Posted by: Bruce Allen | August 20, 2017

Republicans in a Lather

Up&down chart-Main© Bruce Allen   August 20, 2017

Most Republicans have this notion that everything political in the U.S. will be fine once the party unites under the banner of “cutting middle-class taxes and improving the economy,” with Trump leading the way.  They enjoy majorities in both houses of Congress, most of the governorships, most state legislatures, with voting districts they’ve gerrymandered to guarantee red ownership for a decade, etc.  Life, for Republicans, is, in general, very good. 

Except for the lunatic in the White House.  More about him later. 

The problem with the initial premise is that the economy is about as “improved” as it’s going to get.  For the working class of Americans lacking education and/or transferable skills, add the word “ever” to the previous sentence.  Unemployment, or at least the government’s facsimile thereof, stands at under 4.5%, 10% below what economists consider “full employment,” which is usually assumed to be 5%. Inflation is under 2%, which has been the target used by the Federal Reserve for decades.  The economy is growing slowly. A combination of at least three factors suggests that measured unemployment is likely to go up in the years to come. 

(Those red-eyed folks comprising the Trump “core” need those jobs he promised on the campaign trail.  Their communities need those jobs.  Those jobs are going to become more scarce.) 

1.   A rapidly mechanizing workplace, more robotics, more machines, with people only needed to keep them running and cleaned-up after. 7.3 million jobs have been lost in the US in the past decade due to this alone.

2.   Corporate capitalism, which obliges company operators to maximize shareholder value and returns, seeking the lowest costs of production, which in turn supports

3.   Globalization which, despite the bellowing emanating from the White House, continues apace, with only economy-hurting tariffs and trade wars standing in its way. 

Millions of high quality, high-paying jobs go wanting every day in this country for lack of applicants qualified to fill them.  With current immigration policies, crops are rotting in fields owing to there being no one to pick them. There is no priority to deal with massive job re-training or any coherent immigration policy to help the agricultural sector. The party in charge needs to own these issues. 

This misplaced hope that “fixing” the economy through conventional means will work could easily backfire on Republicans, who will have to account for rapidly-growing Federal deficits to enact their agenda.  Tax reform, their version of it anyway, will clearly add to the deficit. Any infrastructure “program” worthy of receiving a name will add to the deficit, at least in the short-term. Healthcare?  Ditto. And the fascinating part is that The Freedom Caucus is ready, willing, and able to drive the economy over the cliff of government shutdowns and debt defaults in order to have these things their way, which is to say, wrong. 

Under Trump, the dismantling of the Federal machine taking place before our eyes guarantees that “externalities” such as pollution of our air and water will increase over time. It is likely that death rates among various populations will grow over time as these externalities manifest themselves in the declining health of vulnerable people. 

In short, the Republicans don’t really have an answer, either to the economy or the 800-pound gorilla in the White House. They are sufficiently disunited to be unable to wield their considerable power effectively. They are inextricably tied to this unfit President due to their spineless refusal to condemn his intellectual and moral vacuity. 

Married to the President, they are like the wives of so many husbands who complain they can’t live with them and can’t live without them. Congressional Republicans can’t afford, politically, to go up against the “Trump core” and can’t afford, morally, to not.  Rock—Congressional Republicans—Hard place. 

If, as seems likely, the wheels of the economy begin to rattle and grind in the next year, the mid-term elections hold promise for Democrats.  As the out-of-power party in Washington, it is up to them to come up with a coherent platform stating what they stand for.  It can be well to the left of what we have seen from them over the past decade.

If voters in the 2018 mid-terms and 2020 Presidential elections are on the rebound from a period of extended “losing,” they could be turned around by a platform built around producing a healthy, stronger, modern American workforce, more able to compete in the world economy without tariffs, government protection or subsidies, with health insurance for all, and without Betsy DeVos. 

For those concerned about Federal debt and deficits, it should be acknowledged that The World regards U.S. debt as virtually bullet-proof, with rates on 10 year Treasury bonds under 3%.  These rates are climbing, but the forces pushing them are weak. Most of them are due to uncertainty, which markets loathe and which comes from the White House by the ton.  Once there is a new, more predictable occupant at 1600, much of that uncertainty will vanish. The recent fall in the dollar likewise. 

The field is set for the Democrats.  Most 2018 Federal and state elections will feature Republican incumbents who have more to lose than challengers.  The opposition is in disarray. The economy is beginning to tilt against the incumbents at a bad time.  If Democrats cannot take advantage of these factors in 2018 and again in 2020 they are a sorry lot.

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