Dems Have No Answer on Great Economy, Damaging Tariffs
The first question a Milwaukee audience member asked Sen. Amy Klobuchar Wednesday at her Fox News Channel town hall was how she would keep the economy booming. She spoke of the downturn hitting the Midwest hard a decade ago, the workers “coming back,” and how, yes, now that the country is stable we could “govern from opportunity.” That, she said, means tackling health care, job training, immigration, addressing racial injustices and climate change. When pressed with the glistening numbers on GDP, average hourly earnings, consumer confidence and unemployment, she said, “You go out there and you talk to real people and they tell you they are not sharing in this prosperity,” before pivoting to the cost of prescription drugs.
Klobuchar is right, and millions of Americans continue to struggle despite the lowest unemployment since 1969, robust economic growth, rising wages and low inflation. For far too many, the cost of prescription drugs is prohibitive, student debt is crippling and life in the middle class -- where adults once owned a home and a car and could afford their health care along with their children’s education -- is a relic from generations past. But Americans are witnessing an economic turnaround they want to believe will eventually reach them, and this seems to be lost on the Democrats trying to win the presidency next year.
Klobuchar doesn’t stand out from the other 20 Democratic candidates in her responses, which tend to start with “yeah, but” before going on to credit President Obama and then criticize the tax cut Republicans passed last year. And the tax cut is unpopular: Republicans couldn’t campaign on it in the midterm elections. But the average Democratic answer to terrific economic data likely sounds to the average voter like this: Obama started the recovery, the tax cut was wrong, so we want to get rid of it and these good times are a mirage. Democrats do not acknowledge what is, after the downturn of 2008, a stark improvement that voters see as progress, nor do they appear to grasp that even voters who can’t stand Trump want it to last.
Put aside the constitutional standoff, the Mueller report, the lies, the dysfunction, the corruption, unethical Cabinet members, nepotism, potential emoluments violations, disdain for the rule of law, undermining of the judiciary, infants and toddlers separated from their parents at the border, the haphazard foreign policy, swooning for dictators, the dark hour of Helsinki. If it truly is the economy, stupid, Democrats may be asking to lose.
And while urban areas are benefiting more from a better economy, the uplift has now trickled out. Red rural Trump counties are seeing more hiring and wage growth, according to a lengthy new study by the Brookings Institution’s Metropolitan Policy Program.
Despite his low job approval, Trump enjoys consistently strong approval on the economy and this is likely to be his leading argument for reelection. Yet simultaneously Trump is doubling down on a dangerous trade war that could dampen the economy and doom his chances.
Net farm income is at its lowest since the recession in 2009, agricultural exports to China fell more than 30% between October 2017 and February 2018. In that same period in 2018-2019 they plummeted by 83%.
Contrary to the president’s claims that China is paying us tariffs, consumers and companies are shouldering the cost of the tariffs by $3 billion per month in new taxes, in addition to other costs companies are passing on as they restructure their supply chains. Some estimates are higher, with a potential loss of 0.4% of GDP.
Democrats, nonetheless, have no means to attack Trump’s glaring vulnerability on tariffs -- because they are largely protectionist themselves. The Peterson Institute studied the candidate positions and divided them into three categories. The “pro-trade” Democrats are: Joe Biden, Julian Castro, John Delaney, John Hickenlooper, Jay Inslee and Beto O’Rourke, while “anti-trade” Democrats include Klobuchar, Cory Booker, Tulsi Gabbard, Bernie Sanders, Kirsten Gillibrand and Elizabeth Warren. Kamala Harris, Seth Moulton, Eric Swalwell, Pete Buttigieg and Tim Ryan all fell into the “mixed/no position” category.
Beyond defending his vote for NAFTA long ago, Biden has remained quiet on the topic. At the town hall in Milwaukee, Klobuchar noted that suicide rates among farmers are skyrocketing but she didn’t take the opportunity to talk about the 49 farms that filed for bankruptcy in Wisconsin in 2018, the highest in the nation, or the damage done by a 25% retaliatory tariff Mexico placed on cheese produced largely from a Wisconsin dairy.
A deal with China to clean up his trade war mess is in peril, and the longest bull run in Wall Street history, which will reach its record next month, surely could reach its end. But that’s not something Democrats should be betting on.