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“Trump's Economy” Started On January 21, 2018


#1

“Trump's Economy” Started On January 21, 2018

John Atcheson

Trump and the Republicans have been passing off the recent gains in employment, the modest increase in wages, and the growth in GDP as their handiwork. It wasn’t. To the extent government had anything to do with it, it was for the most part the policies of the Obama administration that made it all happen. He can claim some credit for the recent stock market boomlet, but it’s been rising for nine years now … long before he oozed onto the stage.


#2

Sustainable Growth – which the stock market seems to depend on – is an oxymoron.

Let’s suppose the GDP continues to grow at about 2.5% for several years, which would require a 2.5% annual increase in resource consumption and produce a 2.5% annual increase in pollution (less an infinitesimal am­ount of each as minor increases in efficiency take effect). So in just 30 years we’ll have roughly twice the con­sumption and roughly twice the pollution we have today (1.02530 = 2.097) — except that the world is already experiencing resource shortages and is already over-polluted.  And imagine what things will be like in 50 years if capitalism continues to require growth and we have nearly 3½ times the consumption and pollution of today.  (1.02550 = 3.437).   The same factors apply to population, by the way, assuming a continued 2.5% average annual worldwide growth in our numbers . . .


#3

I have to be honest, I have never bought that a president owns the economy, especially since there is relatively little a president can do in this system to actually put in place policies he or she wants. We’ve been on a rightward trajectory for decades now, and everything’s falling apart. So, to the extent that a president supports the rough set of policies that got us here, and to the extent that they support a set of policies that have caused particular impacts that we can measure and study, they can be critiqued for that. Trump supports lower taxes on people like him, corporations, he supports deregulation, wants to privatize everything in sight. Many Democrats have this rough vision, it’s written into trade agreements and that model that they’ve been supporting in recent decades, although it is somewhat moderated by a few policies they support. Trump doesn’t want to radically change the trajectory we’ve been on roughly since Reagan. He wants us to go much further down that path. His party does, and so do many Democrats. The difference seems to be that Trump and the right wing want to really pick up the pace, and so the pain will be much more intense, instead of the constant, slow, grinding misery that “centrist” Republicans and Democrats offer. The model itself should be the focus, since Democrats don’t really offer to break from this model.


#4

I understand what you are getting at, but you are confusing different things. GDP is simply the market value of all goods and serves produced in a given year. You could, hypothetically, have GDP growing (since it is just market values), with no increase in throughput and no increase in the generation of pollutants. There is no one to one correlation between resource consumption and pollution generation on the one hand, and GDP growth on the other. The carbon intensity of an economy will increase or decrease depending on how many actual things it makes and how much energy is needed to make those things. Financialized economies and economies reliant on providing services will have different carbon intensities. Even if GDP growth is equal in two countries, if one is an industrial economy while another is a peasant based agricultural economy, or an economy providing services, the amount of carbon they use up and throw into the environment will simply not be the same.

The radical economist Robin Hahnel explains this well: http://content.csbs.utah.edu/~mli/Economics%207004/Hahnel-the%20growth%20imperative.pdf

On your overall point, there is a finite amount of natural resources, there is a finite amount of wastes that we can throw into the environment, and we are running up to our limits with both things. And capitalism as a system is not environmentally sustainable. Capitalism will simply not function well when it runs up against absolute resource shortages, or when no more pollution can be generated without massive repercussions (we’re already there). This is all the more reason that the actual left has to kick these “centrist” people to the damn curve. They have no solutions. We need radically different policies and institutions, and if we don’t, humanity has a very dark future.


#5

The gorging by the plutocrats has really only just begun under the policies signed by Mr Trump, the tax scam/reform. Give it a year or two and see what this feast has done to average working families. My guess is that our social nets that we’ve all paid tax for(Social Security, Medicare) will be relentlessly attacked as entitlements; they are not entitlements! Again, we paid taxes to ensure these were in place when we get old. I’m old now and rely entirely on my SS disability income. My medical costs alone have gone up over 300% in the last six years. An inhaler I need to breathe costs almost $500 and my insurance card had expired the other night so I did without until I got it sorted out the next day and you betcha, I was pissed silly. I’m sure the few grand that ‘generous’ employers give out will be long gone when the real bite occurs in the very near future. Good luck then, we’ll all need it in spades.


#6

“But they did at least try to keep their corporate favoritism from sinking the entire economy and that’s why Obama was able to post some good numbers and increase employment and wages.”

Does the author have his hands on long-term macroeconomic trends? Has he paid attention to the impact of the policies Clinton strongly supported? Keep in mind, Clinton was working to privatize Social Security when the Lewinsky affair broke. Can you imagine if he did and the crash hit in 2007/2008? Or the long-term stagnation in wages, the exponentially growing private debt, the explosion in inequality, the constant increase in the costs of healthcare, housing and education, at a time when wages are stagnating? Obama too wanted to do even worse things, but failed. Beyond the TPP, remember him being very much open to cutting the very programs Trump is now cutting? Let’s stop writing articles about how bad Trump is, then always talk about the Democrats in reference to people like Trump. Once you’ve established that Trump is horrific, what sense is there to then point out that the Democrats clear the insanely low bar you just established? It isn’t nitpicking either, cause this is always the logic as to why we should support Democrats, it will be their 2018 slogan. We aren’t Trump, and Russia! If we had an opposition party worth a damn, they’d be pointing out that Trump just wants a radical version of the same economic model Clinton supports, they’d be strongly critiquing that model and they’d be proposing clear and coherent alternatives.


#7

“Now, one can argue whether capitalism, with its emphasis on growth, and GDP as a measure of growth, is a good thing.”

Mis-Measuring Our Lives (2010) by Stiglitz, Sen, and Fitoussi, is a great short read on this very topic. The authors were asked by Nicolas Sarkozy to address the use of GDP as the be-all and end-all measurement of economies.


#8

Reagan likewise took credit for a rebounding economy more due to Carter energy policy. President Carter’s huge Home Weatherization Tax Credit program sufficiently stimulated the economy and demand for energy efficiency just long enough to carry on after Reagan cancelled the program in 1982. Homes standards today are more comfortable, cleaner, even healthier as toxic chemicals in construction materials were banned. The energy efficiency of common household appliances improved. Double pane windows and insulation became legal code standard. Automobiles too improved average fuel economy. This was my experience.

In the 1990’s I segued into energy efficiency in the transportation field, mostly mass transit, light rail, streetcar and low-floor buses. That decade saw Al Gore’s next generation automobile program’s hybrid drivetrain breakthrough and eventual all-battery EVs. Both EV types are important though I make the case that plug-in hybrids have more potential to reduce fuel/energy consumption overall than all-battery EVs like the Nissan Leaf and the over-rated Tesla. The pretentious notion of self-driving cars reveals the shortcomings of car-dependency as corporate manipulation and exploitation.

Homes became more energy efficient, but most homes are still built in car-dependent suburbia. EVs today have the potential to change how we build communities to become more transit oriented, with more services, occupations, institutions and amenities closer to home and accessible without having to drive, communities less influenced by reckless corporate interests, communities closest to environmentally sustainable.