The GOP Elite Despise the American Heartland

An abandoned gas station in East Lynn, W.Va., a coal mining town (NYT).

While Democrats struggle to determine which of their multitude of presidential nominee candidates can win the American Mid-West and perhaps pinkish red states, Donald Trump continues to play the racism card and panders to evangelicals' extremism even as he and his party continue to push policies that harm working class workers and farmers in these areas of the country. Between the Trump tariffs which have hurt both farming and manufacturing and the Trump/GOP tax cut give away to the extremely wealthy and multi-national corporations.  Then, of course, there is the GOP effort to gut Medicaid and decrease Medicare spending which prove catastrophic to rural areas in so-called flyover country.  The consistent losers under the GOP agenda?  The middle and working classes and farmers, many too blinded by their anti-non-white bigotry and their homophobia to realize that they continued to be played by fools not only by Trump but also the so-called GOP elite who hold them in contempt despite occasional lip service to the contrary.  A column in the New York Times looks at how the GOP really views this element of the party's base.  Here are column highlights: 

“If you live in the Midwest, where else do you want to live besides Chicago? You don’t want to live in Cincinnati or Cleveland or, you know, these armpits of America.” So declared Stephen Moore, the man Donald Trump wants to install on the Federal Reserve’s Board of Governors, during a 2014 event held at a think tank called, yes, the Heartland Institute. The crowd laughed.

Moore is an indefensible choice on many grounds. Even if he hadn’t shown himself to be extraordinarily misogynistic and have an ugly personal history, his track record on economics — always wrong, never admitting error or learning from it — is utterly disqualifying.

His remarks about the Midwest, however, highlight more than his unsuitability for the Fed. They also provide an illustration of something I’ve been noticing for a while: The thinly veiled contempt conservative elites feel for the middle-American voters they depend on.

This is not the story you usually hear. On the contrary, we’re inundated with claims that liberals feel disdain for the heartland. . . . what’s the source of that narrative? Look at where the belief that liberals don’t respect the heartland comes from, and it turns out that it has little to do with things Democrats actually say, let alone their policies. It is, instead, a story line pushed relentlessly by Fox News and other propaganda organizations, relying on out-of-context quotes and sheer fabrication.

Conservative contempt, by contrast, is real. Moore’s “armpit” line evidently didn’t shock his audience, probably because disparaging views about middle America are widespread among right-wing intellectuals and, more discreetly, right-wing politicians.

There is a real economic and social crisis in what one recent analysis calls the “Eastern Heartland.” This region suffers from persistently low employment among working-age men and has seen a surge in mortality from alcohol, suicide and opioids — “deaths of despair,” in the phrase of Anne Case and Angus Deaton.

What lies behind this crisis? The view of most liberals, as far as I can tell, is that it reflects declining economic opportunity, changes in the economy that have favored metropolitan areas over rural communities.

Many conservatives, however, blame the victims. They attribute the heartland’s woes to a mysterious collapse in morality and family values that somehow hasn’t affected coastal cities. Moral collapse is the theme of books like Charles Murray’s “Coming Apart: The State of White America,” and of innumerable articles. One widely read essay in National Review went so far as to label the troubled Eastern Heartland “the white ghetto,” whose people are too indolent to move to where the jobs are.

When it comes to politicians, of course, what they say is much less important than what they do. So what do the policy choices of liberal and conservative pols say about how they value the heartland?  Some Democrats, notably Elizabeth Warren, have been offering real proposals to help rural areas.

Meanwhile, all that Republicans have to offer are fantasies about bringing back lost jobs in things like coal mining and manufacturing. In reality, coal mine closures have continued and the manufacturing trade deficit has widened since Trump took office.

More important, think about what will happen to troubled parts of America if Republicans manage to do what they tried to do in 2017, and impose savage cuts on Medicaid and other safety net programs.

I always think about West Virginia, where Medicaid covers almost a third of the nonelderly population. And it’s not just about receiving care, it’s also about jobs. More than 16 percent of West Virginians are employed in health care and social assistance, compared with less than 3 percent in mining. Hospitals are the biggest employers in many parts of rural America. What do you think will happen to those jobs if Medicaid is hollowed out?

[I]f you look at what conservatives say to each other, as opposed to what they pretend to believe, it becomes clear that contempt for middle America is much more prevalent on the right than on the left. And this contempt is reflected in the right’s policy agenda, which would badly hurt the people it claims to consider the only real Americans.

I know that this will be a hard point to get across. Indeed, I’m sure that some people in the heartland will take any effort to convince them that they’re being misled as just another example of liberal disrespect. But all Americans, wherever they live, deserve to be told the truth.

Will Housing and Deficits Be Trump's Downfall?

With political focus turning to the 2020 presidential election, three particular elements may make  Der Trumpenführer's re-election hopes much more shaky (yea!): The slowing housing market thanks to a combination of rising interest rates, the ballooning trade deficit and impact of Trump's tariffs, and the ballooning federal deficit  which itself will drive up interest rates. Should the housing market continue to slow, it could well drag the economy into recession just as attention on the 2020 election intensifies next year.  A piece in Politico looks at housing's threat to Trump's future - assuming he finishes his term and runs for re-election. Here are highlights:

The luxury real estate market in Manhattan is sagging. The GOP tax law is hitting real estate markets across the nation.

And signs of stress across the broader housing market suggest the industry — which made Donald Trump rich, helped thrust him into the White House and remains a constant obsession for him — could also be one that slows his economy and dents his chances at a second term.

The housing market may not cause the next recession like it did in 2008. But weakness in the construction of new homes, sales of existing homes and affordability for millennials looking to buy for the first time could contribute to a recession arriving as soon as next year or prolong any downturn. In addition to 2008, declines in the housing market were tied to recessions in 1974, 1980 and 1990-91, raising concerns that history is about to repeat.

One area where housing-market stress is obvious is the one Trump knows best: High-end apartments in Manhattan, where prices are now dropping as foreign buyers disappear and wealthy residents flee to lower-tax states.

“When you look at the New York metro area, we are moving from an extended period of stagnation to one of outright softening,” said Joseph Brusuelas, chief economist at RSM, U.S.

The Manhattan declines are directly linked to the late-2017 tax law that capped the mortgage interest deduction and indirectly to the capping of the state and local tax deduction, Brusuelas said. “People joke that they should have called the tax bill the ‘Everybody Moves to Austin Act.’ This wasn’t virtuous tax policy. It was punitive tax policy.”

Trump’s New York home is not the only blue state where the housing market has taken a hit following the tax law changes. Markets are also suffering across the Northeast, where sales of new homes dropped 16.1 percent in December, according to brokerage firm Redfin.

The cap on the state and local tax deduction is already showing in migration rates, according to Laurie Goodman, vice president of housing finance policy at the Urban Institute. . . . New York, California, Illinois and New Jersey topping the states with the largest flows of people leaving between July 2017 and July 2018. The largest in-migration states over that period — Florida, Arizona, Texas and North Carolina — have lower taxes.

A recent decline in mortgage rates following the Federal Reserve’s decision to pause its campaign of interest-rate hikes has improved the demand for new and existing homes somewhat in the last couple of months. But overall, the numbers suggest a broad softening in the housing market. Homebuilding investment shrank 0.2 percent last year, the worst performance since 2010. . . . . the industry’s doldrums could make an already slowing 2019 even slower and make the next recession even worse when it arrives.

“Once the economy moves into recession, so maybe mid-2020, the significant decline in residential investment will exacerbate affordability problems,” said Brusuelas. “The home affordability index and first time buyer affordability index are both showing significant signs of stress.”

Taken together, the declines in high-end markets and across states hit by the tax law changes — coupled with affordability problems for new buyers and reduced construction of new homes — suggest that the market could contribute to the next recession and make life difficult for Trump.

“I see recession hitting before the 2020 election,” said McCabe. “And it’s going to play a part in that election.”

The other area that may threaten Trump is the failure of his tariffs and the further ballooning of the federal deficit thanks to the disastrous Trump/GOP 2017 tax cuts notwithstanding the GOP's disingenuous lies that "entitlements" are to blame.  A column in the New York Times looks at this other thorn in Trump's side.  Here are excerpts:

[O]ver two years of unified G.O.P. control of government, a funny thing happened: Both deficits surged. The budget deficit has hit a level unprecedented except during wars and in the immediate aftermath of major economic crises; the trade deficit in goods has set a record.

What’s the significance of this tide of red ink? . . . . Trump’s twin deficits tell us a lot about both the tweeter in chief and his party — namely, that they’re both dishonest and ignorant.

About the dishonesty: Is there anyone left who believes that Republicans ever really cared about debt and deficits? The truth is that the phoniness of their fiscal posturing should have been obvious all along. . . . . The moment they had a chance, the very politicians who grandstanded about the need for fiscal responsibility rammed through a huge tax cut for corporations and the wealthy — a tax cut that is the main reason for the exploding budget deficit.  Oh, and the tax cut has utterly failed to deliver the promised investment boom.

What about the ignorance? As many people have pointed out to no avail, Trump is all wrong about what trade deficits do. . . . . Trump is completely wrong about what causes trade deficits in the first place. In fact, his own policies have provided an object lesson in the falsity of his vision.

In the Trumpian universe, trade deficits happen because we made bad deals — we let foreigners sell their stuff here, but they won’t let us sell our stuff there. So the solution is to throw up barriers to foreign products. “I am a Tariff Man,” he proudly proclaimed.

The reason America runs persistent trade deficits isn’t that we’ve given away too much in trade deals, it’s that we have low savings compared with other countries.

Tariffs can, of course, reduce imports of the goods subject to the tariff, and hence reduce the trade deficit in that particular industry. But it’s like pushing on a balloon: You can squeeze it in one place, but it will just inflate by the same amount somewhere else. The process through which this conservation of deficits takes place can vary, although a stronger dollar, which hurts exports, is usually one major channel. But the basic result, that tariffs don’t actually reduce the overall trade deficit, is clear.

Sure enough, the Trump tariffs of 2018 did, in fact, lead to a sharp fall in imports of the goods subjected to tariffs. But imports of other goods rose, while exports performed poorly. And the overall trade deficit went up substantially, which is exactly what you should have expected. After all, that big tax cut for the wealthy reduced national savings.

And the supposed cause of the deficit isn’t the only thing Trump gets wrong about trade policy. He also keeps insisting that foreigners are paying his tariffs. In reality, prices received by foreign exporters haven’t gone down. Prices paid by U.S. consumers have gone up, instead.

A slowing housing market, a ballooning federal deficit that increases interest rates, and rising costs and decimated market sectors - think GM's closures - due to the Trump tariffs. The perverse side of me hopes things worsen if it will help ride the nation of Trump/Pence.

Nancy Pelosi - Desperate Republicans' Straw Bogeyman

The 2018 midterm elections are some 80+ days away and Republicans are finding that the Trump/GOP tax cut is falling flat with their constituents who likely have seen little change in their take home pay - and may be in shock when they have to pay when they file their taxes in April, 2019 (small businesses are losing many deductions as well). Then there is Der Trumpenführer  trade war and tariff wars with China and Europe disputes that will likely hit Trump voting counties hard as retaliatory tariffs are continued to be levied against America. Add to this rising health insurance premiums due to Trump/GOP sabotage of the Affordable Health Care Act and GOP proposals to slash Medicaid and Medicare benefits.  Republicans have little to run on other than harping on anti-immigrant and racist talking points.  Hence congressional Republicans need another foil to run against.  The answer?  Nancy Pelosi, the woman male Republicans love to hate.  A column in the New York Times looks at this construct of a straw bogeyman by desperate and hypocrisy-filled Republicans.   Here are excerpts:. 

Normally, a party that gives away $2 trillion without worrying about where the money will come from can buy itself at least a few votes. But Donald Trump’s tax cut remains remarkably unpopular, and Republicans barely mention it on the campaign trail — in fact, Democrats are running against the tax cut more than Republicans are running on it.

Nor are Republicans talking much about Trump’s trade war, which also remains unpopular.

What, then, does the G.O.P. have to run on? It can hype the supposed menace from illegal immigrants — but that hasn’t been gaining much traction, either. Instead, Republicans’ attack ads have increasingly focused on one of their usual boogeymen — or, rather, a boogeywoman: Nancy Pelosi, the former and possibly future speaker of the House.

[I]t’s interesting to ask why she [Pelosi] gets so little credit with the news media, and hence with the general public, for her accomplishments.  What has Pelosi achieved?

First, as House minority leader, she played a crucial role in turning back George W. Bush’s attempt to privatize Social Security.

Then she was the key figure, arguably even more crucial than President Barack Obama, in passing the Affordable Care Act, which produced a spectacular fall in the number of uninsured Americans and has proved surprisingly robust even in the face of Trumpian sabotage. She helped enact financial reform, which has turned out to be more vulnerable to being undermined, but still helped stabilize the economy and protected many Americans from fraud.

Pelosi also helped pass the Obama stimulus plan, which economists overwhelmingly agree mitigated job losses from the financial crisis, as well as playing a role in laying the foundation for a green energy revolution.

It’s quite a record. Oh, and whenever you hear Republicans claim that Pelosi is some kind of wild-eyed leftist, ask yourself, what’s so radical about protecting retirement income, expanding health care and reining in runaway bankers?

It’s probably also worth noting that Pelosi has been untouched by allegations of personal scandal, which is amazing given the right’s ability to manufacture such allegations out of thin air.

[H]ow does Pelosi stack up against the four Republicans who have held the speaker’s position since the G.O.P. took control of the House in 1994?

Newt Gingrich was a blowhard who shut down the government in a failed attempt to blackmail Bill Clinton into cutting Medicare, then led the impeachment of Clinton over an affair even as he himself was cheating on his wife.

Dennis Hastert, we now know, had a history of molesting teenage boys. Personal behavior aside, the “Hastert rule,” under which Republicans could support only legislation approved by a majority of their own party, empowered extremists and made America less governable.

John Boehner didn’t do much except oppose everything Obama proposed, including measures that were crucial to dealing with the aftermath of the financial crisis.

And Paul Ryan, the current but departing speaker, is a flimflam man: a fake deficit hawk whose one legislative achievement is a budget-busting tax cut, a fake policy wonk whose budget proposals were always obvious smoke and mirrors, pretending to address the budget deficit but actually just redistributing income from the poor to the rich.
 Looking at modern House speakers, then, Pelosi stands out as a giant among midgets. But you’d never know that from her media coverage.

While in office, Hastert was generally portrayed as a stolid embodiment of middle-American values. Ryan was for years the recipient of fawning media coverage, which lauded him as the ultimate serious, honest conservative long after his phoniness was obvious to anyone who paid attention. But Pelosi is typically referred to as “divisive.”

Why?

Her policy stances are far less at odds with public opinion than, say, Ryan’s attempts to privatize Medicare and slash its funding. So what makes her “divisive”? The fact that Republicans keep attacking her? That would happen to any Democrat.

Or maybe it’s just the fact that she’s a woman — a woman who happens to have been far better at her job than any man in recent memory.

Does all this mean that Pelosi should become speaker again if Democrats retake the House? Not necessarily: You can make an argument for a new face despite her extraordinary record.

But her achievements really have been remarkable. It’s a sad commentary on Republicans that they have nothing to run on except demonizing a politician whose track record makes them look pathetic. And it’s a sad commentary on the news media that so much reporting echoes these baseless attacks.