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Bullard
Says Unemployment Could Rise to 30%
Photo by John
Vachon/Library Of Congress/Getty Images
23 Mar 2020523
1:15
“This is a planned, organized
partial shutdown of the U.S. economy in the second quarter. The overall goal is
to keep everyone, households and businesses, whole,” Bullard said. “It is a
huge shock and we are trying to cope with it and keep it under control.”
That would be the highest rate of
unemployment since the Great Depression.
Bullard said he expects economic
growth to plunge 50 percent in the second quarter but for the economy to bounce
back later in the year, so long as the appropriate measures are taken by the
fiscal and monetary authorities.
“I would see the third quarter as a transitional
quarter,” Bullard said. The next six months, however, could be very strong.
“Those quarters might be boom quarters,” he said.
Bullard also said the Fed was far
from being “out of bullets,” as some Fed watchers have claimed.
“There is more that we can do if
necessary,” he said. “There is probably much more in the months ahead depending
on where Congress wants to go.”
Donald
Trump’s Economic Record Isn’t What He Says It Is
He claims
the economy is “the best it has ever been.” A closer look at the data tells a
different story.
February 5, 2020
U.S. Department of Agriculture/Flickr
Donald
Trump has been on a mission this week to distract from his impeachment by
touting his administration’s economic record. First, he launched a 30-second ad
after the Super Bowl promising that “the best is yet to come.” Then, in his
State of the Union address Tuesday night, Trump highlighted the “American
Comeback.” The speech was full of audacious—and characteristically
inaccurate—claims: “our economy is the best it has ever been”; the “average
unemployment rate … is lower than any administration in the history of our
country”; and “wages are rising fast.”
The
reality, however, doesn’t match Trump’s
rhetoric.
In fact, it would take much longer than a
30-second
commercial to highlight the many
ways that
the U.S. economy isn’t working for all.
Still,
the moment provides an opening for Democratic presidential candidates to
challenge the president’s record.
In
2019, for instance, the gap between the richest and poorest households in the
United States reached its highest point in more than 50 years. The number of
Americans without health insurance continues to climb following years of declines since the
passage and implementation of Obamacare. And household debt is now in excess
of $14 trillion, exceeding the pre-recession high.
Even
with low unemployment, wage growth is lagging. The most recent employment
report reported wages increasing by just 2.9 percent over the last year. With
inflation at 2.1 percent, that’s not much of a pay raise. To the
extent that wage growth has picked up in recent months, a major contributor has been increases in state and local
minimum wages that Republicans and the president opposed.
Trump’s
signature legislative accomplishment, the 2017 tax cut, has produced none of its promised benefits, including the $4,000
pay raise that he and his allies promised to American workers.
In fact,
as a result of the tax cut, 91 companies in the Fortune 500 paid no federal taxes last year. The country’s six
biggest banks saved $32 billion at the same time that they laid off more
than 1,000 employees.
The
tax cut has also failed to produce the “four, five and even six percent” economic growth
that Trump promised. In the fourth quarter of 2019, the GDP growth of 2.1
percent was lower than both the growth rate before the tax cut was passed in
2017 and the average of Obama’s second term (2.4 percent). Instead, the tax
cuts have produced annual budget deficits of $1 trillion, which Trump has signaled may lead to cuts in Social Security and Medicare, in
addition to his ongoing efforts to erode the social safety net.
Ironically,
despite the president’s pledge to help the “forgotten men and women,”
blue-collar job growth—which includes construction, manufacturing, and
mining—remains anemic, only growing at 0.8 percent in 2019 compared to 2 percent in
Obama’s final term.
What’s
more, the ongoing trade war plunged the manufacturing sector into recession
last year, which has stunted economic growth in states like Wisconsin and
Michigan. Tensions with China produced a 24 percent increase in farm bankruptcies last year, with the most coming
from Wisconsin. The Congressional Budget Office estimated recently that Trump’s trade policies will cost
American households an average of $1,277 this year.
Worse
yet, employers reported the highest number
of
layoffs in four years. For workers who are able
to
find new jobs, data shows they earn about
10
percent
less than before. That gap is even greater
for
workers who were at the same job for three
years
or more.
But
while the economic reality under Trump is troubling for most Americans overall,
it’s even more daunting for African-American workers, who have an unemployment
rate almost twice as high as white workers. Displaced African Americans earn 13 percent less
in their new jobs. Those who were employed for three or more years earned 31
percent less in their new jobs.
Despite
the headlines, too many workers are not feeling the economic boom Trump
describes. Instead of making investments to provide Americans with the
world-class education and training needed for 21st-century jobs, the president
and the Republican Congress chose stock buybacks to benefit the wealthy and a
temporary sugar high for the economy that has now worn off.
Democrats
can and should challenge Trump on the economy in 2020. Millions of workers are
looking for good jobs and a pay raise. Policies to build an economy for all
should be central to any campaign’s message. But it’s more than just good
politics. Building an economy that works for the 90 percent instead of just the
top 10 percent is sound economic policy.
“The remarkable thing is how weak wages are, how weak the
economy is, given that as a result of the tax bill we have a $1 trillion
deficit.”
Donald Trump is ‘just wrong’ about the economy, says Nobel Prize-winner
Joseph Stiglitz
President Donald Trump told business and political
leaders in Davos, Switzerland last week that the economy under his tenure has
lifted up working- and middle-class Americans. In a newly released interview,
Nobel Prize-winning economist Joseph Stiglitz sharply disagreed, saying Trump’s
characterization is “just wrong.”
“The Washington Post has kept a tab of how many lies and
misrepresentations he does a day,” Stiglitz said of Trump last Friday at the
annual World Economic Forum. “I think he outdid himself.”
In Davos last Tuesday, Trump said he has presided over a
“blue-collar boom,” citing a historically low unemployment rate and surging
wage growth among workers at the bottom of the pay scale.
“The American Dream is back — bigger, better, and stronger than
ever before,” Trump said. “No one is benefitting more than America’s middle
class.”
Stiglitz, a professor at Columbia University who won the Nobel
Prize in 2001, refuted the claim, saying the failure of Trump’s economic
policies is evident in the decline in average life expectancy among Americans
over each of the past three years.
“A lot of it is what they call deaths of despair,” he says.
“Suicide, drug overdose, alcoholism — it’s not a pretty picture.”
The uptick in wage growth is a result of the economic cycle, not
Trump’s policies, Stiglitz said.
“At this point in an economic recovery, it’s been 10 years since
the great recession, labor markets get tight, unemployment gets lower, and that
at last starts having wages go up,” Stiglitz says.
“The remarkable thing is how weak wages are, how weak the
economy is, given that as a result of the tax bill we have a $1 trillion
deficit.”
As the presidential race inches closer to the general election
in November, Trump’s record on economic growth — and whether it has resulted in
broad-based gains — is likely to draw increased attention.
BLOG: THE GREATEST TRANSFER OF WEALTH TO THE RICH OCCURRED
DURING THE OBAMA-BIDEN BANKSTER REGIME
“The middle class is getting killed; the middle class is getting
crushed," former Vice President Joe Biden said in a Democratic
presidential debate last month. "Where I live, folks aren't measuring the
economy by how the Dow Jones is doing, they're measuring the economy by how
they're doing," added Pete Buttigieg, a Democratic presidential candidate
and former Mayor of South Bend, Indiana.
Trump has criticized Democrats for tax and regulatory policies
that he says will make the U.S. less competitive in attracting business
investment.
“To every business looking for a place where they are free to
invest, build, thrive, innovate, and succeed, there is no better place on Earth
than the United States,” he said in Davos.
Stiglitz pointed to Trump’s threats last week of tariffs on
European cars to demonstrate that turmoil in U.S. trade relationships may
continue, despite the recent completion of U.S. trade deals in North America
and China.
“He can’t help but bully somebody,” Stiglitz said.
Max Zahn is a reporter for Yahoo Finance. Find hi
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