Today is Labor Day, a day with many meanings in American culture. It is ostensibly a day to celebrate the hard work and achievements of the working men and women. For some, it has a more direct meaning, a celebration of the achievements of organized labor in America. For the rest, it’s the day we use to mark the unofficial end of the Summer.
The White House used the occasion to mark the “strength” of the American economy under President Donald Trump. They crowed about Wall Street reaching all-time highs. They celebrated high GDP growth. They made sure to talk up low unemployment and positive job growth. To hear Sarah Huckabee Sanders tell it, let alone Donald Trump, all’s better than well.
You don’t have to dig deep though to discredit their narrative of Donald Trump creating this economy. The current growth is, at best, on par with the Obama era. President Obama had several quarters as President that beat Trump’s best, so far. The economy had a record number of months of private sector job growth in the Obama era. The unemployment rate had basically reached full-employment in the Obama era. Inflation was low. Wages grew in President Obama’s second term. The deficit was falling, year after year, since the end of the Great Recession. President Obama handed Donald Trump a Cadillac economy.
From what we can tell, Donald Trump has managed to not kill the job growth or Wall Street growth. His signature economic achievement is his tax cut, which mostly went to the rich, and they mostly used it to buy back shares of corporations, hand out dividends, or both. He’s done some deregulation too, which when combined with the tax cut funneling towards shareholders, has turbo charged Wall Street. That’s not a bad thing- millions of middle class, hard working Americans have their retirements tied up on Wall Street. It’s also not a terribly great indicator of the overall economy.
There are plenty of storm clouds on the horizon for the economy. The federal deficit jumped, bringing back trillion dollar annual deficits since the tax cut. Core inflation is now wiping out wage growth. The federal government is uneasy enough about their fiscal footing to cancel federal pay increases scheduled for FY2019. Trump’s tariffs and cancellation of trade deals threatens a trade war that could raise the prices of basic goods, and is already forcing us to pay a bailout to big agriculture. Interest rates are rising, and will continue to. Personal debt is rising again, as it did before 2008. The right to organize under a Union is being eroded by the Supreme Court and the President. The economy is not, despite all of this, actually bad. It’s bad for some working class people, and the poor (it’s always bad for the poor). For the rest of us, there are warning signs of troubles ahead.
On this Labor Day, we have a President who is leading us away from the economy our grandparents and great-grandparents built through struggle, and towards one that favors the rich. Despite that, things aren’t bad, yet. I wouldn’t celebrate too happily, yet.