By Robert Reich
I
wasn’t going to comment on Trump’s lie-filled State of the Union message but
the whoppers were so big – especially on the economy – that I feel compelled. Here, for the record, is the real state of the union:
1.
JOBS:
Average monthly job creation dropped from 223,000 in 2018 to 176,000 in 2019.
The employment rate for working-age adults has increased less than during the
Obama recovery, and is still significantly below that of other developed
countries. The pace of job creation is also markedly slower than it was under
Obama.
2.
WAGES: Wage
growth has slowed, except in states with minimum-wage increases. The typical
American household remains poorer today than it was before the financial crisis
began in 2007. The median wage of a full-time male worker (and those with
full-time jobs are the lucky ones) is still more than 3% below what it was 40
years ago.
3.
TAXES: The
Trump-Republican tax cut has been a huge failure. We were promised an increase
in business investment, but business investment has contracted for the third
straight quarter—the first time this has happened since the Great Recession in
2009. Instead, the tax cut triggered an all-time record binge of share buybacks
– some $800 billion in 2018.
If fully implemented, the 2017 tax cut will result in tax increases for most households in the bottom 80 percent.
And
it has resulted in record peacetime deficits (almost $1 trillion in fiscal
2019) in a country supposedly near full employment. Even with weak investment,
the US had to borrow massively abroad: the most recent data show foreign
borrowing at nearly $500 billion a year, with an increase of more than 10% in
America’s net indebtedness position in one year alone.
Nothing
has trickled down to average workers. To the contrary, If fully implemented the
2017 tax cut will result in tax increases for most households in the bottom 80
percent.
4.
TRADE: The
2018 goods deficit was the largest on record. Even the deficit in trade with
China was up almost a quarter from 2016.
5
GROWTH: Last
quarter’s growth was just 2.1%, far less than the 4%, 5%, or even 6% Trump
promised to deliver, and even less than the 2.4% average of Obama’s second
term. That is a remarkably poor performance considering the stimulus provided
by the $1 trillion deficit and ultra-low interest rates.
6.
WORKERS’ RIGHTS: Trump
administration has systematically weakened workers’ rights. More than eight
million workers will be left behind by the Trump overtime rule. Workers would
receive $1.4 billion less than under the 2016 rule. New Trump administration
joint-employer rule has $1 billion price tag for workers.
7.
HEALTH: Millions
of Americans have lost their health coverage, and the uninsured rate has risen,
in just two years, from 10.9% to 13.7%. US life expectancy, already relatively
low, fell in each of the first two years of Trump’s presidency, and in 2017,
midlife mortality reached its highest rate since World War II.
8.
CLIMATE: losses
related to climate change have already reached new highs in the US, which has
suffered more property damage than any other country – reaching some 1.5% of
GDP in 2017.
Robert B. Reich is Chancellor's Professor of Public Policy at the University of California at Berkeley and Senior Fellow at the Blum Center for Developing Economies. He served as Secretary of Labor in the Clinton administration, for which Time Magazine named him one of the ten most effective cabinet secretaries of the twentieth century. He has written fifteen books, including the best sellers "Aftershock", "The Work of Nations," and "Beyond Outrage," and, his most recent, "The Common Good," which is available in bookstores now. He is also a founding editor of the American Prospect magazine, chairman of Common Cause, a member of the American Academy of Arts and Sciences, and co-creator of the award-winning documentary, "Inequality For All." He's co-creator of the Netflix original documentary "Saving Capitalism," which is streaming now.