‘Trumponomics’ is not the solution to the mess that is the U.S. economy
It should come as no surprise that when President Donald Trump brags about turning the U.S. economy around, he is ridiculously wrong. That is true fake news. Those who believe that any of Trump’s policies are actually good for the economy need look up the term "bubble."
A bubble is caused when the prices of securities, like stocks, increase far beyond their actual value. Bubbles typically continue to grow until investors realize the magnitude of the price increase, which then triggers a sharp decline, or a "burst."
Trump inherited a bubble and all he has done is blow more air into it. The recession of 2008 is not ancient history and should not be forgotten so quickly. Any "impressive" numbers claimed by Trump are simply the wrong indicators of a good economy.
The unemployment rate being at an all-time low of 3.7 percent sounds silly coming from Trump when he was the one who called former President Barack Obama’s unemployment rate a "hoax" because he was using less accurate metrics.
The U3, U5 and U6 are all unemployment metrics with different qualifications that influence how unemployment rates are displayed, with U5 and U6 being the most accurate.
Now that it’s time to pat his own back, Trump is boasting the lower U3 rates, which have ridiculous qualifications to be considered unemployed. Unemployment numbers have been heading in this direction for years and are not a marker of a healthy economy. Most of the jobs being created are low-wage, part-time jobs that lack benefits.
Trump has not turned anything around. The U.S. economy is in its 10th year of growth since the Great Recession, marked by falling unemployment and gains in home values. These are trends that are part of a recovery, not the work of Trump.
Now the second quarter GDP growth of 4.1 percent is being touted as some miracle. Obama had three quarters with over 4.1 percent GDP growth and not a single year over 3 percent.
The first year of the Trump administration ended with 2.3 percent growth, and the first quarter contributed only 2.2 percent, so it seems highly unlikely that 2018 will end with over 3 percent growth.
Whether or not GDP equates to a healthy economy is questionable. Trump’s recent favorite thing to do is have everyone look at the stock market. However, this is where the dark reality of the U.S. economy is most apparent: We are in a boom and bust cycle.
The stock market more than doubled under Obama and continues to rise with Trump because it lost 50 percent of its value in 2008.
The only Trump policies that have helped the market are his tax cuts and deregulations that bought the economy some time. If someone thinks that these are effective ways to stimulate the economy, they need to take a look at the Great Depression, Reagan’s Recession and the Great Recession, which were all presented with the exact same prerequisites.
The stock market reflects how well corporations and the rich are doing. It is not a proper representation of the economy. Eighty percent of stocks are owned by the richest 10 percent of Americans. This is a terrible indicator of how the average American is doing. Despite corporate profits hitting record highs, income inequality still exists in the United States. It is sad that the better off corporations are, the worse off regular people become.
Wages have been stagnant. Most Americans still can’t afford college or health care and are still feeling the bruises from the Great Recession. The only true sign of a good economy is a healthy middle class, and that is something the United States is lacking in the worst way.
Trump’s flaunting of the economy when it’s not even doing that well will be interesting to watch when it starts to tank. The fundamentals of the economy are in a horrendous place. There are millions of Americans without health care. The U.S. infrastructure received a grade of D+ last year.
The federal deficit is up 17 percent thanks to Trump’s tax cuts and spending, the largest it’s been in six years.
The trade deficit is on its way to a 10-year high despite Trump’s so-called art of dealmaking. Credit card debt for the country just recently passed $1 trillion, and student debt has sweltered to $1.5 trillion with no option for bankruptcy. The national debt is now over $21 trillion, but Trump has somehow managed to turn the economy around? Sounds like make-believe.