Perhaps our main economic problem is not one of economics at all, but one of economics education. A reader, max, once commented:
"So much of our economic issues could be solved if people understood that the US cannot run out of money, and how hard it is to cause hyper-inflation from government spending alone."
Let me suggest a way of thinking about gov money that I hope will promote this understanding.
The first idea is that gov operations, militarily, infrastructure, research, etc. are NOT paid for or limited by taxes or borrowing.
The gov doesn't need your money. It can (thru the FED) create as much as it needs out of thin air. Just think about where YOUR money came from in the first place. Unless you have a printing press in your basement, it came from the federal gov. (This isn't quite right. Banks can create a limited amount, but 2008 shows what happens when they produce too much.)
But there's a catch. If the gov needs to create too much money to do the things we want it to do, we may not be able to make enough stuff to soak that money up & will have too much money chasing not enough stuff, i.e. excessive inflation.
But that's easy to solve & where taxes come in. Taxes allow the gov to take back the excess money & prevent inflation. The purpose of taxes is to adjust the amount of money in the private sector. That is what max is telling us.
Now if there are shortages, e.g. oil, we may produce so little, we can't tax enough. That's we we get hyperinflation.
43
I've had to fight state legislators over job creation before. The graph is absolutely accurate but I can tell you how the political argument is going to work out. In short: Republican jobs are better than Democrat jobs.
I'm not kidding.
I was essentially an analyst lobbying on behalf of the Utah outdoor and tourism industries. I would show lawmakers our labor statistics. The response was always "You create low paying jobs" as if everyone in the outdoor industry was turning sheets at a rural motel.
They consistently failed to recognize the airline employees, the hotel owners, the restaurant owners, the ski resorts, the guide companies, the list goes on and on... Meanwhile, lawmakers also conveniently ignore the abandoned fracking fields on the Utah/Colorado border. Where did those jobs go? You won't ever receive an answer to that question.
Presenting evidence to Republican lawmakers is quite frankly demoralizing. I was paid by a Republican as well. Democrats are sometimes absurd in their hobby projects. However, Republicans live in a completely different universe. You feel like you're re-establishing the health risks associated with smoking every time you enter the room.
No, really, smoking is bad for you... I'm sorry your stock interests don't appreciate reality.
117
These charted summaries are fantastic. With enough data and hard cold facts a return to reality is more comforting than anything Trump can lie about or spin. You can only fight for so long against gravity before it slams you to the ground. In Trump’s case the ground is rising faster than the incoming tides that will eventually flood his beloved Florida hideout.
There are no alternative facts for anything alive; there are just good old plain facts that educated professionals put on charts for nonbelievers to change their minds. Facts are indestructible. A man is either a fraud or he isn’t. As a friend once said, if you have to check your pockets after a meeting, you’re in the wrong meeting.
I’ll believe the charts over anything that comes out of the upcoming 2019 Trump Spinnerama on ‘The Wins of 2018’.
49
Thanks Steven. A reality check for the Reality TV Trump presidency.
It's hard to gage the effect of Trump's constant lies and exaggerations ("the most successful president in history), but 40% of Americans seem to be buying it. The rest of the world...not so much.
History will not be kind once Trump's self inflating hype recedes from the media and his actions and their consequences stand on their own.
58
I love charts, graphs, tables, and the like.
But a big part of the problem with taking proper action around what they reveal is that too many Americans do not have the education or critical thinking processes to properly interpret them.
For the majority of 'Muricans, the stuff on this page is nice and colorful and has decent design features, and that's about it.
118
@Glenn Ribotsky I agree -- I love charts, graphs, etc. especially when they relate to economics or politics. I also agree that this article basically tells us what most well informed people already know.
I have a different take on the people who have little education or critical thinking skills. I know that there are many people who don't really pay attention to politics and current events.
But how much education and critical thinking does it take to spot an obvious con man. The Con Don is on television daily acting erratically and telling untruths about this group or that group.
Many of The Donald's supporters that I know, actually bought into him in a big way when he said that Mexican immigrants were all rapists and murders. I think that is a hateful and untrue statement.
Many of the trump faithful actually know that he knows nothing about government but they love him because he hates the people that they hate.
55
Another very interesting statistical source is the UN Human Development Index: http://hdr.undp.org/en/content/human-development-index-hdi
If you visit the site, make the extra click and take a look at the "Inequality-Adjusted" HDI table. In that measure, the data is filtered by the level of inequality in three areas, life expectancy, mean years of schooling and disposable household income. When the inequality filter is applied, the United States ranking drops from 13 to 25. To me that indicates inequality is a huge factor in the reality of peoples' lives in America.
This isn't new information. The whole "Newsroom" television series was produced so Aaron Sorkin could make the first three minutes in which the central character creates an uproar by listing the relative ranking of the United States in a series of quality-of-life categories. What is baffling is how the majority of Americans can be so useless when it comes to translating democracy into a fair society.
Canada ranks 12th in both indexes, Australia ranks 3rd and 7th respectively. These are the countries Americans should be using for comparison, and that's a pretty brutal comparison, if you ask me. Americans need to understand that radical changes need to be made to make the lives of ordinary Americans great again. The key is simple - how do you define what's fair? Living in a fair society should be a basic expectation for everyone - don't you think?
Come on Americans! Your lives could really be very much better.
14
As I have said, maybe what the GOP base needs to bring them back to reality is a big punch to the economic gut.
The market isn’t the economy, just as the economy isn’t dinner table household finance. For many the 12/31/18 401k year-end tally and/or the April 15, 2019, tax bite will be a major wake-up call as to the effects of Trump’s undisciplined and uninformed seat-of-the-pants economic decisions.
12
"It’s particularly bad news for Mr. Trump, who could find himself running for re-election in a slowdown or even a recession. After four years in office, it’s going to be very hard for him to pin that on Mr. Obama or the Democrats."
You do not appear to be following Trump's statements. Anything bad that happens is the fault of the Democrats. Kids die in custody at the border? Democrats. A government shutdown he promised to accept responsibility for? Democrats.
And the base will believe it.
14
@Mike T. - Trump has succeeded in making himself the hero for underperforming rural white cultural values by telling them that any failure to thrive is someone else’s fault. Admitting that Trump is ever wrong is tantamount to admitting they are responsible for their own woes. The fragile egos involved can’t handle that so they have to back Trump no matter what. That stuff about self-reliance, boot straps, and personal responsibility doesn’t apply to themselves - it only applies to brown people and northern liberals.
17
@Mike T.
Trump is pinning the deaths of the two children at the border "strictly" on the Democrats.
From now until November, 2020, every sentence from Trump will begin and end with the word "Democrat".
9
Nicely designed charts, but this is a good illustration of the idea that you can interpret data however you want. I read some of these quite differently, and have to question the choices of time periods, average vs median, and interpretation.
1
The greatest job creator that God ever produced? Hardly. But then, God didn't create Trump; as someone observed, "God don't make junk."
9
Wow!
What an article--
—
"...like a glass of cold, clear water..." [my caption]
--
But who drinks water anymore?
…Well, I do…
—
So I’ll continue, by bragging that my drinking habit puts me squarely in the nation’s top one percent!
…That is, in terms of the *media* I consume…
***
You see, I’m one of the few, I believe, that goes for the New York Times, or the Atlantic, or the Wall Street Journal--
—
These are among the *traditional media outlets*, that spend lots of energy trying to explain what’s *actually* going on.
—
But it’s my guess, that they’re only read by the top one percent.
--
Nevertheless, some say, that:
“…[Cold, clear, *facts*] will prove yet another challenge for Mr. Trump as he tries to convince voters in 2020 that his economic program is working…” [op cit]
—
Oh, will they?
…*Only* if the majority of the voting public gets their news the way I do...
—
And I don’t think they do.
***
My fear, is that most Americans have either lost what it takes, to *read and understand* what the traditional media puts out, or simply don’t care--
...Alternate “truths,” produced by fringe media outlets, seem to make much better reading...
—
In fact, today’s media “experience,” turns out to be just like New Year’s Eve—
…Heady, exciting, and salaciously entertaining…
—
But oh! the following morning.
***
So.
Speaking of which?
I think I’ll stay home tonight, and keep drinking water.
—
Good luck, America, in 2019--
…We’re going to need it…
4
Talk to a Trump supporter and they will sound like a ventriloquist's dummy mouthing Fox News garbage about how the economy has improved under Trump, Way better than under Obama, no less.
But this excellent analysis tells the truth about this widespread Trumpian myth. Sadly, the MAGA-heads will never read this. If they did, and actually understood the analysis, their heads might explode!
Can't have that! Drink the Kool-Aid and shout "Lock Her Up." It will drown out the inconvenient truth that Trump is once again proven to be a liar, a grifter, and a fraud!
19
I am tired of blind partisan statements about which party has been better for market performance and economic growth so here are the actual performance numbers.
Average Annual Market Performance
Date Range | President | Dow | S&P 500 | NASDAQ
1981-1998 | Reagan | 11.40625% | 9.885% | 9.125%
1989 - 1992 | Bush Sr. | 11.7775% | 12.865% | 18.4375%
1993-2000 | Clinton | 16.6375% | 15.87% | 22.71875%
2001-2008 |Bush Jr.| -.89% | -2.4225% | -1.7275%
2009 - 2016: | Obama | 10.89% | 12.43% | 17.4825%
2017 - 2018: | Trump | 9.75% | 6.59% | 12.18%
Adjusted Annual Market Performance
(Credit for first year goes to previous President):
Date Range | President | Dow | S&P 500 | NASDAQ
1982-1989 | Reagan | 15.93% | 14.5075% | 11.93375%
1990-1993 | Bush Sr. | 8.4675% | 7.8175% | 17.31%
1994 - 2001: | Clinton | 14.035% | 13.3575% | 18.24375%
2002 - 2009: | Bush Jr | 2.35% | 2.13875% | 6.39%
2010 - 2017: | Obama | 11.7625% | 11.9262% | 15.5262%
2018: | Trump | -5.63% | -6.24% | -3.88%
GDP:
Unadjusted GDP Average for Republicans above: 2.7045
Unadjusted DGP Average for Democrats above: 2.7375
(Credit for first year goes to the previous President for the following):
Adjusted GDP Average for Republicans above: 2.56904*
Adjusted GDP Average for Democrats above: 2.91875
*4th quarter 2018 GDP estimated at 2.7 in accordance with current Atlanta FED estimate.
There are the numbers - make up your own mind.
14
@Jason
Excellent fact-finding. Of course the response from Trump supporters would be either "fake news" or "but her emails". Sad, and very discouraging!
12
Would someone please show these graphs to President Spanky? I understand he does not read but he likes "pictures."
13
"After four years in office, it’s going to be very hard for him to pin that on Mr. Obama or the Democrats."
Democrats must be cautious about this. In the current conditions of intense partisan hostility, any gleeful predictions of downturn and gloating about it could result in the downturn being blamed on those who delight in it. The levels of distrust allow such blame.
If it happens, stay well clear. Voters will know they are hurting. Glee and gloating will just invite distrust and resentment.
17
Very revealing. Of course, Mr. Trump and his minions who live in an alternative reality will dismiss this with a set of alternative facts.
8
Politics aside, I am certain that Mr. Rattner is aware of the fact that governmental actions can only effect the economy so much. They can help in extreme circumstances like the Great Recession but, if the economy is doing relatively well (like now) it is difficult to force feed the economy to do better. Trump is learning (?) this th hard way. Ouside factors that are not controllable are.....uncontrollable. Don't mess it up should have been the advice Trump got, but...................
2
It's a hilarious thing that Obama, the man to revolutionize health care in modern times, was vilified and criminalized. Now EVERYBODY is hooked on Obamacare, yet demonized its main visionary in 2016. Well, they got what they deserved: a good kick in the rear by Trump and his Good Ole' Posse (read here GOP) who are hell bent on erasing his legacy despite its seemingly popularity. It's high time to eat a good helping of dead crow.
5
When I go to the malls they are full of shoppers. In most places jobs are plentiful, and for the first time in decades wages are going up. Turn off the news and most people are in fact doing better. Ignore the president’s lies and things feel pretty good.
The debt is theoretical for most of us. Pundits have been predicting doom since 1990 at least. Immigrants crossings may be down but our communities are becoming ever more diverse. The average Joe just does not see this. Just ignore the papers
Will the economy turn down again. Sure. But if it just drops back to 2.5% no one will panic. With boomers retiring and immigration reduced jobs will still be here
Is America great again. Definitely not. We were viewed as great because of our actions after WW II when we rebuilt the western world and stopped communism—not because we were rich or had a big military. Trump makes us less great every day
But we can be fat and happy
6
The 2018 stock market had the steepest decline since the 2008 crisis, so clearly the tax cut didn’t help. On the same lines, what would happen to the US economy if Trump shutdown the southern border? No one is covering that aspect because it would just be crazy, but then again look at who’s president. The outcome of following Trump impulses would make for an interesting news story versus reporting on those tasked with disinformation, such as Rudy Giuliani or Kellyanne Conway.
5
Great article!
I'd like to see info on the number of people with minimum wage jobs, and which of them have more than one job. It seems the low unemployment rate can be torqued by the people who are barely scraping by & can't afford to look for something better.
9
One factor appearing in most stories about job creation during the Obama Adminsitration has disappeared in stories concerning the current administration: disappointed workers who have abandoned job searches altogether. In the past, stories about job growth were tempered by concerns about workers who had left the work force and therefore were not captured in statistical reports. Has data collection changed such that this factor no longer is of concern? If not, why has it been dropped as a caveat to favorable job growth reports?
3
"President Trump dominated the news as few of his predecessors have done."
For a very long time, "news" has included "the President played golf today" and "the President walked on the beach today (Nixon & Obama) and even "the President didn't do anything today."
It is the Imperial Presidency. Caesar is all.
Then we elected a clownish reality show host to the position. That was a final straw, but it was very far from the start of the real problem.
We won't fix it just by getting that breathless reporting on a more capable Caesar.
4
Let's take the numbers in a little different direction.
70% of ALL U.S. debt, until the crash of 2007-08, was incurred by Reagan, Bush I and bush ii; under the mantle of the party of fiscal responsibility. The republicans are fiscal scolds when a Democratic President wants to strengthen a safety net, or Social Security, or wants to upgrade our dilapidated infrastructure; but when in office they spend like drunken sailors. (My apologies to drunken sailors everywhere.)
The 12 years of Reagan/Bush I left US with deficit spending, and as I said above lots of national debt; Clinton wiped out the deficit and left office with a surplice which bush ii promptly squandered on an unneeded tax cut for the rich and an unnecessary couple of wars. Then bush ii left US with a financial crash unmatched since 1929 which Obama and the Democratic Congress started to dig US out of. With absolutely no help from the republican/fascist party of the 1%.
This shows that our voters seem uninterested in a sound fair economy and National well being.
Are We the People trying to commit national suicide or are we just abetting the republican party's attempt to murder it?
21
@Bob Laughlin Good comments. People are always trying to figure out what is wrong with politics in this country. They could start by looking at the voters.
Republicans wreck the economy; the Democrats come in and clean it up. The voters promptly put the wreckers back in. I love to follow politics but often feel that it is a waste of time.
15
@Bob Laughlin
Well yes, we the people are committing suicide, but it's global and it's called "climate change".
4
Where do I sign up for the course taught by Professor Rattner!
I can't wait for the semester to begin!
Please keep these lessons coming in the new year.
5
Mr. Rattner’s periodic summaries via graphs/short insights are invaluable and insightful. Wish this series brought a little more joy. Forwarding to all my friends.
6
A great presentation of valuable and interesting data. Too bad that it's too complicated for the White House policy-makers to understand.
4
Most of the major items in this article were fairly easy to predict.
The GOP is in the midst of running the same movie for the third time:
1) massive upward wealth transfer via tax cuts.
Reagan, Bush43, Individual-1
2) massive borrowing to make up for lost tax revenues.
Reagan, Bush43, Individual-1
3) legalize some major stock market manipulation scheme.
Reagan: SEC 10b-18 legalized stock price manipulation
Bush43: Gramm-Leach-Bliley legalized proprietary trading (aka gambling) with FDIC insured depositor's savings [1]
Individual-1: repeal the Volcker rule which was created to prevent repetition of Bush43.
4) the inevitable crash
Reagan: Savings and Loans
Bush43: crash and Great Recession of 2008
Individual-1: crash is in the horizon.
[1] yes, Clinton signed Gramm-Leach-Bliley while under duress by the GOP impeachment for the crime of oral sex with a consenting adult in the Oval Office (seems rather quaint and tame by today's new 'norms')
8
Clinton was impeached for 1 count of perjury and 1 count of obstruction of justice.
2
Tax cuts, whether stimulating or not, are morally right as the money comes from taxpayers. It is mine and yours first, not an allowance from the all powerful DC cabal.
Trump: from the King of Debt to just King.
2
It's a bit sloppy to not mention that job growth will naturally slow as unemployment comes down.
@Adam,
Mr. Rattner may well have some detractors in the financial community, but 'sloppy' when it comes to his meticulous knowledge and measured experience in the world of economics, has yet to put in an appearance.
We could use a financier and professor of his caliber in helping us to understand in our Green Valley how best to venture forth on a limited budget and diminishing funds. 'Business is slow' is a recurring refrain; few of us flirt with The Stock Market, and have a preference for The Lotto.
Perhaps he will consider a visit in the New Year, and thanking him for this latest clarification; forwarding his outlook on our economy forecast to Great Britain before the stroke of midnight.
oh, you and other so-called experts don't know anything because you are missing that one exclusive magical component: President Trump's gut. one day we'll give him a Bromo and send him on his way, but between his biggest-ever inauguration and his bestest-ever departure, he is doing real, lasting damage. ain't we got fun?
4
Oh please, stop trying to explain what's really happening.
As one of our great philosophers once said "Reality has a well-known liberal bias".
2
Data, data, data...
It makes the invisible visible
It shows the truth
If you believe STEM is a good idea for education, you believe in data
Thank you Mr. Rattner
7
Don't worry! Trump will bring all his strategic bankruptcy and debt repudiation skills to bear and we will be winning so much we'll be sick of winning! And we can always sell big USA brand signs to the real owners in Russia, China, India, Brazil, Panama... All hail, it's marketing, marketing, and we have the best brain and the best temperament hard at it! "It's called 'Winning!'"
7
The chart on wages caught my attention most. Middle class wages have been essentially stagnant for almost 40 years. In my own case, in higher ed for 27 years, my average salary increase has been .8% per year, adjusted for inflation. The annual inflation rate since I've been teaching is 2.3%. My purchasing power has been steadily declining. Virtually all faculty are in the same boat-- a sinking one. No one is answering our SOS.
11
@Tim W Have you ever looked at the salaries for adjunct and part-time faculty? There are probably many people who could be full-time adjunct faculty at reputable colleges and universities and still qualify for food stamps. I read recently that across the country almost half of University faculty are not tenure track these days.
We us to call this genteel poverty. I love the academic life, but I am glad that I am retired.
3
Anyone can answer this please. Before the tax cuts the corporate rate was 35% but the effective rate after loopholes and tricks was really 18% for most companies right? So then when the official tax rate is now 21% are companies now actually paying like 4% after loopholes and tricks?
Let me know please, thanks
5
Charts are nice, but the next economic crisis will be about the national debt and it will be the Mother of all crises.
The GOP has marched us to the edge of the cliff with "unnecessary" tax cuts and increased spending (Cheney "deficits don't matter"). To Obama haters: Obama had to raise the debt to clean up the GOP/Bush mess, otherwise we'd have been fighting in the street for dinner tonight
At best the debt is so big it can never be paid down and probably can't even be reduced, without massive cuts in entitlements, which is the GOP's total objective in the first place. It's now too big to even inflate your way out of it.
The Dems have been outmaneuvered time and time again by the GOP and have walked us right into their trap.
The trap is this: let's see, we can raise your taxes or cut neighbor's entitlements; pick one. What do you think that outcome will be?
We are so done for
3
He'll blame any economic slump on the Fed first, Obama second followed in third by Democrats and anyone who hasn't recently bowed down to him.
In the meantime, expect him to ramp up the rhetoric on removing or denying being bound by rules making for an independent Fed. Guilliani may be working on that right now. Just as he thinks the Justice department and the Courts work for him, he thinks the Fed should too.
A near-term slump actually suits his agenda as it gives him firepower to argue for a Fed takeover.
3
The true litmus test will be Americas credit rating over the coming years. The next president will inherit a true headache making interest payments, tackling infrastructure and appeasing fighting both self-centered parties.
Thanks, Mr. R., for another thrilling, data-driven column (I'm a facts nerd, and I look forward to such stuff the way some people look forward to the next episode of "Black Mirror").
71
A couple of charts that are not there that should be, that is if you want a balanced picture: Stock Market over the last two years, Trade balance over the last two years, Unemployment rate over the last two years.
1
The US trade deficit hit a ten year high in October.
The stock markets are down 6% in 2018
Unemployment, as the article noted, is on the trajectory set by Obama.
5
I look forward to this article every year and share it as much as I can! It's a great example of helpful analysis and data visualization, very useful for cutting through the propaganda circulating around Trump's economic performance.
Job creation...faster in Obama's last 22 months than Trump's first 22 months. Unemployment rate improving for all racial groups since 2010. Total number of persons with jobs setting records since May 2014.
GDP growth...Trump's best quarter was 4.2% vs. Obama's best 5.1%. If Trump gets to 3.0% growth this year for the full year, great, not much above Obama's 2.9% best. Longer-term forecasts indicate a return to 2.0% growth, so only short-term impact from the tax cuts.
Budget deficit in 2018...Nearly $800 billion vs. the $500 billion forecast when Trump was inaugurated, up 60%, due primarily to the tax cuts and additional spending.
Debt additions forecast for 2018-2027...About $13.7 trillion vs. the $9.4 trillion forecast when Trump was inaugurated, up 45%.
Healthcare coverage...About 1 million more without health insurance in 2017 vs. 2016, the first increase since 2010, thanks to Trump's ACA sabotage.
Stock market...Up 17% since Trump's election, a roughly 8.5% annual increase vs. 15% annual growth rate during the Obama era.
Inflation, mortgage rates, real wages...all worse than the latter part of the Obama Administration.
Please keep tracking all this "winning" for us!
138
Russia, led by Putin, is working to undo the world order created by the West after WWII. Trump is conspiring with Russia to that end, he is motivated by money.
PROSECUTE RUSSIAGATE!
6
Why no chart on the crowd size at the inauguration? Typical liberal bias, lol.
Trump will eventually lose the 89% support of the remaining 30% of the country who are not yet too embarrassed to admit they are still "Republicans" whatever that now means. But do not hold your breath - it will be decades for change. This is an angry group that runs on emotion and in the case of Wall Street, greed. They are uninterested in rational thought or factual charts.
Remember when they used to say they were "socially liberal but fiscally conservative?" Now they believe Neo-Nazi views are ok, child deaths at the border are ok, massive tax cuts that increase the debt are ok, increased mercury in the air from polluting coal plants is ok, ignoring global warming is ok, bashing transgendered people is ok, judges dismantling health insurance for millions is ok, and supporting dictators who murder people (Putin, MBS, Duterte)is to be admired.
It's going to be a long twilight struggle against this entrenched thinking.
22
Pretty stark picture of the "success" of Trump and his minions. Too bad that no one but you will cover it. Everyone else will be busy with bothsiderism and Trump's foolish tweets.
7
Wait'll you see '19!
1
Mr. Rattner;
Your 1000 word piece can be summed up in one simple sentence.
The man is a fraud that hasn't a clue on how to do anything good for our country.
13
It's almost comfortable to have Trump as the punching bag. The real problems remain, as this article makes clear. Whoever gets to clean it up--even lame duck Pence or the next administration--can't keep kicking the can down the road on American needs and critical issues. We must address climate change, hopefully with boldness. No fossil fuel cars or industries by 2030: tax incentives, car buy backs, and new green industries. We need a different immigration system and vision for the millions of stateless people in the world. What if people were more than their nation state status? How could we do that and yet keep people safe? We need national health care; a better educational system; a better tax system. We need more tax equity and less gaming by the wealthy. These are tough problems; Trump is a distracting flea. Whoever begins to solve these problems may only get one term, and probably won't win any popularity contests.
6
Thank you Mr. Rattner for proving to us that the winning never stops. Anyone with an ounce of sense knew the babbling of the idiot who became our president wasn’t true. You proved it. Of course, I’m sure this would all be labeled a “deep state” attack by his blind and loyal followers.
9
Most of the working folks I know didn't really need/want a tax break, they need/want higher wages.
Our tax rates really weren't that bad, but wages have been bumping along the bottom for way too many years. And, of course, living expenses haven't gone down so we're just going in circles trying to make ends meet - hoping that there isn't an emergency of some sort.
BTW, thanks, Steve for your charts. I always enjoy listening to you - wish more people did.
177
Oh that pesky debt, courtesy of the party of “ financial responsibility”. The gift that will keep on giving.
I cannot see where any of Trumps’ economic policies have helped the middle class in the long run. No solution to the health insurance crisis, no solution to our aging infrastructure, and no solution to Medicare and Social Security shortfalls. Per Trump we can not afford pay raises for federal workers and every effort is being made to gut the food stamp program (which many working Americans depend on to make ends meet) in the midst of the “greatest” economy ever. Greatest for the 1% maybe. For the rest of us, not so much.
220
@C WOlson
We have known for quite some time that Republicans, in cutting taxes for the wealthy, and trying to "downsize" the federal government, have relished the prospect of cutting Social Security, Medicare and Medicaid, and a host of social programs. Despite this, Trump and Republicans last year passed another large tax break for corporations, investors and the wealthy. They claimed that this would benefit workers, create new jobs, and increase revenues. Now, Trump freezes the pay of federal workers. One can only expect that we will soon be told that the government can no longer afford to maintain Social Security, Medicare and Medicaid benefits. This will go down in history as one of the greatest Republican con jobs, along with Reagans "Morning in America," the Savings and Loan bailouts, and the mortgage crisis induced recession and resulting bailouts of "too big to fail" banks. When will we learn?
71
@C WOlson
Also, it proves again he is a lair. We were promised better, cheaper medical insurance, a huge infrastucture program, the closing of loopholes for the rich, and a wall paid for by Mexico, which he has now shut down the government over because Democrats are waiting for Mexico to pay for it and he wants us to pay for it.
Not only does the winning never stop with him, neither does the lying.
50
Republicans never learn because they already know everything, and they rely on voters who also are comfortable only with what they believe they already know to be true, and are okay taking it on faith, as they've learned since childhood from that old time religion. but, not to worry, we will be saved by Santa and the Easter Bunny, aided by the angels who walk amongst us, as recognized by over 60% of Americans.
19
The statement below needs to be qualified. I buy my own insurance and make too much for subsidies. My insurance will cost almost 20 percent more in 2019. My wife and I will pay more than $10,000 for what is essentially catastrophic insurance.
"The only good news is that after several years of hefty raises by insurance companies fearful of losing money on the new product, premium increases have slowed significantly and may fall slightly in 2019."
1
I have an anecdote to report regarding construction jobs that was a big surprise to me.
Went to see some family who love the President over the holidays. My uncle is a union millwright, responsible for bidding and overseeing construction of large industrial plants - steel, wind turbines, etc. He and my aunt say they have never seen so much work in their field. His company is currently bidding on new factories for several domestic steel companies (FYI, he also said Trump's US Steel claims are wrong - but US Steel is only one producer, obviously). So I'm curious how much is actually going on in this skilled union construction work sector. My family is not making up tall tales to impress their Dem relatives.
15
The industrial plants you refer to seem to be directly related to alternative energy requirements. Pedestal for wind turbines, propellers requiring steel, and other associated industries for “the new economy.” Not trying to discount the enthusiasm but we also need to ask how much of these new plants will be automated. The projected job growth will pale when the plants are up and running. Just look at the Foxconn plant defeated Gov. Walker bet his re-election on. Optimism once again clashes with reality.
19
@ann
Average monthly employment increases in manufacturing and construction, in thousands:
2014: Manufacturing 17 / Construction 30
2015: 6 / 28
2016: -1 / 16
2017: 17 / 21
2018: 23 / 22
So manufacturing employment increases have improved, more like 2014 levels. Construction has been pretty steady.
Neither industry is back to its pre-recession level (late 2007). Manufacturing has been in long-term decline so this is a temporary respite in a long downward trend of automation and offshoring, while construction is more cyclical and was artificially boosted by the housing bubble.
Source: Federal Reserve Economic Data (FRED)
14
@100 Grit
Yes indeed, wind power, and making and installing wind turbines is a huge growth industry.
https://www.windpowerengineering.com/business-news-projects/record-wind-farm-construction-is-underway-in-the-u-s/
Hard to believe the most ardent Trump supporter will give him credit for that?
13
Trump's economic dreams have come true. He has enriched himself, his rich friends and donors. Same economic dreams as McConnell and Ryan. They are all winners.
14
@barbara schenkenberg So true. The only people,
other than those you listed -- trump, family, and friends --- who have come out well from the Trump administration are those who benefited from the massive tax cuts -- corporations and wealthy investors. They know how to take care of themselves just like McConnell, Ryan, big donors, etc.
8
I’m reminded of a segment on NPR today interviewing a soybean purveyor who said farmers were facing economic catastrophe because of “global trade politics”.
A clear-eyed analysis wouldn’t point to an amorphous abstraction; it would place the blame squarely on Trump, who imposed the tariffs on false grounds without warning. The man recognized China had probably chosen agricultural tariffs to target Trump’s constituency, but couldn’t say out loud that he was himself the victim of the man he’d likely helped elect.
It helps to remember some people never learn. Trump was elected by a minority over a terrible candidate with a tin ear for the plight of the median wage earner. His 40% approval rating in a good economy is consistent with 25% for George Bush on his last day (amid the recession free fall) and 33% for Nixon the day he resigned (in a recession and energy crisis).
Whether or not Trump is re-elected, though, the real problem is the whole Republican Party, from Ted Cruz to McConnell, every lowlife who’s given Trump a pass to advance their revanchist New Guilded Age agenda. The polluters and thieves and barkers who thrive on globalization and care not a wit for their fellow Americans nor the country that coddles and protects them. They, not Trump, constitute the real and present danger to the health of this country and its citizenry.
9
OK, so his various mythical claims have been debunked. But what about those who still support him: Normally prudish Evangelists who condone his misogyny and predatory sexual offences? Or farmers blind to their own suffering at the hands of self-defeating trade policies? Or minorities unmoved by his racist taunts? Or even the 1 % who must realise his short-term policies are destroying the nation under mountains of debt, climate catastrophe and social upheaval?
The charts confirm what the selfless, thinking, patriotic majority already knows? But how to re-educate his supporters?
18
You can name the fax all you want. In a dictatorship, it is what the leader says that is truth, nothing else. You Americans may think you are not in a dictatorship, but you are. All trump and Republicans and Right wing propaganda does is repeat lies, demand dictatorial powers and ignore everyone else.
This is why America is mediocre, it does not recognize loser leaders and promotes them, both in politics and industry.
2
Keep an eye on credit card defaults reported to the Fed (quarterly).
1
Thank you Mr. Rattner. Your charts are crystal clear. Now, would you please finance large billboards and place them in the middle of the country?
6
Facts? Data? Historical parallels? Why waste your time. Trump makes up his own and has figured out that as long as you say it with gusto and have no shame in lies - exposed or not - enough people will believe what they want to believe, and Trump adds an extra layer of protection for his version by making some outrageous statements to distract from those exposing his fraud, so even those who might actually care are more likely to see discussions of Trump’s latest petty insult or fued with a celebrity than they are an account of his latest big lie.
4
OUCH!
I'm too old to suffer the long-term damage that Trump "magic" will inflict on the future generations.
America has its work cut out for it.
6
Thank you for the comprehensive and informative prospective...unfortunately, his supporters will never have the opportunity to read it (can’t read? and definitely don’t subscribe to this newspaper) and if they do, they will never comprehend it...
5
Thanks for an informative and factual article - hope you get many opportunities in 2019 to comment using data!!
5
So much “wining” in so little time. I fear what “losing” might look like.
3
Trump lost 40 seats. And what about the 60 Obama lost in 2010? Or the 50 Clinton lost his first midterm? You just choose to ignore clear facts?
There’s no mention of the Fed not raising interest rates for 8 years under Obama. How many times have the Fed raised rates since November of 2016? That is impacting jobs, home sales, spending....
What would Hillary’s success have been?
Apprehension rates on the border are certainly lower by talking about it... as the news travels to Honduras, El Salvador, etc. Working?
How many promises did Obama keep? We’re still at war; Gitmo never closed...
Trump is vile, but these (biased) charts show progress. The Popular Vote still doesn’t matter every 4 years.
1
These charts show no progress. Trump is clueless with a totally second rate team that is not respected anywhere. Trump benefitted from the longest jobs expansion in history under Obama. For the first year it was all Obama policies. Now in the last few months we are really seeing the turmoil and destruction Trump and the Republicans are bringing to non-super-Rich America. Open your eyes.
5
Obama losing 63 seats in 2010? For all of history, this stain will be studied as the tide staff that measured the depth of fear and loathing among so many white citizens for their dark skinned neighbors across the nation. Who nows where it leads but so far it's been decidedly downhill.
2
Of course, none of this matters to Trump's electorate for whom facts are anathema. Besides, they're too consumed with fears about hordes of terrorist infiltrated, rapist immigrants ... and fears of white cultural displacement ... all nurtured by Trump. It remains to be seen whether wallet issues trump racism and bigotry as we head into campaign season.
3
"Economic and other indicators are making it increasingly clear that Trump’s economic dreams are unlikely to come true." It didn't take a genius or two years to figure this one out. Most of us knew this before the smoke and mirrors guy was elected.
6
Who knew putting an a six time bankrupt businessman, an unfit fraud and reality show con artist in charge of the world's largest economy would be a disaster?
26
A Vogue President,walking the Conservative catwalk,pouting his lips for his fans. We truly have model government.
4
Your thorough facts and brilliant opinion are great. Please consider a run in 2020 !!
1
@AW I love to read Steven Rattner's column but he would not have a prayer in a run for President or probably any elected office.
For one thing he bases his thoughts on facts -- a sure fire killer in politics. In politics one needs to tell the voters what they want to hear.
Another thing is he actually knows something about economics and economic policy. This is the age of ignorant and arrogant or, as some people, say stupid and proud. Rattner does not fit those categories so he is out.
Hate to be a pessimist. Have a nice day and stay optimistic.
5
Great article with 1 exception. The affordable care act which people insist on calling Obamacare hasn’t worked well. As I write this I think calling it Obamacare is part of the issue. When a large faction of people in the USA didn’t like him why hurt the act with sticking his name to it? 54% opposed it during his administration. It polarizes people from the start - Call it the ACA, revamp it and move ahead. I’m sure there are lots of misconceptions about it - republicans think it is for illegals, it is not, etc.
10
Why hurt the act by sticking his name to it? That was the intention: Republicans dubbed it Obamacare specifically to make it unpopular, and him with it. Then, Obama decided he sort-of liked the name, and wore it as a kind of badge of honor.
You’re right that’s it’s unpopular among the ignorant though. It’s not hard to find people opposed to Obamacare signing up for the ACA.
9
@David L
The term "Obamacare" was deliberately imposed on the ACA by Repubs as a smear tactic to insure the distaste of those who did not support Obama or were wary of people of color.
9
In 2020, when the economy is falling apart, America's standing in the world is rock bottom, we are well into the climate change minefield, we see big health issues due to regulation rollbacks, and bankruptcies, after a huge decline due to the ACA, are again increasing due to lack of good health care coverage (where's the graph?), the Democrats will take over the government. And when in 2 years they can't un-fix the mess that was once the America I served, they will once again be blamed for causing it.
40
. Among the many unpleasant consequences of that: Annual interest on the national debt will be higher than the cost of defense and also of Medicaid by about 2022.
Such as?
Seems the biggest danger is a return to austerity in the face of economic weakness because of superstitious fears of debt ratios. Didn't we just do that dance? Have we learned nothing?
12
Thank you , Mr. Rattner. This was both interesting and informative. That said, I think the only economic dream that Trump really cares about has come true, at least so far: he has enriched himself by being president. There is ample evidence that nothing else matters to Trump except Trump.
124
My only beef with this article: ‘Trump... could find himself running for re-election in a slowdown or even a recession. After four years in office, it’s going to be very hard for him to pin that on Mr. Obama or the Democrats.’ In addition to being a master showman, Trump is a master at pointing fingers at others. He is indeed the Projector-in-Chief. He takes credit for things he’s not done. One case in point: he has solved the North Korea challenge. When his top aides get into trouble, he claims to have hardly known them. That despite the fact that he hires only the best. There is no problem for which he bears responsibility. There is no delusional victory for which he doesn’t claim credit. Were the economy to turn south, there will be others to blame. The chairman of the Federal Reserve is already auditioning for that role, in spite of his appointment by the one who only hires the best. Then of course, trump may just claim that an economy gone sour is in fact the best economy in History! If that doesn’t work, well, there will always be Hillary to blame. Long live the best president ever!
58
Has there ever been a President who insulted more Americans, spread more hate, told more lies, frustrated more hopes, endangered more species, ignored more environmental dangers, courted more dictators, insulted more allies, accomplished fewer repairs to our infrastructure, violated more provisions of the Constitution, did greater damage to our two-party system, created more governmental chaos, issued more inane tweets, listened to fewer advisers, was less bound to fundamental moral principles and bragged more often about his bogus accomplishments than Donald J. Trump.
Future historians assessing the damage he did to the country in 2017 and 2018 will be presented with the near- impossible task of figuring out where to begin and where to end.
For G-d’s sake, let’s lock him up in 2019.
257
@A. Stanton
If you are really serious about change, lock up the entire GOP from dog catcher to Trump. The entire organization would be unable to survive a RICO ( Racketeer Influenced and Corrupt Organizations Act) investigation.
35
I recommended your post as it fairly described the Trump years so far, yet I object to your suggestion that "locking him up" should be done for the sake of "G_d". As a functional atheist with a lingering respect for the value of faith as expressed by many of the billions of believers in the world I find the invocation of a god pointless from my atheist perspective and insulting to those on the other side of the boundaries of faith. To rephrase Albert Einstein's quote regarding quantum physics, "God doesn't play politics (dice) with the Universe", Can we leave the various incarnations of the Almighty out of it?
8
There should be no surprise that Trump has done nothing to change our economic trajectory, to help the middle class; because, he had no economic plans, he never expected to be elected.
What we got was standard Republican gifts to the rich in the form of a $2 trillion tax cut for corporations that stimulated the stock market but nothing else.
The Republicans either don't care about anyone other than their campaign donors or when it comes to economics they are simply incompetent.
57
@Ronny
The Republicans are not incompetent, just corrupt. Where do you think they are getting their campaign contributions from? Why are they getting the contributions?
The Citizens United ruling by the Republican appointed Supreme Court Justices (am I allowed to use the term "lackeys" here?) has destroyed any illusion of democracy and fairness.
14
Oh, you mean Trump's economic dreams for Americans is unlikely to come true. Trump's economic dreams for Trump? Coming True.
56
Great article! But it will still be ignored by the conservatives. Their voodoo economics will bend all these curves in the opposite direction beginning sometime after the next election. Just another year or two or three from now and we’ll all be rich.
33
The charts are good, but any assumption that the charts would matter to Trump and the Republicans is incorrect. Placing the economy in peril is a feature because it gives the Republicans and Trump a set of readymade demons they can blame (Democrats, Obama, immigrants, the deep state, etc) while at the same time transferring money from the treasury to the pockets of their wealthiest donors. Thinking that facts like a weakening stock market or the government shutdown are problems the Republicans want to solve is wrong because Republicans want to rule, not govern.
This isn’t about debt ratios, interest rates, unemployment or any of that stuff. Trump is playing a much longer game and Republicans are going right along with him because they believe it will result in their permanent rule. If you’re still shocked at the lies and hypocrisy you’re playing the wrong game. Everything Trump and the Republicans are doing makes sense when you realize one thing:
Republicans want to rule, not govern.
51
Hello Steve,
Could you add a chart on C02 emissions, Arctic and Total Sea Ice, Methane, Global Temperature, and sea level rise?
Just to round out the picture, thanks!
71
@Simpleton
I’ll try to scare everyone on the thread with this NOAA YouTube of the Arctic ice shelf over the last quarter century.
https://m.youtube.com/watch?v=Fw7GfNR5PLA
Don’t try this at home kids.
1
So explain to me where, exactly, is the disaster that was the Obama economy? Trump hands out a trillion dollar tax cut to the wealthy and the numbers haven't blown past Obama's numbers. So when the economy does slow down, and that is, according to the experts, certainty not speculation., where will the pain be felt? I believe the answer is those who were forgotten, not listened to, and who were the "what do you have to lose ?" group. Trump's economy is he gives the wealthy a huge, prepaid debit card and expects them to go out and use it, that , by doing so, those underneath them will do better. The holders of the cards have gotten all kinds of expensive toys and services. These lower on the ladder were given jobs producing all those toys and providing those services. But now the credit limit on the cards is being reached. It doesn't take a rocket scientist to figure out what happens next. But Trump followers don't look at the numbers you provide, Steve. They head out to the rallies and listen to the carnival barker instead. Make no mistake. though. No prepaid debit card is coming in the mail to them. The question is how long will they fall for "It's Obama's fault". Obama is not coming back. They will need to find a new whipping boy. I wonder if they will recognize who that is. Or continue to fall for the same old song and dance.
84
@walking man
Most of the corporate tax cuts under Trump were not used to build "expensive toys" or provide expensive services, which would have created jobs in the short term. Instead, 85% of the tax cuts were used by corporations to buy back their own stock. They gave big bonuses to executives. This was predicted by critics of the tax cuts, but Trumpers and Republicans insisted that the money would be used to increase worker pay and create new, well paying jobs. You are absolutely correct that Trump supporters will ignore the evidence of what really happened, and, instead, will go to the rallys wearing their MAGA hats, and continue to blame Democrats for their "misery."
80
@Michael Banks All true! And the icing on the cake is that the recent declines mean the stock buybacks were an "investment" with negative returns!
10
@walking man
Can we stop with this ridiculous fallacy that Trump or any Republican thought the tax cut would help the economy? It was designed to enrich themselves and keep the donor class happy--there was nothing beyond lip service to the 90%.
17
A tour-de-force of this wrecking ball administration, where even GOP'er economists lament the snake-oil math of this White House:
https://www.foreignaffairs.com/reviews/review-essay/2018-12-11/snake-oil-economics
Future historians will ask 'who in the world ever believed a serial bankruptee from the casino business - where the House is always guaranteed a profit - should be listened to when they opined as to how run the largest economy on the planet ?'
A 70+ year old Orange Jabberwock condo sales guy who wouldn't show his tax returns, but couched his entire credibility on his whiz bang biz cred, and had to be rescued by bankers in 1990, who put him on an allowance of $450,000/month (in 1990 !!) and started running his businesses when they discovered he had no CFO.
But the worst thing about GOP'ers allowing this person to ever get near one of their ballots, is the disinformation campaign he has been waging, endlessly repeating lies, which are ventriloquized by Right Wing TeeVee, then broadcast throughout their echo chamber:
https://www.washingtonpost.com/opinions/2018/12/10/trumps-lies-disinformation-require-new-kind-media-response/?noredirect=on&utm_term=.9af4bebc15c7
Rattner's charts are invaluable metrics to counter the virulent disinformation campaign.
301
@R. Law
The problem is Trump and his backers don't believe in facts or hard, cold data.
20
It's time to stop referring to the wealth the American economy has produced since its inception as the "national debt." This "debt" is actually nothing more than an accounting of the amount of currency our government has created since the beginning of the republic minus the amount of currency it has clawed back in taxes.
Americans would be crazy to want to pay back this "debt." It would bankrupt our economy and, besides, what the "debt" really signifies is the wealth well earned by the private sector. True, the currency may have been created "out of thin air," but the goods and services created to acquire this currency are very real indeed.
Think motor oil. It adds nothing to the structural components of an automobile, but its absence will cause a car's engine to seize up and stop working. The US dollar is our economy's lubricant, motivating millions of people to provide all of the goods and services we expect to be able to purchase.
How can we be sure the "debt" actually represents real wealth? Because inflation has been so low! Imagine dumping another $20 trillion into the economy tomorrow--all of this extra money chasing the same number of goods and services would cause inflation to skyrocket.
Don't fear the interest on the "debt." The federal government, being the ISSUER of currency--and not the USER (like state and municipal governments)--does not need to borrow or even tax in order to spend. Thus, it has the power to set its own bond rates.
4
A very idiosyncratic, to be polite, view. Among other things: Sure, the government can set the rates of interest paid on the debt, but then investors can decline to invest in the debt.
19
@Barbaro
WDG appears to be an adherent of Randy Wray's "Modern Monetary Theory". (Rolls eyes). Regardless of his and Wray's assertions about debt, that debt has to be serviced at rates that are ultimately set by investors, not by the government. As rates approach their historic norms the cost of debt service will exceed the defense budget.
15
@Barbaro This *view* is anything but idiosyncratic. It is how the finances of a monetarily sovereign nation such as the USA, Canada, Australia, UK, inter alia, actually work. Two questions for you to ponder, what did Chairman Bernanke mean when asked if he funded QE(x) with tax dollars and he answered no, he funded each iteration with "keystrokes"? And what was the minting of a large denomination (multiples of trillions) coin offered as a solution by heterodox economists when Republican debt/deficit fever was at its highest during the recovery from the Great Recession?
Answer these two and you'll begin to understand how your American government's finances work. And no, your household finances are not analogous.
8
Some additional facts are needed here to really understand what is going on in America and why all these facts are more ominous than they already seem.
For starters, the number of Americans who lost their retirement investments, both housing and capital holdings that instead went to medical bills and just plain having to have money to endure a 10 year stint of unemployment and under-employment. We have yet to see the biggest long-term destruction by the Great Recession, poverty in old age. Forget about the Boomers for a second, this means GenXers too.
The under-employed are mentioned here but not enumerated and those who've fallen off the back end no longer counted are not. Both need to be put more front and center, especially as it's reality is still being felt by the mentioned failure for wages to rise more than the pitiful amount mentioned. The monumental unused productivity of the country left idle and blamed for it's own redundancy must be reckoned.
The Trump Tax Cut was mentioned but no mention of how much of the gift to corporate America was spent in stock but backs and tax evasive maneuvers and not in true investment for instance R&D, training up employees, etc. that would have had an effect felt by people not just C-suites.
And last but most important is the effect of global environmental destruction, all the more important given the several roll-backs of legislation and policy that will speed up that destruction thanks to Trump and the GOP.
172