You know those middle-aged guys who like to throw out seemingly random movie quotes in the midst of a conversation, or even, since it’s now 2019, a group text thread? I’m talking about the guys who, if someone happens to utter the word ‘zero’, just can’t resist furrowing their brows and going all baritone, doing their best Dean Wormer and jumping in with a “Mr. Blutarski. Zero. Point. Zero.” As you probably have surmised, you’re reading a post by one of them. I y’am what I y’am (see what I mean?).
In reading this week’s economic news, along with President Dumpster Fire’s ridiculous, head-spinningly contradictory responses, a bit of movie dialogue floated to the front of my mind. In My Cousin Vinny, Joe Pesci put his fiancée, played by Marisa Tomei in an Oscar-winning performance, on the witness stand. He started, in his best Brooklynese, by posing a question as a sort of accusation: “You’re supposed to be some kinda expert in ...”
In a very different scenario, I imagined Vinny, in that voice, grilling Trump on the basis of his supposed, self-proclaimed expertise when it comes to matters of money, business, finance, etc., and starting out the questioning the same way. Only in this instance, unlike in the movie, Vinny would not be examining the witness to demonstrate said expertise, but instead to expose the utter lack thereof.
When it comes to the economy, Trump is the one doing the fantasizing—both about how strong it is as well the crazy idea that somehow the media is, in his words, “doing everything they can to crash the economy because they think that will be bad for me and my re-election.” As for his re-election chances, in addition to all the race-baiting rhetoric he’s been spewing, he has been reaching out to those who aren’t exactly all in on a second Trump term by selling his economic performance. And it’s not a soft sell:
You have no choice but to vote for me because your 401(k), everything is going to be down the tubes. Whether you love me or hate me, you’ve got to vote for me.
Please note that those pesky things known as facts demonstrate that Trump is not even in the same ballpark as the truth. The stock market is a decent measure of economic performance, although the top 10% of households by income own a whopping 84% of all dollars invested in stocks. In other words, plenty of people don’t have much in the way of a 401(k). Either way, as the graph to the right demonstrates, Obama kicks Trump’s ass. Oh, and this data doesn’t include Friday’s market meltdown, a plunge of over 600 points in the Dow Jones Industrial Average. This is the fourth week in a row of declines for the Dow, which has fallen 4% this month alone.
Separate from fantasies, QAnon-style conspiracy theories, and a full-on bizarre tweet in which Trump—essentially proclaiming that capitalism is dead and we are now a command economy—“hereby ordered” every American company to follow his dictates on how to run their businesses, the reality-based economic news this week was not good, and reveals even more clearly that President Individual 1 doesn’t know what the hell he’s doing when it comes to the economy.
Before we get into this week, let’s start with the baseline: Trump inherited a strong overall economy. Although too much of the wealth still flowed to the top, Democratic policies under President Obama did help improve the situation on economic inequality, as Derek Thompson at The Atlantic explained:
A new examination from the Council of Economic Advisers credits the Obama presidency for the most aggressive and successful attempt to reduce inequality in half a century. “President Obama has overseen the largest increase in federal investment to reduce inequality since the Great Society,” the economists write.
One might immediately think to dismiss such a report as shameless self-promotion from the White House. But the nonpartisan Congressional Budget Office (CBO) reached the exact same conclusion in June. It found that the federal government is doing more to reduce inequality right now than any time on record, going back at least 35 years. The gap between the rich and poor is as wide as ever judging by before-tax income (e.g., wages and capital gains). But judging by after-tax income, the CBO found that income inequality is no higher than it was in 2000, and Obama’s policies have done more to reduce inequality in the last few years than any other time on record.
As opposed to Obama’s policies, Trump’s are making economic inequality worse again. That’s not surprising, given the Republican Millionaire’s Tax Cut passed in 2017, the benefits of which flowed overwhelmingly to the wealthiest among us—not, as Team Trump promised, to American workers.
Separate from the gap between the rich and the rest, Trump said that his economic policies would lead to tremendous economic growth compared to the economy under Obama—which he mocked during the 2016 campaign. Trump has failed miserably on that front.
The revisions to the employment numbers we saw this week (half a million fewer jobs were created over the past year or so than we initially thought) further demonstrate that the tax cuts, and Trump’s economic policies in general, did essentially nothing to improve the overall performance of our economy.
So what has Trump done, if he hasn’t actually improved the economy in any significant way? Well, he started a trade war that is hurting our economy, which he shows no signs of being able to win, and which he has continued to escalate even on Friday afternoon. And he’s given lots of money to the rich, and he has blown a hole in the deficit, to the point where it is projected to tally over $1 trillion in fiscal year 2020. That’s even worse than was projected only a few months ago. And what’s the reason?
Tax revenues for 2018 and 2019 have fallen more than $430 billion short of what the budget office predicted they would be in June 2017, before the tax law was approved that December.
[snip] Mr. Trump’s indifference to deficits has shattered his campaign promise not only to balance the budget, but also to pay off the entire national debt. And it has left his fellow Republicans, who pushed through deficit-reduction measures under Mr. Obama when the economy was still fragile, in a bind. Congressional Republicans have largely gone along with Mr. Trump’s moves to add more debt, even as they insist they will return to shrinking the deficit if Mr. Trump wins a second term in office.
The deficit has now risen four consecutive years, and is on track to rise for the next four. Such a streak would break the record for longest run of deficit increases in recorded American history — five years, from 1939 to 1943.
A detailed comparison of 15 data points done by The Washington Post shows that the overall economy has not improved under Trump. It has essentially continued along the path it was following since being rescued by Barack Obama. Remember how the whole thing crashed in 2008 and gave us the worst recession since the 1930s? Remember, too, that Obama brought us out of that crash with essentially no help from Trump’s party—who were busy doing that whole pretending to be fiscally responsible thing they always do when they don’t hold the White House.
Going forward, there are serious warning signs for our economy. Activity in the U.S. manufacturing sector contracted in the most recent month, according to the manufacturing purchasing manager’s index, something it hasn’t done in 10 years. Consumer confidence in August hit the lowest levels seen so far this year. Additionally, the bond market sent up a major red flag when the yield curve inverted on both Wednesday afternoon and Thursday morning—this on top a yield curve inversion that took place earlier in the month. As NBC News’ Martha C. White explained:
Three times in roughly the past week, the yield on 10-year U.S. Treasuries has dropped below, or inverted, that of two-year Treasury bonds. When interest rates on short-term debt rise above those on long-term debt, this indicates that investors expect growth to slow in the future, and an inverted yield curve historically has been a recessionary precursor.
The Trump White House likes to claim that this doesn’t matter, but people who actually understand economics (and care about things like the truth), pushed back. In fact, The Man Who Lost The Popular Vote and his minions have been all over the place with their messaging on the economy in ways that make about as much sense as, I don’t know, throwing a fit when Denmark won’t sell Greenland just because our man-baby of a president told them to. Here’s economics commentator Neil Irwin of The New York Times on Trump’s conflicting messages:
President Trump and his aides are sending two simultaneous, contradictory messages about the economy: That it is booming, and everything is fine. And that it is time for emergency measures to keep this boom going.
It’s also certainly quite interesting that Team Trump, in private meetings with wealthy donors, is warning that a recession is coming. Meanwhile, on social media—where the regular people who like him get their information—Hair Twitler said the economy is “very strong.” You know that when the shit does hit the fan, Trump’s donors are going to end up much better off than his average Twitter follower.
And that, in a nutshell, is the story of Trump’s economic policy. His economic expertise is as real as the psychology exam the Delta House boys thought they were stealing. What is real is that the only people who benefit from his bullshit expertise are the people laughing their asses off while too many working-class white people—riled up from years of hateful, race-baiting rhetoric aimed at exacerbating their anger at immigrants, as well as black and brown Americans more broadly—cut off their nose to spite their face by voting for Trump and his Republican lackeys.
Someone should make a movie about that.
Ian Reifowitz is the author of The Tribalization of Politics: How Rush Limbaugh's Race-Baiting Rhetoric on the Obama Presidency Paved the Way for Trump (Foreword by Markos Moulitsas)