Saturday, April 01, 2017

Trump: Bogus and a Charlatan

An insightful article on Trump has come to the blog's notice and it is worth quoting extracts.

Trump’s supporters believe that his election will end business as usual in Washington. The self-glorifying Trump agrees and indeed his has, so far, been the most unorthodox presidency of our era, if not any era. It’s a chaotic and tweet-driven administration that makes headlines daily thanks to scandals, acts of stunning incompetence, rants, accusations, wild claims, and conspiracy theories.”

Unemployment, underemployment, stagnant wages, and the outsourcing of production (and so jobs) have hit those who lack a college degree especially hard.  Yet many of them were convinced by Trump’s populist message.  It made no difference that he belonged to the wealthiest 0.00004% of Americans, if his net worth is the widely reported $3.5 billion, and the top 0.00002% if, as he claims, it’s actually $10 billion... Trump wasn't cut from humble cloth; nor in his present reincarnation has he even claimed to stand for the reallocation of wealth (except possibly to his wealthy compatriots).  His father, Fred Trump, was a multimillionaire who, at the time of his death in 1999, had a net worth of $250 million, which was divided among his four surviving children. ...  A man who himself benefited handsomely from globalization, outsourcing, and a designed-for-the-wealthy tax code nonetheless managed to convince coal miners in West Virginia and workers in Ohio that all of these were terrible things that enriched a "financial elite" that had made itself wealthy at the expense of American workers and that electing him would end the swindle.”

Poverty: According to the U.S. Census Bureau, in 2015, 43 million Americans, 13.5% of the population, lived below the poverty line ($11,700 for an individual and $20,090 for a three-person household) -- an increase of 1% since 2007, the year before the Great Recession.  For children under 18, the 2015 poverty rate was 19.7%.  While that was an improvement on the 21.1% of 2014, it still meant that nearly a fifth of American children were poor.

The working poor: Yes, you can have a job and still be poor if your wages are low or stagnant or have fallen. The Bureau of Labor Statistics (BLS) uses a conservative definition for these individuals: “People who spent at least 27 weeks in the labor force during the year -- either working or looking for work -- but whose incomes were below the poverty level.” Though some studies use a more expansive definition, even by the BLS’s criteria, there were 9.5 million working poor in 2014.
Even if you work and bring in wages above the poverty line, you may still barely be getting by.  Oxfam reports that 58 million American workers make less than $15 an hour and 44 million make less than $12 an hour.  Congress last raised the minimum hourly wage to $7.25 in 2007 (and even then included exceptions that applied to several types of workers).  That sum has since lost nearly 10% of its purchasing power thanks to inflation.

Wage stagnation and economic inequality: These two conditions explain a large part of the working-but-barely-making-it phenomenon.  Let’s start with those stagnant wages.  According to the Economic Policy Institute (EPI), for about three decades after World War II, hourly wage increases for workers in non-supervisory roles kept pace with productivity increases: at 91.3% and 96.7%, respectively.  Then things changed dramatically.  Between 1973 and 2013, productivity increased by 74.4% and wages by only 9.2%.  In other words, with wages adjusted for inflation, the average American worker made no more in 2013 than in 1973. 
As for economic inequality, the EPI reports that from 1980 to 2013 the income of the top 1% of wage earners increased by 138% compared to 15% for the bottom 90%.  For those at the lowest end of the wage scale it was even worse. In those years, their hourly pay actually dropped by 5%.
When was the last time you heard Donald Trump talk about stagnant wages or growing economic inequality, both of which make his most fervent supporters insecure? In reality, the defunding of federal programs that provide energy subsidies, employment assistance, and legal services to people with low incomes will only hurt many Trump voters who are already struggling economically.

Climate change: There is a scientific consensus on this problem, which already contributes to droughts and floods that reduce food production, damages property, and threatens lives, not to speak of increasing the range of forest fires and lengthening the global fire season, as well as helping spread diseases like cholera, malaria, and dengue fever.  Trump once infamously described climate change as a Chinese-fabricated “hoax” meant to reduce the competitiveness of American companies.  No matter that, in recent years, the Chinese government has taken serious steps to reduce greenhouse gas emissions. 
Now, President Trump is gearing up to take the U.S. out of the climate change sweepstakes entirely. For instance, he remains determined to withdraw the country from the 2015 Paris Agreement (signed by 197 countries and so far ratified by 134 of them) aimed at limiting the increase in global temperature to a maximum of two degrees Celsius during this century.  Scott Pruitt, his appointee to run the Environmental Protection Agency, denies that climate change is significantly connected to “human activity” and is stocking his agency with climate change deniers of like mind. Needless to say Pruitt didn’t balk at Trump’s decision to cut the EPA’s budget by 31%.
Nor do Trump and his team favor promoting alternative sources of energy or reducing carbon emissions, even though the United States is second only to China in total emissions and among the globe’s largest emitters on a per-capita basis. Trump seems poised to scale back President Obama’s plan to increase the Corporate Annual Fuel Efficiency Standard -- created by the government to reduce average automobile gas consumption -- from the present 35.5 miles per gallon to 54.5 miles per gallon by 2025, end the 2015 freeze on leases for coal mining on federal land, and ease power plant emission limits. Worse yet, Trump’s America First Energy Plan calls for producing more oil and gas but contains nary a word about climate change or a green energy strategy. If you want a fail-safe formula for future environment-related insecurity, this, of course, is it.

And don’t forget automation, a subject Donald Trump has essentially been mum about.  It has contributed decisively to job loss and wage stagnancy by reducing or even eliminating the need for labor in certain economic sectors.  As economists Michael Hicks and Srikant Devraj have demonstrated, increased productivity through automation has been far more crucial in reducing the need for human labor in U.S. manufacturing than outsourced jobs and imports.  Thanks to labor-displacing technologies, U.S. manufacturing output actually increased in value by 17.6% between 2006 and 2013 while the workforce continued to shrink.

Full Article can be read here