Rising GDP & wages favor GOP in midterms

IS the economy strong enough to help the Republicans Tuesday and hurt the Democrats?

I told you what I think a long time ago — that the Democrats would be disappointed on Election Day because the economy is strong enough that voters aren’t going to mess with success.

Last Friday’s employment report helped the Republicans. It showed a much better than expected 250,000 new jobs in October.

In last Thursday’s column (and several previous ones) I predicted that the report would be strong because of positive adjustments the Labor Department always makes in October.

I’ll also tell you this: If the Labor Department hadn’t fiddled with the seasonal adjustments, Friday’s report would have showed around 30,000 additional jobs. Would a report that showed 280,000 new jobs have clinched the election for the Republicans?

Well, I think that it’s a lot more complicated than that.

Voters may hear what the nation’s gross domestic product is doing — up at an annual rate of 3.5 percent in the third quarter of 2018. And the jobs report each month certainly gets a lot of attention.

But despite the fact that there are more than 7 million new jobs since President Trump took office — with many going to Hispanic workers — voters really don’t ask the question: Is the economy better under Trump?

What they do ask is: Am I better off since Trump took office? And that may be where the Democrats have a glimmer of hope that they can make gains in Congress Tuesday. I don’t think they will, but the Democrats have to dream.

Take, for instance, a poll by Bankrate.com that says the majority of Americans have not seen their finances improve since the 2016 election. And 76 percent of people earning less than $30,000 say they aren’t better off.

The middle class is doing better. More men than women have seen financial gains (44 percent to 32 percent) and the rich — well, they are rich.

And, Bankrate says, nearly 1 in 3 people blames Trump and/or Con- gress for personal-finance troubles. So if Bankrate’s survey is correct, the Democrats have hope, and the Republicans should worry.

But there are other surveys that tilt the opposite way.

For one thing, wages and salaries rose over 3 percent in the third quarter of 2018, and consumer confidence in October was at its highest in 18 years. And a recent study by the Federal Reserve shows that 74 percent of adults said they were either doing OK or living comfortably in 2017. That was 10 percentage points higher than in the first survey done in 2013.

Bottom line: I think polls that say the Democrats will do well on Election Day are wrong, unless there’s a hidden dissatisfaction with money issues.

Former Federal Reserve head Janet Yellen said last week that she’s worried about the federal deficit. She says current government spending is unsustainable. And, Yellen said, she’d raise taxes if she had a “magic wand.”

Well, I’m also worried. And Yellen is absolutely right.

But let’s parcel out the blame. The US debt level rose by $8.59 trillion from 2010 to 2017, according to HowMuch.net. That was on Presi- dent Obama’s watch. And while Yellen wasn’t in charge of federal spending, she deserves some of the blame for the economy during half of those years.

US debt is now nearly $21.7 trillion, and it’s growing fast. It will grow even faster when interest rates rise and the government has to spend more to borrow.

With his tax cuts, Trump is expected to add $4.78 trillion to the debt between now and 2021. So he’s to blame also. And if the economy doesn’t respond massively to his tax cuts, Trump will be very much to blame.

I love it when former government officials like Yellen suddenly grow a conscience and start lecturing when they are out of office and have no power.

My idea for the economy was still better: Forget the tax cuts. Stimulate the economy by changing the rules on how people can use their retirement accounts. That would have helped the economy and not cost Uncle Sam a nickel. In fact, it would raise revenue for Washington.

Oh well, our elected officials decided to do it their way. Let’s see what happens. Maybe someone should be writing a song titled “God Help America.”

Trump warned recently that some of the people in the caravan headed toward the US through Mexico are terrorists and all-round bad guys.

And the media jumped on him for alleging this without proof.

In the first place, what are the odds there aren’t some terrorists or drug cartel members in the crowd of 7,000 people in the caravan?

But I also know a little more about this than I can say here. But remember — White House chief of staff John J Kelly already said he’s worried about bad people with bad ideas coming into the US from Mexico.

And since Kelly is the former head of the Homeland Security, he probably knows what he is talking about. And, therefore, Trump probably knows more than he can say.

One thing this caravan will do is make more people believe Trump’s cherished wall is necessary, a view I don’t agree with. The caravan can be very helpful to the President.

If this really was a Democratic plot, we’ll know Tuesday night whether or not it backfired.