Trumponomics Is Killing The Economy Everywhere-- But Hitting Rural America Hardest Of All

The thriving economy Trump inherited from Obama was on autopilot. All he had ti do was not mess it up. The post-Bush recession Obama fixed and the economy he put in place kept chugging along for 2 years despite the trickledown ideology Team Trump started installing from day one. Too late to do anything to save it now. The trade war was meant to feel relatively painless 'til after the midterms. Mission accomplished. As David Lynch put it in the Washington Post , "According to the Atlanta Federal Reserve Bank's 'nowcast,' the picture is increasingly gloomy-- and most economists say the U.S. economy will slow in 2019... The adverse signs are enough for economists... to warn of a 'synchronized slowdown'... A global economy that until recently was humming has broken down, a sharp contrast to the picture just a year ago when the world was experiencing its best growth since 2010 and seemed poised to do even better... Although almost all economists expect the economy to continue growing through 2019, there is now a roughly 1-in-6 chance of a recession over the next 12 months, the highest likelihood since the recovery began in mid-2009, according to the New York Fed." How do we know?

Already, builders in the United States are erecting fewer single-family homes. German factories are sputtering, and in China, retail sales are growing at their slowest pace in 15 years.

The sudden slowing has fed into a global financial sell-off that has driven several U.S. stock indexes into or near bear market territory with losses of more than 20 percent.

Political turmoil at the highest level in the U.S. and other advanced economies-- epitomized by the partial shutdown of the U.S. government and street protests in France-- is further feeding investor anxiety.

Additional forces threaten to turn what had been a gradual global slowing into something more serious. Central banks that went to extraordinary lengths to boost growth after the global financial crisis have become less supportive-- with the Fed announcing another increase in its benchmark interest rate last week. And tensions over Trump's “America First” trade offensive are sapping business confidence on multiple continents.

“The theme coming into this year was everything was synchronized, everything was good everywhere,” said Torsten Slok, chief international economist for Deutsche Bank Securities. “Now everything is not good everywhere.”

...In the United States, despite nearly a decade of uninterrupted economic growth, almost 55 percent of Americans say the country is on the wrong track, according to the RealClearPolitics polling average. A sharp economic slowdown could short-circuit belated rewards for workers who are receiving average annual wage increases of 3.1 percent, the highest mark in nine years, according to the Bureau of Labor Statistics.

“If that doesn't continue, you'll see continued domestic political polarization,” said Peter Harrell, a senior fellow at the Center for a New American Security. “Clearly, a slowing economy is a huge concern to the Trump administration.”

An economic slowdown-- coupled with tumbling stock prices-- could also make the president more amenable to a quick deal with China in the months-long tariff war, Harrell said.

“They are getting nervous about the markets and nervous about the slowing in the economy, and there's a similar reaction in Beijing,” he added.

Headlines like World Economy Is Set to Feel the Delayed Trade War Pain in 2019 at Bloomberg News indicate that although Tump's trade wars started in 2018, "2019 will be the year the global economy feels the pain. Bloomberg’s Global Trade Tracker is softening amid a fading rush to front-load export orders ahead of threatened tariffs. And volumes are tipped to slow further even as the U.S. and China seek to resolve their trade spat, with companies warning of ongoing disruption. Already there are casualties. Recent data underscore concerns that trade will be a drag on American growth next year. U.S. consumers are feeling the least optimistic about the future economy in a year, while small business optimism about economic improvement fell to a two-year low and companies expect smaller profit gains in 2019."

Trump's mucking up the economy was his bullying and bullshit-- overlain with failed tax cuts for the rich, paid for by the poor-- gives Democrats an opportunity to expand their 2018 inroads into red rural districts if the party and the candidates present a vision and policy agenda to reverse rural and small-town America’s declining living conditions, something promised by Trump with hollow, cynical words and no action. Savvy Democrats like Audrey Denney and Mike Siegel, expected to run in significantly rural districts like CA-01 and TX-10, appreciate how and why those conditions plummeted in the first place and why there have been few signs of improvement. Rural communities have not recovered the jobs they lost in the Bush recession and a Trump recession is already rearing its head threateningly.

Lillian Salerno, was Obama's undersecretary of rural development in the Agriculture Department from 2012-2017 before moving back to Dallas. She didn't win a 2018 primary bid against another Obama alum, but recently explained to us that "For years, rural and small-town America have fought an uphill battle for economic survival. Many in the halls of power viewed the shuttered storefronts and desolate downtowns as the inevitable consequence of globalization and technology, about which little can (or even should) be done. But one major force behind the steep economic decline is something that, until very recently, has received virtually no attention: the unprecedented level of corporate monopoly power that has been concentrated throughout the American economy. The consequences are wide-ranging and dramatic (one new research paper found that the increase in corporate consolidation effectively transfers $14,000 a year from workers’ wages to corporate profits). But nowhere are the effects more visible than in rural and small-town America. In these communities, corporations dominate local economies to such an extent that people are unable to start their own businesses or sell into markets. They are no longer free to take their labor elsewhere for better pay. Small town businesses and the communities they serve no longer have the power to shape their own economic destinies, which were once vigorously protected by federal antimonopoly laws. She continued:

Let’s look at just one indicator-- new business formation. From 2010 to 2014, 60 percent of counties nationwide saw more businesses close than open, compared with just 17 percent during the four years following the 1990s slowdown. During the 1990s recovery, smaller communities-- counties with less than half a million people-- generated 71 percent of all net new businesses, with counties under 100,000 people accounting for a full third. During the 2010 to 2014 recovery, however, the figure for counties with fewer than half a million people was 19 percent. For counties with less than 100,000 people, it was zero.

How did we get here? After the Great Depression, the government used antimonopoly laws to keep markets open and fair for smaller, independent businesses-- in other words, to keep mom-and-pop shops open and Main Street buzzing. These were businesses run by people who cared about and understood their communities, that kept wealth circulating locally, that created the vast majority of new jobs and that were often the source of game-changing innovation.

But in the 1980s, folks in power decided bigger was better, and conventional political wisdom followed suit. For the federal officials charged with protecting competition, that meant that cheap consumer prices trumped all other values, including the preservation of American jobs, open and competitive markets where innovation could flourish, and maintaining level playing fields for start-ups and small businesses. To this day, when government officials evaluate mergers, it’s considered a good thing when they result in job losses-- because that means, in the twisted reasoning we still use, gains in economic efficiency. The hard-working Americans turned out on the street corner to look for new jobs are the human sacrifices to the insatiable beast of corporate concentration.

This slow-rolling wave of corporate mergers has left almost all major markets-- airlines, telecommunications, health care, retail, milk, seeds for growing crops, hardware, even cowboy boots-- dominated by a cluster of mega-corporations, cloaked behind a plethora of brand names. These behemoths now hold unprecedented power over thousands of once-thriving community economies.

Corporate concentration has hit farmers, ranchers and agricultural workers especially hard. Many markets are entirely monopolized by a single company that dictates the terms of business to suppliers. Two decades ago, in the seed industry alone, 600 independent companies existed. Today there are six giants, several of which are pursuing high-profile mergers that will result in even more radical concentration. Similar levels of concentration exist for the beef, pork, chicken and dairy industries. The result is that the farmer’s share of each retail dollar of food has been collapsing, while consumers pay either the same or higher prices. Mega-corporations in the middle exploit their dominant market positions to reap all the profits.

It is a myth that the economic challenges that rural and small-town America face are caused by forces largely outside our control, like globalization or improvements in technology. We have the ability to help restore competition and economic vibrancy in rural America and beyond. The government has the authority to ensure markets are once again open and competitive so that communities have a chance to shape their own economic destinies. The question is whether we will recognize the error of our ways and put taking on monopolies high on the economic agenda-- for rural and small-town America, and for everyone who wants to ensure our country can once again be the land of opportunity.

Denney and Siegel, both of whom made significant inroads in their 2018 campaigns against entrenched Republicans are talking to rural voters about the rigged economy. Siegel has been explaining, for example, how the GreenNewDeal-- already endorsed by Texas' admired and respected Congressman Lloyd Doggett in a nearby district-- "will bring countless quality jobs to build renewable energy infrastructure, support energy efficiency, and promote local agriculture. Here in Texas, we have a tradition of economic populism going back a hundred years, and we can tap into that with a program that seeks both short-term and long-term change."

Former Iowa congressional candidate Austin Frerick has no plans to run again in 2020 but he's been working at the Open Markets Institute on solving uniquely rural problems facing districts like Siegel's and Denney's. Recently, he wrote that "At the root of rural America’s angst is a fairly simple story that many rural voters recognize. Over the course of a generation, major sectors of the rural economy have been rolled up and are now controlled by a handful of predatory, extractive multinational corporations. As a result, manufacturing and farming jobs have left the area, and opportunities-- to change jobs, start your own business, fund good schools, and build communities where your kids can thrive and start their own families-- are the exception, not the rule. It is no surprise that many of those who remain in these communities have lost any sense of respect, dignity, and self-determination."

He insists that to regain trust, Democrats "need to they are willing to take on the faraway monopoly bosses who are carving up rural communities, shutting down competition, and gaming international trade to get even farther ahead, while corrupting the political process with lobbyists and dark money all along the way. He makes the point that if Democrats want to "compete against Republicans in rural America, they can start by standing up for the right of rural Americans to compete against the corporate monopolies that have been left free to loot and plunder our communities." That should be easy for a Democrat like Audrey Denney in the rural northeast corner of California. Her mostly white (78%) district is 48% rural and growing up on a family farm, studying and then teaching agriculture at a local state university has prepared her well to represent her neighbors. She told us the rural communities up there are dying.

"People," she told me, "don’t have access to healthcare services-- in two of our 11 counties women can’t deliver babies in hospitals. Schools are closing. People are struggling to live paycheck to paycheck. We have a housing crisis and devasting fires like the Camp and Carr Fires continue to ravage my district. Our 2018 campaign cast a vision that our economy shouldn’t just work for the rich-- and every single person should be able to earn a living wage. We talked about bold progressive policies like single-payer healthcare in terms that resonated with rural voters. We cast a vision for how restoring our ecosystems to health could help mitigate climate change and protect us from the devastation of wildfires. We made real strides communicating a unifying message to voters in our vast, rural California district. In 2014, Rep. LaMalfa won by 22 points, in 2016 by 18, and we narrowed that gap to 9 points after only 10 months of campaigning. Another indicator that our message resonated with voters that normally vote conservative is that I earned about 15,000 more votes than governor-elect Newsom in the CA-01. We’ve created a strong base of support and have a roadmap for success in a traditionally conservative district."