Shap­ing the Trump econ­omy

The pres­i­dent needs only a small num­ber of de­sert­ers to get him the tax deal he wants

The Washington Times Daily - - OPINION - By Don­ald Lam­bro IL­LUS­TRA­TION BY HUNTER Don­ald Lam­bro is a syn­di­cated colum­nist and con­trib­u­tor to The Wash­ing­ton Times.

The Trump econ­omy badly needs two things to lift it out of the eight-year Obama lethargy: across the board tax cuts and global trade ex­pan­sion.

Amer­ica’s mid­dle-class in­comes shot up by 3.2 per­cent last year, ac­cord­ing to the U.S. Cen­sus Bureau, af­ter a decade marked by the Great Re­ces­sion, weak eco­nomic growth and wide­spread un­em­ploy­ment.

The fed­eral agency, which com­piles eco­nomic statis­tics through­out the coun­try, re­ported Tues­day that U.S. me­dian house­hold in­come climbed to $59,039 in 2016.

That’s a hefty in­crease over the pre­vi­ous year’s $57,230 me­dian in­come fig­ure.

The na­tion’s poverty rate also fell last year to 12.7 per­cent, “with 40.6 mil­lion peo­ple in poverty, 2.5 mil­lion fewer than in 2015,” the re­port said.

How­ever, the bureau said the poverty num­bers were “not sta­tis­ti­cally dif­fer­ent from the 2007 rate (12.5 per­cent), the year be­fore the most re­cent re­ces­sion.”

Large num­bers of Amer­i­cans are still at or be­low the poverty in­come line, and a num­ber of cities are still los­ing jobs.

“Some 1.3 mil­lion peo­ple joined Amer­ica’s civil­ian la­bor force over the past year,” says a sur­vey re­port by the 24/7 Wall St. web­site.

But “the re­cov­ery has eluded some parts of the coun­try. Ap­prox­i­mately 1 in 5 U.S. metro ar­eas lost jobs over the past 12 months, and the num­ber of em­ployed per­sons has de­creased by at least 1 per­cent in 25 of the coun­try’s 388 metropoli­tan ar­eas,” writes Steven M. Peters.

Among some of the job losers: Bing­ham­ton, N.Y., where un­em­ploy­ment is 5.5 per­cent; Wil­liamsport, Penn., 5.6 per­cent; Lafayette, La., 5.7 per­cent; Rocky Mount, N.C., 6.1 per­cent; Danville, Ill., 6.7 per­cent; Shreve­port-Bossier City, La., 5.7 per­cent; Rock­ford, Ill., 6.3 per­cent; Elmira, N.Y., 5.5 per­cent; and Cas­par, Wyo., 5.2 per­cent.

Lag­ging job growth was clearly ev­i­dent last month when the Bureau of La­bor Statis­tics (BLS) re­ported that the econ­omy pro­duced a lower-than-pro­jected 156,000 jobs.

Wage growth was pa­thetic, too. Av­er­age hourly wages in­creased a mere 3 cents in Au­gust.

Ear­lier this sum­mer, the BLS ap­peared much too ea­ger to re­port that job growth was ex­plod­ing un­der the Trump ad­min­is­tra­tion, only to see some of its es­ti­mated num­bers shrink un­der sub­se­quent re­vi­sions.

It turns out that the num­ber of jobs cre­ated in July and June have been re­vised down­ward by 41,000.

Since he was sworn into of­fice in Jan­uary, Pres­i­dent Trump says his job cre­ation record has been “ex­cel­lent.”

But eco­nomic re­porters put his score at around 170,000 jobs a month, a rate that can only be called medi­ocre.

The Obama econ­omy limped through his pres­i­dency at an av­er­age two per­cent growth rate, be­cause he raised taxes that crip­pled new busi­ness cre­ation and in­vest­ment, and un­leashed a tidal wave of suf­fo­cat­ing reg­u­la­tions on busi­nesses large and small.

The Trump econ­omy badly needs two things to lift it out of the eight-year Obama lethargy: across the board tax cuts and global trade ex­pan­sion. Mr. Trump is work­ing hard on the first, and still fight­ing against the sec­ond.

Through­out the first half of this year, Mr. Trump has been push­ing Congress to give him a sweep­ing tax cut re­form bill, with­out of­fer­ing any de­tailed specifics.

Let’s be blunt about this: the House and Se­nate will write what­ever tax bill Congress may pass, if it passes any­thing. And that is very much in doubt right now.

In­ter­nal de­bates in com­mit­tee rooms are all about the rate cuts, but also about mak­ing the bill rev­enue-neu­tral by elim­i­nat­ing or re­duc­ing loop­holes, de­duc­tions and other forms of cor­po­rate wel­fare.

That would raise rev­enue on cer­tain sec­tors in ex­change for lower tax rates over­all. Pres­i­dent Rea­gan won that fight against a Demo­cratic-run House by ap­peal­ing to a small, pro-growth group of South­ern con­ser­va­tive Democrats.

Mr. Trump is us­ing Mr. Rea­gan’s play­book by also reach­ing out to Democrats who face tough re-elec­tion prospects back home. As a party, they are over­whelm­ingly op­posed to any and all tax cuts, but Mr. Trump needs only a small num­ber of de­sert­ers to send him the bill he wants.

Bash­ing free trade deals has long been the bi­ble of the Demo­cratic Party’s so­cial­ists, left­ists, lib­er­als and its union bosses. Their mantra: it kills jobs and makes us poorer.

Mr. Trump grabbed the is­sue and ran with it, scar­ing vot­ers about the trade deficit. But over a cen­tury or more of trade deals, Amer­ica has grown wealth­ier, not poorer, stronger, not weaker.

Ear­lier this month, the U.S. and Mex­ico met in four days of talks about changing the rules of the North Amer­i­can Free Trade Agree­ment, with the U.S. fo­cus­ing on the trade deficit.

But that doesn’t re­flect the stream of cap­i­tal in­vest­ment flow­ing be­tween us and our trad­ing part­ners. “The trade deficit is a macroe­co­nomic is­sue. It has noth­ing to do with trade pol­icy,” says Jaime Zablu­dovsky, who helped ne­go­ti­ate NAFTA in the 1990s.

Trade helps U.S. firms to be­come more com­pet­i­tive in what we make and sell here at home, and ben­e­fits hard-pressed con­sumers with less ex­pen­sive prod­ucts.

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