After Donald Trump grew tired of responding (mostly falsely) to Leslie Stahl’s “tough questions” and then walked out of his “60 Minutes” interview that was aired yesterday, his press secretary Kayleigh McEnany handed Stahl a huge “book” that was allegedly the Trump health care “plan.” Upon closer examination, it was just an exhausting compilation of pointless, non-binding and confusing “executive orders and congressional initiatives” that was more like disjointed discards collected in a child’s scrapbook.
But before that happened, Trump boasted that "his" economy was the “greatest” in history, to which Stahl retorted that he knew very well that was not true; he was, of course, “prepared” to show her all the “numbers” to "prove" it. The problem is that most of the numbers are reflective of how the very wealthy in this country have done very well in this country. As I pointed out last week, due largely because of Trump’s mishandling of the pandemic, 8 million more people are experiencing poverty, with more that 25 percent of both blacks and Hispanics currently in poverty, compared to 12 percent of whites.
But even before the pandemic, were we experiencing the “greatest” economy in the nation’s history? Of course not, not when there were times when this country was a manufacturing powerhouse and its exports dominated the world market. The period between 1932 and 1946 actually saw the nation’s greatest economic growth gains and losses in its history, with a GDP decline of more than 12 percent in 1932, and in 1942 a GDP increase of over 18 percent. The highest rate of GDP growth during the Trump administration (3.0) in 2018 was less than the highest during the Obama administration (3.1 in 2015), and was considerably less than the 13 times since WWII that the GDP rose by at least 5 percent. While the unemployment rate did dip to 3.5 percent, this was no “record”: The lowest unemployment rate in U.S. history, according to the Labor Department, came in 1944, at 1.2 percent. It was 2.7 percent in 1952, and 3.4 percent in 1968.
What has increased--particularly during the pandemic--has been income and wealth inequality. After a brief downturn, the Dow Jones Industrial Average is just 900 points off its record high. Who is benefiting from this surge in stock prices when there was a record 33 percent decline in the GDP during the past second quarter and a surge in the poverty rate?
Consider: From the third quarter 1989 to the second quarter 2020, the top one percent and 90-99th percentile group saw their share of the increase in household income to be 74 percent of the total. The bottom 50 percent saw there share of the increase to be just 0.7 percent. The bottom 50’s share of the nation’s net worth--which includes stocks, was actually halved from 1989 to 1.9 percent, compared to 70 percent for the top-10. What this means is that the top 10 percent in this country have far more excess cash to buy stocks, plus the top managers tend to be receive stock options as part of their compensation packages. Those are the people who are really benefiting from the Trump economy.
There are other indicators that show that working people are worse off today than they were before Ronald Reagan became president. The Gross National Income coefficient measures the level of income equality. A score of “0” would mean everyone has the same amount of income, while a score of “1” means that only one person controls all the wealth. Between 1937 and 1982 the GNI coefficient was generally below .4, which indicates an “adequate” income equality; but with the help of the Reagan tax “reform,” anti-labor measures and the loss of manufacturing jobs to Asia--to be “replaced” by low-wage service jobs--the GNI rose above .4 and hasn’t stopped; it is currently at .48, which indicates a “large” income inequality gap. Anything above .5 is considered a “severe” gap.
The dollar certainly doesn’t buy what it used to either. According to usinflationcalculator.com, in 1970 what cost $1 would cost $6.71 today--an inflation rate of 571 Percent. Some items have gone up more than others; I remember when a pack of Hostess Twinkies cost 10 cents, now it is about $2.50. You could go into a mom-and-pop store with a couple of pennies and come out with a handful of candy. 50 cents could get you a cheeseburger, fries and a drink at McDonald’s. I was stunned one day when I went to a gas station to put a dime in a vending machine for what passes for a “king-size” candy bar these days and discovered that the price had gone up to 20 cents. For the adult side of consumerism, automobiles and pick-up trucks of any type have gone up at least 10 times the price that they were in 1970. That year, the median household income was over $9,800; today it was over $68,000 before the pandemic started, and has lowered somewhat since; but it still means that a typical vehicle takes a 50 percent higher chunk of your income today.
Meanwhile, Forbes notes that the dollar doesn’t pay for same thing in every part of the country: “A person living in San Francisco earning a salary of $150,000 may actually be worse off than someone residing in a smaller city with a much lower compensation. When you factor in the high cost of living in San Francisco, including rent, housing prices, taxes and other large expenses, their after-tax dollars don’t go very far. You could live a much better lifestyle—with affordable housing, lower taxes, good schools, less crime and shorter commute to work—on a lower salary in a less expensive city or state.” We could go on and on with this. The Pew Foundation noted that “In fact, in real terms average hourly earnings peaked more than 45 years ago: The $4.03-an-hour rate recorded in January 1973 had the same purchasing power that $23.68 would today.”
The question of is this economy “the greatest” it’s ever been is patently false. The people who have benefited most have been the same people who in fact benefited from Reagan’s disastrous “trickle-down” economic policies. The only “benefits” from the 2017 tax law were for the profit margins of corporations and for “pass-through” business owners. The only people benefiting from record stock prices are shareholders, most of them who already had a lot of money to begin with. Raising minimum wages would certainly help, but that would mean that the rich would have to accept being less rich, and they clearly won’t accept that, starting with Trump--who has a history of refusing to pay contractors for work done on his properties.
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