Donald Trump 2016 – Page 8 – The Wrongologist

Sunday Cartoon Blogging – June 26, 2016

Sunday cartoons return! Sorry for the hiatus, but it was unavoidable.

Quite the week. Did the sky just fall on the UK? We will have more over the next few days. There is still left-over emotion about Orlando. We had a sit-in by Dems, or as one wag said, it was the first time in years that Democrats stayed up past 10:00pm. But, did it achieve much? And of course, there is the 2016 presidential campaign.

Europe and the UK worked for nearly 70 years to put the EU together, and it is undone in an evening:

COW Brexit 2

The conventional economists’ view of what Brexit means:

COW Brexit 3

UK Prime Minister David Cameron misreads the people, pays the price:

COW Brexit 4

Orlando led to sit-ins, political and otherwise:

COW Sit In

Loyalty oaths were on display after Orlando:

COW Loyalty

Trump has less campaign dough than expected, but there was a benefit:

COW Bigger Hands

The Pant Suit vs. the Pant Load – Jobs, Part Infinity

We are in a time when a presidential candidate’s personality counts for more than the candidate’s policies. Candidates obfuscate on most policy issues and the media lets them get away with absolutely outrageous declarations of near-facts or outright half-truths.

One policy we must make them nail down explicitly is their jobs policy.

The key to making America great again is adding more jobs. Wrongo is a pest on this subject, but without more jobs, growth in GDP is harder to achieve. Tax revenues are more difficult to grow. People who are idle get into trouble.

The Pant Suit and the Pant Load know this, so they will talk from here to November about adding manufacturing jobs back to cities that lost them starting in the 1970’s. Those jobs are never coming back, but both of them are working hard to convince you they can do it. Consider this, from Parallel Narratives:

We’re now being told by folks who know better that all we need to do to bring those jobs back, to resurrect a future we can believe in, or make America great again, is to elect the outsider politician who is not beholden to elite interests like banks, CEOs and politicians. Unfortunately, that horse has left the barn, those jobs are gone for good…

A great example of a politician braying the “I can bring jobs back” mantra was in Sunday’s NYT business section’s column, “Preoccupations.” In it, a young couple had the option to work from home, so they moved from Austin, TX, that hot-bed of tech, to South Portland ME, not so techie. They work for two different firms from two home offices. Then, they are invited to attend a funds-raiser for a gubernatorial candidate: (emphasis by the Wrongologist)

The candidate raising campaign funds was a hard-working lawyer who seemed genuinely well meaning, but no one had told him that his economic platform of protecting manufacturing jobs and Maine’s traditional industries wasn’t going to fly with an audience of health care professionals, programmers, web designers and researchers…We muttered to each other that this guy didn’t have a place in his platform for people like us, many of whom worked for employers in other states. Our checkbooks stayed in our pockets.

If you hear this kind of BS from the Pant Suit or the Pant Load, your checkbook should also remain hidden.

While the low-wage jobs problem has been around for more than 40 years, America’s politicians are still peddling the same solutions. In fact, a new analysis from the White House’s Council of Economic Advisers (CEA) released Monday shows that only 88% of men ages 25 to 54 are participating in the US workforce. The CEA reports that the US has the third-lowest labor-force participation rate for “prime-age men” among the world’s developed countries. We have done so well that, on a percentage basis, Greece, Slovenia and Turkey all have more men working than the US does. Greece! The decline is concentrated among less educated. Here is a chart:

Male Labor Force Part by Edu

More than 95% of men used to work in 1964, regardless of their educational attainment. Today, you better have at least a bachelor’s degree if you want to be sure you will get a job. But it is worse than that. The CEA said:

In recent decades, less-educated Americans have suffered a reduction in their wages relative to other groups. From 1975 until 2014, relative wages for those with a high school degree fell from over 80% of the amount earned by workers with at least a college degree to less than 60%.

Clinton and Trump would have you believe that the problem is bad trade deals with China, the TPP, or immigration. Trump in particular, is saying that the political elites have knowingly caused this all at the expense of the American worker. There is a modicum of truth to that, but it is the American corporation and the American tax code that is closing out US jobs, and hammering the middle class. American corporations now pay about 11% of our total US taxes, down from about 30% of US taxes in 1960, as jobs (and markets) have moved abroad.

What are the Pant Suit and/or the Pant Load going to do in the face of advancing automation now facing us not just in manufacturing, but also in the service and knowledge industries?

It is time to make the candidates talk about this on the campaign trail.

The basic policy choice we have is to put people to work, or to continue to allow the profit motive to dominate. If the profit motive remains supreme, we will continue our relentless drive to reduce labor costs — by eliminating jobs, or by paying workers less for the same work.

To date, our leaders have chosen the latter path, and we have reaped the results. We have become a land of spreadsheets and flags.

Can the GOP Edge in the Primaries Carry Over?

(Note: There will not be a Sunday Cartoon post again this week. Wrongo and Ms. Right will be in Santa Barbara CA for our granddaughter’s college graduation. Blogging will resume on Tuesday, 6/14)

In 2008, the Republicans turned out a total of 20.8 million votes in 45 Primaries. In the 2016 primaries, the Republicans grew that total to 28.6 million votes.

The Democrats have 27.7 million primary votes in 2016, before the DC primary. When Clinton and Obama ran against each other in 2008, they had 37.4 million votes.

So the GOP is up 7.8 million votes or a 37.5% increase over 2008. The Democrats are down nearly 26% or, 9.7 million votes. The parties were separated by only 900,000 votes by the end of the 2016 primary season, and the GOP was on top.

The question to ask the pundits: What does the Republican increase in primary voter turnout by almost 8 million, and the Democrats’ vote shrinking by almost 10 million mean for the general election?

We could talk about the populist turn in 2016. The electorate is rebelling against the establishments of both parties. We could point to the insecurity about jobs, social security and pensions for the 98% of America who know these things are no longer certain in today’s America, and are even less certain in tomorrow’s America. These have made the Bernie promise of free education, Medicare for all, and a break-up of the banks very popular with Millennials. Trump has understood the economic fears of the white middle and lower classes, and has added fear of Muslims, fear of Mexican immigrants and a longing for a simpler world where America was unchallenged, and the 40-hour work week was nearly a right, to be the aspirational standard for tomorrow’s America.

We could talk about Hillary Clinton and the enthusiasm gap. In 2016, Hillary has garnered 15.7 million votes, and she will win the nomination. In 2008, she received 18.1 million votes, 2.4 million more than she got in 2016, and lost. This time around, she was not facing one of the best retail politicians of the last 100 years in Barack Obama, and no one thought that Bernie was real competition, until he was.

So, America is now at a point where, for the Pant Suit vs. the Pant Load, these numbers really begin to matter. Let’s remember that primary turnout doesn’t necessarily translate into a reliable indicator of the turnout in the general election.

Also, over half of the GOP turnout was for candidates other than Trump. Voter preference may change significantly for the general election.

This election will be true to previous form and will be decided in just a few states: Ohio, Florida, Michigan, North Carolina, Virginia and Pennsylvania will likely decide the outcome. Obama won all but NC in his 2012 race against Mitt Romney.

Assume that Hillary will win the majority of blacks, Hispanics, other ethnic minorities and many white women. The biggest question is: What percentage of women will vote for Hillary? If Trump peels off enough, he may be able to win in a few of those states.

So, turnout will be key. As an example, Charlie Crist would be the current governor of Florida if just 50% of the African American voters who were registered Democrats, had voted in the last gubernatorial election. In just in one (populous) Florida County.

The gap in the primary voting numbers are a good indicator that the GOP primary voters were more enthusiastic than were Democratic voters in 2016. However, the Democrats were very good at “Get out the Vote” programs in 2008 and 2012. Can Donald Trump match that in 2016?

Hillary starts with better odds of winning since the Democrats have an Electoral College advantage. Romney won 206 Electoral College votes. He lost Colorado, Florida, Ohio, Pennsylvania and Virginia each by between 150,000 and 250,000 votes. So, it’s conceivable that the enthusiasm for Trump in these states combined with less enthusiasm for Hillary could give him an Electoral College victory.

OTOH, Trump can’t change who he is. He’s not going to go toe to toe with Hillary on wonky policy details. So, he’ll continue the campaign that won him the primary in the general.

Will Pant Load fatigue set in? It hasn’t yet.

The Pant Suit vs. the Pant Load – Jobs

The 90% know they’ve gotten the short end of the stick for way too long. Now, with the bad May jobs report that came out last Friday, there is concern that our seven-year recovery, which has not helped everyone, may not last a lot longer.

So, a quick review of the numbers: The BLS reported that the economy had added 38,000 jobs in May, the lowest since September, 2010. Furthermore, the April job gains of 160,000 were cut by 37,000, while the March job gains of 208,000 were cut by 22,000.

So, with 59,000 jobs revised away, and with only 38,000 jobs “created” in May, the net total in today’s report was a net loss of 21,000 jobs in the last 3 months. We haven’t seen this since the 2008 Financial Crisis. And the labor participation rate dropped for the second month in a row, to 62.6%, which doesn’t bode well for the future either.

But the true bad news was that the number of temporary jobs also fell by 21,000. Temporary employment is a predictor of future employment trends, both on the way up, and on the way down.

The temporary-help sector has been the best thing about the economy; we reported in March that more than 100% of the jobs created in the US since 2005 were temp or contracting jobs. The temporary jobs sector peaked in December 2015 at 2.94 million, and has lost 63,800 jobs since then:

Temp Jobs 2006-2015

Wolf Richter thinks that the decline in temporary workers isn’t just a one-month statistical blip, but a five-month trend, and that the sector has become a warning sign that the labor market could be heading towards deeper trouble. From Richter:

This also happened in 2007, when the temporary help sector started shedding jobs even as the overall economy was still adding jobs until right up to the official beginning of the Great Recession. And it happened in 2000, before the 2001 recession kicked in.

We lost nearly 8 million jobs in the Great Recession. Since 2009, the economy has added 14.5 million new jobs. But if we subtract the 8 million jobs lost during the recession, our net job growth was 6 million added, while our population grew by 16.5 million.

Now, not all of the growth in population is a person currently looking for a job. The big contributors are immigrants (both legal and otherwise), and births. Most of the immigrants want work, but they are the smaller fraction of our population growth, while infants, toddlers, and young children do not need access to employment just yet. The Boomers are trying to stay employed and not retire, while Millennials have moved into the workforce.

All of these groups are jostling for jobs. If US job growth can’t accommodate them, their individual situations will get worse, even while the overall numbers might look acceptable on paper.

So the questions for the Pant Suit and the Pant Load are:

Do they think that the lack of GDP growth and our lack of jobs growth is politically sustainable? How long could it go on without seeing pitchforks in the streets?
Where are the jobs going to come from?
What will they do if the jobs fail to materialize?

Hillary Clinton has the bigger problem, since she is presenting herself as the heir of Obama’s (and earlier, Bill Clinton’s) economic policies. She has to play defense on the economy. Trump can jump on the bad data, saying he can fix it, and many people will accept that uncritically.

But don’t count on hearing either candidate say anything that you think is useful. They will look for, and fail to find, “market” solutions to this dilemma created by the “market.”

And market solutions are what they will tell us we must wait for.

Pant Suit vs. Pant Load, Part III

(Note: this week there will be no Sunday Cartoon Blogging, since Wrongo will be visiting MA and PA through Sunday, returning on Monday.)

Wrongo and long-time blog reader Terry engaged in a short email dialog on how to “fix” the US political system. We were concerned that there is no individual Congressperson accountability. A backbencher can follow an agenda that can imperil our nation (and a few have done just that) without consequence.

But in America, accountability is managed by election district. Your only alternative is to round up enough votes to replace poor representation. So, if you wanted to reform the impact that money has in our politics, or the way the filibuster works in the Senate, you have to reform Congress.

Yet, under our Constitution, only Congress can reform Congress. And today, there are three parties vying for control of it, and since they rarely are willing to work with each other, not much gets done. So you can completely forget about Reform.

And the parties have not been willing to deal with the not-so hidden desperation in America that shows up in statistics like increasing opioid addiction and suicide rates. The political class ignores how lethal the US economy is for the less fortunate: The New York Times reported this week that US death rates have risen for the first time in a decade.

The increase in death rates among less educated whites since 2001 is roughly the size of the AIDS epidemic. One reason is the use of opioids. And, despite Mr. Obama’s speech in Elkhart, IN where he said our economy is doing well, there has been a spike in suicides to levels higher than during the 2008 financial crisis.

The little people know that the economic policies followed by both parties have brought income inequality to Gilded Age levels. They know that all of the post-crisis income gains have accrued to the top 1%. Unlike in China which continues to grow, our economic expansion has brought with it high unemployment and underemployment, particularly among the young.

As a result, people feel powerless. In fact, a RAND survey in January found that 86.5% of GOP voters who strongly identified with the statement “people like me don’t have any say about what the government does” were Trump supporters.

And, since so much of politics is about corralling money into the bank accounts of our politicians, your Congresspersons have no intention of listening to you unless you have given at least $10,000 to their campaign fund, or are the CEO of a major employer in their district or state. In US politics, money=speech. But, there is little meaning to free speech without free access to influence the political process.

Many of us feel nihilistic about our politics and our government. So the Pant Load’s support seems a lot like a form of public political vandalism where The Donald is the can of spray paint.

Most people can see that a large portion of Americans are poorer with each new election cycle. After all, the reason Trump (and Sanders) are doing well is because many, many workers are seeing their job security, income security, and retirement security all go up in smoke. That’s no mystery, just the natural outcome when the government fails to represent the people in favor of the rich who fund their campaigns. It’s no wonder the Pant Load is easily corralling the frustrated.

But can the Pant Suit reverse the Democratic Party’s abandonment of the working class in America?

We know that she needs to focus on drawing more potential working class and young supporters, but so far, Democrats are content to run only in their municipal strongholds, following a strategy of stitching together interest groups, largely in states with big urban populations.

Energizing people around the fact of our corrupt political system is both a way to get higher turnout, and a way to elect members of Congress and state legislatures to fix the corrupt system. That is Bernie’s message, what he calls a “political revolution.” But Sanders is not the person to bring this about. Consider Sanders just the messenger.

Strategically, the Pant Suit needs to figure out how to get folks energized enough to vote for her and against Trump for reasons that don’t so paralyze them with fear that they stay home. If she is successful, it could be the start of re-establishing the New Deal coalition, and a re-installation of the principles of the civil rights movement.

That’s a huge job that will not be completed in one election cycle.

This threat is the GOP’s worst nightmare. They have worked for 40 years to eliminate these ideas, so expect the GOP to unanimously support the Pant Load:

COW Never Hillary

The Bernie Dems will rally behind Hillary for similar reasons.

Trump/Arpaio 2016: Because immigrants are the greatest threat to the nation.

Will Take-Home Pay Grow?

One of the big questions that we must force Hillary Clinton and Donald Trump to address is: Where will growth in take-home income come from?

If we look at pay, despite recent improvements, real average hourly earnings have declined since the 1970s:

Real Hourly Earnings 2016

Source: Advisorperspectives.com

At the same time, the average hours per week have trended down from around 39 hours per week in the mid-1960s to a low of 33 hours at the end of the last recession. It is 33.7 hours today. After eight years of economic recovery, it is only up by 42 minutes.

So, take-home pay has stagnated (or worse) for the average American since the Nixon administration. People have coped by having both spouses work, by borrowing under a Bank of America heloc, and by refinancing mortgages when interest rates declined.

But, by 1995, spousal participation in the job market had peaked, at about 60%. Borrowing under home equity lines of credit peaked in 2005 at $364 billion. These loans that were used to pay for remodeling, education costs, or new Ford F-150s were less than half of that amount in 2015, at $150 billion.

After the Great Recession, The only remaining way to boost household cash was mortgage refinance. There were windows to refinance a mortgage in 2009, and again in 2013. The reason was that mortgage interest rates stayed very low. In fact, US 10 year treasuries were at a 60 year low in 2013 at 1.50%, and mortgage rates are tied to the treasury rate. Refinancing mortgages can happen to many people, this is where companies like Polar Mortgage come in to help homeowners out. Homeowners also have the ability to get financial help from the government through the use of federal credit union home loans in order to refinance their homes.

As an example, a 1.5% decline in a mortgage payment on a $250,000 house would save $3750 a year, or a little over $300 a month added to the pockets of the average hourly worker. Taking income tax into consideration, it would take an additional 17.5 hours of work at the $21.45 rate to equal that amount. But that’s not practical. It would require a 52% increase in hours, if you are working the national average number of hours, which isn’t going to happen.

So, if the Federal Reserve raises interest rates, as they seem set to do this month or next, mortgage refinance will no longer be helpful to the vast number of working people. CoreLogic tracks the interest rates on outstanding mortgages, collecting data from mortgage servicers. Their data track the volume of outstanding mortgages by interest rate level for both the number of mortgages, and the unpaid principal balance on those mortgages (UPB).

Their analysis says that few mortgages will be refinanced if rates go up: Most borrowers have mortgages with rates below 4.50%, with 62% of mortgages and 72% of UPB in this range. There are an additional 14% of borrowers and 13% of UPB with mortgage rates between 4.5 and 5.0%.

Since refinancing has costs (legal, title search and insurance, and points), a simple rule of thumb is to add 1% to the current mortgage rate to get a rate at which borrowers would have a financial incentive to refinance. The current Freddie Mac mortgage rate is 3.57%, so the point of indifference for a borrower would be ~4.5%. CoreLogic estimates that only about 28% of the UPB of America’s outstanding mortgage loans are worth refinancing today. And should the Fed live up to their plan, and increase rates by ½% in 2016, an additional 5.5 million borrowers will lose their incentive to refinance.

So, if mortgage rates rise in 2016 as predicted, refinancing won’t improve the financial situation for very many of us.

New Deal Democrat sees all of this and says:

So the bottom line is, we are already in a period…where real gains by average Americans won’t be available from financing gimmicks, but must come from real, actual wage growth. At the moment I see little economic or political impetus to make that happen, even though average Americans understand via their wallets the issue all too well.

We’ve killed our economy.

You’d think after 8 years where most US job growth was in part-time jobs, where hourly income is at the same level as in the Ford administration, where we have the most people ever in poverty, where student debt exceeds credit card debt and automobile debt, people would catch on.

Maybe, but not unless we demand real answers of Hillary Clinton and Donald Trump, and not let the candidates say the plan is to rearrange the deck chairs on the Titanic.

The Pandering Pant Load

Trump is a thin-skinned Pandering Pant Load© with rabbit ears: He hears everything that is said about him and responds to it all. Say something, and @realDonaldTrump will tweet back something nasty.

We saw two examples of his pandering in the past few days. First, Trump attended “Rolling Thunder” an annual event which brings hundreds of thousands of motorcyclists to DC to raise money for POW-MIA’s of the Vietnam War. On Sunday, He told about 5,000 that illegal migrants in the US are often better cared for than the nation’s military veterans:

Thousands of people are dying waiting in line to see a doctor. That is not going to happen anymore

Although Trump has used this comparison of the treatment of immigrants and veterans before, it isn’t true. Congress and many states have written an assortment of laws and policies designed to restrict government services to people living in the country illegally.

Could Congress do more for vets? Absolutely. Do we do less for them than we do for illegals? NO.

We know that the Pandering Pant Load© claimed to have raised $6 million for veteran’s groups, including $1 million of his own money when he held a fundraiser for veterans’ causes in place of an Iowa debate that he skipped.

But so far, he hasn’t distributed it, or said where it is going. He is expected to hold a news conference today to announce the names of the charities selected to receive the money. We’ll see.

Still, when you tell an interest group that you will do more for them than we do for illegals, you are setting the bar very low.

Second, the Pandering Pant Load© supposedly told House Speaker Paul Ryan (R-Wis.) he supports cutting Social Security but cannot admit it publicly because it would hurt his election chances, according to Bloomberg BusinessWeek. Trump said of cutting Social Security:

From a moral standpoint, I believe in it…But you also have to get elected. And there’s no way a Republican is going to beat a Democrat when the Republican is saying, ‘We’re going to cut your Social Security’ and the Democrat is saying, ‘We’re going to keep it and give you more.’

Bloomberg reported that The Pandering Pant Load© made the above comments during the May 12 meeting with Mr. Ryan aimed at improving ties between them, citing an unnamed source who was in the room.

So the deal was made, and what we have been watching is theater. And from a “moral standpoint”, Trump just lies about what he plans to do, because his audience is against it?

HuffPo reported that Trump’s opposition to cutting Social Security (SS) has been both a hallmark of his campaign and one of his greatest departures from traditional conservative ideology. Now it seems, he is simply pandering. Consider this:

Many conservative House Republicans told The Huffington Post shortly after the May 12 meeting with Ryan that that they were unconcerned about Trump’s public posture on Social Security.
Why? Because Trump policy advisor Sam Clovis had already appeared to reverse course on May 11, indicating that Trump would be willing to consider cuts as president.

The media have their nice, shiny Trump, and they have signed on for the whole ride, so don’t expect to hear much more about his pandering.

The Pant Load will try to dupe people (this week, Vietnam Vets and the middle class) into voting against their interests, because he is sure that they can’t be bothered to pay enough attention to understand that he’s lying.

The truth is that SS faces a funding gap beginning in 2034. Without Congressional action to either raise the program’s revenues or scale back benefits, there will be an across-the-board benefit cut of approximately 20%.

We all know this.

Why is the Pandering Pant Load© being dishonest about it? Maybe the real shock shouldn’t be that Trump is devoid of integrity; if he’s breathing, he’s lying.

It’s that his base doesn’t seem to care that he’ll throw them under the bus without a second thought.

Sunday Cartoon Blogging – May 29, 2016

Californians will be pleased to know that when Donald Trump becomes president, he can stop their drought overnight. California just went through the driest four-year period on record.

But Trump isn’t sold. He told supporters in Fresno, CA that the dry spell is bogus. Trump said the state was denying water to Central Valley farmers to prioritize the Delta smelt, a native California fish nearing extinction — or as Trump called it: “a certain kind of three-inch fish.” He told the crowd:

We’re going to solve your water problem. You have a water problem that is so insane. It is so ridiculous where they’re taking the water and shoving it out to sea…

At least we know where Trump stands on the issue:

If I win, believe me, we’re going to start opening up the water so that you can have your farmers survive.

Never mind that this is a state, not a federal issue, because Trump will win on the environment too.

In other news, Hill’s email problem gives her a few hurdles:

COW Hillarys Hurdles

So far, we’ve heard what we already knew, she broke a rule that others had broken before her. Of course, to Republicans, breaking an agency rule is proof she’s broken the law. Maybe, but rules ain’t the same as the law. She needs to put this behind her, or face death by a thousand cuts.

We got our first look at Hill’s emails: