Thursday, January 23, 2020

Debunking Trump's False Claims About the Economy

The first task of the Democratic candidate, whoever it is, will be to point out the manifest dangers of giving a figure like Trump four more years in office.

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Doesn't matter. #Cult45 is allergic to facts.

Anything that takes the luster off their turd is "fake news".

#1 | Posted by Nixon at 2020-01-23 07:37 AM

Is the DNC going to set up a new DJIA or alternative set of employment figures?

Yeah, have fun with that.

#2 | Posted by Rightocenter at 2020-01-23 10:43 PM

but we should know the truth...

#3 | Posted by BruceBanner at 2020-01-23 10:45 PM

In all seriousness, I read the article, where is the false claim?

I mean Obama stated Trump would need a magic wand to accomplish what has happened ...

So pardon me if I see a disconnect.

#4 | Posted by AndreaMackris at 2020-01-23 11:24 PM

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#4 | Posted by AndreaMackris at 2020-01-23 11:24 PM
So pardon me if I see a disconnect.

You are hereby pardoned.

It takes blinders not to see the sharp deceleration in the economy, despite spiking passive ETF and tech-led stock market.

Leading indicators for December 2019 just turned sharply lower and negative at -0.3% from already anemic 0.1%.

Lakshman Achuthan is a co-founder of the Economic Cycle Research Institute:
(Sources: U.S. government; Economic Cycle Research Institute)

"The Strength of Consumers Is Overstated. Weakening sales trends and wage growth underscore a sustained slowdown in spending.

The consensus is that the U.S. consumer is still strong enough to propel the economy forward even though the manufacturing sector has weakened. This view underpins expectations for improved corporate earnings in 2020. But the hard economic data strikes a discordant note. In particular, growth in industrial production on a year-over-year basis remains in a decisive downturn, sliding deeper into negative territory. Indeed, the production actually declined in 2019 amid losses in manufacturing job in recent months, fueling talk of a recession in that part of the economy.

The undeniable weakness in manufacturing has caused the consensus to trumpet the strength of the consumer. Yet, the consumer, while reportedly confident, is not spending hand over fist. Rather, weakening sales trends underscore a sustained slowdown in consumer spending.

Real retail sales growth fell to a six-month low of 1.25% in November on a y-o-y basis, from 3.75% two years earlier. Big rebound in December was due to a highly favorable comparison to the disastrous December 2018. Plus, that doesn't negate the fact that spending growth has been tailing off even though surveys report a confident consumer and the stock market is at record highs.

The lifeblood of the average consumer is job growth, not stock prices. So it's important to recognize that year-over-year growth in nonfarm payrolls has dropped to its lowest level in 2.25 years. Not only that, but growth in total hours worked " which reflects growth in both jobs and the length of the workweek " hasn't been this weak since 2010, dropping to 0.9% in December from just over 2% a year earlier.

Worse, growth in total pay has fallen even faster over the past year or so than growth in hours worked, slowing to a 3.8% pace from almost 5.5%. The y-o-y growth in average hourly earnings " the ratio of total pay to total hours worked " has fallen to 1.1% from 1.6%. That is worrisome downturn in wage growth even in the face of a very low 3.5% jobless rate.

For the average American, this limits spending growth. No matter how confident consumers might feel, there's only so much fresh debt they can realistically incur to support even more spending. The hard data shows growth in jobs, total pay and total hours worked are stuck in cyclical downswings. It also shows weakening trends in consumer spending and industrial production growth.

Meanwhile, one third of those buying new vehicles have negative equity in the used ones they are trading in, up from about one quarter before the financial crisis. And farm debt has topped $400 billion, up almost 40% since 2012.

That is why the boost to the economy from the Fed's dovish pivot primarily aided relatively narrow parts of the economy - financial services, residential construction and affluent consumers. But it has not helped business investment or average consumers.

(cont'd)
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#5 | Posted by CutiePie at 2020-01-24 01:29 AM

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(cont'd)

Manufacturing is in recession, officially. Most of retail is in recession despite false claims of "strong consumer" - "consumer confidence" soft data surveys are not supported by "consumer spending" hard data, same story in "rising wages" in this gig economy. Many farms are going bankrupt and/or sell for almost nothing, new "phase one and done" deal "based on market conditions" (read the fine print regarding so-called 'commitments') with China notwithstanding. "Tariff Man" is not popular with small businessmen left broke after his and Kushners' renamed (NAFTA -> USMCA) or crooked "deals" that make things the same or worse off than have been in place before or could have been done without all the trade negotiations dramas, after another episode of Trump schitt-shows. Huge trade deficits will continue - of course, there is no problem with having "trade deficits" unless you are Trump / Navarro "trade" cultist. The real problem - budget deficits and increases in national debt are going higher despite "the best economy ever" i.e., a very slow recovery, even slower than under Obama. Jobs creation is also slower than under Obama, especially for "prime age" workforce - which makes sense considering late stages of the economic cycle, but nothing to brag about.

A few of many esteemed fact-based conclusions:


WSJ: "With So Many Vacant Stores, E-Commerce Is Only Part of the Problem. Don't blame all the vacant stores on e-commerce. Sky-high rents are squeezing retailers, too."

FT: "Shop vacancies rise across Europe and big brands desert New York's Fifth Avenue and high-end malls"

Mark Hulbert (MW): "Why the stock market's top 20 years ago is a warning for investors now. Valuations are less extreme " but not by much"

John Authers (Bloomberg): "Do the Machines Driving Markets Remember 2000? Quant strategies are even more overweight in this tech-led stocks rally than individual investors. U.S. Stocks Rally Starts to Resemble 2000 Tech Euphoria"

Investor Jimmy Rogers: "The Fed has increased its balance sheet over 500% in the past decade; The Bank of Japan is printing money to buy bonds and stock ETFs; and The European Central Bank is mired in insane negative interests." Rogers notes that "in 2008 we had problems because of too much debt, however, since then the debt has skyrocketed everywhere and it's going higher and higher. We all are going to pay a horrible price someday but in the meantime it's a lot of fun for a lot of people."

There's so much more if you take the blinders off.
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#6 | Posted by CutiePie at 2020-01-24 01:30 AM

Capitalism sucks! Utopia can only be achieved via central planning!

- A small but extremely loud and influential wing of the DNC -

#7 | Posted by JeffJ at 2020-01-24 07:08 AM

It incredibly sad that Dems have fallen for this idiot's exaggerations. They have fallen so hard and dumb that they continue to try to disprove his exaggerations instead of his actual accomplishments. No, he didn't bring about an economic change like the world has never seen. But voters aren't going to not vote for him because of that. They ARE going to vote for him because they have jobs and things are looking really good regardless of how much doom and gloom the Dems try to spread to get votes. Come on Dems, start being smarter. That's all the country is asking. Be smart enough to beat someone like Trump. You haven't been able to do that yet because you continue to fight dumb with dumb.

#8 | Posted by humtake at 2020-01-24 11:50 AM

"There's so much more if you take the blinders off."

Another reason why we never get anywhere. It has nothing to do with blinders, it has to do with partisan hate. You are right, there are negatives. No doubt about it. Always has been with anyone in charge. But there are positives, as well. Yet partisan hate prevents you from actually acknowledging that a list of negatives while ignoring all other aspects of an argument actually prevents you from winning. The only thing it does is make people in your party nod their heads and people in other party shake their head. It's not blindess, it's an "ignoring" problem. Start being objective and look at the economy as a whole instead of just the negative parts that fit your narrative and more people will listen. Then, provide solid explanations as to why the negatives outweigh the positives. But the reason this never happens is because neither side would ever dare to actually acknowledge there are positives...because hate is more powerful than truth these days.

#9 | Posted by humtake at 2020-01-24 11:56 AM

In all seriousness, I read the article, where is the false claim?
I mean Obama stated Trump would need a magic wand to accomplish what has happened ...
So pardon me if I see a disconnect.

#4 | POSTED BY ANDREAMACKRIS

More Mackris lies:
Obama said, "President Trump would need a magic wand to get to 4% GDP."
We didn't get 4% ever, not even in a single quarter. (Obama had a few quarters of +4% GDP growth)

Let me help with the disconnect:

1. GDP Growth Rates haven't magically gone up since Obama
The growth has been about the same since Obama left office. In part because Trump took out a $5.5 trillion loan and gave it away as a tax cut. He bought his GDP growth by having future generations pay for it.
1/3 of Q3's GDP growth is from the Farm Bailout alone.

2. Unemployment and Job Growth
The number of jobs being created hasn't magically increased under Trump. Job growth has actually slowed under Trump. So I'm not sure how the unemployment rate is a miracle from Trump's economic policies.
If Job Growth had continued at the same pace as when Obama was in office, the unemployment rate would be even lower.

3. Median Incomes
Middle class incomes really haven't gone up that much either. They are barely outpacing inflation despite the low unemployment rate.

So I'm trying to figure out where your disconnect is coming from other than refusing to acknowledge basic facts.

#10 | Posted by Sycophant at 2020-01-24 01:01 PM

It incredibly sad that Dems have fallen for this idiot's exaggerations. They have fallen so hard and dumb that they continue to try to disprove his exaggerations instead of his actual accomplishments. No, he didn't bring about an economic change like the world has never seen. But voters aren't going to not vote for him because of that. They ARE going to vote for him because they have jobs and things are looking really good regardless of how much doom and gloom the Dems try to spread to get votes. Come on Dems, start being smarter. That's all the country is asking. Be smart enough to beat someone like Trump. You haven't been able to do that yet because you continue to fight dumb with dumb.

#8 | POSTED BY HUMTAKE

So you admit Trump hasn't improved the economic trends of Obama's presidency.

But then say voters should vote for him because he hasn't destroyed those trends.

Interesting position to take.

#11 | Posted by Sycophant at 2020-01-24 01:04 PM

#10 - Newsworthy.
If we had the same rates under Trump we had under Obama we'd have over a million more jobs, wage pressure might finally kick in, and people might be moving out of the crappier jobs into better ones. We'd likely have lower prices, too, without all these trade wars. Our farmers would definitely be better off.

Trump and the GOP want credit for not killing, just slightly maiming, the golden goose they were handed. Obama's recovery and growth.

#12 | Posted by YAV at 2020-01-24 01:08 PM

__________

#12 | Posted by YAV at 2020-01-24 01:08 PM
Obama's recovery and growth.

It's actually not "Obama's recovery and growth." Most of his term he had a Republican Congress (since 2010 "shellacking" by Tea Party), auto industry bailout and monetizing of $600B financial liquidity package was originated and scripted mostly by the Fed under Ben Bernanke, with the help of Nancy Pelosi and Bush administration and happened under George W. Bush. Later, the Fed kept providing liquidity and quantitative easings (QE1-3) under Obama and both Democratic And GOP Congresses as well as monetizing fiscal deficits some of which were only partially justified by the need to fiscally stimulate portions of the economy as well as accommodating the financial markets.

Practically, the lion's share of credit for the longevity of this recovery should be given mostly to Ben Bernanke, Janet Yellen, and now Jerome Powell, with some smidgeon of fiscal and regulatory relaxation under both administrations at the expense of the deficits and increased debt. This, and, with some lag, the European economies, just as 3 decades of Japanese economy were the Central banks' liquidity-driven economies.

The huge fiscal deficits currently, under "Who cares about the budget?" Trump and then all/now mostly GOP Congress is an absolute disgrace, and yet even with all these huge budget deficits and the Fed once again expending the balance sheet and pumping liquidity at breakneck speed - yes, you heard it here first, the Great Repo Market intervention/bailout means we are now in QE4, even if they don't call it that - due to corrupt and brain-dead trade, fiscal and immigration policies of Trump, the economic growth, job market growth and wages growth are barely moving and actually slowing down despite all the fiscal and monetary stimulus.

It takes special kind of talent to brag about the "accomplishments" of the inherited demographics, tech-led free/gig economy changes while simultaneously trying to destroy it by imposing Soviet-style central planning with the President picking and choosing winners and losers (which factory must stay open and who can or can't move plant or headquarters to another place, which companies are allowed to trade without tariffs (e.g., Apple...) and which can't (e.g.,Huawei, Broadcom...) etc., causing the capital / DFI drain and brain-drain of Chinese and other "foreign" existing and potential future scientists, entrepreneurs, founders, students) but Trump certainly has this kind of "talent for destruction."

"If it moves - tax it, if it keeps moving - regulate it, if it stops moving subsidize it" (Ronald Reagan, describing central planning of economy)
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#13 | Posted by CutiePie at 2020-01-24 03:49 PM

Trump and the GOP want credit for not killing, just slightly maiming, the golden goose they were handed. Obama's recovery and growth.

#12 | POSTED BY YAV

That's a good way of phrasing that. I'm gonna borrow that if you don't mind.

#14 | Posted by jpw at 2020-01-24 08:07 PM

"But then say voters should vote for him because he hasn't destroyed those trends."

You can go back and forth on who deserves credit, but it is and always has been the case that an incumbent president, even one like Trump, is going to benefit enormously from what is perceived as a strong economy.

#15 | Posted by madbomber at 2020-01-25 06:39 AM

Debunking the President's economy is pretty damn difficult. I suppose if your are a wealthy person you're feeling a big pinch. OR, if you happen to live a heavily tax burdonsome state like NY or CA and benefited on your federal taxes from those state's high tax rates, but now have limits as to what you can deduct you're unhappy.

BUT real 'taxpayers', and not the 47% who pay NO income tax, who are in the middle income tax brackets and are always overtaxed have fared very well through lower income taxes and MORE money in their pockets from the Trump Tax Cuts.

They are working. As are the benefits from the stock markets for our pensions, CDs, savings / investments.

#16 | Posted by SJHamilton at 2020-01-25 12:18 PM

"I suppose if your are a wealthy person you're feeling a big pinch."

It's the extra bulge, a combination of the thicker wallet and the foie gras.

#17 | Posted by Danforth at 2020-01-25 12:28 PM

"Debunking the President's economy is pretty damn difficult."

Unless you use math.

#18 | Posted by Danforth at 2020-01-25 12:30 PM

"BUT real 'taxpayers', and not the 47% who pay NO income tax..."

Your claim is intellectually dishonest. Other government spending systems have been incorporated into what used to be just an income tax return, and now it covers income tax, child-raising subsidies (CTC, ACTC, CCTC), education subsidies (AOC, LLC), and welfare (EITC). The real reason the number "paying NO income tax" has risen is NOT due to more lazy people; it's due to these all these initiatives folded into the income tax return, which spiked the percentage each time.

Look at kid-subsidies. The Child Tax Credit started at $400/child, then $500, then it doubled, then doubled again. Now, it's $2000/child. Oh, and the income caps for claiming the credit? They skyrocketed over 160% in the new tax code. Even child care gets subsidized though the income tax code, and welfare is almost exclusively kid-based.

Look at education: Up to $2500 can be subtracted from your income tax balance per college kid, per year. (BTW, This merely pretends to help the taxpayer, since they'd be better off if costs were $2500 lower to start.) But this takes people off the "income tax" roles.

Look at welfare: Let's say, when you were a kid, the neighbors filed their tax return and had a liability of $1000, which is exactly what they had withheld on their W-2s. Because they had four kids and didn't make a lot of money, they got $1200 that year in welfare via the welfare bureaucracy. Did that family pay income tax?. Back then, they did. Now, it's counted as they don't, because two different systems---income tax and welfare---have been put on the same income tax form. BTW...to qualify for the EITC, you've got to have kids; otherwise you've got to be making four figures as a single person, just to get a few hundred bucks in EITC.

Ultimately, the equation's designers purposely want to shove every possible benefit into the 1040. They could send a check to every mommy & daddy separately, they could have Universities disburse the AOC, they could send out monthly welfare checks like they used to....but that would make their talking point less dramatic, wouldn't it?

#19 | Posted by Danforth at 2020-01-25 01:47 PM

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