Pandemic and Economic Collapse Slam Trump Across Rust Belt

Some Donald Trump supporters are so invested in their racism and hatred of "liberals" that they will likely never open their eyes to the reality that Trump's tariff wars and tax cuts for the very wealthy and regulation cuts to big business are the real source of their worsening personal financial situations.  Then there are evangelicals so obsessed with Trump's promises of special rights that place them above the law and grant them a license to discriminate that they seem unable to grasp the financial ruin Trump has ushered in for them.  Now, however, the covid-19 pandemic and the related economic collapse may wake some of them up, especially in hard hit rust belt states that collectively gave Trump a 70,000 vote margin and an Electoral College victory.  A piece in Politico looks at Trump's adverse current situation in these same rust belt states and how November will be a referendum on Trump's policies and failures to handle the pandemic crisis.  Here are highlights:

The Industrial Midwest was always going to be a battleground in November.

The region is now becoming a new frontline for Americans’ lives and livelihoods as coronavirus hotspots proliferate and jobless rates spiral. The confluence of a ferocious pandemic, deepening economic turmoil and rising political tensions is more pronounced here than anywhere else in the country. And it sets the stage for a combustible campaign season that is testing President Donald Trump’s efforts to move on and insulate himself from the crisis—and Joe Biden’s ability to blame him for the fallout.

On Thursday, Trump ventured to a swing county in Pennsylvania, stopping off at a Lehigh Valley medical equipment distributor where he used an official speech to mock “Sleepy Joe,” chastise governors for moving too slowly to reopen and assail the news media as a “disaster” while touting American workers.

“I say it’s the ‘transition to greatness.’ The transition is the third quarter," Trump said. "The fourth quarter is going to do very well. And next year is going to be through the roof.”

The numbers and interviews, however, paint a much grimmer picture. The virus has moved from urban centers like Detroit and Chicago into suburbs and more sparsely populated counties, a trend seen from western Pennsylvania to Minnesota and Iowa. In Wisconsin, Michigan and Pennsylvania—Democrats’ so-called “Blue Wall”—19 counties report coronavirus cases doubling in less than 14 days. Trump won all but one of those counties, by an average of 65 percent.

Democrats are working to ensure that doesn’t happen again by casting his stewardship over the virus and economy as a betrayal.

“There are so many things Trump has done to attack the labor movement to undermine and betray workers,” Sen. Sherrod Brown (D-Ohio) told POLITICO. “And since the coronavirus, he’s done nothing to help the essential workers.”

The region has been devastated by job losses amid pandemic-induced economic shutdowns, in some cases far outpacing the national average in terms of the proportion of their workforces that have applied for unemployment benefits since mid-March.

In Michigan, more than 3 in 10 workers have sought aid in the past two months, according to a POLITICO analysis of Labor Department data. Layoffs and furloughs are also piling up in Pennsylvania, where more than one-fourth of the workforce — or 29.6 percent — has filed an unemployment claim.

The double shock of the virus and financial meltdown has further sharpened partisan divides in the states. Wisconsin and Michigan were home to the highest percentage of people saying their state governments were overreacting to the crisis, according to a survey conducted by researchers at Harvard, Northeastern and Rutgers Universities last month.

Overall, however, the public has remained solidly behind governors who are urging caution, giving them high marks for their performances while their assessments of Trump’s handling of the outbreak sag.

And private surveys conducted by both parties and described to POLITICO show concerns about the virus and health care running ahead of worries over the economy.

Personal protective equipment also remains a problem in many jurisdictions, health officials say, and there are fears of how rural areas with rising caseloads and fewer hospitals will manage future outbreaks, particularly in Michigan, where health officials are starting to see spikes in rural counties.

The economic fallout is expected to be even more long-lasting, casting a shadow over the presidential election. Biden has maintained polling leads over Trump in Wisconsin, Pennsylvania and Michigan, while public polling of Ohio has been scarce.

The emerging economic downturn has also further undermined [Trump's] the president’s promises of reviving American manufacturing, particularly the steel industry.

In some industries — construction and building trades, for example — workers are used to long breaks between jobs, and many have filed for unemployment in the past. But the abrupt nature of the country’s shutdown threw many out of work with little warning, leaving them without time to prepare.

Democrats maintain that the region’s long standing financial difficulties were already being exacerbated by the Trump administration in the three years before the coronavirus struck. They point to tariffs and renewable fuel-standard waivers that impacted corn farmers. Manufacturing, too, has taken big hits. Last year, Pennsylvania saw a drop of 5,700 factory positions, while Michigan was down 5,300 and Wisconsin lost 4,100 jobs.

In her conversations with constituents, Sen. Tammy Baldwin (D-Wis.) says they now recognize Trump’s role in a string of earlier economic setbacks, which have been compounded by the virus.  “They are very clear about what those missteps are and, frankly, they are angry," Baldwin said.

Trump aides and allies are primarily focused on changing the subject from the pandemic and ensuing economic devastation — highlighting Biden’s vulnerabilities in the region rather than defending the administration’s response.

Pennsylvania Democratic Gov. Tom Wolf last month vetoed a GOP-backed bill to reopen more businesses. He's issued stern warnings in recent days that county leaders who defy current state orders will lose out on funding.

“Even though we are seeing a positive trend in our Covid-19 cases, we know that we’re far from done with this,” said Benjamin Weston, director of medical services for the Milwaukee County Office of Emergency Management, who added that the county will continue dealing with the coronavirus and continued outbreaks and surges until a vaccine is, hopefully, available sometime next year.

Democrats need to relentlessly hammer Trump for his trade wars, war against unions and the working class and utter malfeasance in the federal government covid-19 response.

Economists' Fears of a 2020 Recession Surge

Trump brags about the state of the US economy but economists increasingly fear his economic policies are about to drive the economy into the ditch.  The main cause of concern?  Trump's insane tariff and trade policies that are already slamming many manufacturers and farmers and, if continued will also begin to hit consumers with steeply higher prices.  If these fears prove correct, I hope they hit early enough in 2020 so as to help purge Trump from the White House and lead to the defeat of numerous Republicans.  CNN looks at the economic forecast:

America's business leaders are growing more worried that the United States will enter a recession by the end of 2020. Their primary fear: protectionist trade policy.

That is the topline finding of a report released Monday by the National Association for Business Economics. The survey, based on responses by 53 economists, is a leading barometer of where the US business community thinks the economy is headed.

"Increased trade protectionism is considered the primary downwide risk to growth by a majority of the respondents," Gregory Daco, chief US economist for Oxford Economics, said in a statement. The report found what it called a "surge" in recession fears among the economists.

The report comes as the United States ratchets up its trade war with China and has gone after other major trading partners, including Mexico and India. The risk of recession happening soon remains low but will "rise rapidly" next year. The survey's respondents said the risk of recession starting in 2019 is only 15% but 60% by the end of 2020. About a third of respondents forecast a recession will begin halfway through next year.

The United States is probably somewhere in the last stages of an epic run of economic growth that began in 2009. Dramatic and coordinated responses by the Federal Reserve, Congress and the Obama administration helped pull the country up from the Great Recession.

Donald Trump, who took the reins of the US economy from Barack Obama in 2017, has aggressively tried to reorder the US position on global trade. He has picked prominent fights with China and Europe and has threatened tariffs on Mexico over illegal immigration and India over access to its markets.

Other notable findings from the National Association for Business Economics: 

-- 56% of respondents cited increasingly protectionist trade policy as the greatest risk to the US economy in 2019. Separately, 88% pointed to US trade policy, and retaliation by other nations, for why they lowered their GDP growth forecasts.

-- 14% believe a "substantial" decline in the stock market, and 10% feel a slowdown in global growth, are the biggest risks to the US economy.

-- Business spending will moderate this year and next after growing a strong 6.9% in 2018.

Setting the Stage for a Possible Global Recession.

Racism and greed were, in my view, the main motivations for those who voted for Trump in 2016.  The racists were the angry whites fearful of lost white privilege while never looking in the mirror to see their own role in the plight.  The other group was comprised of the very wealthy and others of a similar mindset who want to horde their money and never contribute to the best interests of the nation.  Now, thanks to the actions of Der Trumpenführer - trade wars, tax cuts ballooning the federal deficit, and the government shutdown - , actions  of like minded anti-immigrant racists in the UK and other parts of Europe, and China's structural economic problems, these same people may be about to see the start of a recession that will worsen their plights.  A column in the New York Times looks at the potentially coming Trump/GOP recession.  Here are highlights: 

The last global economic crisis, for all its complex detail, had one big, simple cause: A huge housing and debt bubble had emerged in both the United States and Europe, and it took the world economy down when it deflated. 

[The slump] in 1990-91, was a messier story. It was a smorgasbord recession — a downturn with multiple causes, . . . . The best guess is that the next downturn will similarly involve a mix of troubles, rather than one big thing. And over the past few months we’ve started to see how it could happen. It’s by no means certain that a recession is looming, but some of our fears are beginning to come true. Right now, I see four distinct threats to the world economy. (I may be missing others.)

China: Many people, myself included, have been predicting a Chinese crisis for a long time — but it has kept not happening. China’s economy is deeply unbalanced, with too much investment and too little consumer spending; but time and again the government has been able to steer away from the cliff by ramping up construction and ordering banks to make credit ultra-easy.

But has the day of reckoning finally arrived? Given China’s past resilience, it’s hard to feel confident. Still, recent data on Chinese manufacturing look grim.

And trouble in China would have worldwide repercussions. We tend to think of China only as an export juggernaut, but it’s also a huge buyer of goods, especially commodities like soybeans and oil; U.S. farmers and energy producers will be very unhappy if the Chinese economy stalls.

Europe: For some years Europe’s underlying economic weakness, due to an aging population and Germany’s obsession with running budget surpluses, was masked by recovery from the euro crisis. But the run of good luck seems to be coming to an end, with the uncertainty surrounding Brexit and Italy’s slow-motion crisis undermining confidence; as with China, recent data are ugly.

And like China, Europe is a big player in the world economy, so its stumbles will spill over to everyone, the U.S. very much included. Trade war: Over the past few decades, businesses around the world invested vast sums based on the belief that old-fashioned protectionism was a thing of the past. But Donald Trump hasn’t just imposed high tariffs, he’s demonstrated a willingness to violate the spirit, if not the letter, of existing trade agreements. . . . . For now, corporate leaders reportedly believe that things won’t get out of hand, that the U.S. and China in particular will reach a deal. But this sentiment could turn suddenly if and when business realizes that the hard-liners still seem to be calling the shots.
 The shutdown: It’s not just the federal workers not getting paid. It’s also the contractors, who will never get reimbursed for their losses, the food stamp recipients who will be cut off if the stalemate goes on, and more. Conventional estimates of the cost of the shutdown are almost surely too low, because they don’t take account of the disruption a non-functioning government will impose on every aspect of life.

As in the case of a trade war, business leaders reportedly believe that the shutdown will soon be resolved. But what will happen to investment and hiring if and when corporate America concludes that Trump has boxed himself in, and that this could go on for many months?

So there are multiple things going wrong, all of which threaten the economy. How bad will it be?

The good news is that even taking all these negatives together, they don’t come close to the body blow the world economy took from the 2008 financial crisis. The bad news is that it’s not clear what policymakers can or will do to respond when things go wrong.

Monetary policy ­— that is, interest rate cuts by the Federal Reserve and its counterparts abroad — is normally the first line of defense against recession. But the Fed has very limited room to cut, because interest rates are already low, and in Europe, where rates are negative, there’s no room at all.

Fiscal policy — temporary hikes in government spending and aid to vulnerable workers — is the usual backup to monetary easing. But would a president who’s holding federal workers hostage in pursuit of a pointless wall be willing to enact a sensible stimulus?

Finally, dealing effectively with any kind of global slump requires a lot of international cooperation. How plausible is that given who’s currently in charge?

Again, I’m not saying that a global recession is necessarily about to happen. But the risks are clearly rising: The conditions for such a slump are now in place, in a way they weren’t even a few months ago.

Trump Immigration Changes Are Killing Maryland's Crab Industry

Small manufacturers are not the only ones suffering under Der Trumpenführer's failed economic policies.  In Maryland, that state's signature crab industry is reeling - I suspect Virginia is experiencing the same phenomenon - thanks to Trump's anti-immigrant policies that are keeping seasonal workers from Mexico from coming and doing work key to the crab industry that Americans simply will not do.  Some businesses are considering closing down and moving to Mexico. It's yet another example of Trump's "winning" that makes American businesses losers and leaves Americans losing their jobs.  The Washington Post looks at the damage being done to a long standing industry.  Here are excerpts: 

Normally, the crabs would be steamed and hauled through double doors to a long, fluorescent-lit room, where dozens of employees at Russell Hall Seafood would extract the meat. But on this day, the steel tables inside that room sat empty.

“There’s nothing going on at all,” said owner Harry Phillips, “ ’cause we haven’t got our pickers.”

Changes to a foreign-worker visa program have left businesses like Russell Hall without the seasonal laborers — mostly from Mexico — who help drive Maryland’s signature industry.

About a third of picking jobs remain unfilled across the Eastern Shore this summer, as few Americans have responded to openings and Mexican laborers are stranded at home without permission to come here to work.

The situation illustrates a general unwillingness among U.S. workers to perform certain kinds of labor, some of the business owners here in Dorchester County say. It also demonstrates how President Trump’s “America First” policies have not necessarily helped those workers or small-business owners but instead have dealt them a new economic reality.

Crab-picking houses are boosting wages and expanding overtime but are losing customers — and profits — because they can’t provide a reliable supply of crabmeat. One local supplier buys meat elsewhere to serve at its restaurant because the in-house picking plant has none. And at Russell Hall, Phillips is weighing whether to pack up and move his operation to Mexico. . . . . “Our girls are right in Mexico, and they have crabs just like we have.”

Since he took charge of the family business in 1992, Phillips has hired 50 Mexican workers a year through the H-2B visa program to work summer through fall. Most were women. Some had been coming for 18 years. But changes to the program shut him out this year.

The Trump administration announced this past winter that it would distribute the temporary visas through a lottery — not the first-come, first-served system previously in place. In addition, Congress dropped a rule in 2017 that said workers who had gotten visas in the past could get them again without counting toward the annual cap.

“It’s just ridiculous,” said Phillips, who failed to secure any visas when the first 33,000 were allocated in February or when an additional 15,000 were issued in June. “I’m not a gambler. I want to know I got my crew.”

Just under half of Russell Hall’s business comes from picked crabmeat used by restaurants to make crab cakes and other delicacies. For now, the company is trying to stay afloat through its sale of whole crabs and menhaden, which are used for bait.

Phillips said he has lost about 20 customers — hotels in Ocean City, restaurants in Baltimore and seafood shops from as far as Massachusetts — who are turning to vendors with a more reliable supply. “We used to sell 800 to a thousand pounds of crabmeat a day,” Phillips said, “but now, we’re producing nothing.”

A 10-minute drive away, Aubrey Vincent faces similar woes. While she was able to secure about 40 of the 104 visas she requested at her family’s picking house, Lindy’s Seafood, the shortage means she can’t run the business as she did last summer.

Generations ago, picking was the job of women born and raised on Hoopers Island. They spent their days extracting the crabmeat as their watermen husbands went out on the Chesapeake to catch the crustaceans.

But as these couples have aged, their children have not followed in their footsteps. Many families have left the area entirely, their homes converted to vacation rentals. Young people who are still around tend to look for office jobs farther inland.

Hampton, Virginia, has a large crab industry and I recall seeing Mexican workers in the past picking crabs.  I suspect they are not faring well either.