Tuesday, August 20, 2019

Economic reality vs. Trumpian mythology

Here are some items related to our economy from 538’s morning significant digits email.

74 percent of economists
Seventy-four percent of American business economists, as surveyed by the National Association for Business Economics, “appear sufficiently concerned about the risks of some of President Donald Trump’s economic policies that they expect a recession in the U.S. by the end of 2021.” Trump, for his part, said over the weekend that “I don’t think we’re having a recession. We’re doing tremendously well. Our consumers are rich. I gave a tremendous tax cut and they’re loaded up with money.” [Associated Press]

181 CEOs
Nearly 200 CEOs belonging to the Business Roundtable — including the chiefs of J.P. Morgan Chase, Bank of America, Apple, Amazon, Boeing and GM — signed a statement Monday concerning “the purpose of a corporation.” The statement appears to shift away from the ultimate notion that shareholder value is the main objective. Rather, it says, that the companies commit to delivering value to customers, investing in employees, dealing fairly with suppliers and supporting communities in which they work. We shall see. [CNBC]

And then there is The world according to Trump. Here a conspiracy, there a conspiracy, everywhere a conspiracy. “President Trump’s claims provide a ready target to help him deflect blame if the economy does tip into recession.”

Maggie Haberman at the NY Times reports on Trump’s preparations to lay off the blame for a recision, In Economic Warning Signals, Trump Sees Signs of a Conspiracy (with thanks to our Roving Reporter Sherry). Here are snippets.

President Trump, confronting perhaps the most ominous economic signs of his time in office, has unleashed what is by now a familiar response: lashing out at what he believes is a conspiracy of forces arrayed against him.

The president’s broadsides follow a long pattern of conspiratorial thinking. He has claimed, without evidence, that undocumented immigrants cast millions of ballots, costing him the popular vote in the 2016 election. During the campaign, he predicted that the system might prove to be “rigged” if he did not win. He conjured up a “deep state” conspiracy within the government to thwart his election and, more recently, his agenda. And he has said reporters are trying to harm him with pictures of empty seats at his rallies.

The attacks come as the economy has begun flashing some warning signs, despite unemployment near historic lows and relatively high marks by voters on Mr. Trump’s economic stewardship. Global growth has been slowing. Last week, stock markets plunged as the yield on the 10-year Treasury note briefly fell below that of the two-year Treasury note, an unusual situation known as an inversion of the yield curve that is considered one of the most reliable leading indicators of recession in the United States.

Roving Reporter Sherry also tagged The Obamas’ First Big Anti-Trump Statement of 2020 that appeared at politico.com. The former first couple’s Netflix documentary takes aim at Trump’s promises to reinvigorate the industrial heartland.

Here’s a wee bit of it.

The documentary [“American Factory”], which debuts on Netflix on August 21, never mentions President Donald Trump by name—but its message is clear: Trump’s promise to reinvigorate the industrial heartland is going to take a lot more than a campaign slogan. There are no easy solutions. And if some manufacturing jobs do come back, they’re going to look nothing like they used to. Americans will have to accept a new reality to stay competitive in the global marketplace—one that they might not like, and one that Trump doesn’t acknowledge.

This message is also coming straight from Barack and Michelle Obama. “American Factory” is the first project to come from the Obamas’ production company, Higher Ground, as part of the deal they made with Netflix to produce a slate of series, movies and documentaries that reflect their values. Higher Ground acquired the movie after its debut at the Sundance Film Festival.

Since he announced his run for president in June 2015, Trump’s “Make America Great Again” campaign centered on his promise to revive manufacturing in areas of the industrial Midwest that had been wiped out by globalization. “We can turn it all around,” he said in one June 2016 speech, “and we can turn it around fast.” Today, Trump is campaigning for reelection heavily in the industrial Midwest, touting a strong record. He told a crowd in Lima, Ohio, earlier this year that when it comes to manufacturing, “We’re bringing it back in record numbers.”

The reality isn’t so rosy. U.S. factory job growth has accelerated since Trump took office. But growth has slowed this year and U.S. manufacturing output fell 0.4 percent in July amid Trump’s trade spat with China. Moreover, a recent study by Economic Innovation Group showed that the largest manufacturing job gains have been in western and Sunbelt states like Texas, Nevada and California. Traditional manufacturing hubs like the industrial Midwest have not seen a similar boost.

As usual, there is a huge cap between what is real and what Trump says.

Trump took credit for the bump, and now he wants to blame Obama for the slump. The growing economy, at least up until recently, reflects trends begun on Obama’s watch. If the economy reverses and goes into recession any time soon, it will be because of Trump’s ineptitude.

The conspiracy BS from the Trumpster belongs in the Dumpster.

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