So Far, There’s No Sign Of A ‘Trump Bump’ In The Economy
So far, there's no sign that Donald Trump is having much of an impact on the economy.
If you listened to the rhetoric coming from Donald Trump from the time he got into the race for President back in 2015 until the time he was elected, putting him in the Oval Office would be the key to restoring America from its allegedly declining economic state to the booming economy we all remember from the 1980s under President Reagan and the 1990s under President Clinton. When he entered the race, he made the claim that the country was in “terrible” economic shape and claimed that “the American dream is dead” in what remains the most bizarre campaign announcements in American history. It was an odd statement to make both because one usually expects American politicians to be positive and optimistic rather than dwelling on the negative. Even in the depths of the Great Depression and on the eve of a far-reaching war, for example, Franklin Roosevelt maintained a positive attitude that defined much of his Presidency. When he was campaigning for President in 1979 and 1980, Ronald Reagan still spoke of America as a ‘shining city on a hill,’ and optimistically looked toward a better future. Trump, on the other hand, campaigned largely on gloom, doom, and fear of the ‘other,’ whether that other was an immigrant from Mexico or a neighbor that happened to be Muslim. Notwithstanding the fact that the economy had been growing, albeit slowly, since 2009 and that unemployment was, slowly but surely, returning to the “full employment” levels we saw prior to the beginning of the Great Recession. In Donald Trump’s world, though, all was gloom and doom and only electing him would
In Donald Trump’s world, though, all was gloom and doom and only electing him would lead to a new era of prosperity. Not only would he bring back jobs that had gone overseas years ago, but he would bring about an economic boom unlike anything we’ve seen since the 1980s. At least initially, it seemed as though Wall Street agreed as stock prices went on an upward march starting on the day after the election that has only recently seemed to cool down. Now that we’re more than two months into Trump’s Presidency, though, there’s little sign that the economy is going to behave any differently than it did under President Obama:
Consumers are more confident. Stocks are up 5 percent since the start of the year. And from the president on down, there’s talk of a Trump bump.
The only problem: The boom is apparent everywhere except in the economic data.
It’s not that the economy is stalling — far from it. But with the first quarter ending Friday, growth in the first three months of the Trump administration is looking much the way it did under President Barack Obama.
In fact, experts see the gross domestic product in the quarter coming in at only about 1 percent, on an annualized basis — less than half the pace in the second half of 2016, and a far cry from President Trump’s own 4 percent target.
“There is a temporal disconnect,” said Ellen Zentner, chief United States economist at Morgan Stanley. “There has been an incredible rise in sentiment, but the proof is in the pudding later.”
Ms. Zentner expects growth of 1 percent this quarter, and considers recent data “solid,” but added that the big gap between expectations and reality “creates discomfort for economists and monetary policy makers.”
“The divergence is stunning,” she added, drawing a distinction between “soft data” like consumer confidence and “hard data” like retail sales.
The pattern continued this week, when the Conference Board reported on Tuesday that its index of consumer confidence in March rose to its highest since December 2000. More hard data is expected Friday, when the Commerce Department releases new figures on personal income and spending in February.
Wall Street, which surged in the months after Mr. Trump’s unexpected victory on hopes of tax cuts and deregulation, is coming to grips with the fact that at least in the short term, the outlook remains restrained. The Dow Jones industrial average has dropped on nine out of the last 10 trading days, the longest stretch of losses since 2011, albeit for a total decline of only 1.4 percent.
One quarter is only a snapshot, and official government data on the gross domestic product for the period will not be out for another month. What is more, the American economy is expected to pick up some speed later in the year, especially if the White House and Congress can agree on a package of promised tax cuts and new infrastructure spending.
The Federal Reserve raised interest rates this month and signaled two more rate increases later this year, indicating that the central bank is also in the faster-growth-around-the-corner camp.
Still, for all of 2017, the economy is expected to expand by roughly 2 percent, the rate of the recovery under Mr. Obama. The identical figures illustrate how much easier it is for a president to lift economic spirits, as opposed to actual growth rates.
If tax reform and other legislation in Washington suffer the same fate as the bid to roll back Mr. Obama’s health care overhaul did last week, Ms. Zentner said, the Trump bump “could be built like a house of cards that comes crumbling down.”
Part of the problem is that despite Mr. Trump’s Oval Office sessions with chief executives and the return of what the economist John Maynard Keynes termed “animal spirits,” corporate America is not investing heavily, at least so far, in new plants and equipment.
At the same time, demand in many industries is growing only modestly, while a few sectors like retail chains are having to make painful adaptations to a rapidly evolving consumer landscape.
(…)
There is still a chance that first-quarter growth could surprise the doubters. Although the widely followed GDPNow model of the Federal Reserve Bank of Atlanta calls for a 1 percent expansion rate in the first quarter, the New York Fed’s Nowcasting Report is looking at 3 percent growth.
“The difference is larger than usual and is being driven by the fact that the New York Fed incorporates soft data into its tracking,” said Ms. Zentner of Morgan Stanley.
The government’s estimate of gross domestic product is based on specific data points for economic factors like monthly retail sales, inventories, trade and other hard data, which also count more heavily in the Atlanta Fed’s model.
Whoever is right, most longer-term forecasts estimate growth for all of this year and 2018 to be in a range of 2 to 2.5 percent — again, largely in line with the pattern of the last eight years.
To be fair, it has only been two months since Trump has become President and the Administration has yet to even introduce any of its proposals regarding tax reform, spending, and other economic issues. At the same time, though, what the hard data does show us even in the minimal amount we have so far for the beginning of the Trump Presidency is that it’s far more likely that we’ll continue along the same economic path that we’ve been on since the Great Recession ended in 2009 than it is that we’ll see the kind of economic growth that Trump and many of his surrogates claim would result from his policies. Part of the reason for this is that we live in a country that is already fairly highly developed and it’s generally the case that such economies don’t see the kind of economic booms that emergent economies in places such as China are seeing. In fact, if we were seeing that kind of economic growth it would likely be a sign that the economy was becoming overheated and that we’re headed for another inflationary spiral that would do considerable harm to consumers and businesses alike. Additionally, the current economic recovery has gone on quite a long time and created patterns of it’s own. If we were going to see massive economic growth, it would have come at the beginning of the recovery, as we saw strong growth in the early 80s after the economy recovery from the “stagflation” that was the reality for much of the 1970s.
Time will tell what kind of economy we end up with after four or eight years or President Trump. Right now, though, it looks like it will be more of the same, which makes me wonder how Trump will explain that.
Slightly OT, but it made me laugh. When Trump finished delivering his inaugural address, three people apparently overheard George W. Bush remark: “That was some weird sh!t.”
Trump will probably explain it by saying, “you know, when you look at what happened in 2008 and 2009, Obama did a damned good job with the economy, who knew?”
I don’t present myself as an investment advisor in any way shape or form, but I think one of my general rules in life applies in this case: never bet on incompetency. The Republicans are monumentally unprepared to actually govern, and in fact have been increasingly contemptuous of those that accept reality since the election of Ronald Reagan. And with the leader of the Republican Party being Donald Trump, well, the idea that they are not going to completely screw up the economy is a long, long shot.
Yes, he’s only been in office two months. The economy is like a big oil tanker. It can’t turn quickly. It’ll take years for Trump and the Rs to completely screw it up.
@al-Alameda:
“Trump will probably explain it by saying, “you know, when you look at what happened in 2008 and 2009, Obama did a damned good job with the economy, who knew?””
No, that will never happen, any more than Republicans give Clinton (or Bush the Elder) any credit for the economy of the 1990’s. Tax cuts for the rich cannot fail, they can only be failed.
@Moosebreath:
Trump never gives credit to anyone else. He is more than happy, however, to assign blame for all of his multitudinous screw-ups.
And what happens when all those would-be coal miners realize that no, their jobs aren’t coming back?
@grumpy realist:
The cynic in me assumes they still won’t regret their vote. They know their jobs weren’t coming back under Clinton either, and voting for Trump let them stick their finger in the eye of all the people they didn’t like.
P.S. considering that even the Vatican is coming out against Trump’s stance on climate change, (as well as pointing out that this just simply puts China in the driving seat), Trump may discover he doesn’t have as much power as he thinks he does.
What I’m desperately hoping for is another “Sputnik”, carried out by China, which serves to put the fear of losing technological supremacy into the Republican party. Otherwise, I guess it’s hello, learn Chinese.
@MarkedMan:
That’s it in a nutshell. Voting for Trump was a chance to say “f*ck you” and hold up a stiff middle finger to the people they mockingly refer to as “our betters” and “our lords and masters.”
@CSK: Someone who grew up in Appalachia said the problem is that in that culture, anyone above them economically is considered an “elite” and not to be listened to, while anyone below them economically is considered a “lazy SOB” and to be despised.
No wonder believers of such a mindset don’t get anywhere. They can’t work with anyone except their own in-group.
Trump seems to be really really miffed at the Freedom Caucus.
Republican civil war, coming up. Gee, governing when you’re in power is a little harder than when you’re in the minority and don’t have to actually accomplish anything, isn’t it?
Snicker.
This is pretty much how I feel about this entire administration.
Until there are actual laws passed and policies enacted, it’s awfully difficult to pin economic changes on an administration. However, if things keep going they way they are in DC–with Republicans fighting among themselves and little getting done–regardless of laws and policies, there will be economic repercussions.
Starting with increasing the debt ceiling. I have a strong sense that if that goes down to the wire Wall Street will react.
@grumpy realist: I lived in Appalachia for a while, and later the Missouri Ozarks. Your comment is spot-on.
@Jen:
Wall Street is dominated by blustery male loudmouths with inflated opinions of their own wonderfulness, so they love Trump. He’s one of them. And they expect a big tax cut. They’ll stick with him until he starts costing them serious money.
To be fair, Trump just got started.
He’ll need more time to screw things up. And I’m confident that he’ll find the time.
Trump may be miffed at the Tea Party / Freedom Caucus nut jobs, but I think even they are beginning to realize he is irrelevant. Those in Congress have seen Trump doesn’t have the attention span or the intellectual heft to really be for or against something in the way governance works. Sure, he says something, but tomorrow he might say something different, and even if he takes a few hours off of his vacations and golfing to promote something, he will be totally ineffectual. And if you tie yourself to him,like Lil’ Pauly Ryan tried to do, he’ll take all the credit if something goes right (or if in his feeble little mind he perceives it has gone right ala all the FC members he met with and changed their minds, 100%) but will turn on you viciously if trouble hits. So maybe the fear of the great orange clown going after them personally isn’t the cataclysm they thought it was a few months ago.
@grumpy realist:
They’ve sat there for 30 years watching jobs go away and lacked the energy or courage or determination to get GTFO and follow the jobs. They’ve seen that the jobs they used to have are now automated, but they actually believe that jobs will come flooding back in because they elected a reality show star.
There is no cure for stupid. And let’s not mince words. These people are stupid. Stupid, lazy and self-pitying. Too racist to make common cause with minorities. Too insular to make common cause with immigrants. Too sexist to make common cause with working women. They bet all their chips on a man who is quite literally incapable of empathy, a user, a thief, a traitor, a buffoon, a conman, a fraud. But a white, male who angers people smarter than Trump voters.
They voted race and gender and spite. And what they will get for their vote is nothing.
Donald Trump, the first Presidential candidate in U.S. History to promise a better economy if he gets elected.
Crazy!
None of which will help anyone but the already wealthy & the Military-Industrial-Congressional complex, while screwing people who actually work for a living.
@Gavrilo: It’s not the promising of the bettering of the economy; it’s the wildly unrealistic numbers that we’re laughing at.
And you claim yourself a businessman.
If Trump were a SEC filing, there’d already be a class-action suit against the company for fraud.
@grumpy realist:
We may be getting it.
I’ve seen recent claims (sorry, no sources to hand) that we are right on the brink of the point where generating power using solar is cheaper than using coal, once the externalities are priced in. Obama wanted the US to be driving that bus, but the GOP traded it in for a used Hummer then drove it off a cliff.
My god, I just down voted Reynolds, who I usually agree with and up voted Gavrillo who I never agree with. Cold day in hell, I guess. Reynolds because I think he paints all Trump voters with the same brush, which I don’t think is either accurate or useful (sorry, Michael) and Gavrillo because, well, his observation struck me as valid.
The answer to this riddle seems obvious to me: partisanship affects public life more than ever before, especially on the GOP side of the hill, so we can’t expect consumer sentiment and other soft indicators not to be influenced by it. In other words- one can SAY things are going better and still behave as one did in the Obama years.
The fact is, is that we are overdue for a recession. Stock market is up due to the promise of stimulus from more deficit spending which is only popular when Republicans are in charge. Tax cuts are on the table for the wealthy. When the economy heads south, guess what, tax cuts will also be on the table to stimulate the economy.
I think we will have a recession (probably mild) next year sometime. No rigorous economic analysis, just gut feeling. The fun part is how Trump will react (shifting blame, probably) and how the electorate will react.
@MarkedMan:
Well, you are off my Christmas card list. (Granted, I don’t actually send Christmas cards. . .)
You are right that there are different subspecies of Trump voters, (as with Hillary voters). I’m referring specifically to the rust-belt, coal-belt voters. In a rational world those people would see that Obamacare was designed to help them, and did in fact help them. In a rational world they would see that they share much more with minority voters than they do with Trump.
There also dyed-in-the-wool Republicans incapable of prioritizing anything over partisanship. There are the more-for-me establishment Republicans, the bankers and billionaires. There are the Trump-curious voters who thought, “what the hell, let’s try this.” There are the alt-right Nazis craving a fourth reich. There are the single-issue anti-abortion evangelical voters.
Of those groups I no longer think we can get anything from the rust-belt, coal-country voters but a relapse into sullen non-voting. We have a shot at weakening the loyalists, and the money-Republicans, over time. But the jackpot of persuadables are the Trump-curious, maybe 10% of his voters. We need to cut them out of the herd and ease them into our paddock, and we do that in part by driving a wedge between the hopelessly stupid and the merely reckless.
@MarkedMan:
I am absolutely not one to time the market, but last week when I rebalanced to capture recent stock market gains and get back in line with my desired allocation, this thought certainly occurred to me.
@michael reynolds:
You mean those people who are willing to go anywhere and do anything to support their families? Clearly they have nothing in common with those folks.
@Tony W: Since the election I’ve moved 2/3 of everything into cash or Inflation indexed government bonds
@michael reynolds: Why should people have to sacrifice community and heritage to find work? This notion we should be a nation of rootless wanderers hustling for a paycheck is rather strange.
To put it simply, I know a great many people who voted for Trump who aren’t racists, aren’t sexists and aren’t stupid. Some of voted for him for rather complex reasons. Others voted to shock the system because no one among the elite listens to them or cares about their problems. People who act and speak and think differently matter much as anyone else.
I see a pattern since the election where liberal x tells a flyover person they’re wrong and when that person doesn’t immediately agree, liberal x throws up her hands and declares them lazy losers who suck. That ain’t how it works.
@DrDaveT:
China’s investing in solar like crazy, because their government isn’t owned by oil interests.
@Ben Wolf:
No, you don’t. If they voted for Trump, they qualify as stupid. Period.
@Tony W: That is:
1) Judgmental
2) Illogical. “You’re stupid because I say you’re stupid” is not a coherent argument. It’s sentimental nonsense.
@Ben Wolf:
They do, of course, also have the option of remaining in their dying burgs waiting for the last gas station to close. The choice is theirs.
@Mr. Bluster:
You should do some better research. I said way worse stuff about Trump last year.
@Ben Wolf:
What nonsense. The only reason we have a country is because people came here looking for a better life. It’s absurd to talk about a nation of immigrants while pretending that we can magically deliver good jobs to every little village. Does every town get it’s own factory? That’s ridiculous. If the mountain won’t come to Mohammed. . .
If these people don’t want to move for work, guess what, there are a whole bunch of other people who will. They come all the way from Honduras and cross the Mojave desert to work, but I’m supposed to feel sorry for some guy who sits in Nowhereville whining about an industry that’s been dying for 30 years? I’ve moved many times in my life, looking for work. I moved to Ocean City, Maryland and Sarasota, Florida to wait tables and Cape Cod, Massachusetts to clean homes, among other examples. I would be ashamed to let my family go without because I couldn’t be bothered to pack up and go where necessity drove me.
@Ben Wolf: I’m sure the Irish during the Potato Famine were saying the same thing: “why should I forsake heritage and community to find work?” Ditto for people during the Dust Bowl. Ditto for everyone else throughout history stuck in an unenviable location.
Fat lot of good that did them….
And here I need to quote that notorious bit from the National Review:
P.S. Not that I completely agree with Kevin Williamson, but it does seem a little over-the-top to remain in a town with little or no economy and then whine about your job situation.
@Ben Wolf:
It is odd that someone who resides in a nation that was founded on immigration, homesteading and waves of westward migration would possibly believe what you just said.
@michael reynolds: @grumpy realist: @HarvardLaw92: @Pch101:
Just out of curiosity, does the same advice apply to the people in Detroit, Baltimore, Camden, And Gary, or is it only whites in Appalachia who are supposed to pick up an move for lack of jobs?
@Gavrilo:
In that same vein: Have you ever been laid off or found yourself unemployed for an extended period of time?
Well, I have. I’ve been in finance management for many years and when the 2008-09 economic crash unfolded, my (then) position – which was funded by a combination of 7 contracts (aka ‘soft money’) – was phased down over the course of 12 months from 100% to 40% then 0%. I was out of work for 9 months, and it became stressful.
My unpaid job for the next 40 weeks was looking for my next opportunity. I had to rethink what aspect of finance management and in what area (healthcare, traditional NPOs, support to underwriting companies, universities, etc) did I want to land? I focused on healthcare and eventually I landed a very good position. I was fortunate to have most of the skills necessary to hit the ground running, however I did have to acquire new knowledge in order to make myself more relevant to prospective employers.
None of that experience was easy. Frankly, I was not so very far from very serious consideration of selling or renting my house and moving to another area.
I had no time to complain about how unfair all of this was, or which political party did me wrong, or how people did not care about people like me.
@Gavrilo: Funny thing about that, back when the white working class was living high on the hog and it was only inner-city blacks who were poor, we heard a lot of “why don’t they just move?”
The big difference, of course, is when it was blacks it was their fault, but whites get a bunch of excuses made. Coal’s dead, the immigrants took all the jerbs, the Rust Belt got too rusty, whatthefuckever. Anything to avoid taking actual responsibility for oneself.
Now that whites are finding themselves in the position they’ve always put blacks, stuff like dying towns and drug addiction is suddenly a BFD? Puh-leeeze. Black Americans have been dealing with that for decades and people like you couldn’t have cared any less. Bugger off.
No Trump bump? Outside of a major policy initiative one wouldn’t expect anything for at least 6 months or so. An economy doesn’t turn on a dime.
And as for a politician engaging in hyperbole…………………well blow me over.
Can a mod please release my previous comment from purgatory?
@Gavrilo:
If you can’t figure out the difference between Appalachia and Detroit, then your analytical skills are more lacking than I had thought.
Some places have potential for being turned around, others don’t.
Doug are you serious? No bump in the economy. The Dow Jones is up over 2,000 since last election day. That is over 10%! In under 5 months.
http://money.cnn.com/2016/11/09/investing/dow-jones-trump-wins-election/
I don’t like Trump much either but can’t deny the obvious and I’m seriously surprised no one at this post hasn’t pointed it out already.
Get real from your former colleague at OTB Sports.
@Gavrilo:
The issue for those trapped in poverty in places like Detroit and Baltimore isn’t lack of opportunity and available jobs, but the lack of the skills needed to take advantage of the opportunities available.
@Bill:
It’s up 1,000 points since trump became president. That’s 5%. ‘course, the DJIA went up over 140% under obama, so let’s see if trump can sustain it.
which, since trump will be lucky to even get 4 years, it’ll be hard to compare.
@Gavrilo: I suggest you take a look at the size of the cities you mentioned: Detroit (688,701). Baltimore (662,104). Camden(76,903). Gary (78,450). They’re all big enough to be self-sustaining. It’s much harder when you are in a small city of 100 or less inhabitants.
Basically, smaller cities which aren’t within a reasonable distance of a larger urban area are evaporating population. That is going on all over the US and probably isn’t going to stop until we have Peak Oil and everyone goes back to getting around by horse.
It’s possible for Rust Belt cities to remake themselves–Pittsburgh for instance has done an extremely good job of it–but it requires thought, a node of higher education (a bunch of research universities are good), and a willingness to totally remake yourself. Pittsburgh didn’t get where it is by whining about how all the steel jobs had vanished and it wasn’t FAIR and why didn’t someone RESCUE them, etc. etc. and so forth.
@Ben Wolf:
This is an idiotic statement. This country was built on people moving around hustling for a paycheck. It’s practically the national pastime.
Anecdote ahead:
I’m in Film/TV Production. In 2007, when the incentives boom started,, I quickly realized that I could make a whole lot of money working away from Los Angeles, despite my entire life being in L.A. So I started what I’m doing to this day: going where the jobs are offered. Many of my co-workers and competitors refused to do so. You know what has happened? I thrived. They didn’t. And now, they can’t catch up, because those areas have created their own crews.
Last 10 years, i’ve worked in S. Florida (four years on a two TV Series), Louisiana (two feature films), Georgia (1 Feature film, 3 TV Pilots, and 4 TV series), Texas (two TV series). Shows I’ve worked on have been nominated (and won) Emmy Awards. Meanwhile, some very talented people can’t find work in Los Angeles, because they refuse to go to Atlanta, Kentucky, Austin, Miami, New Orleans, Pittsburgh, among other places. You know what they do? They blame those people in those cities for “taking their jobs”. No. They refused to go, so other people chose to go. No one took their jobs. Those jobs were never “their” jobs.
Coal ain’t coming back. Ever.
Manufacturing ain’t coming back. Ever.
Eventually, computers will take over filmmaking. When that day comes, I’ll see what field is growing and transition into that.
If I was a healthy person looking for work, I’d get my ass some medical and/or dentail assistant training. Hospitals and Doctors can’t find enough nurses. Will you get rich? No. Will you make a good living? Heck yes.
If your job disappears and you decide to do nothing about it, it’s on you.
yeah bank and wall street stocks, and private prison stocks, have gone way up since trump became president.
This is not good news, and doesn’t mean “the economy” is better. It mean people think wall street and private prisons are going to make a killing under trump. This is bad news, not good news.
Goldman Sachs is up 27% since the election. This is not because “the economy” is doing great. It’s because people expect Wall Street is going to make a fortune doing risky shit after deregulation thanks to former goldmanites Bannon, Mnuchin, Cohn, Clayton….
Doug is right, and you are wrong as usual.
@Bill: If you are arguing that the stock market has experienced a Trump Bump, that is one thing.
That is not the same thing as saying the *economy* has. There are clearly fundamentals that indicate either flat or modest growth. The stock market can reflect confidence in those fundamentals. It can also at times ignore them. Stock bubbles happen when the market isn’t paying attention to what is happening on the ground. They burst when everyone realizes this.
@EddieInPHL (Only Today):
No. Americans largely stayed where there families and communities were until the 20th Century. Nothing in your anecdote addresses why Americans should be expected to abandon community to obtain money created by the public sector.
@al-Alameda: If all 62 million Trump voters (whom we’re told are all lazy, useless and ought to be recycled) “got the skill” like you did, how many of them could be absorbed by your industry? How many could find positions as lawyers and silicon valley programmers and Democratic Party fundraisers and consultants? Those industries couldn’t even accomodate a tenth of their number, so the meritocratic argument is almost entirely bogus. We’d have 60 million highly skilled unemployed people who would continue being told they have no value.
It’s just more victim blaming.
@Ben Wolf:
Honestly, it’s just more self-pity. I have compassion for people who make every effort to improve their own situation – and if that involves seeing the writing on the wall: that their towns are dying, have been dying for decades, and likely aren’t going to survive, so they need to make some hard choices about what they want their lives to be like – then so be it. Those are the people I will try to help.
I tend to have little, if any, compassion for people who sit around blaming everybody but themselves for failing to take any sort of action to change their circumstances.
Frankly, if the only response to economic challenge one can muster is to sit around wallowing in self-pity, blaming everybody but themselves & loading up on heroin, then that’s Darwin at work. If they want help, they can start by trying to help themselves.
@Ben Wolf:
Yea, that’s the nature of agrarian societies – you stay where you are because that’s where the farm is. Agrarian societies are geographically constrained.
Industrialized societies – not so much. Know what those former farmers did in the South when enterprising individuals started opening textile mills & offering them an alternative? They moved to where the mills were.
Are you honestly arguing that we should be pursuing deindustrialization?
@Gavrilo:
Of course it apples to black people, why wouldn’t it?
@HarvardLaw92:
1) We’ve already de-industrialized.
2) The U S. isn’t the sole country in the world that industrialized. I’m sure you can figure out where that’s going.
3) Increasing atomization of society and community have been more a problem of post-industrialization. We used to have industry that meant you didn’t have to leave home to find a good job, but financiers weren’t making enough money so we chose to do away with that.
@HarvardLaw92:
Your understanding of compassion vs. pity is exactly backward, indicating you lack experience with the terms.
Why not just admit you want someone to view as beneath you?
Could Phil Ochs have been right?
“Ten degrees to the left of center when times are good, ten degrees to the right when it affects them personally.”
https://m.youtube.com/watch?v=u52Oz-54VYw
@Ben Wolf:
This romanticized version of American history would benefit from a reality check.
@Ben Wolf:
Your argument is based on a misunderstanding of history.
My ancestors came to this continent in the 17th century. They landed in Massachusetts, Virginia, Maryland. Over the next 350 years, they moved relentlessly — the ones in the north to Rhode Island, Connecticut, Pennsylvania, Kentucky, Ohio, Indiana, Illinois. The ones in the south to North Carolina, South Carolina, Tennessee, Kentucky, Illinois. The ones in the mid-Atlantic to West Virginia, Kentucky, Missouri, Illinois. Even within those states, it was constant motion, from town to town and county to county.
NONE of them laid down long-standing roots in one place, until the 20th century when we all got affluent and lazy. Only newbies think that’s normal.
@HarvardLaw92:
Not even. The eldest son stays, because he inherits the farm. The other 4 brothers and 5 sisters move away, to find an opportunity somewhere else. That might be down the road, or in the next county, or a long way away. If there’s a frontier, they move there for the free land. If there isn’t, they become laborers somewhere and hope to work up to a trade, or maybe their kids.
The family farm persists in one place, but the family disperses.
@Ben Wolf:
Have we? Manufacturing constitutes over $6 trillion of gross output in the US (the largest sector of the US economy, in fact, by far), with over $2 trillion of value added (coincidentally equal to that of Germany, Japan and South Korea combined). We’ve hardly deindustrialized.
Yea, we used to have buggy whips too. When did you become such a Luddite?
No, no, dear. I have compassion for those who don’t wallow in self-pity.
Sure, just as soon as you admit that you’re incapable of viewing anyone who doesn’t share your paternalistic view of these people with contempt. I want to actually help them, which unfortunately entails being honest with them. You want to give them some sort of patronizing hug & tell them it’ll all be alright. Which one of us truly has their best interests in focus?
It won’t be alright for them, ever again, unless they see the light and take action to change their own reality. Cold. Hard. Truth.
A few things for Ben Wolf ought to learn about:
-The Dust Bowl
-The Great Migration
-The Great Depression
-Upton Sinclair’s The Jungle
-Jim Crow and the Black Codes
-Black lung
@HarvardLaw92:
Years ago on NPR I heard an interview with the owner of a buggy whip factory, and other riding accessories. He allowed as how he was the last one left, but there were enough buggies left in the country for one reason or another, that the buggy whip business was great.
@gVOR08:
Well, buggies and Fifty Shades of Grey.
@michael reynolds:
Because for decades, I’ve been hearing from elected Democrats that the government, particularly the federal government, is supposed to do something about the lack of jobs in the inner cities. It’s just interesting that you disagree with the majority of your party. I appreciate your consistency.
@DrDaveT:
Your personal anecdote regarding your supposed pioneering family is not the history of a nation. Let’s try again: “Americans largely stayed where they were.” And that is correct. Different parts of the nation were largely colonized by waves of immigrants. That’s why you have Dutch in New England, English in the mid-Atlantic, Germans in the Mid-West, Scandinavians in the upper mid-West, Germans again in Texas.
The only real mass “hustle” at the time was the California gold rush, and I’ll ask again: why do Americans have to be a country full of rootless wanderers hustling for a paycheck?
@Bill: The rising stock market may be “obvious,” but (as has been said many times before) the stock market isn’t the economy, and vice versa. There will be corrections. My personal guess is when “the market” perceives how little of DT’s agenda he will be able to get through Congress, we’ll see a correction.
@HarvardLaw92:
Google is not your friend.
That doesn’t make sense, so I think you’re flailing a bit.
Making the same mistake twice does not equate to correctness. Compassion is by definition, unconditional. If you set parameters for your compassion then you can’t have any.
What’s clear, given the hate-speech infesting this thread, is that liberals never objected to the thinking of racists, they just objected to the groups it was applied to.
These are the people you have such contempt for:
http://www.register-herald.com/video-tommy-davis-reacts-to-don-blankenship-sentencing/video_6ec00514-fc3d-11e5-85e2-9399dbb895ee.html
@gVOR08: It’s like vinyl records. They’re making a bit of a comeback, but still a “niche” appeal. My brother owns a store that sells them. Back when there were three or four stores in the area that did, nobody was doing very well. My brother’s store is now the last one standing in a wide radius that still sells them, and business is good.
There will usually be a niche market for most otherwise-obsolete things, generally geared toward artisanship and craftsmanship. If you can get in and be very good at it, you can make a living.
But for the public at large, it’s not generally an option.
@Ben Wolf: I’m a walking example of the mobility of the people who came to make up Americans: Portuguese great-grandmother, Swedish great-grandfather, Belgian background, Ukrainian background, Polish background, grandmother born in Hawaii….
When things get dicey economically or politically, people MOVE. They have throughout history.
In a battle between data and Ben Wolf, data wins:
https://www.nytimes.com/interactive/2014/08/13/upshot/where-people-in-each-state-were-born.html
https://www.nytimes.com/2014/08/16/upshot/mapping-migration-in-the-united-states-since-1900.html
@Bill:
Remember how in the Obama years, conservatives finally realized that much that goes on in financial markets has no connection whatsoever to the real economy? They have successfully unlearned it. They have finally learned to love the bull (until such time as President Booker is in office, and the market rises, when they start disdaining financiers and globalists again).
@Ben Wolf:
I actually agree that the meritocratic “if I could change my career, why can’t they” argument is bunk: a financial adviser of a Hollywood person has access to resources and social capital that a resident of Appalachia doesn’t – and liberals should not make bootstraps arguments, because those are dumb and immoral. However, what you are saying is beyond dumb: the vast majority of the 62 million of Trump voters are not Appalachian sons of the soil: they are middle-to-upped middle class Republicans. And the vast majority of Hillary Clinton supporters are not Sillicon valley programmers or Democratic fundraisers (amazing how the leftier-than-though crowd mind-melded with Breitbart)- they are middle-class to working poor people. They just have a high probability to be too dark to be considered working class by our popular tribunes.
@Ben Wolf:
As noted above, our popular tribune simply don’t see color, in the sense that dark people simply don’t exist in their version of reality. Ben, for example, doesn’t seem to be aware that the Great Migration, the single greatest popular shift in American history, ever happened, because he just KNOWS that all industrial workers are white.
@DrDaveT :
Exactly. So when these people say “we’ve been here forever”, what they really mean is “my particular line of descent has owned this for some time”. Even if you only moved a few miles away, you still had to “move” if you weren’t the inheritor…. or do these people think dozens of great-aunts, sort of uncles, and x-removed cousins were wandering around tiny-ass farms since time immemorial? These weren’t megafarms but rather enough to keep a small family alive. If they managed to get that big, they’d be their own community because somebody started up a farm a little down the way for more room – which is how some small towns got started in the first place!
@Bill:
5% in two months…continuing a trend…look at a graph of the Dow over 1 year or 6 months. Any one with average intelligence cannot look at it rationally and attribute it to the Comb-over Donnie.
No doubt the promise of tax cuts for the rich and eliminating regulations that protect workers will provide greater profits and thus may drive the market some. Will we see the 4% GDP growth that Dumb Don promises? I really doubt it considering that it’s almost impossible. 70 days into his so-called presidency and he is simply proving what a lot of us said before the election…that he is terribly incompetent. I mean…he lost money running a casino…a business where the house always wins…how fwcking stupid can you get?
@Ben Wolf:
You’re wailing, at great length, about how mean bankers and technology ruined these peoples’ lives. How they used to have it so much better back in the good old days (which is the mother of all fantasies, but … )
Tough noogies. The world moves on, and you either move with it or you get run over. Apparently, pointing out this unfortunate, but accurate, fact to these people – in order to motivate them to take action & DO something, instead of sitting around & waiting to get hit by the truck – offends your sensibilities. That it would probably help them doesn’t seem to register. To you, who seems to prefer patronizing them, it’s evidently mean and condescending.
So, by all means, educate us. How would YOU attempt to solve their problem (note: condoling them doesn’t constitute solving their problem). We’re all ears.
@Mikey:
Jesus Christ, YES. This sooo much.
It drives me absolutely bonkers to see it on the news every damn night that there’s a “opioid epidemic” and now we need to do something for these poor victims…. other then throwing them in jail like we used to and calling them junkies. When drugs were the province of the inner cities, there was no talk of free treatment plans or how legal punishments should be lightened so this doesn’t “ruin lives”. Narcan wasn’t available in the schools or treated like epipens are – something you should carry just in case someone around you has an incident. If you survived your OD, you went to jail or you went back to the streets to try again.
It’s irritating to see fellow whites suddenly give a crap about how drugs are devastating to communities but somehow its still “urban youths” that are druggies, not small town dwellers or even suburbanites. Much like with AIDS, the caring comes too little too late and any chance to head off the horrible systemic consequences is lost because it affected another community instead of quaint little ole Americana.
@Ben Wolf:
Well Ben, I’m not sure that I suggested that those unemployed Trump voters are lazy and useless – but I’ll go back and review my words.
Just checked … nope, I did not.
@Daryl’s other brother Darryl:
A good sized portion of the market appreciation is financial stocks, and that’s much more predicated on expectations that Treasury will continue increasing rates (which boosts the profitability of banks, given the historical trend that their consumer lending products which are tied on a variable basis to those Treasury rates also go up in tandem, while their consumer investment rates – savings accounts, CD’s, etc. lag behind. Same payout, more pay-in = more profits). Trump has nothing to do with this.
Much of the rest has been, AFAICT, stocks related to expected infrastructure spending (Caterpillar, etc.). You can probably expect these to reset when this spending never happens (we’ll see the moon turn blue first). Trump’s rhetoric probably motivated this.
In other words, any effect Trump might have had on the market is predicated on a lie that will be exposed as the fantasy that it is soon enough.
Stocks are higher because the market expects a corporate tax rate cut, which should increase after-tax earnings. As share prices are a function of earnings, lower taxes should make shares more costly.
That’s good for shareholders, but that does not mean that the rest of the economy necessarily benefits.
@ Ben Wolf:
Call a spade a spade. It’s complacency and entitlement. Now, these are NOT inherently bad things. Entitlement is only a dirty word because Republicans have made it so. I personally think that as an American, we are entitled to the belief that families can stay in the same town for generations earning a good living. Whether its reality or not is a different thing.
Trump voters are being faced with reality. They don’t want to own their complacency and entitlement because they’ve been told these are bad things. Instead, they’ve been told they were cheated by {insert scapegoat} and that’s why life sucks, not their sitting around waiting for a miracle. In olden days, waiting for a miracle leads to bankrupt lifestyles and dead families. Sure, they blamed the same scapegoats but they were smart enough to realized they had to move. Rail against the banks, rail against the government, rail all you want but pack up the jalopy and head West, young man. Start again – its the American Dream in its essence. That you can start again – that its not the end of the world when things go bad. You have chances and choices here.
Now, voters expect to have things delivered to their doorstep. Town of only 500 souls? Bring me high paying jobs anyhow, screw the economics of it all! Suburban voter who lost their factory job but doesn’t want to learn a new trade? Build me a new factory and ignore all the robots! I’m comfortable in my roots so how dare you tell me to take a risk to better myself!
That which does not grow, dies. Swaths of America is being a given a choice and they are choosing social and economic death. So be it. They do not, however, have the right to make a big drama fit about it and expect us to talk them down from the ledge every damn time. If you wanna jump, jump. Don’t expect a net to catch you if you’ve been cutting all the ropes.
@KM:
Instead, we got “get tough” legislation like mandatory minimum sentences and the 100:1 sentencing disparity between crack and powder cocaine (the latter being favored, of course, by white people).
@KM: I think that in response to Ben’s over-simplification, you are also over-simplifying things. First off, let’s stipulate the differences between the then and the now:
1. Americans are, on average, older then they were 100 years ago. That is going to put a crimp in the “go West young man plan.
2. The crucial point to past migrations is that ,within some limits, physical labor is physical labor is physical labor. Farming in New Hampshire and farming in Kansas are not that different, and farming and menial labor are also used to be not that different from each other. This is simply not the case today: moving from West Virginia to San Francisco is one thing, becoming a code developer is another thing.
3. Land prices: setting up a stake in the West used to cost little. Rent in the cheapest East Coast city is expensive.
4. The welfare state gives people a margin of security that they lacked back then- and as a liberal I think its a glorious thing.
So – the Trumpian line of “we are going to bring the 50s back” is a monstrous line. But the neo-libertarian line people here espouse is terrible and immoral and impractical. Luckily, we had a candidate who grasped that and offfered a via media of government investment to revitalize areas that are being left behind. But, her emails.
@panda: @Mikey: My home state of North Dakota has recently seen growth and prosperity from carbon extraction. Before that they were losing population. There was a sort of reverse primogeniture that the farm family sent the oldest son to college, then he left the state to get a job. Then the next son until the youngest son got the farm. (Daughters married guys leaving the state.) It was sometimes said that the states biggest export was educated kids. I saw something similar in small town Indiana. There was a running joke, probably true, that there were more Richmond HS graduates in Indianapolis than in Richmond.
It’s hard for a 50 year old with no education to leave where he has friends, family and a support net. But they can get their kids out.
@Ben Wolf:
People are flocking to the Washington D.C. gold rush now. Smart people go where the money is. If you are going to suckle at the government tit, you may as well make it a six or seven figure haul.
@michael reynolds:
Ah, OC, spent some of my summers there (’87, ’90), some days on the beach, others in the OC jail.
@Gavrilo:
We’ve been more aware of joblessness in the cities in large part because there are no news bureaus in Mayberry. There are lots of reporters in NYC and DC and LA, so we get lots of stories about NYC, DC and LA.
And there’s the differences mentioned up-thread: concentration. Six unemployed people in Mayberry is too small, too diffuse to attract attention. It requires a new vocabulary, a designation we can use as shorthand. ‘Inner city’ is a thing, and until recently ‘rural unemployment’ wasn’t. Until they started eating oxy and committing suicide no one in the mainstream media world knew there was anything going on – just as we generally ignore inner cities until there’s violence or a drug epidemic.
As for relocating, granted I’m unusual – I’ve lived in more than 50 homes in countless cities and towns in 14 states and three foreign countries. But my principle has always been that it is my job to support myself and my family, and I will do what I have to do to accomplish that. If that means driving a dying Chevy pick-up truck towing a dead Plymouth Valiant used as a trailer from Maryland to Florida, and live in a roach-infested motel to get a job waiting tables, well, that’s what you have to do. It’s not fun, but life isn’t always a barrel of laughs.
@J-Dub:
I’m going to call on my psychic powers and guess there was alcohol involved?
I have a love-hate thing with OC. I lived there in-season and off, when it’s a ghost town. It’s a strange place, OC. It sticks in my memory in ways many other places do not.
@J-Dub:
Hey, I just looked at those dates. I was there I think in 82 and again in 84. Do you recall a restaurant called the White Marlin, downtown next to Marina Deck? I was head waiter there for a while. Later waited tables at the Wild Goose Chase, the restaurant on the bay in the faux lighthouse, not far from Fager’s.
@panda:
You’re maybe reading too much into it. Welfare? I support it. Retraining? Child care assistance, transportation assistance, tutoring? Job search assistance? Career counseling? Where do I sign? I support all of these things, and a great deal more. I pay a fortune in taxes I could easily avoid precisely because I believe in them.
Why? Because I believe that I have a duty to give back and I honestly would love to see these people reclaim broken lives & thrive again.
The problem is that they don’t want any of those things, and, frankly, they resent me for supporting the programs that offer them. You can’t help people who not only don’t want to be helped, but also resent you for trying to help them in the first place.
@HarvardLaw92 :
Precisely. A lot of these places are dying of their own volition because they want everything to stay the same or be the “way it was”. How many coal small towns would accept a factory with high paying jobs making solar panels? What about a workplace that paid $50 per hour to the lowest paid worker but was run by a militant atheist or Muslim? How ’bout them hipster liberals and snowbirds with their blue-state expectations but open wallets? Don’t get mad conservative businesses aren’t moving to where you are but learn to love the liberals that are willing to give you a chance.
There was an article not too long ago about a small town that was refusing hundreds of needed jobs because the owner was a non-white immigrant who planned to accept immigrant workers moving in as well. Everyone in town would have had a job if they pleased so there was no excuse of “competition”. Those interviewed were blatant in their assertion that they didn’t need the one company trying to open a business in their podunk town in the last decade. They valued their culture more then their paycheck – good for them if those are their values but don’t complain about a lack of opportunity when you slammed the door on the only one to come a-knockin’.
@KM:
Could you find that article? Because a while ago, the Atlantic ran a great series of articles on rural America showing that on the local level, those attitudes are not as common as you would think.
https://www.theatlantic.com/magazine/archive/2016/03/how-america-is-putting-itself-back-together/426882/
As for your question about solar panels: I suspect that when push came to shove,an Appalachian town would say “yes” in a heartbeat. But there is relatively little reason for a solar panel factory to be set up in rural Appalachia: hard to convince engineers to move there, insufficient workforce, trasnportation difficulties etc.
As for snowbirds and hipsters as such: not many people know this, but West Virginia has a pretty strong eco-tourism industry.
Again- real life is a bit more complicated than caricatures on the internet.
@KM:
I can’t help but believe that , on some level, this is all underpinned by their own refusal to accept that they’re economically and socially now on the same level with the people they used to look down on. To do so would force them to admit that they’re the same. You have economic and social policy being driven by a perceived threat to white cultural hegemony coupled with pride.
They hate us because we look at both groups and draw the unavoidable conclusion – they ARE the same, and both are equally deserving of a helping hand. I used to believe that they’d actually have to hit bottom – to be at risk of starving to death – before they’d see the light. Now, I’m becoming more and more certain that they’ll never accept it, even if it means starving to death.
Someone here – I believe it was Reynolds although I’m not sure – once used an apt analogy: you’re dealing with people who would cheerfully agree to live under an overpass and eat sparrows cooked over a fire on an old curtain rod, just as long as you promised them that the African-American / Hispanic / LGBT person next to them wouldn’t even have a curtain rod to cook with. More and more, that rings unfortunately and painfully true.
And as you said above – if someone is determined to drive the car off of a cliff, sometimes you just have to let them. Some people can’t be saved.
@panda:
I believe this one is it or else another town’s having the same problem:
http://www.newsmax.com/TheWire/immigrants-minorities/2016/05/02/id/726699/
This is cutting off your nose to spite your face. This is *exactly* the type of business they need in that agricultural area but “concerns” are suddenly popping up because of “who would work there”.
@panda :
I wanted to make a pithy comment on the marketplace clearly having made a decision about Appalachia but don’t want to get labeled heartless or condescending. I’ll just leave it at Appalachia’s problem is it is Appalachia.
@KM: See, that’s exactly the problem I have with this thread. The core tenant of American liberalism is that we understand (or supposed to) that the the market is not a deity which issues judgements we can’t appeal.
@panda:
Fine. YOU move to Appalachia and start up a business to save a small town. That is, if they’d have you. Odds are sadly good they might not.
As you noted upthread, its hard to convince engineers to move there. The market is made up of real people who make their own decisions and they don’t want to go there. You can offer them all the shinies you want but they aren’t going to go or they’d already be there. The market is not a deity but it is a collective and the collective seems to be speaking pretty damn clearly here. These places, as they are, are not attractive and they are uninterested in making themselves attractive. The collective has responded with a firm No, Thank You. It’s up to these places to convince the collective to change its mind and they don’t want to because they think the collective is supposed to come to them.
So, again – do you have plans to move to Appalachia and defy the market’s decree? Why not?
@panda: What about this one?
There are certain levels of stupidity for which you finally have to let the individuals a) try to cure cancer by homopathic remedies b) send their money to that nice prince in Nigeria c) love the Affordable Care Act but vote against “Obamacare”
@EddieInPHL (Only Today):
Excellent.
In the early 1980’s there was a deep recession (by traditional recession standards). I was living in Seattle at the time, and Seattle was not then what it has become today – a diverse powerhouse regional economy. Back then it was Boeing, Weyerhauser and a few other resource-based companies. Seattle was prone to deeper recessions than more diverse regional economies.
I was in financial management for one of those resource-based companies companies and I was laid off. I intensively searched for work for 3+ months, and I realized early on that I needed to move. And so I de-camped for my home region – the San Francisco Bay Area. Within 4 weeks I had 3 job offers.
Again, as I recounted elsewhere in this thread, and as you put it very very well – change is gonna happen with or without you, and you’re going to have to, every once in a while, understand it and take a new direction yourself, or become roadkill. If you’re going to curl up in a fetal position and blame politicians, or complain that ‘elites’ don’t understand you, it won’t be long before friends and family are scraping your backside off the center divide.
@michael reynolds: I wish I could blame alcohol. My lawyer told me to give up crime or get better at it. I gave it up.
@michael reynolds: I know Fagers, still there as far as I know. Not familiar with the ones you worked at. I parked cars at the Carousel Hotel. I avoid OC these days. I prefer the relative solitude of the Outer Banks, Salvo in particular. I read once that OC is more densely populated than Tokyo in-season.
@gVOR08:
I have an acquaintance who actually owns and operates a an online 8-Track store. He buys (often) and sells (often) 8-Track Cartridges (Eagles, 3 Dog Night, Lynyrd Skynyrd, etc) Cassettes (Disco, 80’s rock) and Vinyl Albums. He made almost $220K last year. And he runs the whole thing from his rather large barn, in rural Georgia.
The kicker: He gets most of his inventory for free. He puts want ads in online publications around the world. And he offers to pay for shipping if they send him cassettes or vinyl.
This is probably too late for this thread, but there’s an excellent blog post at Breaking Smart that is on-topic for this discussion.