trickle down economics

Mitch McConnell: Republicans are coming for your healthcare, Social Security, Medicare and Medicaid. Believe them. (Updated)

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Republicans were supposed to run on their tax cuts. Instead, they’re running away from them. Only the Chamber of Commerce (naturally) is running ads thanking Republicans like Martha McSally for making permanent the deficit busting corporate welfare tax cuts for wealthy plutocrats that did not benefit the average American taxpayer. Republicans stunned to learn voters understand exactly what their tax cut did:

The reality is not in dispute. Around two-thirds of the benefits of the tax cuts went to those in the top quintile of taxpayers, with about 20 percent of the benefits going to the richest 1 percent. By 2025, when the cuts are fully phased in, the top 1 percent will get 25 percent of the benefits. (See details here.) The centerpiece of the plan, furthermore, was a gigantic corporate [welfare] tax cut. Republicans promised that this cut would produce a wave of investment and wage increases for workers, but so far the only wave that has resulted is a tsunami of stock buybacks benefiting wealthy shareholders, which is exactly what liberals predicted.

Those facts are available to anyone who might seek them out, but most people aren’t going to. What people do notice, however, is that their paychecks didn’t look much bigger after the tax cut. Maybe they’re getting a few more dollars a week, but it certainly wasn’t life-transforming.

Tax cuts are actually tax expenditures that are paid for by borrowing money. Tax cuts do not pay for themselves, despite the GOP’s insane adherence to faith based supply-side “trickle down” economics. All it does is explode the federal deficit. Republicans like to claim they are “deficit hawks” when a Democrat is in the White House, but the truth is they are actually deficit peacocks who really don’t care about the federal deficit, especially when a Republican is in the White House.

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September jobs report well below expectations, real earnings decline

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Steve Benen has the September jobs report. Job growth cooled in September, falling short of expectations:

Though there were some concerns about the effects Hurricane Florence may have had on the U.S. job market, most projections pointed to monthly job growth in September around 194,000. The initial data suggests we fell short by a significant amount.

The September results are 25 percent below what economists had forecast.

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The Bureau of Labor Statistics reported this morning that the economy added 134,000 jobs in September, while the unemployment rate dropped further to 3.7%. The 134,000 is the lowest of the year to date.

On a more encouraging note, the revisions for the two previous months – July and August – were quite good, with a combined net gain of 87,000 jobs as compared to previous BLS reports.

In terms of the larger context, this morning’s data points to 1.875 million jobs created so far in 2018, which is quite good, and which is an improvement on the totals from the first nine months of 2017 (1.53 million). It’s also roughly identical to the numbers from 2015 (1.84 million) and 2016 (1.85 million).

That said, this year’s tally is still short of the totals from the first nine months of 2014 (2.19 million).

When the White House says this is the best growth “ever,” it apparently means “since 2014.”

As for the political implications, Donald Trump has now been in office for 20 full months – February 2017 through September 2018 – and in that time, the economy has created 3.8 million jobs. In the 20 full months preceding Trump’s presidency – June 2015 to January 2017 – the economy created 4.15 million jobs.

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With a government shutdown looming, Congress is wasting its time on ‘GOP tax cut scam 2.0’

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Just as a reminder, Congress has until September 30 to pass a federal budget, or the government will shut down (again). Trump has threatened to shut down the government at least seven times in the past six weeks:

After spending the summer threatening to shut down the government if Congress doesn’t give him billions of dollars to build a border wall, President Trump is now declaring he thinks a shutdown is good politics for him.

That’s despite the fact nearly everyone else in his party disagrees.

Republicans control all of Washington, and if the government shuts down at the end of this month when the fiscal year ends, it would come just weeks before most members of Congress face voters. Republican leaders have a hard time imagining a more nightmarish scenario for their party: The government has already shut down briefly twice this year under their watch, and the Republicans’ majority is on the line this November in the House of Representatives and maybe even the Senate.

Yet Trump doesn’t seem to care much. Each time he appears to assuage Republican leaders’ concerns by moderating his position, he says something a day or two later more strongly in favor of a shutdown.

What Trump ultimately does will decide whether the government shuts down this month — and, potentially, Republicans’ fate in the midterms.

Congress should be doing its damn job and passing a budget to keep the government operating, especially this week when there is a catastrophic hurricane bearing down on the Carolina coast. Government rescue and relief efforts are going to be needed.

Instead, the geniuses (sic) in the GOP leadership, after passing its $1.5 trillion GOP tax cut scam bill earlier this year that has predictably led to an unprecedented round of stock buybacks (and not investment or raises for workers) and created a record deficit, “retreated to their policy war room, thought and debated and deliberated and analyzed, and came up with a bold new proposal for where to go next: “GOP tax cut scam 2.0.”

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All that glitters is not gold: storm clouds on the economic horizon

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“There is perhaps no single person or entity that has done more to sell the economy under President Trump than Fox News.” When Trump faces a negative story, Fox News pivots to the economy:

Fox routinely finds ways to spin bad, unrelated news about the economy into good, related news about the economy, often blaming the media for its focus on Trump’s scandals and ethics probes.

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Indeed, Fox has been so anxious to praise Trump for the economy, it has even admitted to deliberately giving the president positive economic coverage.

The economy is not as good as the three dolts on the divan (Fox and Friends) who provide Trump his presidential daily briefing (PDB) of Fox propaganda each morning would have you believe.

Earlier this month, the New York Times editorialized Clouds Darken Trump’s Sunny Economic View:

[T]he American economy has a lot more power than it can handle right now, and it’s making a lot of noise. So is President Trump, who takes singular credit for a robust second-quarter rise in the gross domestic product of 4.1 percent, something that hasn’t happened under any other president since … Barack Obama. While Mr. Trump praised himself effusively — he’s good at that, isn’t he? — the stock market seemed unimpressed. Friday’sannouncement that 157,000 new jobs were added in July, a modest gain or perhaps a seasonal glitch, elicited an even more subdued reaction. That’s because if you look down the line, there are few clear reasons to be so enthusiastic.

“Over all, we see this report as supportive of our views that the economy is currently firing on all cylinders,” wrote Bricklin Dwyer, a senior economist with BNP Paribas, after the new G.D.P. numbers were announced. But there was a caveat: Mr. Dwyer said that “growth is likely peaking. Indeed, in our forecasts, [the second quarter] marks a high-water mark for growth.”

For one thing, the initial jolt of the Republicans’ $1.5 trillion tax cuts, mostly for corporations and the wealthy, is wearing off. Corporations have bought back $437 billion of their own shares, which leaves them that much less to invest in new production, or wages. In fact, spending on business equipment slowed.

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All that glitters is not gold in the new Gilded Age

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On Friday the government said that the economy grew at a 4.1 percent annual rate last quarter.

Naturally our egomaniacal Twitter-troll-in-chief, who always speaks in exaggerated superlatives, tried to claim that this was the biggest, bestest, greatest economic achievement by any president ever in the history of the world!

Not even close, dumbass. Fact check: Mr. Trump cited a long list of indicators of how well the economy has performed on his watch, some lacking context or foundation. Barack Obama had three quarters besting Trump’s best quarter.

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Economists caution that the latest acceleration, while good news for American businesses and households in the short term, is unsustainable in the long term and could raise the risk that the recovery will flame out in the years ahead.

The quarter’s figures were pumped up by a range of one-time factors — including a surge in exports tied, at least in part, to Mr. Trump’s trade policies, as foreign buyers rushed to stock up on American goods before tariffs took effect — that are unlikely to recur. Most forecasters expect growth to cool in the second half of the year — even without factoring in the possibility of a trade war, which corporate executives in recent weeks have cited as a source of uncertainty that could force them to pare hiring and investment plans.

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