As i write this, Donald Trump is well on his way to becoming the Republican Nominee for the 2016 US Presidential election. It is already a historic run, even keeping aside the Trump histrionics. He has risen on a wave of widespread anger towards the establishment, self-funded his campaign for the most part, and his non-political demeanor has endeared him to swathes of middle America that has become nauseated by the stench of unfulfilled promises emanating from the D.C beltway.
I write this today specifically for my friends and colleagues, who have largely been confounded by the Hitler-esque enthusiasm that Trump has generated. He has breached the line of civil discourse so often, it has left the intellectual elite tattered and fumbling for explanations. 'Surely the American public can't be gullible enough to put up with this bile?' they ask with red faced exasperation. Exhausted, they just chalk it up to hatred and ignorance among the general public.
I think this is a mistake. What many don't seem to realize is that despite President Obama's protestations to the contrary, the economy is indeed in decline. The average household, which makes around $50K annually, is struggling due to high rents, rising healthcare premiums, record credit card debt, record student debt, which can't be serviced adequately even with multiple part-time jobs that make up most of the 'good' jobs numbers. Their savings have been decimated by the Fed keeping rates at zero for nearly a decade. They are living paycheck to paycheck, many requiring food stamps to feed the family, and are a layoff away from being kicked to the curb, dignity and all.
Their anger is economic, not racial.
First, let me lay out exactly why i think the economy is rolling back into a recession some time before the election, and why the mainstream media is missing the boat completely on Trump's popularity. I'll try to keep the data points as recent as possible.
1. Chicago PMI: Expectation from the talking heads on TV was 52.5. The actual figure came out as 47.6 (below 50 is a contraction). Not only is that a big miss, it fits the contractionary trend of the last few months.
2. Pending Home Sales for Jan: Expectation was .5%. It fell -2.5%. Again, a big miss on expectations.
3. Dallas Fed Manufacturing: Expectation was -30(huge contraction). Came out at -31.8 (worse)
3. Dallas Fed Manufacturing: Expectation was -30(huge contraction). Came out at -31.8 (worse)
4. Markit Manufacturing PMI: Expectation was 51.2. Came in at 51.3, the lowest rise in output since Oct 2013.
5. ISM Manufacturing: Expectation was 48.5, came in at 49.5 (still a contraction, that has continued the trend from the last few months)
5. ISM Manufacturing: Expectation was 48.5, came in at 49.5 (still a contraction, that has continued the trend from the last few months)
6. Auto Sales for Feb: Expectation was 17.7 million, came out at 17.43 million. Auto sales are in a bubble imo, driven by artificially low interest rates and lax lending standards. Housing Crisis 2.0 if you will. Subprime auto loan defaults are already at a record high.
7. Markit Services PMI: Expectation was 50, came out at 49.7 (contraction). This is important since services form a great deal of our economy.
8. ISM Non-Manufacturing: Expectation was 53.0, came out at 53.4, still lower than January's 53.5.
9. US Factory Orders: Expectation was 2.1, came in at 1.6.
10. Baltic Dry Index: All time low at 290. Shipping worldwide is falling off the cliff.
11. Sales to Inventory Ratio: The inventory-to-sales ratio rose 1.35 in January from 1.33 in December, the highest ratio since April 2009.
7. Markit Services PMI: Expectation was 50, came out at 49.7 (contraction). This is important since services form a great deal of our economy.
8. ISM Non-Manufacturing: Expectation was 53.0, came out at 53.4, still lower than January's 53.5.
9. US Factory Orders: Expectation was 2.1, came in at 1.6.
10. Baltic Dry Index: All time low at 290. Shipping worldwide is falling off the cliff.
11. Sales to Inventory Ratio: The inventory-to-sales ratio rose 1.35 in January from 1.33 in December, the highest ratio since April 2009.
12. Retail Sales for January: Expectation was .2% increase, came in at -.4%. Another huge miss for an extremely important economic indicator for the US consumer economy.
This litany of bad economic news goes on and on. Export numbers for January fell for the fourth consecutive month. The national debt continues its inexorable march towards 20 trillion dollars. Corporate earnings were down 3.5% in the 4th quarter 2015 compared to 4th quarter 2014. Even the sole positive indicator being bandied about with much fanfare, the jobs numbers, falls apart at closer inspection. The latest jobs figures showed close to 88% of new jobs created to be part-time low wage jobs. All this facade of economic recovery has been kept alive under the aegis of ridiculously low interest rates kept for an unprecedented period of time. Not to mention low gas prices that should have propelled the consumer instead of stalling it to 1% GDP growth in the 4th quarter.
Black Swans are circling the American economy in anticipation, yet the mainstream media continues to peddle the fiction the Obama administration is feeding it: that the economy is just fine. They just need this lie to stay the course until the end of the election.
This litany of bad economic news goes on and on. Export numbers for January fell for the fourth consecutive month. The national debt continues its inexorable march towards 20 trillion dollars. Corporate earnings were down 3.5% in the 4th quarter 2015 compared to 4th quarter 2014. Even the sole positive indicator being bandied about with much fanfare, the jobs numbers, falls apart at closer inspection. The latest jobs figures showed close to 88% of new jobs created to be part-time low wage jobs. All this facade of economic recovery has been kept alive under the aegis of ridiculously low interest rates kept for an unprecedented period of time. Not to mention low gas prices that should have propelled the consumer instead of stalling it to 1% GDP growth in the 4th quarter.
Black Swans are circling the American economy in anticipation, yet the mainstream media continues to peddle the fiction the Obama administration is feeding it: that the economy is just fine. They just need this lie to stay the course until the end of the election.
Without this necessary context, it is impossible to fully understand and appreciate the radical success of the Trump campaign. He is sourcing Howard Beale and his 'Im mad as hell, and im not going to take it anymore' moment. Sure, like most well meaning demagogues, in absence of real thought out policy, he goes after the low hanging fruit to direct people's frustration. Immigrants, terrorists, minorities, foreign threats, real or imagined. But he also mixes it with real concerns. Like the national debt. Like terrible trade deals in NAFTA and TPP, or the worldwide currency war. Like the absolute lack of a cohesive foreign policy, especially in the middle east. Even he's constantly surprised by how far he can push the envelope. That should tell you how desperate people are, how ripe the system is for a violent implosion, no matter who lights the fuse on the dynamite of discontent.
Yet, we comfort ourselves with tired slogans that fit our trained Pavlovian responses. He must be a misogynist, a racist, a xenophobe, a fascist, a tyrant. He's none of those things, yet. He's a manifestation of our inability to listen. People are afraid, living hand to mouth, and you continue to berate them as 'Trump's stupid racist supporters'. If you do not open your eyes to what is happening in the economy, the real economy, not the New York Casinos, you will never see it coming.
I worry about what a President Trump would do once he figures out that he can't fix the system by plugging it with the 'best people'. That the system is terminal. Would his megalomania be able to handle the failure? I worry about that.
The economy will be in much worse shape six months from now, and Donald Trump will be within a hair's breadth of the most powerful seat in the history of the world. If you want to stop him, listen to the people supporting him. They're not racists. And you're not listening. Your dismissiveness feeds their anger, and makes him stronger.
