NDN Blog

The Trump Economy Is Not Working For Average Americans

At his State of the Union address this evening, Trump is likely to make grandiose claims about the state of the American economy. In just the past few months, he has claimed that the economy today is better than it has ever been, and that he has accomplished more in his first two years than any President ever. However, these claims are transparently false, and indeed, the economic performance of the US economy over Trump’s first two years has not even been better than that of Obama’s last two years, much less all of American history.

First, jobs growth. Although January’s payrolls report showing 304,000 new jobs was undoubtedly strong, we can’t let this cloud the fact that jobs growth has slowed under Trump (and indeed, monthly job growth was 300k or higher 4 separate times in 2015-16, compared to only twice in 2017-19). During the last 25 months of Obama’s second term, monthly jobs growth averaged 213,000. In the first 25 months of Trump’s term, meanwhile, it has slowed to 205,000 jobs per month.

Second, real wage growth. During the first 24 months of Trump’s term, real hourly wages have increased at a monthly average (annualized) of 0.9%. By contrast, real wages increased at a monthly average (annualized) of 1.35% during the last 24 months of Obama’s term.

Furthermore, median household income (which includes both private income and government taxes/transfers) grew by 1.76% in Trump’s first year, compared to growth of 5.15% and 3.13% in 2015 and 2016 under Obama.

Third, the deficit. When the economy is near full employment, traditional Keynesian economics would prescribe a reduction in the deficit, to provide the fiscal room for stimulus in the future. As a result, the deficit as a % of GDP fell under Obama from 9.8% of GDP in 2009 to 3.1% in 2016. Trump has reversed this trend, increasing the deficit from 3.1% of GDP in 2016 to 3.9% in 2018, and a projected 4.2% in 2019. Deficits this large while the economy is strong are unprecedented in US history. Trump’s budget deficits of 3.4%, 3.9%, and 4.2% in 2017, 2018, and 2019 will be the largest deficits while the unemployment rate is under 6% since 1950.

Fourth, the trade deficit. Perhaps Trump’s most signature promise was to end the so-called “foreign theft of American wealth” that he thought the trade deficit represented. Regardless of the lunacy of such thoughts, how successful has the President been in reducing the trade deficit? In fact, Trump’s policies have led to a surge in the trade deficit, as growth in imports has increased significantly while US exports have struggled. In June-October 2018, the average monthly trade deficit was 28% larger than during Obama’s second term.

Finally, access to health insurance. Trump promised expanded access to healthcare coverage during the 2016 campaign and argued that Obamacare was stopping people from accessing quality insurance. In office, however, Trump has down the opposite, eliminating the individual mandate, reducing federal government subsidies to individuals on the exchanges, and encouraging work requirements for Medicaid that have kicked tens of thousands off of the program. As a result, 2017 was the first year that the uninsured rate didn’t fall since 2009, and the uninsured rate actually rose by 0.3% for households earning less than $100k/year. By contrast, the uninsured rate fell by an annual average of 1.6% in Obama’s second term, and by 1.7% annually for households making under $100k/year.

After two years of the Trump administration, then, how has the US economy performed? Jobs and wage growth have fallen, even in the face of a surging fiscal deficit. The trade deficit has increased significantly thanks to Trump’s own trade policies. And the most vulnerable Americans have seen their access to healthcare worsen for the first time in a decade.  

Protecting the 2020 Dem Primary from Disinformation, Bots and Hacking

In a long thread this past weekend, I called on the 2020 Democratic Presidential candidates, the DNC and the State Parties to band together to fight disinformation and illicit campaign tactics in the Democratic Presidential primary.  Among the things I called for is for the Presidentials to sign a pledge committing to forgo use of bots, trolls, troll farms, fake accounts, fake sites, deepfakes and faked images, hacking and use of hacked materials; and for the campaigns to be vigilant about reporting illicit activity to the proper authorities, the platforms and the Party, and to discourage the use of these tactics by their supporters. My hope is that either the DNC or the State Parties will demand they sign such a pledge, or for the campaigns to make their own pledges now, without delay, and not wait for the Party to get involved. 

I know the DNC is in the process of standing up a disinformation unit - it should be given ample funding and broad support to become a leader in this space and not a laggard.  This unit can help all the campaigns stand up their own disinformation teams, something which is now, unfortunately, a requirement in today's politics - a must to have, not a nice to have. 

Simply, we cannot let what happened in 2016 happen again.  As we learned at the DCCC in 2018, we are not powerless.  We got the social media platforms to do takedowns, refered illegal activity to the FBI and helped train our campaigns how to protect themselves and win in a fast changing information landscape.  Healthy democracies cannot accept the poisoning of their discourse, and must do everything they can to let the residents of their nation drive the daily debate not inauthentic voices from inside or outside the country.  

For more on the work we did at the DCCC this past cycle battling disinformation, see this NBC News op-ed I wrote with DCCC Chief of Staff Aaron Trujillo; this Washington Post article about our strategy to first "flood the zone" to make it harder for disinfo to work; a Reuters story which looks into one of our major take downs; and a great NBC News piece recounting right wing trolls complaining about the more aggressive countermeasures coming from the platforms - in this case the take down they were complaining about was a multi-platform campaign the DCCC found and worked with Twitter, Facebook and YouTube to mitigate.  Here is a link to the DCCC's pledge" from the fall of 2018, and a smart deep dive from the Atlantic's Natasha Bertrand on the pledge and the GOP's refusal to sign on even after months of negotiation. 

NDN originally dove into this world through a paper we published back in the fall of 2017 on bots and disinformation, and I worked on a project in the fall of 2017 which deployed bot detection technology for the Democratic candidates in both the Virginia Governor's race and the Alabama Senate race.  Articles about that work in Virginia can be found in the Washington Post and Politico.  And this Alabama work should not be confused with the illicit campaign waged as a test by some Democrats - we were working for Doug Jones not the other guys. 

Finally, my vision for how we counter disinformation and illicit tactics goes far beyond a pledge.  What we learned in 2018 is that we are not powerless; using modern tools and being smart about hunting disinfo organizations and campaigns can provide an effective counter.  It is my belief that what must happen in the next two years is that parties, campaigns, governments, NGOs, and even the media must go on offense here, be louder and smarter on the Internet and social media, and learn how to better manage the discourse in their own particular areas of debate and discussion.  If all of us do our part we can together eliminate a lot of the low hanging fruit, the easy stuff.  The platforms while they have much more to do have made things harder.  But we can't wait for them, or for governments, to act.  We all need to do our part to clean up our areas of the Internet and social media, and ensure that authentic and well intentioned voices prevail.  The tools to counter disinformation are cheap and readily available - it is more about learning how this all works and making a true commitment to win debates in a very new and changing information landscape. 

Fri, 2/1 Update - Justin Hendrix has taken this pledge concept and turned into a thought piece on the Internet.  Go check it out and offer feedback.  He also discusses this idea in this new piece on Just Security.

Mon, 2/4 Update - Got to talk about all this stuff on Joy Reid's MSNBC program on Saturday.  Check it out - was a very good segment. 

In New Global Age, Dems Have Produced Prosperity, the GOP Decline

This essay originally appeared on Medium.

Earlier this week, Bloomberg News published a new analysis of America’s economic performance under the past seven Presidents. The report ranks the economic progress made during each Presidential term since 1977 based upon 14 gauges of economic and financial activity, from wage growth to job gains to economic growth. On aggregate, Clinton and Obama take the top two spots, followed by Reagan and H.W. Bush in third and fourth, with Carter, Trump, and W. Bush coming in fifth, sixth, and seventh. Perhaps most importantly, this ranking shows the deep discrepancy in economic performance between the two parties. The last two Republican Presidents have overseen the two worst economies since 1977, while the last two Democratic Presidents have managed the two best economies. In this new age of globalization since the end of the Cold War in 1989, the two Democrats (Clinton and Obama) rank one and two, while the three Republicans (H.W. Bush, Trump, and W. Bush) rank three, four, and five. For all his bluster about “the best economy ever,” Trump ranks second-to-last behind even Jimmy Carter, and ranks above average among the seven Presidents on only 2 of the 14 metrics.

Source: Bloomberg

This study is consistent with the big argument that NDN has been making through our Patriotism and Optimism Project that the two parties’ recent performances while in the White House are not symmetrical, particularly on economic issues. While Trump’s central argument about the economy has been that this new age of globalization has failed to deliver economic prosperity to most Americans, regardless of which party has been in power, it is actually the case that Democrats have made the new global economy work for everyday Americans, while Republicans have failed to do so. Since 1989, the two Democratic Presidents (Clinton and Obama) have overseen strong and inclusive economic growth, while the three Republican Presidents (H.W. Bush, W. Bush, and Trump) have seen economic under-performance and even recession and decline. Rather than broad economic trends, it is the wide difference in economic management between the two parties that has shaped America’s economic fortunes.

Aggregate data that NDN has compiled for our Patriotism and Optimism Project confirm the startling asymmetry between the two parties on the economy. On job growth, Clinton and Obama have overseen almost 4 times the yearly gains as H.W. Bush, W. Bush, and Trump (averaging an increase of 2.12 million jobs per year compared to only 0.63 million jobs per year for the three Republicans). In total, the two Democrats oversaw an increase of 34 million jobs during their tenure, while the three Republicans saw only 9 million new jobs.

Source: BLS

On median income growth, meanwhile, Clinton and Obama averaged growth of 1.2% per year, whereas the three Republicans averaged a decline of 0.4% per year. All the more alarming is that even though the Republican Presidents achieved poor job and income growth during their tenures, they did so while also increasing the budget deficit significantly more than the Democratic Presidents. H.W. Bush, W. Bush, and Trump increased the deficit by an average of 0.5% of GDP per year, whereas Clinton and Obama reduced the deficit by an average of 0.4% of GDP per year. As can be seen, the difference in economic performance between Democrats and Republicans has been stark and significant.

Source: Federal Reserve Bank of St. Louis

Looking over the data, it is clear that the Democrats have been the party of economic progress and fiscal sustainability, whereas the Republicans have boosted deficits while achieving poor job and income growth. It is unsurprising, then, that the two generations that have grown up since 1989 (Millennials and Gen Z) are strikingly Democratic-leaning. In the 2018 midterms, voters under age 29 supported Democrats by a 35-point margin, and voters under 45 by a 25-point margin. For these voters, who will soon make up the majority of the electorate, America has succeeded both economically and socially under two successful Democratic Presidents, whereas Republicans have had three consecutive failed Presidents.

The President Can't Speak To 2019 Priorities Until He Finishes The 2018 Budget

The President of the United States shouldn’t be giving a speech which historically lays out the agenda for the coming year until he finishes his budget from last year and the last Congress. We know the President is new to politics and doesn’t play by its rules but on this one he must – he simply must complete the budget process which was required by law to be finished on October 1st of last year.  Not finishing his 2018 budget, first proposed in early 2018, is at this point reckless and irresponsible.   His inability to do the very basics of governing, in this case completing budgets on time and keeping the government open, is doing extraordinary harm to the nation. 

He sold himself to us in 2016 as a can do guy – well he needs to get his 2018 budget done and the government up, operating and funded before it is appropriate for him to begin talking about 2019.  This isn’t Foxlandia, this is Washington, the real world, the American government, and he needs to roll up his sleeves, put down the golf clubs and his TV remote, and lead our nation as every President before him has.

Backgrounder: Trump, Immigration, And The Border

Research and policy recommendations about our border and immigration system have been one of NDN’s most influential areas of work over the past 13 years.  We send along some of our most recent releases below, hoping they will inform your own work and thinking in the days ahead.  What is happening on the border today is not an emergency; and the crisis, if there is one, comes from the failure of Trump’s extreme immigration approach which has created an extraordinary mess on both sides of the US border with Mexico.   Responsible policy makers from both parties should use this moment to advance smart solutions to the real challenges our immigration system faces, many of them made far worse by Trump’s misguided policies.  In that vein we offer a three part plan for what the nation can be doing now to improve our border and immigration enforcement system, shore up our neighbors to the South, improve our economy, and remove this toxic debate from our politics so we the nation can move on to other more important matters. 

Finally, it is our belief that the shutdown is not about the wall, but about our democracy.  It is whether our nation has a President, or a Mad King.  The stakes here are far higher than they may appear, which is why the Democrats and an increasing number of Republicans are right to stand and fight the worrisome and increasingly authoritarian behavior of Mr. Trump.  

The Ridiculous Shutdown, A President In Decline - Simon Rosenberg, Medium, 1/7/19 - The shutdown isn't about a wall.  It is about our democracy and whether Trump is a President, or a dangerous mad king. 

Some Thoughts About The Caravan - Simon Rosenberg, NDN, 10/24/18 - The Caravan, composed of 3,000 poor, unarmed, mostly Honduran migrants, poses no threat to the US, and illegal border crossings continue to be way down. Some thoughts on what Democrats should do to respond to Trump's farcical attacks and inane policies.

Trump's Brand Is His Xenophobic Immigration Policy. That's Why He'll Go To Any Lengths To Enact It - Simon Rosenberg, NBC News, 8/6/18 - Trump's separation of kids at the border is the result of a political crisis for his administration, rather than any real immigration crisis on the ground. As Trump's immigration policies continue to fail in the face of legal roadblocks and public outrage, expect even more outrageous policies from the administration.

Rebutting Trump’s Ridiculous Attack On “Chuck and Nancy” And All Democrats - Simon Rosenberg, Medium, 11/28/17 - The Democratic Party that Trump describes - on immigration, taxes, and more - is one that exists only in his mind. The Party that he is facing everyday is one that has governed responsibly when in power, and left the country far better than they found it.

The Case For Optimism: Rejecting Trump's Poisonous Pessimism - Simon Rosenberg, NDN, 11/19/18 - Simon argues that the great rationale of Trump's Presidency  –  that America is in decline – simply isn't true, and must be challenged more forcefully. This is the piece that spurred the creation of NDN’s “Patriotism and Optimism” deck.

The Ridiculous Shutdown, A President In Decline

This essay originially appeared on Medium.

The United States government and legislature have become paralyzed because the President is demanding Congress fund something he explicitly promised the American people we would never have to pay for.  The President’s immigration ideas were rejected repeatedly by a GOP Congress these past two years.  Not content with that, seeking in essence a legislative do-over, the President shuts the government down right before Christmas after agreeing not to.  Both the Senate and House have passed bills which would re-open the government but fund DHS only through February so cooler heads could prevail and a deal on border policy could get worked out.  Even this reasonable path, supported by both parties and both chambers, has been rejected by the President.  Instead, he keeps the government shut down, causing real harm to the country

And now the President’s ransom note is becoming clearer.  $5.7b for more wall, $800m for detention facilities, controversial and potentially illegal changes in immigration law.  He is asking for all this to be passed by Congress before reopening the government without going through regular order – no hearings, no studies, no debates, no votes.  The letter and presentation the President sent to Congress justifying his demands was sophomoric, unpersuasive and reinforced how crazy his demands are.  He has still NEVER EXPLAINED why more wall is needed – where would it go? Has flow increased in those areas? Has the border been penetrated in ways it wasn’t before? We don’t have answers to these simple questions.  The legislative changes he is asking for are complicated, may violate both domestic and international law, and may be, in his hands, dangerous. Mad King George has returned to America after an absence of hundreds of years.

And please, the argument he is standing on principle and fighting to fill a campaign promise is absurd.  His promise to all of us was clear - we would get a wall without paying for it, not by spending billions and billions of dollars.  He is betraying his core promise, not keeping faith with it.  And what makes his petulant demands even more galling is that he has used a worsening deficit as a reason to freeze the pay for federal workers next year.  No modest increase in wages for workers, but billions for an unjustified wall. 

What the President is asking for was rejected by a GOP Senate and was something he explicitly promised would never happen; his demands are controversial and unpopular, and has no back up explaining why what he is proposing will address what has become a crisis on the border through his current, deeply misguided immigration policies; he wants Congress to appropriate huge sums of money and make major legislative changes without going through the process we’ve used for hundreds of years to make decisions like this.  What the President is asking for and doing is unreasonable and potentially precedent setting.  If he succeeds at using these un-democratic/authoritarian methods to get his way what will stop him from doing it again and again? Democrats are right to play the issue the way they have – it would be reckless for them to give into the President at this point given how crazy he is acting. 

The President is not winning the argument with the public.  He made these issues central to his election argument and suffered one of the worst defeats of the modern era of American politics.  He has dropped 3 points in the polls since early December, from -9 to -12.   The economy is worsening, the market is way off and volatile, his tariffs are doing real material harm to the global and US economies, the President’s legal challenges are mounting and getting far more serious, and his foreign policy performance of late has been, frankly, scary.   At this point, given all the real challenges in front of the President, the shutdown has become a reckless indulgence by a very vain and self-centered man, a diva sitting in their dressing room angry over not getting their way.  His party needs to urge him to re-open the government and then bring his ideas about the border and immigration to Congress for a debate – like every other President has done throughout our history.  His repeated insistence on creating mechanisms to go around Congress is undemocratic and must be opposed; this wild man must play by the rules and work within the system which has created the most powerful nation in the history of the world.  This is not too much to ask and is, literally, what the Democrats are asking him to do right now.  

Now that we have begun this debate about immigration, no matter how the standoff plays out, Democrats should be aggressively putting forth their vision for how they want to improve our border and immigration system.  In a recent op-ed I offered a 3 part plan: 1) Convene a regional process to address the worsening conditions in Central America, 2) put comprehensive immigration reform back on the table, 3) offer ideas on how to best improve an immigration enforcement system weakened by the President’s failed policies.  We cannot defend the immigration status quo – the President took a creaky immigration system and has broken it.  We should step up and offer plans on how to best fix it now. 

How this ends isn’t clear but what is clear is that this standoff is not about a wall.  It is about ensuring we have a functioning democracy, and a President who plays by the rules established by our Founding Fathers a long time ago, rules which have indeed made this country great long before the Trumptrain arrived in Washington. 

Simon's Work With The DCCC On Disinformation, Cybersecurity

We are pleased to send along a new NBC News op-ed by Simon Rosenberg and the DCCC’s Aaron Trujillo which recaps the disinformation and cybersecurity work they did this past cycle for the DCCC.  The op-ed is here, and below.  They conclude by expressing confidence that in the coming years we as a society can make great progress against these new and complicated threats to our discourse and democracy. 

While this project Simon ran was outside of NDN’s own work, we felt our audience would find it of interest.  You can learn more about this exciting project through recent stories in The Washington Post, The Atlantic, and Reuters, and review NDN’s cutting edge paper on bots and disinformation published last fall.  

Trump Doesn't Take Russian Electoral Interference Seriously. This Is What Democrats Did To Oppose It In 2018

By Simon Rosenberg and Aaron Trujillo

In the last few years bots, trolls and hackers have become a new and unfortunate part of our politics here in the U.S., as new reports prepared for the Senate intelligence committee showed this week.

Those reports looked at the 2016 election, and found that Russia’s Internet Research Agency made extensive use of social media, including Facebook, YouTube and Instagram, to push right-wing conspiracy theories and engender distrust in the electorate among the left, ultimately recruiting people to take concrete political actions in real life.

While these reports address the broader social media campaigns of the Russians, it is important to remember that the Russians also directly hacked both the Democratic National Committee and the Democratic Congressional Campaign Committee (which oversees House campaigns) in 2016. Materials stolen from both committees were then used by Republicans in their campaigns against Democratic candidates.

Determined to never let these kinds of influence campaigns succeed again, DCCC Chairman Rep. Ben Ray Luján, D-N.M., established a program designed to fight the malicious activity — which is poisoning our discourse and weakening our democracy — during the 2018 election cycle.

The two of us led that team over the past two years, and now that the midterms are over, we offer some observations from the front lines of this new political battlefield.

We regularly found accounts on the major social media platforms that were in violation of the rules set by Twitter, Facebook and YouTube; nothing we found was on the scale of the Russian’s extensive efforts in 2016, but the activity wasn’t insignificant either. So, as part of the DCCC’s efforts, we deployed unprecedented defensive tools to help us identify malicious activity on social media, using a customized bot-detection tool to diagnose robotic, inauthentic activity and a commercial off-the-shelf social listening platform that allowed us to better see what was happening in near real-time on the major social media platforms.

When we found malicious activity, our internal team went through a rigorous review process to make sure it was in violation of the social media platform’s terms of service, rather than just something we didn’t like. Offensive accounts and activity were then reported to the platforms both through their public systems and through teams specifically assigned to the U.S. elections. While not everything reported was addressed, a great deal of it was.

We also found, as is common among cybersecurity researchers, that the easiest way to secure against cyber intrusions is to arm every user to recognize the tactics common among hackers. And, as in 2016 (and at every organization in the world), we did see phishing and spear-phishing efforts directed at the party and at individual candidates, from various sources we did not or could not identify.

We don’t believe the DCCC had a large breach like we did in 2016, but can’t be certain. But, when campaigns encountered problems, we worked quickly to mitigate the damage and reported these intrusions to the FBI. And, working with outside partners, we were successful in helping staff internally and at campaigns embrace new behaviors and tools that were effective, affordable and simple — like two factor authentication, encrypted messaging and better data protections. Much of the DCCC’s strategy work was inspired by the highly regarded cybersecurity framework developed by the U.S. government’s National Institutes of Standards and Technology (NIST) — a set of smart protocols which should become far more familiar to those of us in politics.

This big new emphasis on digital is being driven by how Americans’ own media usage is changing; it will be any day now that more Americans get their news from digital sources than television, something which is already true for those under 50 in the U.S. Which is why, as the intelligence committee reports show, the Russians in 2016 leaned so heavily on targeted ads to access voters on various social platforms, where news and ads (or sponsored posts) can feel (and often are) indistinguishable. Learning how to win in this new digital-first landscape will be increasingly important for those in politics here and around the world.

The first step in winning in this new information landscape is be far louder on the internet and on social media. The DCCC had the most ambitious digital advertising and organic communications effort in its history, and encouraged its candidates to not cede this space to either the Republicans or malicious actors. In politics the best defense remains a very good offense.

The DCCC also made an unprecedented public pledge to combat these new malicious tactics by committing to never use hacked materials in the election, as was done against us in 2016. We think future pledges like this one should include promises not to hack, use hacked materials or use fake accounts, bots, troll farms or “deep fakes.” Whether the parties themselves can agree to a common approach remains to be seen — it didn’t work this time — but the DNC and sister committees should lead by example and get every Democratic presidential campaign to sign on to some set of practices similar to the pledge released by the DCCC in 2018.

Everyone in US politics, regardless of party, should follow our lead and commit to not use the tools the Russians used — and continue to use — against us and other democracies in our own work. But we also need to commit ourselves to higher cybersecurity standards in general, and to being more cognizant users of email and the internet.

Based on our time working with cybersecurity at the DCCC, we strongly recommend that Congress also dramatically upgrade the way it handles the cybersecurity of senators, House members and their staff by mandating cybersecurity and counterintelligence training.

Toolsets for identifying inauthentic social media — like what we had at the DCCC — should become commonly used throughout American politics, from campaigns to advocacy organizations to official Senate and House offices. Users of these tools should be disciplined about their submissions to the platforms so as not to overwhelm systems which are not yet fully mature, and they should rely, as we did, on the many incredibly able researchers and think tanks who are making their findings public. We learned a great deal from them throughout this process.

While the social media platforms did make things far harder for malicious actors over the past year, far more must be done — and Congress should pass some of the many smart, already introduced bipartisan bills which address these matters without delay.

It is also our belief that the best way for the government to help support to our nation’s elected officials in their official, political and private roles is for the Department of Homeland Security to partner with the major federal party committees to share information, best practices and emerging threats through a similar arrangement to the ones it has with the financial services and energy industries, among others, though it may require legislation.

But the most important lesson we learned in the last two years is that the U.S. and its politics are not powerless to stop the kind of foreign hacking and disinformation tactics we saw in 2016. Far more can be done to protect our democracy and our discourse — and doing so should be a very high priority for the new Congress in 2019.

Trump’s Tariffs Are A Growing Threat To The American And Global Economies

This is the eighth article in a series produced by NDN challenging Trump’s tariffs.

Today there is a growing body of evidence that one of Trump’s signature policy proposals, the tax cut, hasn’t delivered the economic returns promised by the President. I will argue in this piece that his other major initiative, the protectionist trade policy, has also failed to deliver on his promises. In launching the tariffs, Trump’s promises to Americans were simple: strengthen growth, reduce the trade deficit, and help US manufacturing. By any account, each one of these has failed. Instead, the trade war is now viewed as a growing risk to the global economy, and threatens to weaken the strong economy that Trump inherited in 2017.

Risks to Economic Growth

Since mid-summer, future growth expectations for the US and global economies have rapidly declined.  In Bank of America’s November investor report, 44% of investors expected a decline in global growth in 2019, the highest number surveyed since November 2008 on the eve of the Great Recession. In October, meanwhile, the IMF reduced their forecast of global growth for both 2018 and 2019 from 3.9% to 3.7%, representing a global income loss of almost $530 billion. This weakening of the global economy is likely to put significant downward pressure on US growth as well. Goldman Sachs now forecasts that US growth will fall from 3% this year to 2% in 2019, and will hit only 1.6% in the fourth quarter of 2019. Similarly, JP Morgan estimates that growth will decline from 3.1% this year to 1.9% in 2019, and will hit just 1.5% in Q4 2019.

Trump’s trade policies, which have placed tariffs on $250 billion of Chinese imports and $50 billion of steel and aluminum imports primarily from Canada and the EU, have played an important role in this slowdown. First, higher tariffs mean that domestic companies have to pay more for intermediate inputs, putting downward pressure on jobs, income, and capital investment as firms have to account for higher costs. Second, with less access to cheap foreign goods, the purchasing power of domestic consumers falls, meaning that workers can buy fewer products for every dollar they earn. Finally, tariffs create inflationary pressures by taxing low cost goods, which forces the Fed and other central banks to hike interest rates faster, thereby tightening financial conditions in the global economy. It is no surprise, then, that in Bank of America’s November investor report that found 44% of investors expecting a decline in global growth in 2019, investors cited Trump’s trade war as the biggest risk to the global economy (35% of investors), ahead of the Fed’s rate hikes (26% of investors), and rising corporate debt (14%). Business investment, a key component of growth and something heavily affected by firms’ input prices and consumer demand, has likewise slowed significantly in the face of Trump’s trade policies. Non-residential private investment rose only 2.5% in Q3 2018, compared to an average of 10.1% in the first half of 2018 and 6.3% in 2017. Furthermore, new durable goods orders have fallen for two straight months and are down 1.2% since June, significantly lower than the 2.3% growth seen in January to June 2018.

Worsening of the Trade Deficit

The six months since June have also seen a large widening of the trade deficit, and the US today is running its largest trade deficits since 2008. Since the tariffs were enacted, the trade deficit has increased by 18.1%, compared to economic growth in that period of 1.8%. Since June, the trade deficit has averaged $50.8 billion per month, which is 5% higher than its Jan-May 2018 average, 10.4% higher than its 2017 average, and 21.4% higher than its 2016 average under Obama. Given that one of the biggest impetuses behind Trump’s tariffs was to reduce the trade deficit, the policy as a whole seems to have faltered.

Driving the increase in the trade deficit, firstly, has been a decline in US exports. Exports have fallen at a 0.6% annualized rate since June, compared to an increase of 8% (annualized) in Jan-June 2018, 7.8% in 2017, and 4.1% in 2016. Secondly, US imports have skyrocketed since the tariffs were enacted, even though one of their major purposes was to encourage the substitution of imports with domestic production. Imports have risen at a 12% annualized rate since June, compared to 0.2% (annualized) in Jan-June 2018, 9.7% in 2017, and 4.5% in 2016. These trends are unsurprising given the effects of Trump’s tariffs. Almost $150 billion of US exports have had retaliatory tariffs enacted against them by our trading partners, and crucial intermediate inputs like steel and aluminum have seen their prices rise by over 20%, making American products uncompetitive abroad and at home.

Harms to US Manufacturing

Outside of the major macro-economic goals of improving growth and reducing the trade deficit, the tariffs were also primarily crafted to help US manufacturing. Instead, however, American manufacturing companies have been strongly hurt by the tariffs, and the auto industry in particular has seen its global competitiveness weakened. Since June, the S&P 500 Industrials index (which covers industrial companies within the S&P 500) has fallen by 5.1%. By contrast, it rose at an annualized rate of 11.8% from January 2017 to June 2018 and by an annual average of 14.2% during Obama’s 2nd term.  

GM, meanwhile, has seen a 15.2% decline in its stock price since June and earlier this week announced the layoff of 14,000 workers in North America and the closure of five plants. This is on the back of the company losing $1 billion in earnings in 2018 alone as a result of Trump’s steel and aluminum tariffs, and a 15% decline in GM’s sales in China in October as a result of worsening trade tensions. Similarly, Ford’s stock price has fallen 20.1% since June and the company last month announced likely layoffs of 12% of its global workforce (24,000 workers). Ford too reported that Trump’s tariffs would cost the company over $1 billion in earnings this year. Tesla also reported a drop in its China sales of over 70% in October, after warning last month that the trade war would harm its business. Finally, new reports suggest that the 25% tariff on foreign-made autos that Trump is considering would destroy a further 715,000 jobs in the auto industry and reduce annual GDP by $59 billion. Rather than revitalize US manufacturing, Trump’s tariffs instead have reduced its global competitiveness. With rising input costs and constrained export access, US companies particularly in the auto industry have been forced to lay off workers and close plants.

Large Losses in American Agriculture

The second biggest supposed benefactor from Trump’s tariffs were American farmers, who Trump claimed were taken advantage of by Canada and European protectionism. More so than any other industry, Trump’s trade policy has significantly harmed American agriculture. From June to September 2018 (the most recent data), US agricultural exports fell 1.8% YoY and the US trade surplus in agricultural products fell by 26%. As a result, the recent increase in farm bankruptcies throughout the country that began in 2017 has continued unabated, reaching levels over twice as high as those in 2013 and 2014. Soybean farmers in particular have been devastated by Trump’s trade war with China, and have seen a 97% decline in exports over the past three months.

Furthermore, while $12 billion in government bailouts has kept some farmers afloat, the damage done to agriculture (and to the rest of the US economy) will continue long after the tariffs are rescinded. New supply chains that exclude American workers, instead going to Canadian and Brazilian exporters, have been developed in place of American ones that took decades to develop. Further, the level of uncertainty over basic trade policy created by the Trump administration makes it less likely that American or foreign firms will invest in long term projects in the US.

Today there is an overwhelming body of evidence that Trump’s tariffs are unpopular and causing material harm to the US and global economy. The question now is, what do we do about it? In a recent Wall Street Journal interview, Trump showed that he doesn’t understand what he’s doing and that no rigorous analysis backs up his views on trade. As a result, it is unlikely that he can offer ideas to address the growing risks of the trade war with China and the conflict with our closest allies over auto tariffs. It will be up to members of both parties in the next Congress to challenge Trump far more directly on his reckless trade policies, and remove the threat to the US and global economies. 

The Case for Optimism: Rejecting Trump’s Poisonous Pessimism

This piece was originally published on Medium on June 2nd, 2017. 

So, imagine if you lived in America at a time when:

· Incomes of everyday people are at an all-time high, have been rising for at least four years now and saw their largest annual increase in recorded US history just a year ago.

· The unemployment rate is 4.3%, about at what economists consider “full employment.” This rate is historically low — over the past 70 years (821 months), the rate has only been lower in 130 of those months or just 16% of this 70 year stretch. A reminder that the unemployment rate never dipped below 5.3% during the entire Reagan Presidency.

· More people have health insurance and access to quality than any time in American history. A recently implemented health care law has materially improved the lives of tens of millions Americans in a very short period of time.

· The US stock market is at an all-time high, and 33% percent higher than any sustained high in US history and between 5 and 10 times higher than where it has been most of last 50 years. So really high.

· The high school graduation rate is the highest ever recorded.

· Violent crime rates are half of what they were a generation ago, and cities across the US are blossoming, seeing growth, investment and people once again living “downtown.”

· Teenage pregnancy rates are plummeting, and now are at all-time low.

· There has not been a foreign fighter terror attack on US soil in 16 years, few American troops are dying overseas and the US faces no true existential threat from a foreign power.

· Due to smart policies and years of investment, the flow of undocumented immigrants into the US has dramatically slowed, seeing no net increase for a decade now.

· The US is taking control of its energy future, seeing a sharp decrease in foreign oil imports and sharp, even historic, increases in the production of renewable energy.

Would that America sound like a good America to you? I think so. And of course this list describes the America of today, early June, 2017. America is not without its problems, of course. Despite our economic success, we are still leaving too many behind. Growing levels of inequality are corrosive to the social fabric and bad for the economy too. We have too much public and private debt. Tribalism, racial strife and social coherence remain daunting challenges. Mass incarceration too. The opioid epidemic is tragic, and needs far more attention and action. Too few people vote in America, and our civic life needs renewal on many fronts…..

For a 70 year old alive today, the unemployment rate has been higher than 4.3% for 59 of her 70 years. Line is current level of unemployment.

But it is the premise of this essay that while America has very real challenges, somehow the positive side of the nation’s balance sheet — and there is a lot there — has been recklessly ignored in our national discourse. It is my contention that contrary to the claims of our President, America hasn’t lost its greatness, and that by many historical measures there has never been a better time in all of America history to be alive. Certainly better than the Great Depression, or when we held millions of slaves in cruel bondage, or when kids worked and didn’t go to school, or before there was a minimum wage or a social safety net, or when little black kids and little white kids couldn’t drink from the same water fountain, or when hundreds of thousands were dying in Vietnam, or a Cold War could lead to nuclear annihilation at any moment? Or when sky high interest rates prevented us from buying homes, or women couldn’t vote or work or pursue their dreams, or when OPEC decided to punish America, forcing us to wait in lines for hours just to buy gas? Or especially, my Republican friends, when Ronald Reagan was President and the unemployment rate never dipped below 5.3?

Incomes recovering after years of stagnation, decline. Note difference of GOP (red) and Democratic (blue) Presidencies.

Which brings us to Trump. So much of what he is doing flows from the argument that America isn’t managing this new age of globalization well but being defeated by it. It is the rationale behind stripping health care from tens of millions, dismantling common sense environmental regulations, and getting out of the Paris climate deal and TPP; behind his harsh new immigration enforcement and criminal justice policies; behind his dancing with dictators and distancing himself from democracies. And of course, the data above suggests that this argument — the entire rationale for Trump’s Presidency — just isn’t true. Not even close. Things are far better than he says, or perhaps, understands.

Dow Jones Average 1900–2017. Today, far far above historic norms.

Our new President is the first in our history to be under investigation for treason while in office. Whether he has in fact betrayed our nation to a hostile foreign power (and I think he did) will be determined soon. But to me the greater betrayal of this remarkable nation and its hundreds of millions of decent, hardworking people is the President’s denigration of our collective accomplishments over the past generation. Despite the many headwinds of the modern world America has made true, substantial progress. We are a better and more prosperous nation than we were a generation ago. Our companies lead the world in just about every possible sector, and the innovation and creativity in our private sector remains the envy of the world. Our military has no near peer, and remains the greatest fighting force ever assembled. We are taking control of our energy future, and making great strides against climate change. We are working through our unique challenges with race and tribalism, and while Trump is an obvious setback we just saw a man of color lead our nation successfully for the first time in history. Millions of new Americans are starting businesses, building families and making their mark. Our universities are the best in the world, and our public schools are getting better. I could go on and on and on.

But the bottom line is by selling us short Trump betrays both the greatness of our country and the goodness of the American people every day of his Presidency.

And this is the key. To defeat Trumpism we must be optimists, patriots, pragmatists now. To defeat the man, we must defeat his fallacious arguments about America and what we have become. While he talks down America, we must talk it up. We should be proud stewards of a great nation, but steely-eyed and resolute about tackling the real challenges that remain. In many ways, even in these nasty early days of Trump, I have never been more proud of my country, more in touch with what it means to be an American. For it remains the greatest country on Earth, the inspiration for so many — and it will reclaim that role in the days after Trump if we can together not just defeat the man, but defeat the dark pessimism his brand of politics has unleashed into America and the rest of the world.

Can we do it? In the words of another who came before, there is no doubt in my mind that “Yes, we can.”

2018 Was A Very Good Election For Democrats, And An Even Better One For Their Future

This piece is part of a series by NDN analyzing the 2018 election.

Much has been made about whether to call the 2018 midterms a “wave” election for Democrats. During election night, pundits were quick to capitalize on some early evening setbacks for Democrats to argue that the Party had underperformed their polls. However, with a dominating performance in California and strong results in Arizona coming in over the past week, it is clear that 2018 was indeed an historic wave election for Democrats.

National Popular Vote

The House popular vote is the best way to conceptualize the election results as a whole. It includes every voter in the country, isn’t affected by district gerrymandering, and ignores the partisan lean of the Senate seats up in a given year’s cycle. As of November 17th, Democrats had a 7.7% lead in the popular vote ahead of Republicans, and this is likely to end up close to 8% once all of California’s ballots are counted. How does this compare to previous elections? Firstly, it will likely be the largest popular vote win by any party in a national election since 1996 (when Democrats won by 8.5%) – larger than Republican’s 6.8% margin in 2010, Obama’s 7.2% margin in the 2008 presidential election, and likely Democrat's 8% margin in 2006. Second, compared to the three definitive midterm “wave” elections of the modern era (1994’s 7.1% margin for Republicans, 2006’s 8% margin for Democrats, and 2010’s 6.8% margin for Republicans), it is right at the top. Third, while Democrats have passed the 7.7% margin twice in the modern era, this margin is larger than any Republican electoral margin since 1988 (when Bush won the presidency by a 7.8% margin) and any Republican House margin since 1946 (when Republicans won by 8.5%). Fourth, the Democrats have won 53% of the vote in 2018 so far and are on track to hit near 53.2% once all of California comes in, which beats Obama’s 52.9% in 2008 for the largest percentage won by Democrats since 1986. Finally, the 37-40 seat pick-up by Democrats (depending on a few seats not yet called) will be the largest gain by Democrats since 1974. Clearly then, this election was one of the best showings by either political party in recent decades.

Young Voters

Even more decisive than its actual results, however, was what this election said about the future of the two-party system. In every demographic group that will increase its share of the electorate in future years, Democrats won unprecedented victories. Firstly, young people. Democrats won the 18-29 age group by 35%, the largest margin by any party for that demographic group ever recorded (data goes back to 1992 for House races and 1976 for Presidential ones). For context as to how dramatic a shift this has been, in 1998 this age group went 50-50 to Democrats and Republicans. For all under 45s, Democrats won by 25%, also the largest margin ever recorded for this group. As late as 2004, Republicans were winning this demographic group by 1% (and by 6% in 2002). The catastrophic Republican performance among young people cannot be overstated. In every single state with an exit poll in 2018, Democrats won the 18-29 group, including deep red seats like Mississippi (D+6 among 18-29 year olds), Tennessee (D+16), and Georgia (D+29). In Texas, a state where Republicans won 18-29 year olds by 5% in 2008, Democrats won that age group by 42%.

Hispanic and Asian Voters

Hispanic voters, who made up 11% of the electorate this year compared to 6% in 1998, showed a very similar trend. Democrats won the Hispanic vote by 40% in 2018, the 2nd highest margin among this demographic group since 2000 after Obama’s 44% margin in 2012. By comparison, Democrats won Hispanics by only 26% in 2014. Among Asian voters, who this year comprised 3% of the electorate versus 1% in 1998, Democrats won by 54%, their highest ever margin among this demographic. Among college-educated voters, meanwhile, Democrats won by a 20% margin, also the highest margin for either party since at least 1992. This compares to a Republican win of college-educated voters by 3% in 2014 and by 8% in 2010.

Democrats won an historic victory in 2018 among all voters, but their dominating victories among all of the emerging demographic groups should cause Republicans significant concern. In the early 2000s, the Republican Party put significant effort into reaching these voters, and they were rewarded in the 2004 presidential election with historic support from under 45s (R+1) and Hispanics (D+9). Under Trump, however, the party has harshly veered from that trajectory and has been decisively repudiated by those groups as a result. The R+1 among under 45s in 2004 has turned into a D+25 in 2018, while the D+9 among Hispanics in 2004 has turned into a D+40 in 2018. Unless Republicans can dramatically change how they are viewed by these groups, their long term path to power seems difficult.

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