It’s a good time to take a “selfie” of the US. Remember the salad days of January 2001 during the transfer of power between Presidents Clinton and Bush. There was a budget surplus, no foreign wars of any consequence, low unemployment; I even recall a debate about whether surpluses might be bad for the country’s economic long-term health. Ah yes, dream on!
There are many similarities today. We have an unemployment rate of 4.7%, and miniscule US forces remain in Iraq and Afghanistan; the deficit, however, is now at an unseemly $552 billon (still, many economists feel that while borrowing rates remain low the US economy can handily sustain this deficit level.)
Given the economic Armageddon that President Obama inherited in 2009, he’s done an amazing job. Stock markets are zooming, housing values have recovered, and gas prices continue to be low.
Let’s paste this selfie on our refrigerator door - we may need cheery memories in the coming years.
On the other hand, who knows what wonders await us under the incoming Trump Administration? I, for one back in 2009, never imagined that the tanking American car industry would be booming today. If you remember, 600,000 jobs were lost in that awful January President Obama took office.
Still unless President-elect Trump’s plans change, one can safely predict that “huge” tax cuts, allied with increased infrastructure and defense spending, will lead to even “huger” deficits. The consequential higher inflation and interest rates will pose severe threats for the present healthy economy.
But from what I’m hearing, the first Trumpian priorities will be to kill Obama Care and cut regulations.
Although the Affordable Care Act has led to some costlier individual premiums it is saving many billions in overall US health costs. And in the rush to kill this flawed but helpful scheme, Republicans and the Trump Administration have yet to propose a meaningful alternative. The resulting chaos suggests millions left without coverage and a return to the staggering cost increases of the pre-Obama days.
As for regulations: some can undoubtedly be done without, but those that affect climate control are there for a reason, and without them a price will be paid in terms of rising sea levels, breathable air and other such niceties.
President-Elect Trump’s plan to “drain the swamp” is admirable, especially his threat to ban administration officials from becoming lobbyists for five years after their term of duty.
As distasteful as these crony capitalist enablers may be they are minnows compared to the real swamp alligators – the “huge” corporations that have increasingly been calling the shots in this country.
Despite Mr. Trump’s populist campaign rhetoric, notice how effortlessly wealthy veterans of Exxon, Goldman Sachs and other members of the swamp elite have glided into his cabinet. They share one overriding concern - the amassing of corporate profit.
Corporate taxes will definitely be cut. Will this help in the creation of well paying, non-service jobs? I doubt it.
Corporate profit rates have been growing for the last 30 years while investment in factories and the work place has not kept pace, apart from a drive for more automation that inevitably leads to less jobs.
In a major publicity move, Mr. Trump recently saved 800 Carrier jobs from moving to Mexico at a cost to the state of Indiana of 7million in tax rebates. The problem is - many of these jobs will eventually be lost to automation. Is there a solution?
There are over 5 million jobs nationwide that cannot be filled because Americans lack the necessary skills. Wouldn’t it be better for federal and local governments to collaborate with unions and employers, and train workers for these positions?
Such an investment would engender less headlines and 4am tweets, but would provide many families with a path to the middle-class.
And while we’re at it - Fortune 500 companies have stashed more than $2.1 trillion in profits offshore to avoid taxes. What are the chances of those trillions being repatriated? Slim to none I’d say - without a sweetheart deal for the corporate alligators.
So there you have it – things could be better as President Obama leaves office; but they could get a whole lot worse. Don’t forget to check that selfie on your refrigerator door!