to Central America and Bangladesh.

Back in the days when our economy just grew and grew, we had a government and a capitalist class that invested in our people and their future — in the Interstate highways, the community colleges, the scientific research, the generous federal grants for transportation and regional development.

And, funny thing, during all this time, socialism didn’t have much appeal.

So, back now to our 28-year-old. She was born in 1990. She will probably remember, in the late ’90s, her parents feeling pretty good about things — median household income did go up under Bill Clinton more than they had under any president in a long time, even more than under Ronald Reagan. But ever since, the median income picture has been much spottier, hardly increasing at all in inflation-adjusted dollars over 18 long years. And those incomes at the top have shot to the heavens.

So if you were a person of modest or even middle-class means, how would you feel about capitalism? The kind of capitalism this country has been practicing for all these years has failed most people.

But I understand completely why it’s happening. Given what’s been going on in this country, it couldn’t not have happened. And if you’re a capitalist, you’d better try to understand it, too — and do something to address the very legitimate grievances that propelled it.

Sadly, I suspect the last thing the vulture capitalists

Buffett: Subprime Woes May Linger for Up to 2 Years

I guess I am not the only one who believes that the U.S. economic woes will be ongoing for some time. Naturally, I'd love to be wrong, but Warren Buffett seems to have the same pesimistic view (http://www.cnbc.com/id/21464380):

American billionaire investor Warren Buffett said Thursday he remains negative on prospects for the U.S. dollar and that problems in the U.S. subprime mortgage sector may continue to cause problems for some time. Buffett said he is still "negative on the dollar relative to most major currencies." He said subprime problems could weigh on consumers for anywhere from another six months to two years. He made the comments during a press conference during his first visit to South Korea.

Personally, I suspect we are looking at a year or more before the housing melt down begins to subside.