First, let’s deal with the “500 pound gorilla” in the room. I will stipulate that, on a personal basis, there is a lot to dislike about President Trump. He can be inappropriate, arrogant and boorish. His off-the-cuff tweets can and have been offensive to some. Sometimes, he will say things tongue-in-check that are meant to be facetious that some people will take literally and misinterpret as offensive and inappropriate. He definitely rubs some people the wrong way. All that said, I will repeat what I and many others have been saying since Mr. Trump first declared his candidacy. PAY ATTENTION TO WHAT HE DOES, NOT WHAT HE SAYS.
With respect to the upcoming mid-term elections the first thing one must realize is I A A T E. It’s all about the economy. History shows that most of the time, absent an existential external threat people vote their pocketbooks. To quote the late Casey Stengel “you could look it up.” The oft-used expression “are you better or worse off today than you were four years ago” resonates today as well as it did when it was first uttered by Candidate Ronald Reagan in 1984.
So, let’s analyze President Trump’s record with respect to the economy.
Unemployment/Job Creation – According to USA Today and other sources the May unemployment rate declined to 3.8%, a level not seen since 1969. When Mr. Trump took office the rate was 4.8%. Moreover, USA Today cited the BLS report for May that the economy added 223,000 jobs in the month.
Unemployment is even shrinking among traditionally hardcore unemployed groups. For example, the same report revealed that unemployment among AAs had declined to 5.9%, the lowest percentage ever recorded. The rate for Hispanics declined to 4.9%; for teens, 12.8%. Reporting in CNNMoney, Nathaniel Meyerson disclosed that the unemployment gap between whites and AAs had shrunk dramatically, and year over year wages were 2.7% higher, a modest increase, to be sure, but better than before.
Moreover, Meyerson characterized the economy as “strong” with a “tight labor market.” He added that “job openings were at a record high, and businesses were hungry for workers.”
Regarding job growth Josh Wright, chief economist at the software company iCMS, stated that employers are “digging deeper into the pool of [the] unemployed.” He added, “the US economy has an incredible head of steam.”
Tempering all this good news somewhat, the same USA Today article denoted that the “labor force participation rate,” the percentage of Americans working or looking for work, declined to 62.7%, and cautioned that if the economy’s growth (2.3% in 2017) were to continue to accelerate, inflation could become an issue. However, I don’t believe inflation is a cause for concern right now, and I should like to denote that we should expect the labor force to decline prospectively as baby boomers retire.
One final point, the areas of greatest growth have been in the blue collar, working class fields of construction, manufacturing and healthcare. Thus, the greatest benefit has been going to the very constituency that Mr. Trump’s critics have been maintaining his policies would hurt.
Stock Market – According to Market Watch the Dow Jones Industrial Average gained 32% during 2017. On January 20, 2017 when Mr. Trump took office it stood at 19,805. Yesterday, it closed at 24,843.
What is the significance of this for the country? First of all, some 43 million households, most of them consisting of working class people, own one or more IRAs or other retirement accounts. So, those results are relevant to the abovementioned “Are you better or worse off…” question.
Secondly, the stock market is a leading economic indicator. Therefore, the investment community is betting on a further improvement in the economy. As the late president JFK famously intoned, “a rising tide lifts all boats.” One could question whether or not this level of optimism is due solely to President Trump’s policies, but, in my opinion he should get the lion’s share of the credit. You know that if the economic results were different he would get the blame.
Tax Reform – President Trump and his supporters have been extolling the benefits of his tax reform package for months, and his critics have been doing their best to discredit it as a huge giveaway for the rich. For example, Nancy Pelosi famously, or, perhaps, infamously, denigrated the $1,000 bonuses some employers had paid to their workers as “crumbs.” This quote illustrated how insensitive and out of touch the Dem leadership is, and I believe Dem candidates will regret it in November.
I urge you not to believe the critics. By now, many of you have seen tangible evidence of its effect in the form of higher take home pay, a better job, and/or an increase in your retirement accounts. What amounts to “crumbs” for Ms. Pelosi amounts to real money to most of us.
Perhaps, the most significant part of his tax package was the reduction of the corporate tax rate from 35% to 21% (with a special lower rate for repatriated funds). A recent World Economic Forum survey identified high tax rates as the most problematic factor in doing business. (One does not have to be a tax expert to realize this, just have common sense.)
I expressed my opinion of the tax package in an earlier blog, and there is no need to repeat myself now. However, an objective person would have to concede that the early returns have been very positive. Many international companies have announced their intention to repatriate profits currently being held in foreign locations to avoid the onerous 35% corporate tax rate. The Business Insider characterized this as a “tidal wave of internationally-held cash.” According to Citigroup this amounts to some $2.5 trillion. Goldman Sachs estimates that approximately $250 billion of that amount is likely to be repatriated to take advantage of the lower tax rate.
The expectation is that this cash will be used to (a) reinvest in the business, (b) increase employment, (c) pay bonuses, and/or (d) buy back company stock. Any of these would have a beneficial effect on the economy. Indeed, several major corporations have already weighed in.
For example, Apple, which has reported it has some $250 billion stashed overseas, announced it expects to repatriate most of those funds, expand its physical plant and create 20,000 new jobs; AT&T has paid $1,000 bonuses to in excess of 200,000 employees and pledged to invest $1 billion domestically; Comcast also paid $1,000 bonuses and announced it intends to invest “in excess of $50 billion” on infrastructure over the next five years; Fifth Third BankCorp and Wells Fargo announced they will increase their minimum wage to $15. Workers should already be seeing the benefits of the reduced tax rates for individuals in their paychecks.
Based on the foregoing, I believe any objective person would conclude that “Trumpenomics” has been very beneficial to the country. After all, who wouldn’t be pleased to have a better job and more money in their pocket. Yes, I wish Mr. Trump’s personality were more “presidential,” but assuming you can’t have both, which would you want?
Please answer the following question: If you had to choose a surgeon to save your life, would you select a nice, polite, professional-appearing doctor who is an average surgeon or a nasty, arrogant, SOB who is an exceptional surgeon?
I think the answer is obvious. Trump haters, like, for example, the shrill far left harpies on The View, CNN, and MSNBC, (and we all know who they are) should take a figurative “chill pill” and enjoy the fruits of his policies.
And, please, leave his family alone. Families should be out of bounds, especially children. You wouldn’t have countenanced criticism of Chelsea, Melania or Sasha.