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EDITORIAL: Making America great?

Trade and budget deficits, interest rates, and divisiveness are all on the rise under Trump

Posted

Midterm elections are, by nature, a referendum on the president, and that will certainly be true this coming Tuesday. While President Trump won’t be on the ballot, he will be on the minds of many when they head to the polls.

We have seen the extent to which the current president will go to stem potential political losses. His use of the vile language of hatred and bigotry, his fear-mongering, and his frequent lauding of the use of violence, have left most decent Americans disgusted and alarmed. Trump’s demagoguery is the kind normally associated with Third World dictators— certainly not the American president.

Even many of his supporters acknowledge that Trump acts like a bully and that he would do himself and this country a favor if he could just put down his Twitter finger. But even those supporters who acknowledge his immaturity and recklessness, defend him as the guy who was needed to fix what ailed the country.

They like Trump’s tough talk on putting America First. They like his imposition of tariffs on foreign steel and aluminum and his focus on America’s trade deficit. They like his tax cut and his push for deregulation, which they see as having juiced the economy.

We hear Trump’s rhetoric on the job he’s done. “A-plus all around,” as he likes to say, and his supporters nod their heads without really paying much attention to the details or the warning signs which are increasingly flashing yellow and red.

Trump isn’t shy about touting his successes, but his record is far more mixed than his supporters recognize, especially on the economy. Trump, unlike most presidents in recent memory, had the good fortune to inherit a strong economy. Most presidents take office with less than ideal economic conditions. Trump’s predecessor inherited an economy in total collapse. President Obama not only stemmed the fall, but quickly turned it around and presided over the longest uninterrupted period of economic expansion in the nation’s history. Or as Trump called it— “American carnage.”

Trump hasn’t yet blown up Obama’s economic legacy, but he’s working on it. Trump’s imposition of tariffs has left America’s agricultural sector reeling as trading partners retaliated by slowing imports of agricultural products, sending prices plummeting. Manufacturers, like Minnesota boat makers, are facing the prospect of lower profits and potential layoffs as Trump’s tariffs have increased the price of aluminum, the largest single component of most pleasure boats. Falling corporate profits as these higher costs ripple through the economy have hurt auto sales and helped fuel the recent dramatic losses on Wall Street.

And here’s the kicker: Trump’s tariffs have done absolutely nothing to reduce America’s trade deficit. That deficit was remarkably stable under President Obama, but under Trump, it’s risen steadily and is currently on pace to set an all-time record high in 2018. On one of his signature issues, Trump deserves a D-minus at best.

Trump’s tax cuts may have temporarily goosed the accelerator on the U.S. economy, but the hangover is already becoming apparent. Any competent economist would have told the president that juicing the already strong economy he inherited would speed the rise in interest rates, and rising interest rates are now slowing the housing market and other types of investment. New housing starts and sales have been dropping for months, as both higher interest rates and the rising cost of home construction (due to tariffs and labor shortages) discourage home buyers. That slowdown could have repercussions close to home. Without increased demand for home siding, the prospects for a new siding mill near Cook look more tenuous all the time.

Those rising interest rates have another troubling aspect— they’re pushing up the interest America pays on its debt, which has exploded under Trump due to his tax cuts for corporations and the wealthy. President Obama inherited an economic disaster and a $1.4 trillion annual budget deficit. He got the economy back on track and sliced nearly a trillion dollars off the annual deficit, but Trump quickly reversed that progress.

Trump talked a good game about helping working people, but the effect of his policies are only increasing wealth inequality, slowing home-buying, weakening American manufacturing, and will leave future generations saddled with more debt. And whatever benefits we’ve seen to the economy are temporary.

Here’s our prediction: Trump will leave office with a higher deficit and a higher unemployment rate than he inherited from Barack Obama. And his toxic rhetoric will leave the country more divided than ever before. As you head to the polls on Tuesday, ask yourself if that’s really your definition of “making America great again.”

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Scott Atwater

I've heard some real whoppers in my time, but this particular editorial takes the cake. The writer is asking us believe that President Trump inherited a strong economy, and even though Trump reversed virtually every aspect of the Obama economic policy, the results we enjoy today are simply a continuation of Obama's economy. That doesn't even pass the smell test. Thanks for the chuckle.

And editors wonder why the approval rating of the news media is lower than a snake's belly.

Friday, November 2
Marshall Helmberger

This comment is so typical of those who still wish to believe that President Trump has somehow worked an economic miracle, when the evidence suggests otherwise. Note that "Scott Atwater" (who regularly comments on our site without using his actual name) does not cite any data to bolster his argument. It's simply derisive without any substance, because he can't deny that the trade deficit AND the budget deficit are both rising sharply under Trump. His only "fact" claim is to suggest that Trump inherited a weak economy from Obama. "Strong" versus "weak" are obviously subjective, but the objective numbers are as follows:

Unemployment peaked in 2009 (when the financial collapse bottomed out) at 10.0 percent and it declined to 4.6 percent as of Election Day 2016 (that's under Obama).

Over the last three years of the Obama administration, GDP growth averaged 2.3 percent. In other words "terrible," according to Mr. Atwater. Through the first six quarters of Trump, the average GDP growth has been 2.7 percent, and that slightly improved growth rate is due almost entirely to the tax cuts which have blown up the budget deficit. It would have had more impact had the tax cuts not been geared towards the wealthy. I have no issue with people commenting under fake names if they don't have the courage of their convictions, but if Mr. "Atwater" is going to take issue with an editorial, I challenge him to use data, not just invective.

Saturday, November 3
Scott Atwater

Folks, I'd just like to clear up a few issues raised by Mr. Helmberger (if that's his real name, or is there an overzealous intern at the Timberjay?). First, it would be a full time job refuting Mr. Helmbergers hopelessly slanted presentation of past and present economic conditions. He's collecting a paycheck to do so, while I'm not.

So let's take a look at the import/export historical data from 2018 to 1989:

https://www.census.gov/foreign-trade/balance/c0004.html

As you can see - we do have a historically large trade imbalance. We also see that this imbalance is slightly lower under Trump's 24 months in office as compared to Obama's eight years in office. More importantly, Obama had record setting deficits WHILE THE COUNTRY WAS IN A DEEP RECESSION!

Speaking of the recession, logical thinking dictates that yes, Obama did have an economic recovery, because after a crash of those proportions there's nowhere to go but up! The rate of Obama's so called recovery was painfully slow, and as I noted earlier, Trump did not continue that splendid Obama economic policy......he reversed it.....and we see those results today. In short, Obama did inherit a crashed economy, but the recovery happened in spite of Obama policy not because of it. Obama did not cut taxes for anyone, and increased regulations that hamstrung businesses during his entire presidency. Remember when Obama told us that we had better get used to $4 a gallon gasoline?

The budget deficit: As we all know, the executive branch submits a budget proposal, after that it's on congress to present a bill that the president can sign. Any newspaper editor with an ounce of intellectual honesty can tell you that the executive branch is at the mercy of congress when it comes to the federal deficit.

Interest rates: The Federal Reserve sets interest rates. The executive branch has no control over interest rates.

A few questions and observations: When have Democrats ever been concerned about deficit spending? Better yet, when have they ever been concerned over trade deficits? The answer is - only when they aren't in power. Certainly I must have missed Mr. Helmberger's strong editorials condemning the loss of US manufacturing and jobs under the Obama administration. I must also have missed his editorials on steel dumping and unfair trade practices that eventually idled the Taconite industry. I did however like his explanation on the Canadian owner's decision to close of a state of the art OSB mill at Cook Minnesota, while no such closings occurred in Canada during that time period...........oh wait..........I didn't see that in the Timberjay either.

I'll ask once again, If Obama's economic policy was so darned good..........why is it that Trump reversed it and the stock market is at record highs, unemployment is at record lows, and manufacturing jobs are gaining at a record pace after Obama said that they were gone forever and that we'd better get used to it?

In closing: I find it mildly amusing that several here are quite obsessed with my identity, and question one's courage and conviction because of the use of a screen name. Although, I guess it's ok for other members to do so if they agree with an editorial. Rest assured, seven minus four is three, and you can't intimidate or bully me....ever.

Sunday, November 4
bonfire

A JEC report in Oct, Families and Seniors Foot the Bill, shows the estimated $2 trillion cost of Bush and Trump era tax cuts through 2025 is the same amount that Republicans are proposing cutting from Social Security, Medicare, Medicare and ACA and average beneficiary of safety net programs would lose about $1,500 a year with proposed cuts. In MN beneficiaries number just over 2 million people/37.5% beneficiary share, households 1,143,600/50.1%. In MN district 08 beneficiaries number 303,900/45.8% share and 169,555 households/59.1% share.

People may quibble about the numbers but there's no doubt that the GOP tax cuts, permanent for corps /top 1%, which Republicans openly state will have to be paid for by deep cuts to our earned benefits and safety net programs, will be devastating for up to 130 million Americans, financially and healthwise.

I remember GW Bush 2005 proposal to privatize SS. A leaked memo from Bush's director of strategic initiatives Jan 2005 marked "not for attribution" stated "this will be one of the most important conservative undertakings of modern times" and "For the first time in six decades, the Social Security battle is one we can win". Bush went across the country speaking to senior citizens extolling how privatizing SS would be good for them. It's not surprising that seniors, no matter their political bent, were not impressed nor persuaded.

Polls show that finally this time around for huge GOP tax cuts, it's unpopular with majority of Americans. I don't know why it's taken so long for people to catch on that giving trillions of our money to corps and 1% doesn't "trickle down" to the rest of us, corporation tax breaks don't "create more jobs" and employees know that pay raises are worth a lot more to them than one time bonuses.

Mitch McConnell and GOP are blaming Social Security, Medicare, Medicaid, etc for the deficit. Brazen lying just as Republicans in office are claiming they want to protect ACA pre-existing conditions ban. Scott Walker's ads say he will protect the ACA rule while at the same time, WI is one of 20 states in a lawsuit to reverse it. Presumably if Walker was serious, as governor he has influence for WI to drop out of the suit. Only 14 Republicans running this year have not voted to kill ACA. The other Republicans running are flat out lying they care about people with pre-existing conditions and would protect them. At least 60 times Republicans have tried to kill ACA. In 2016, House GOP had a celebratory "pep rally" before a vote playing the Rocky theme as they arrived, Kevin McCarthy putting George Patton on screen reading Patton quotes. Members also heard "Taking Care of Business before a prayer (WWJD?) and reciting the Pledge of Allegiance. Rep. Martha McSally AZ stood up and told her colleagues to get this "effing thing" done. Appalling.

Pete Stauber says no cuts to SS and Medicare...Republicans won't do that...we will preserve and strengthen them...promises made, promises met (ala trump) but can't/won't say how. Weasel words. When federal budgets and drawing down the debt came up, he again didn't have any policy plans except he'd use a scalpel. When pressed where he'd cut, he named SNAP, food stamps! It couldn't be more clear that he would be the same old corrupt GOPer, rob from us to make the 1% fat cats even more wealthy.

I don't think current senior citizens on Medicare or collecting Social Security should be confident that their earned benefits will not be reduced in their lifetimes if Republicans keep the House. All bets are off for people not yet eligible. If some older people aren't worried about their own Social Security, Medicare and Medicaid earned benefits being cut, aren't they concerned about their families, their children and grandchildren having these safety nets to get through their 60's and beyond. I shake my head when Republicans talk about instituting work requirements for Medicaid recipients. Medicaid covers children and adults with disabilities and senior citizens in nursing homes who don't have financial means to pay for nursing home care. The percentage of people on Medicaid that can actually work and then find jobs that can support them has to be extremely small. I also don't want to see health insurance companies allowed again to deny adults and children coverage for pre-existing conditions. Americans went bankrupt when family members had medical issues that the companies would not cover and they could not afford very expensive plans that barely covered anything anyway. People died that wouldn't have if ACA had been available.

Sunday, November 4
Marshall Helmberger

One of the benefits of flushing out somebody like “Scott Atwater” is that in trying to respond, they only dig themselves a deeper hole. I’m not going to call Mr. “Atwater” a liar, even though he falsely represented virtually everything in his above comment, including the U.S. trade deficit in goods.

The data set that Mr. “Atwater” cited is the same one I used. My representation of the data, both in the editorial at issue and in my response to Mr. "Atwater," has been entirely accurate. Mr. "Atwater’s" representation of that data was false. Readers can certainly check the data for themselves. At least Mr. “Atwater’s” url is accurate.

But to make things easy, here is the data you would find:

US Trade deficit by year:

2006 (Bush) $827 billion

2007 (Bush) $808 billion

2008 (Bush) $816 billion

2009 (Obama) $503 billion

2010 (Obama) $635 billion

2011 (Obama) $725 billion

2012 (Obama) $730 billion

2013 (Obama) $689 billion

2014 (Obama) $734 billion

2015 Obama) $745 billion

2016 (Obama) $736 billion

2017 (Trump) $795 billion

2018 (Trump, thru 9/30/18) $641 billion

2018 (Trump est. year-end) $854 billion

Mr. “Atwater” is either misrepresenting facts or was confused about the information he was looking at. I suspect he failed to account for the fact that the 2018 data he cited only went thru Sept. 30. The trade deficit is averaging $71 billion per month in 2018 so far, and if we assume it continues at that level for the final three months of the year, the 2018 trade deficit in goods will hit a new all-time record of $854 billion.

To be safe, let’s assume it only hits $840 billion. Add the $795 billion from Trump’s first year in office and you have an average trade deficit through the first two years of $817 billion. Obama’s average over eight years was $687 billion. I told you Obama had a lower deficit than Trump. Mr. “Atwater” told you the opposite. Readers should judge who is credible and who is not.

We can argue about how to interpret the data, but if Mr. “Atwater” is going to misrepresent the data, or fails to understand what he’s looking at, then I’m going to call him out.

Mr. “Atwater” is correct that I collect a paycheck for the work I do, which is why I endeavor to do it very carefully to make sure the facts I cite are accurate. Mr. “Atwater” should bloody well make sure he’s got his facts straight before challenging mine.

And since I’m taking the time here, I might as well point out Mr. “Atwater” long list of other gross errors of basic economics. He makes an all-caps point of criticizing President Obama for high deficits in the midst of a deep recession. Had Mr. Atwater ever cracked an economics textbook, he would know that it is Standard Economics 101 to run large deficits during a recession, particularly in a financial collapse when liquidity is in danger. If “Atwater” isn’t aware of such basic economic principles, he has no business commenting on anything related to the subject. His comment simply exposes his lack of basic knowledge.

He also should brush up on history, since anyone who has studied financial collapses of the past knows that the economy had a lot further to drop had Obama not enacted the fiscal stimulus when he did. The last time we had such a collapse, (The Great Depression) the unemployment rate bottomed out at nearly 30 percent, not ten percent.

Mr. “Atwater” is also wrong about Obama tax cuts. In fact, tax cuts were a significant portion of the stimulus package. And the $4 a gallon gas that he refers to? That was under Bush, not Obama.

Mr. “Atwater” wonders why I didn’t editorialize against the loss of manufacturing and jobs under Obama. The reason is simple… the job loss never happened. There were 11 million new jobs created under Obama. Only on Fox News did the U.S. economy never recover.

As for why we didn’t editorialize about steel tariffs in 2015, in fact, we supported the tariffs against the illegal dumping that was threatening the industry. Here it is… http://www.timberjay.com/stories/united-taconite,12728? We reported on the Ainsworth closing as well.

So, at this point, I’m just calling Mr. Atwater out. He’s spent the past several months as a troll on our website, spewing invective and misinformation. So I’m taking a little time today to lay out the reality here… “Scott Atwater,” whoever he is, has absolutely no idea what he’s talking about. He spews falsehoods, either intentionally or out ignorance. And I’m going to pay a lot closer attention to his efforts in the future. We don’t operate a news site to leave our readers less-informed.

Sunday, November 4
Scott Atwater

Yes, much to my embarrassment, I did miss the the final three months of the 2018 chart.. The trade deficit figures suggest that our exports under Obama and Trump have remained relatively constant since 2012. Imports under Trump are trending up, which I will attribute to increased consumer confidence and demand. That being said, an increase in imports means that there is a greater demand for many goods are no longer produced here in the US. Isn't that really the root cause of our trade deficit?

Let's take a look at manufacturing jobs. During the first 21 months of the Trump administration 396,000 manufacturing jobs were created. That's more than 10 times the amount of manufacturing jobs created under the final 21 months of the Obama administration.

https://www.forbes.com/sites/chuckdevore/2018/10/16/the-trump-manufacturing-jobs-boom-10-times-obamas-over-21-months/#54bfb8cd5850

This is what I'm talking about when I say that Trump has reversed course on Obama economic policy, and the positive results are quite evident for working class Americans.

I take it that Mr. Helmberger is less than comfortable when his assertions are challenged. He was correct about the trade deficit in this case, but as I pointed out we really don't need to go that deep into the weeds to realize that one of the reasons for the deficit is the loss of American manufacturing.......and that's really what's important, at least to me.

Hillary said she'd put miners out of work, Obama said that manufacturing jobs were never coming back. That's one poor message for a political party in my opinion. Make sure to vote this election day.

Sunday, November 4
Marshall Helmberger

Mr. "Atwater" isn't going to catch me defending Hillary Clinton. I've long critiqued both of the Clintons for converting the Democrats from the party of workers to the party of Wall Street. I was a Bernie guy. And I'm not one of those free traders, but I recognize the issue is not as simple as some would like to make out. As for my past commentaries or editorials on the subject of manufacturing and the Democrats, Mr. "Atwater" might want to familiarize himself with these...

http://timberjay.com/stories/sanders-may-be-countrys-best-hope-for-real-change,12464?

http://timberjay.com/stories/breaking-trust,12398?

He also should be aware that manufacturing jobs did actually increase under Obama, and not always at a poor clip. Mr. "Atwater is correct that the economy added 196,000 manufacturing jobs in 2017, which is a decent clip. But the economy added more than 200,000 manufacturing jobs in 2011 and 2014. The difference is that Trump trumpets every tidbit of good news like it's evidence of the second coming, whereas Obama was much more matter-of-fact about the good numbers. Everything wasn't about praising himself, which is all Trump does.

Monday, November 5
bonfire

Our revenue shortfalls are the result of Republican tax cuts. Barry Ritholtz says spending did grow 3.2% but revenue just rose 0.4%. Stan Collender says this red ink (forecast of more than $1 trillion in 20019) is remarkable given our growing economy. "Normally the budget deficit would be shrinking when the economy is expanding".

Ritholtz calls it the "Kansasification of America". Kansas Gov Sam Brownback's "real-live experiment" tax-reform plan that would "pay for itself" in economic growth passed in 2012 and mirrored many of the elements in the GOP tax cut bill, predominately sharp cuts to business income taxes. Instead of boosting the economy, in just a few years Kansas instead had sluggish growth, brutal cuts to services, state highway fund, education, pretty much every government service citizens rely on plus Brownback declined to expand Medicare. All services were raided to pay for the massive budget shortfalls. By 2016, no state performed worse than Kansas which had been on a par with similar states before 2012. Things got so bad that Kansas decided to just stop updating the public about state economic news. (Maybe they should have just lied about it like our president does..seems to work for him). Kansas legislators (bipartisan) voted last year to reverse tax cuts but it will take years for the state to recover. Some Kansas legislators are concerned Congress is making the same mistakes. Secretary Steven Mnuchin's said in Sept. "Not only will this tax plan pay for itself but it will pay down debt" and Republican Kansas state Senator Barbara Bollier warned, "That won't work so you better learn our lesson. You can't just cut taxes. You've got to have pay-fors. I can only say: Look at Kansas".

I don't think we have to guess what the pay-fors are going to be to subsideze the GOP tax cuts.

Monday, November 5
Mr. Atwater

Opening statement of the editorial - "Midterm elections are, by nature, a referendum on the president, and that will certainly be true this coming Tuesday."

Wednesday, November 7
jtormoen

Indeed showed much weakness for the "me" generation

Sunday, November 11