Tuesday, May 01, 2018


I want to believe that some combination of Robert Mueller, Stormy Daniels, and a Democratic House (and possibly Senate) will bring President Trump down, but I continue to be skeptical -- white America still likes him (his 42% approval rating from Gallup this past week was his best showing in that poll since last May) and he's persuaded his base that the words "truth" and "lies" mean, respectively, "stories we want to hear" and "stories we don't want to hear."

If anything brings down Trump, it will be an economy that's not delivering for ordinary Americans -- and even that disappointment will take a long time to register with the heartlanders, because Republicans are much better at cheerleading for themselves than Democrats are, which is why the president has succeeded in persuading so much of America that the economy is going like gangbusters now. It's not bad, but it's about to go into a decline.
For most of the past decade, as the U.S. economy marched through the second-longest expansion in its history, Americans enjoyed a rare trifecta: soaring stock values, cheap loans and consumer prices that rarely rose....

But suddenly, the good fortune is melting away....

Consumer prices by a key measure are rising at their fastest point in seven years, with mass consumer companies such as McDonald’s and Amazon.com increasing prices on some of their popular offerings. Mortgages and business loans are becoming more expensive. And after peaking in late January, the Dow Jones industrial average is now roughly flat on the year.

The result is that Americans have to spend more money on staples, pay more to borrow money to buy big-ticket items such as cars and homes, and are seeing less growth in their investments. These factors will probably pinch Americans particularly during spring and summer, when home-buying and driving peak.
But what about all that awesome new investment from the tax cut? That's not happening.
Republicans sold the 2017 tax law as “rocket fuel” for American investment and growth, saying that corporations — flush with cash from lower tax rates — would channel money back into the economy by building factories and offices and investing in equipment, which would help companies grow and provide winnings for workers.....

But, so far, hard evidence of such an acceleration has yet to appear in economic data, which show more of a steady investment roll than a rapid escalation. And while there are pockets of the economy where investment is picking up — among large tech companies and in shale oil business, for example — corporate spending on buying back stock is increasing at a far faster clip, prompting a debate about whether the law is returning money to the overall economy or just rewarding a small segment of investors....

A survey by the National Association for Business Economics ... finds ... two-thirds of respondents said the new tax law did not cause them to change hiring or investment plans. Morgan Stanley said Monday that its Capex Plans Index for future capital expenditures fell slightly in April, from what had been a record high.
Unfortunately, gullible Trump backers will grasp all this only gradually, as they did in the Bush years, when tax cuts also failed to improve their lives.

I don't expect a resounding rejection of Trump in the next year or two. I think he could win reelection, and even if he doesn't, he'll get at least 45% of the vote. (Hell, that might be enough to win the Electoral College.) Whether he serves one term or two, it will dawn on voters that the money isn't trickling down to them someday. But it's going to take a while.

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