Are you better off today than you were four years ago?
Yes. I am better off. So are most people, especially the working poor.
Trump and Fox News keep telling Americans how terrible the economy is, and how we should be angry about it. Meanwhile, the GDP is up, the stock market is up, real estate values are up, we are producing more energy than ever in our history and are a net exporter of it, and among our peers of developed countries, the U.S. economy is the strongest, is growing the fastest, and has the lowest unemployment. Oh, and violent crime is down sharply from 2020, Trump's last year in office.
Yeah, I am better off today.
And what about the future? Goldman Sachs advises that the country will do better if Harris wins than if Trump does.
Goldman Sachs on a Kamala Harris victory: "If Democrats sweep, new spending and expanded middle-income tax credits would slightly more than offset lower investment due to higher corporate tax rates, resulting in a very slight boost to GDP investment due to higher corporate tax rates, resulting in a very slight boost to GDP growth on average over 2025-2026"
Goldman Sachs on a Donald Trump victory: "We estimate that if Trump wins in a sweep or with divided government, the hit to growth from tariffs and tighter immigration policy would outweigh the positive fiscal impulse, resulting in a peak hit to GDP growth of -0.5 percentage points in the second half of 2025 that abates in 2026."
Trump is out and about selling his tariff plan, making the argument that foreigners will pay our taxes for us. Economists and business people know that tariffs are not paid by foreigners. The tax gets paid by U.S. consumers, as price levels on foreign and domestic goods adjust to the distortion of the tariff. Tariffs are inflationary and they slow economic activity, which is why Goldman Sachs -- which normally would enthusiastically support the candidate who would lower taxes on corporations and the very wealthy -- concluded that a Harris victory would be better for the economy.
Grocery prices are indeed higher than four years ago, and that is a problem for Harris. She is looking for someone to blame. Her first crack at it, decrying "price gouging," was over-broad and it fed the criticism that Harris supports centralized-control socialism, which would empty out grocery shelves. She backed off of that. The Biden administration opposes the Albertsons-Kroger merger, which is a more popular position, but I suspect is the wrong target. Those stores face sharp price competition from Walmart, Costco, Amazon and independent grocery stores. There is one place that is ripe for antitrust investigation by the federal government: the concentration in meat packing and poultry production. Harris can address this with a clear conscience.
Grocery prices are higher for a good reason, in large part because wages for the working poor have gone up. This need not be a bug. It is a feature if Democrats call it one, and they should. Praise the workers in the fields and in the stores. Those cashiers and shelf-stockers deserve to be paid a living wage. It affirms the Democratic Party's FDR roots and the language that Jesse Jackson used, praising the hard-working people who took the early bus to work. There is a positive non-elitist message there for Democrats, and Harris can voice it wholeheartedly. Criticize the investment bankers pulling off the Kroger merger, if she must, but defend working people.
The $15/hour wage that Bernie Sanders argued for in 2016 seemed like an incredible stretch at the time. We thought only government compulsion could achieve such a wage. Now, at least in my observation here in Oregon, that wage is inadequate to fill positions. The labor market demands more than $15/hour -- and far more for outdoor agricultural work. This is good. It means that people can be paid to work, not underpaid for working and then qualify for food and rent assistance from the government. Low pay discourages work, which has myriad downstream effects. It is a roundabout subsidy to Walmart and other low-wage employers, and that is fertile ground for Harris to point out. Better for Democrats to share Biden's message about the dignity of work, and the self-respect a paying job gives a person. In Harris's case, it complements her story of immigrant grit and social mobility. It contrasts well with Trump who has enjoyed privilege at every point in his life, the "affirmative action of generational wealth," as Michelle Obama put it.
Harris cannot hide from grocery prices, but she can put them into a context that makes the case for her campaign. There are deep suspicions about Democrats and public benefits to the undeserving. This issue puts Harris in a good position and takes some of the sting out of higher grocery prices. She isn't looking out for the investment bankers or the meat and poultry cartel. She is looking out for the hard-working people who produce and deliver the food.
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24 comments:
What we’re talking about here is how our standard of living compares to four years ago. Economists frequently measure standard of living using GDP. Per capita GDP provides a quick, rough estimate of the total amount of goods and services available per person. Numerous more complex ways of measuring standard of living have been devised, but many of them corelate highly with per capita GDP.
The US per capita GDP in 2020 was $63,529, while the expected per capita GDP in 2024 is $66,451.
As I recall, 4 years ago, the largest hospitals in our area had Refrigerated Semi Trailers in their parking lots filling in as temporary morgues for the casualties of COVID dying because they hadn't taken advantage of the Vaccines being provided for free, unemployment was raging, and most of us were afraid to go to a movie or any other public venue.
Hell Yes, I'm better off today ! And I'm not worried that a demented lunatic is going to try stopping a Hurricane with a Nuclear bomb, or take this Country out of NATO.
Not sure that I can see a linear connection between Goldman Sachs and the economic welfare of the working poor, but there must be at least some overlap.
The Four Years Ago test must be informed in this case by Covid, though, right? Are we better off than before the epidemic? Than since it largely ended?
So apparently, (financial) expert opinion says the voters are better off. The problem is, many voters have lost faith in experts/elites of all types, and with good reason in some cases. They are not in the mood to agree with those experts.
This is populism, and it’s a significant political force these days.
Telling someone who is angry about the price of eggs that they are really better off economically (say the experts) is not a winning political strategy. Telling them grocery prices are higher so that agricultural wages can go up is easily countered by saying that the real problem is profiteering by big agriculture. Maybe Kamala could get some traction about high grocery prices by taking on big agriculture, but she doesn’t seem to be going that route.
Populism has always been a significant political force. It approved slavery, motivated the Confederacy, and drives the white nationalism that now composes the Republican base. It never has been their MO to listen to reason or experts. Thus their delusions about climate change, who won the 2020 election, etc.
You're very dismissive of the financial expertise of financial experts.
Meanwhile, wage growth is 4% .
Mike is apparently determined to counter every single thing I say with implied accusations of racism. When all you have is a hammer, everything looks like a nail. When all you have is the R-word…
Just to point out the obvious, I didn't accuse anybody of racism, but it's true that white nationalists are by definition.
Kamala should be talking more about Trump’s wildly inflationary tariff plan. Btw, I don’t know where y’all are buying eggs, but they are $2.59 per dozen at Fred Meyer. Stop buying expensive eggs.
Wasn't slavery the province of propertied elites, such as Washington at Mount Vernon, or Kamala Harris' forebearers in Jamaica? And is not Populism in connection to slavery if anything associated with anti-slavery groups before the Civil War, and poor farmers' and workers' alliances--white and black, North and South--after the war?Of course, Nikole Hannah-Jones may know otherwise....
Seems like “the obvious” that Mike likes to point out is always that someone or something is racist. Not even a 1-track mind, more like a monorail mind. When all you have is a hammer…
I’m describing how many voters feel, not necessarily about me personally.
Throughout our history, we've had populists on both ends of the political spectrum. The 1920s resurgence of the KKK was one example of right-wing extremist populism.
"The obvious" I pointed out is that populists don't listen to reason or experts. Sometimes they're racist, sometimes they're not. If the shoe fits...
Sometimes, “reason“ is a violation of common sense masked by highly intellectual obfuscation
Mike, then FDR came along, and with mostly "Woke" policies, put people back to work, created Social Security (with Frances Perkins urging) and started saving people's lives, including those of my Grandparents.
That's certainly the view of Trump supporters, anyway. It's like their attitude toward facts: "fake news."
It’s the attitude of people who retain a healthy respect for common sense, and an understanding that experts, with their own high-resolution limited field of view, can also sometimes be wrong.
In 2016, all the political experts “knew“ that Hillary was going to win.
I am a political expert, at least in my own mind. On Eection Day morning in 2016 the headline was "Prediction: Trump."
Maybe some of them, on the morning of the election. But leading up to the election, most of them were predicting Hillary. I shouldn’t have said “all”.
What you call "experts" are just pundits expressing their opinion. Real experts confirmed the safety and effectiveness of the COVID vaccines, but whackos dismiss it as fake news. Real experts confirm the death and destruction being wreaked by climate change, but Trump and his chumps dismiss it as a Chinese hoax. The list goes on with no respect for common sense whatsoever.
Peter, as I recall, you had been predicting that possibility for nearly a year, after following the Campaigns in person.
I am a real expert: about computers and software. That background helps me distinguish real from fake experts.
It also gives me personal experience with how an expert (e.g. me) can still get something wrong, leading to insight on some of the limitations of expertise and the value of common sense.
It doesn't take an expert to know that Trump is a malicious criminal, and those who would make him president are worse than he is.
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