The Hidden Economy
Wednesday, May 22, 2019
The award for this year’s Biggest Backhanded Compliment to Trump goes to White House acting chief of staff Mick Mulvaney, who recently predicted a Trump victory in 2020 because “people will vote for somebody they don’t like if they think it’s good for them.”
Trump is the least popular president to run for re-election in the history of polling but Mulvaney thinks Americans will vote for him anyway because unemployment has hit a 50-year low, wages are rising and economic growth exceeds 3 percent. A CNN poll released in early May shows 56 percent of Americans approve of Trump’s handling of the economy.
This is making Democrats nervous. No president since the second world war has failed to be reelected during a good economy.
“What Democrats have to be most worried about is the economy,” says Democratic pollster Celinda Lake.
It is possible, of course, that the economy will take a dive before election day, especially in light of Trump’s trade wars and the global economic slowdown. But it’s more likely the recovery that began in 2009 will continue, even though Trump isn’t responsible for it.
Yet there’s a difference between how Americans view the overall economy and how they see their own personal economy. That difference has widened in recent years as more people get into financial trouble even as the economy soars.
Which means the official economic statistics have less relevance to what people tell each other over the kitchen table when they’re trying to pay the bills.
And it’s these kitchen-table economics—not the official statistics—that drives votes.
In a survey by The Washington Post and ABC News published May 7, more than 80 percent of Democrats and 66 percent of independents said “the economic system in this country” mainly works “to benefit those in power,” rather than all Americans. Nearly a third of Republicans agreed.
More Americans are employed but most jobs still pay squat. Adjusted for inflation, recent wage gains are smaller than the wage gains of 2015. Workers have lost so much bargaining power that not even the lowest unemployment rate in half a century is doing much to boost pay.
Employers continue to sack workers willy-nilly. One example: AT&T executives promised that the corporate tax cut would allow them to create more jobs. Instead, they’ve laid off 23,000.
Add to this that almost 80 percent of American workers are living paycheck to paycheck, and you get a feel for the havoc so many families are living in.
Meanwhile, the costs of education, childcare, housing and health care are skyrocketing. Trump hasn’t done a thing to help. If anything, he’s made everything worse. Student loan debt is in the stratosphere. Housing is out of reach for young workers, yet Trump keeps cutting affordable housing. Childcare is becoming impossible.
Health insurance is a nightmare. Last year alone, 30.4 million Americans went without any coverage—about 1.1 million more than the year before, according to the Centers for Disease Control and Prevention’s National Health Interview Survey.
That’s the second year the figure has risen after years of declines after the Affordable Care Act. The reversal is largely because of Trump’s efforts to kill the ACA. His administration is now asking a court to throw it out entirely.
Copayments and deductibles are out of control. According to a recent Gallup survey, Americans borrowed $88 billion to pay for health care last year, and one in four people decided not to see a doctor because of cost.
Trumpland has been especially hard hit. A quarter of working-age adults in Texas lack health insurance, for example.
As if this weren’t enough, Trump’s trade wars have hammered rural America. Farm incomes are down $12 billion in the first quarter of this year, according to the Department of Agriculture. Farm bankruptcies are at near record levels.
Mulvany may be correct that people will vote for somebody they dislike if they think it’s good for them. But Trump’s economy isn’t good for most people.
If Democrats speak to the practical economic needs of Americans and offer realistic solutions, as they’ve started to do, Americans won’t pay attention to overall economic statistics when they vote in 2020.
They’ll heed what’s in their kitchen, and Trump will be toast.
Robert Reich, a former U.S. secretary of labor, is professor of public policy at the University of California at Berkeley.