A lagging economy is following Trump to the 2020 ballot box

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by Bill Bonner

YOUGHAL, IRELAND – Our dreary job is getting drearier and drearier.

We used to lighten it up with jolly mockery. “Laugh and know,” was the Roman poet Martial’s formula. You only really understand the absurdities, vanities, and stupidities of the world when you can laugh at them. Then, they are entertaining rather than irritating.

But now, it’s getting harder and harder to ridicule the great and the good. The most lunkheaded of them are given Nobel prizes… appointed to head the IMF… or elected president!

Sarcasm is mistaken for earnest praise. And our mockery falls short; they mock themselves better than we ever could.

Parody in New York

Of course, Dear Readers will know what’s on our mind: President Trump’s self-parody at the Economic Club of New York yesterday.

As you know, we had been on the edge of our seats. We thought he would blow his own horn, in a fanfare of triumphalism, announcing a great victory in the trade war, which would send the stock market higher. Instead, he largely dodged the trade issue and took the occasion to present a whole orchestra of off-key musicians, sour notes, and noisy nonsense.

“Lunatic claims” is how James Fallows described it. But the president is no nut case; he’s a showman… and a master of pasquinade. That is, he burlesques himself, the White House, the government, democracy, politics, celebrity, money, economics… and just about everything else. And best of all, he does it unwittingly.

For example, he claimed that his daughter had “created 14 million jobs.” Wow. What a woman! The whole economy only added 5 million jobs during the Trump years. And Ivanka Trump did not create a single one of them.

The “fact checkers” were quick to jump onto this mathematical impossibility, but they missed the point. Mr. Trump was just doing what he does – satirizing the pretensions of economists and statisticians… and himself.

That was just the beginning. Yahoo Finance:

President Donald J. Trump cheered the strength of the U.S. economy and said that the “war on American workers” has come to an end.

“We have ended the war on American Workers, we have stopped the assault on American Industry, and we have launched an economic BOOM the likes of which we have never seen before!” In the speech, he said his administration has “delivered on our promises” and “exceeded expectations” on the U.S. economy, “despite the near-record number of rate increases and quantitative tightening” that was “far too fat an increase and far too slow a decrease.”

Wheels Fall Off the MAGA Train

Trump is right. This is a BOOM unlike any other. As we showed yesterday, real economic growth has been slower under Trump than Obama.

Government spending is included in GDP, but it is almost always a drag on real growth. Instead of creating wealth, it destroys it… converting time and resources into boondoggles, bamboozles, and BS. So, the more government spends, the less is left for people to invest or spend themselves.

Trump has increased government spending faster than any president since Lyndon B. Johnson. Take away that extra government spending and GDP growth has been 0.5% lower than it was during the Obama years.

Does slower growth help American workers? Of course not. Not only that, almost every measure now shows an economy that is weakening, not strengthening.

Colleague David Stockman climbed into the grease pit to have a closer look. He sweated out that not only did the job creation numbers fall off, so did every other wheel on the MAGA train.

Comparing the 11 quarters of Trumponomics with the equivalent period under Obama, Stockman found:

  • Real final sales fell from an annual rate of 2.6% growth to 2.5%.
  • New job creation fell from 227,000 per month to 191,000 per month.
  • The growth rate on the number of aggregate hours worked fell from 2.3% during the Obama years to 1.9% under Trump.
  • Personal consumption expenditures also fell from a 3.4% growth rate under Obama to 2.7% with Trump.

Then there’s real wealth. It ultimately depends on productivity. While there’s a lot of chop in the numbers, output per hour rose at a 1.9% rate from the beginning of the 21st century to the day Trump was elected. Since then, it has averaged 1.3%.

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A true picture of the U.S. economy shows business sales collapsing… inventories rising… with pre-tax corporate profits actually lower today than they were seven years ago.

And oh yes… $3 trillion more in debt has been added.

A bit of mockery is in order. But here, as in everything else, we are overshadowed and outdone by the commander in chief. MAGA, it’s not. But he’s changed his campaign promise to “Keep America Great.”

From “make” to “keep”… all while the economy degrades and life in America degenerates. What Voltaire, Swift, or Orwell could have done better?

But let’s leave the world of economics for a moment. We’ll come back to it tomorrow.

Instead, let us leave you today with a gratuitous look, of no particular importance, at a scene in the lobby of our hotel last night…


A Look Behind the Diary Scenes…

Easily one of Dublin’s chicest places to hang your hat, the décor is modern, stylish, and comfortable, with blends of light green and light coral fabrics. Chairs and sofas are clustered around marble tables, with a Christmas tree already taking center stage at the top of the stairwell.

The “off” thing about this place is the noise. It is constant. It is repulsive. During the day, it is a mixture of jazz and show tunes. But in the evening, it goes hip… to a boom… boom… boom… with no melody, rhyme, or reason.

Groups of people have gotten together for drinks or evening snacks. At one table is a pair of very sober-looking Indians. They sit correctly. They talk discreetly. They are dignified.

Their place is soon taken by a young couple from the musulman world. Both are dressed in black; she hides her hair under a black scarf. They sit quietly, talk, and smile at one another.

At another table, a young blonde woman in a brown sweater sits by herself. She is nervous. She looks around. She checks her phone. It is as if she were waiting for someone who hasn’t shown up. Finally, she tires of waiting, gets up, looks around one last time, and leaves.

Another young woman, meanwhile, is talking. She has an American accent and long blonde hair, slightly curled as it falls over her shoulders. A woman’s hair is her crowning glory, or so they say, but she fidgets with her crown. She shakes her head like a shampoo model, rakes her hair with her fingers, or tosses it over her shoulder when it gets in her way.

She is an attractive woman, leaning towards her companion provocatively, exposing a fetching bosom, and talking… talking… talking. But whatever she is selling, the young man isn’t buying. She leans forward; he leans back. She laughs; he holds his tongue. She gesticulates; he sits still.

We are watching all this take place out of the corner of our eye while preparing today’s Diary. Midway through, another couple comes in and takes their place on the couch opposite to our own. Decidedly un-chic, the woman is overweight, with a nose ring. The man – hardly more than a boy – has a smallish head and narrow shoulders.

They sit down, side by side. They do not talk, except to order a drink. After about half an hour, he puts his arm around her, and she settles her head against his shoulder. Still, nothing is said.

Boom… boom… boom… the beat goes on.

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