The May jobs numbers were good last week – so swell, in fact, that our putative president couldn’t resist hinting about them in an early morning tweet Friday morning, a major breach of confidentiality and protocol that instantly affected Treasury yields – basically, the interest rate at which the government borrows money.
Trump’s jumping the gun triggered speculation as to whether he might be sharing good – or bad – economic news with his financier buddies before it becomes official, a potentially catastrophic and criminal breach of insider trading laws. Remember that eighties movie “Trading Places” with Eddie Murphy and Dan Ackroyd? Profiting from secret government economic info before it was officially released – that was the felony that helped fuel the plot.
This is all speculation, of course, but we do know that the president receives the employment numbers the night before they’re released, that he has been known to leak classified information when it suits him, and that Trump insists on holding onto an unsecured cell phone – demonstrating, Politico recently reported, “reluctance to submit to White House security protocols that would limit his ability to tweet or contact friends freely…”
With any of his modern predecessors, you’d dismiss such notions of impetuous and potentially illegal behavior as crazy and unlikely but frankly, who would put it past this guy? As Brian Beutler writes at the website Crooked.com, “Trump’s jobs report tweet isn’t necessarily evidence of specific acts of corruption, but a reminder that in his administration, corruption is elemental.” (In a separate article, Politico claimed on Monday that former National Economic Council Director Gary Cohn used to withhold the numbers from Trump to prevent precisely what happened on Friday.)
In any case, as noted, the numbers were very good: unemployment fell to 3.8 percent with a net increase of 223,000 jobs, the 92ndstraight month of job improvement but with an increase in the number of people no longer in the work force and modest wage growth. What’s more, the months of steady job growth actually stretch back to the first Obama term and as John Harwood at CNBC notes, while the average monthly growth for the first sixteen months of the Trump administration has been 185,000 jobs, during the last 16 months of the Obama White House it was 215,000.
Perhaps more to the point, ABC chief political analyst Matthew Dowd tweets, “Let's keep in mind that every other President who had unemployment under 4% had a job approval in the 60s. Donald Trump's approval numbers are 20 points below the norm. Shows what Americans think of his leadership.”
In other words, the lying, the hatred, the bumbling, bullying and overall graft and grist slowly may be taking their toll. But let’s also take into consideration the economic damage Trump is wreaking despite the jobs numbers. For that, you already can thank the tax cuts – especially the slashing of corporate tax rates -- that he touts as a highlight of his term thus far, and the damage from an unthinking trade policy that as the months go by will more and more reveal itself as the incoherent blunder it is. There are two sets of books; one totally clear-eyed and one with just the numbers Trump crows about (and remember how he used to scream that Obama’s positive jobs numbers were fake?).
House Speaker Paul Ryan bragged that the tax cuts would result in “more jobs, fairer taxes and bigger paychecks.” He claimed, "This is going to make such a positive difference in the lives of everyday working Americans, from all walks of life." But here’s what Florida’s Republican Senator Marco Rubio – yep, the Rubio who voted for the $1.5 trillion worth of cuts – said to The Economist a few weeks ago: “There is still a lot of thinking on the right that if big corporations are happy, they’re going to take the money they’re saving and reinvest it in American workers. In fact they bought back shares, a few gave out bonuses; there’s no evidence whatsoever that the money’s been massively poured back into the American worker.”
In addition to the buybacks, companies are paying stockholders higher dividends, and in the first quarter, merger and acquisition deals were being negotiated at almost twice the number they were a year ago. In fact, corporate America is “awash in cash,” according to Jeff Cox at CNBC– trillions of it -- but the money from the cuts isn’t going for capital spending and it’s not going to employees. Even The Wall Street Journal was demurely startled: “Given how much money the corporate tax cut is providing companies, and how much money is being repatriated from overseas as a result of the tax law’s provisions, this is something of a surprise.”
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Look at Harley-Davidson, the motorcycle giant Donald Trump praised for “building things in America.” Paul Ryan said the tax cuts would put "American companies like Harley-Davidson on a much better footing to compete in the global economy and keep jobs in America." Instead, Harley-Davidson “wants to take the money and run,” Don Wiener reports for the Center for Media and Democracy. “Harley-Davidson announced the following in quick succession in February: the closure of its Kansas City factory, a dividend increase, and a $696 million stock repurchase plan.” The buyback, Wiener adds, “doesn’t build anything; it concentrates ownership and dividends in the hands of large investors and boosts the value of CEO stock options, making the problem of extreme inequality of wealth in America worse.”
Trump’s tariff plans aren’t helping the Harley-Davidson workers either. The steel tariff could add $30 million to its costs, according to the investment firm Wedbush Securities and the European Union just announced that starting in July it will impose retaliatory “rebalancing” tariffs of its own on products from the United States, including motorcycles.
When it comes to trade, there’s much to be said for withdrawing from such pacts as NAFTA and the Trans-Pacific Partnership – and in the past, colleague Bill Moyers and I have said it -- but the sum total of Trump’s trade policy, such as it is, ranks as so ill-informed, fickle and inchoate that the only result can be recrimination and chaos.
John Harwood cites Mark Zandi, an independent economist at Moody’s Analytics, who estimates, “the net effects of trade conflicts Trump has initiated at 0.2 percent in reduced economic growth, 250,000 in lost jobs, and $210 in higher costs for an average family. Such a reduction in growth would wipe out half the projected boost in growth from the tax cuts Trump and the GOP Congress enacted last December.” And Tom Donahue, CEO of the US Chamber of Commerce, the enormous, hyper pro-business lobby, said it could be even worse: Trump’s trade war might affect as many as 2.6 million jobs. Consider the source and always take what Donahue says with an enormous block of salt but still…
All of this thanks to Trump and a non-free market interventionist attitude that would seem to fly in the face of conservative tradition but nonetheless plays well so far to a Wall Street giddy with profits and the full-throated return of a capitalism unchained attitude that has exponentially expanded the anti-union, anti-worker attitude of big business. At a recent conference at the Dallas Fed, the moderator asked whether there would be across-the-board wage gains anytime soon. “It’s just not going to happen,” one of the corporate executives replied. “Absolutely not in my business.”
Perhaps the best and most perfect revenge against Trump and his fat cat pals (besides capture, trial and imprisonment) would be as suggested a couple of weeks ago by the Democratic congressional leadership: take back the tax cut for the top one percent and turn it over “to increase teacher compensation and recruit and retain a strong, diverse workforce.”
Of course that’s not going to happen while this particular mobster and this particular Congress hold power, especially when our chiseler-in-chief is running around falsely bragging, “We’re setting records like we’ve never seen before!”
But one can dream. Contrary to the belief system of this current kleptocracy, what the business of America should be is not business (especially not any of the Trump family’s rackets) but a commitment to full and fair employment, to families having roofs over their heads, to clean water and air, healthy food, and social justice. Then those jobs numbers might really mean something.