I heard on the news this morning, the 75th Anniversary of the end of World War II, that although Donald Trump’s poll numbers are relatively dismal, just over 50% of men approve of his handling of the economy. I’m puzzled by this. The U.S. national debt at over $26 trillion now exceeds the record debt incurred during WWII, but more troubling, debt as a percentage of GDP at 136% is its highest in history. According to economists, this level of debt-to-GDP slows economic growth, and as revenues decline the debt-to-GDP ratio climbs, and the “Greek Death Cycle” accelerates.
Maybe men see Trump as a hugely successful businessman, so under the circumstances he must have handled the economy as well or better than anyone could. But, in fact Trump is a terrible businessman, as has been thoroughly documented. Furthermore, the “circumstances” are largely of his own creation — surely no one would argue that he’s managed the coronavirus pandemic well, unless the predicted 200,000 deaths is acceptable.
Maybe men, especially those relatively well off, are attracted by the siren call of today’s advancing Stock Market. But the Market is a chimera buoyed by Fed bond buying, and propped up by stock buybacks, collateralized loan obligations, and other “unknown unknowns,” as Donald Rumsfeld might have said. In any case, according to Reuters, 84% of stocks owned by U.S. households are held by the wealthiest 10% of Americans. So the deregulatory fever under Trump has boosted the Market, but, as usual, it’s the rich getting richer.
Maybe more men are impacted by and therefore especially appreciative of the lower tax rates instituted under Trump. But first of all, the so-called Tax Cut and Jobs Act (TCJA) didn’t end up paying for itself, as promised. In fact, the TCJA substantially reduced revenues, adding further to the aforementioned monumental debt.
Secondly, it was corporations who gained the most from the TCJA; their taxes were reduced by 40%, and they are permanent, unlike individual tax cuts, which expire in 2025.
Finally, the TCJA increased disparities in after-tax income by giving the largest relative and absolute tax cuts to high-income households — the top 1 percent will claim 83%of the benefit of the bill. As Stephanie Kelton, a senior economic policy analyst has pointed out, “Trump’s plan will widen the country’s already dangerous wealth and income gaps, and because the gains go mostly to those at the very top, the tax cuts won’t do much to promote broad-based consumer spending or overall job growth.”So, I remain puzzled. Who are the guys that approve of the way Trump is handling the economy and what explains their attitude?
