Posts tagged ‘wage growth’

Flim Flam Man

I believe it was Abraham Lincoln who said, “You can fool some of the people all of the time, and all of the people some of the time, but you can’t fool all of the people all of the time.” Enter President DFF. That 32% base is some of the people all of the time. Back in 2016 he was approaching that all of the people some of the time, but his all was still not a majority of voters. But now I think reality, who like Mother Nature, is a bitch, is going to demonstrate to the flim-flam man and his party that you can’t fool all of the people all of the time.

Remember on Monday when President DFF went to somewhere where like in the State of the Union took credit for the high stock market (while stock prices were plunging), the amazing jobless rate, rising wages from the tax cut, and his new infrastructure plan? Wow, what a man, except it is all flim-flam. Let’s start with rising wages. He trotted out some anecdote who had got a raise and all is wonderful. Okay, I am about facts and data and here is a fact check from the Washington Post:

Egged on by the White House, corporate America has spent the past few weeks touting how it is sharing its big Trump tax cut with employees in the form of bonuses and pay increases — an apparent validation of the trickle-down approach to economics espoused by the president and his Republican allies.

But when we look at the numbers, we see the opposite: The nation’s workers are getting woefully little, at least relatively speaking. Peeking beyond the PR, our analysis finds that major corporations are planning to spend more than 30 times what they are putting in the wallets of employees on buying back their own stock — a practice solely meant to lift the fortunes of shareholders.

To get a sense of how the pie is being divided, we collaborated with Emre Gomec of the Academic-Industry Research Network to tally the sums of commitments from the 44 companies in the S&P 500 stock index that, according to Americans for Tax Reform, are giving their employees a bonus or a raise because of the new law. When you add it all up, you get about $5.2 billion — $3.7 billion in one-time bonuses and an estimated $1.5 billion in annual wage increases.

But that total pales in comparison with the $157.6 billion in stock buybacks announced by 34 S&P 500 companies since early December, when the tax bill passed the Senate. Companies typically purchase their own shares in a bid to bump up the price — a move that tends to please Wall Street and swells the compensation of chief executives, who are paid largely in stock.

Oh and let us not disregard what has not been tallied yet on the expenditures from the tax savings in automation. But it gets better. President DFF said the following in his speech last Monday: “Something that I’ve been talking about for two years — campaigning, and everyone said, ‘You’ll never do it’ — after years of wage stagnation, wages — so what happened two days ago and a month ago — wages are now, for the first time in many years, rising. In fact, more companies are pursuing pay increases right now than at any time in the last long period of time — they actually say, ’in the 21st century.’ Can you imagine that? It’s amazing what people with some good ideas can do. It’s amazing what we’ve all done together.”

Except again it is a big lie. Again from the Washington Post:

According to The Fact Checker’s database of Trumpian claims, the president in his first year eight times falsely suggested that wages were finally rising because of his policies. He also made a similar claim in the State of the Union address.

But there is little dispute among economists that wage growth — after being essentially being flat for years — started to pick up again in 2014, after reaching a post-Great Recession low. In other words, Trump is simply blowing smoke when he claims that when he was campaigning that people thought it was impossible for wages to rise again. Wages were already increasing, though the increases were lower than what would be expected in a mature recovery and the impact was uneven, as shown by this chart from the Hamilton Project at the Brookings Institution.

For the purposes of this fact check, real wage growth for most workers in 2017, Trump’s first year as president, actually lagged the last four years of Barack Obama’s term. “Real wage growth in 2017 for production nonsupervisory workers in 2017 was 0.2 percent, the lowest since 2012,” Shambaugh said. “For the bulk of workers, purchasing power did not rise very much in 2017.”

Okay, let’s move on to the wonderful infrastructure bill that I have told you before is a sham. First he gave away all the money we needed to infrastructure improvements in the Great Tax Gut. Now here is the plan as it now looks, again from the Washington Post:

Despite calling for a $1.5 trillion boost in infrastructure spending, Trump is proposing just $200 billion in federal funding. The remaining $1.3 trillion is expected to come from a combination of state and local governments and the private sector. Yet in most places with the greatest need for new infrastructure, cash-strapped governments won’t be able to pay for it without raising taxes. Meanwhile, the private equity firms and foreign sovereign wealth funds that are likely fill the void will undoubtedly demand guaranteed returns in the form of, say, new tolls. The reliance on private investment also creates, as Paul Krugman writes, the potential for “an orgy of crony capitalism.”

You know, toll roads everywhere and instead of taxes to pay for it, you will just get bills for flushing your toilet. And we won’t own any of it. The ultimate flim-flam man can full some of the people some of the time and all of the people some of the time, but he can’t fool all the people all of the time and when they finally feel all this in their pocket book, well then things will change. Reality, facts, and data are a bitch.