It's unfortunate, but you can paint a picture that is anything from rosy to swamp brown by emphasizing the statistics you want to use. For example, consumer confidence and consumer spending have reached record highs this Christmas...quite rosy. On the other hand, wages are still growing at a rate that is just above inflation, so the working person in this country isn't progressing, but rather is just breaking even, though production, and thus profits are up...closer to swamp brown. Unemployment is at a low that matches levels from decades ago and is regarded as virtual full employment. On the other hand, the rate of participation in the labor force among males in particular is at record lows, probably because a living wage is so hard to find despite record profits in business itself...pretty brown again. But of course Republicans, Donald Trump in particular, choose to accentuate the positive by pointing out that jobs continue to be created as if they started a trend that is actually a few years old, dating back to the mid-Obama years, and the big Christmas at the big box stores and on the internet, they claim that those are reflections of Trump administration policies, though they really can't point to anything that was actually changed by them. Of course this tax cut is something they will harp on, claiming all kinds of prospective changes--more jobs because businesses will invest their tax savings in capital projects and wages will increase out of the largess of the corporate ethos in America. It's never happened with any tax cut before, but maybe this will be the first time, and though wages didn't go up when record profits piled into corporate bank accounts to the tune of trillions of dollars without wages going up, maybe the influx of a different kind of dollars...tax savings rather than say price gouging profits for example...will make the difference. But with regard to how workers have managed to spend so much more money than last even though they aren't making more, no one seems to be asking why, and that may be the biggest issue of all.
The savings rate of American workers in the period from 1959 to the present was 8.28%. People saved a lot of money over that period for their retirement, contingencies, big ticket purchases, college and new houses. But in 2005, just prior to the housing bubble, savings were down to all time lows under 2%, and now, in November 2017, they are just 2.9%. In other words, American workers are spending virtually everything they earn and dedicating only the meager gains they make at the rate of inflation to their futures. So what's going to happen when all these Christmas present buyers retire? If the Republicans have their way, entitlement programs, and they improperly include Social Security, we pay every week in our paychecks and which payments are by law excluded from general fund tax revenue and usable only to pay Social Security benefits, will be diminished, especially to pay for this most recent tax cut benefiting business and the rich primarily. To put it more cynically, the Republicans are giving average workers $20-$40 per week now so that they can take that and more away from them years from now when the link between the two things will seem far less obvious. And combined with the low savings rate that has become the American norm, we'll be back where we were before the new deal, but who'll remember that either.
It's important to remember thinks like the diminished capacity of our working people to provide for their own retirement because the Republicans want to reduce the extent to which retirees can rely on Social Security and other social safety-net programs. Because it they get away with allowing us to spend our future security now, we'll have no recourse when the future comes. That's why 2018 is so important. We are bleeding now, and the Republicans want to bleed us some more, though they're being very quiet about it right now. If we let them stay in control next year, we'll pay farther down the road, and we'll pay massively.
So, remember the savings rate...remember how much you yourself save when you go to the polls in November. The quality of your later life depends on it even if you are benefiting from a fraudulent tax revenue give-away today. Remember the savings rate as if you were remembering The Maine. Make no mistake about it. This is war...class war.
Your friend,
Mike
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