Reclaim the American Dream

Washington – Maybe you’ve forgotten, as I had, how snidely candidate Donald Trump declared war on Wall Street back in 2016, savaging Hillary Clinton as ”the puppet” of Wall Street – “they pull the strings” – and personally vowing to generate an economic renaissance that would lift the American middle class out of stagnation and restore 7.7 million lost manufacturing jobs.

“I know Wall Street. I know the people on Wall Street.” Trump boasted to a small-town crowd in the Gothic farm country of Ottumwa, Iowa, in January 2016. “I’m not going to let Wall Street get away with murder. Wall Street has caused tremendous problems for us.”

A year later, at his Inaugural, Trump limned a glowing future for the anxious and disenchanted working class who helped put him in the White House. “We will bring back our wealth and bring back our dreams,” he promised. “We will build new roads and highways and bridges and airports and tunnels and railways all across our wonderful nation. We will get our people off of welfare and back to work rebuilding our country.”

And what happened?  Bait and Switch. just the opposite of what he promised in Iowa. Remember  that massive Trump tax cut in late 2017. It was, in his words, “murder!” Trump handed a financial bonanza to Wall Street, Corporate America, and the financial elite, but he never made any serious effort to create all those middle-class jobs by investing significantly in rebuilding America’s aging, pothole-riddled infrastructure.

Now, once again, in the midst of the corona collapse, Wall Street and the top 1% are riding high reaping enormous profits, while the real economy and working-class Americans are stuck in protracted pain. What that means is that Trump has failed the true believers in Ottumwa, Iowa, and Fargo, North Dakota, and small-towns across Michigan, Pennsylvania, Wisconsin, Missouri, North Carolina, Ohio and beyond, who blindly bought  his staged taunts against Wall Street and his gossamer promises of a miraculous Trump-Utopia for Middle America.

663 promises – Which Ones Did Trump Keep?

In his presidential campaign of 2016, Donald Trump was a veritable Santa Claus – showering out promises to all kinds of voters – 663 promises in all, by one count. And in fact, he has kept faith with parts of his core constituency.

For the evangelical and ideological right, Trump delivered on his promise to alter the political balance of the federal courts, moving the U.S. Supreme Court firmly to the right by appointing conservative justices Neil Gorsuch and Brett Kavanaugh, and naming nearly another 200 like-minded federal judges.

For the MAGA, anti-global right, Trump carried out his condemnation of President Obama’s nuclear agreement with Iran and the Paris Climate Accord and, casting aside the advice of his own policy team, Trump walked out on both.

And for the frightened, xenophobic, ultra-nationalistic right, Trump ceaselessly slapped restrictions on immigration, separated families at the Mexican border, and sent them back to Central America. Despite opposition in Congress, he even managed to construct a few more barriers along the U.S. border with Mexico, though he never got Mexico to pay one peso toward the border wall, as he had promised.

Economy Boxscore: Weak Hits and Goose Eggs

It’s ironic, given Trump’s touting the economy as his ticket to re-election with his inflated hyperbole about creating “the greatest economy that we’ve had in our history,” that the economy is where Trump has most pitifully fallen short of his own promises.

• Trump Promise: 4% to 5% annual growth: “We’re bringing it from 1 percent up to 4 percent. And I actually think… you can go to 5 percent or 6 percent.” (CNN debate, 10/19/16). Trump’s best year, 2018, showed 3.18% growth. But his other two years were just a bit over 2% – no better than Obama – and the corona economic collapse will obliterate much of Trump’s gains.
• 

  THE FEDERAL DEFICIT has been growing significantly under Trump. (Source: Pew Research Center)

   Trump promise: Balanced budget in 5 years – “We can balance the budget very quickly… over a five-year period.” (Fox News – Sean Hannity). Trump never came close. Obama’s last deficit was $585 billion. The red ink of the Trump era shot up to $984 billion in 2019, and first a $2.8 trillion and then a $3.3 trillion deficit for FY 2020, driven largely by corona.

• Trump Promise: Wipe out $19 trillion national debt in 8 years – “We’ve got to get rid of the $19 trillion in debt.” Bob Woodward asked “How long would that take?…. Trump: “Well, I would say over a period of eight years.” (Washington Post, 3/31/16). Just the opposite. Trumponomics ballooned the debt – to $23.4 trillion before corona hit, and $26.7 trillion today.

On Jobs, Trump Misses His Own Marks

But beyond the macroeconomic numbers, what’s striking is how little Trump’s self-proclaimed wonder economy paid off in lasting gains for his political base, in farm country and blue-collar America.

• Trump Promise: “And we will produce 25 million jobs over 10 years.” (Charlotte, NC, 10/14/16). That works out to 10 million new jobs in his first term. In fact,  the Trump economy added 6.8 million jobs in the first three years and brought unemployment down to 3.5%, its lowest level in 50 years,largely thanks to President Obama who had lowered the jobless rate from 10% to 4;7% and handed Trump a booming economy. Trump’s job gains, while good, are less impressive in comparision  with Obama did much better by adding 8.1 million jobs in his final three years. Now, with Trump’s mishandling of corona, his record to date is a net loss of 4.7 million jobs 
• Trump Promise: Bring back 7.7 million lost manufacturing jobs – “In the year 2000, America had nearly 20 million manufacturing jobs in the Rust Belt. Okay? Today we have only 12.3 …We’re going to bring them back.” (Cincinnati,12/1/16). Even at its high watermark, last February, the Trump formula added less than ten percent of what he promised – just 483,000 manufacturing jobs. Since corona, 237,000 manufacturing jobs have been lost and economists forecast that some will never come back.
• Trump Promise: Reopening Appalachian coal mines: “We’re gonna put the miners back to work….You’re going to be working your asses off.” (Charleston, WV, 5/10/16). But the steady erosion of coal jobs has continued, despite Trump.
• Trump Promise: “Apple and our other major companies will start making their iPhones, their computers, and other products in the United States.” (Clive, Iowa, 9/13/16) Trump’s big win in 2017 was the news that Apple’s main Chinese supplier, FoxConn, would build a $10 billion plant in Wisconsin, generating up to 13,000 jobs. But even though Wisconsin offered $3 billion in incentives, That deal hasn’t panned out as advertised. FoxConn has scaled down to a smaller plant, a $372 million investment, and an unknown number of jobs, but certainly far fewer than first expected.
• Trump Promise: Raising Wages – “Many, many workers in our country are making substantially less money today in real wages than they made 18 years ago… We’re going to get the wages up.” (Dimondale, MN, 8/19/16) In the Trump years, wages have gone up, but so has inflation, meaning that the real wage gains under Trump have been less than half of one percent, more than offset by losses in job benefits.  So on this score, workers are net losers

 Trump Fueled Inequality – Richest 400 made $240 billion in 2019

For Trump, the hallmark of his economic strategy was the $1.5 trillion tax cut which he pushed through Congress in late 2017 and which has added to the nation’s deficit, despite his promises that it would pay for itself by generating more growth and taxes. Like a sun king of old, he held out its promise to individual Americans

• Trump Promise: Middle-class tax cuts that would “benefit working families while ensuring the wealthy pay their fair share.” (Detroit Economic Club, Aug 8, 2016): “My council of economic advisers estimates this change alone will likely give the typical American household a $4,000 pay raise.” (Harrisburg, Pa, Oct 17, 2017)

Independent economists estimate that roughly two-thirds of Americans did get a tax cut, averaging close to $1,000, although close to 10 percent had to pay higher taxes. But Trump’s promised $4,000 bump in pay turned out to be what Trump calls “a hoax.” It never happened. What’s more, Most of Trump’s tax cut went to the top earners – 17% to the highest-earning 1%  and 60% of the total going to the upper 20%. 

Running for office in 2016, Trump told Iowa he’d fight Wall Street and the elite. But once he got into the White House, he gave Wall Street’s favorite investors a cut in individual tax rates, lower capital gains rates, and lower corporate taxes, meaning lucrative payoffs for wealthy investors. With Trump’s help and blessing, Forbes magazine’s richest 400 American made $240 billion in 2019. the super rich 400 are now worth $3 2. trillion

That’s the bottom-line on Trump’s economic performance – a grossly unequal payoff to the top vs the middle. After the Trump tax cuts, former Federal Reserve board member, Princeton economist Alan Blinder, pointed to academic studies that show  “For the first time in the past hundred years, the working class today pays higher tax rates than billionaires.”

In short, Trump’s policies have more deeply embedded into our system the gaping inequalities that haunt almost every aspect of American society, politics as well as economics, and that not only reduce America’s long-term economic growth but breed growing mistrust of modern American capitalism and the fairness of the nation’s politics, especially among the younger generation.