Monday, July 30, 2018

Prices Soaring, Wages Down; Republicans Should Talk- Prosperity?

Maybe Donald J. Trump knows more than the rest of us.  However, Washington Post reporter Robert Costa, widely believed to have contacts within the Republican Party second to none, tweets
Obviously, Trump's secondary motive in criticizing the Special Counsel's investigation is to discredit and delegitimize it so that if the President is unable to end the probe, Mueller's eventual report detailing multiple high crimes and misdemeanors is unconvincing.

Yet Trump's emphasis on the investigation and immigration rather than on tax legislation and the economy may even help the GOP retain its House majority in the November elections.

Costa isn't alone in implying that the GOP should focus on economic issues. It's conventional wisdom among Joe Scarborough and other anti-Trump Republicans that gosh darn, if only Trump would lay aside his bigotry and paranoia, Republican orthodoxy would carry the day.

There are three ideas which unite Republicans: tax cuts are good; tax cuts are good; tax cuts are good. Trump and his Party would benefit, the reasoning goes, from pointing out that jobs are increasing and the economy currently is growing rapidly, at the annual rate of 4%.

However, June's bump means very little because the numbers were buoyed by accelerated export of soybeans to avoid the impact of expected tariffs. Moreover, much of it was fueled by deficit spending, which is unlikely to sustain growth.

Nor are most Americans interested in the quarterly growth rate. Admittedly, they do care about whether they have a job, and the number of jobs is up, as it was once President Obama helped pull the nation out of recession.

Additionally, despite the absolute wage increase, real wages are down. They have declined because of inflation, which has been fueled by a rise in gas prices as well as housing and medical costs. Voters do care about the cost of living, and the price at the gas pump is a visceral reminder of increased prices.

Gasoline prices, vulnerable to changes in global politics, can go down as well as up.  However, interest rates have risen lately and they're likely to go up further.

And so President Trump may know more than  (alert: demagogic observation ahead) journalists and other media types, perhaps trapped in their bubble.

If Republicans want to pound the notion that Americans are swimming in an ocean of wealth with the tax cut, Democrats can emphasis that the cost of living is up and wages are down. Hillary Clinton noted during her campaign that the economy was improving, especially with stock market and job gains- much as is the situation now. Thereafter, many pundits attributed her loss to "economic discontent."

The Washington Post noted that one non-partisan analysis of the GOP tax law passed at the end of 2016 gives "the richest 1 percent of Americans an average personal income tax break of about $33,000, while the poorest Americans will receive an average personal income tax break of $40."  Or as Democrats running this year could say, "Republicans are giving billionaires a new BMW; you're getting a new bicycle."

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