News On the Economy Won’t Help GOP in Midterm Elections

Advertisements

Donald Trump was so anxious to brag about “his” latest job growth and unemployment numbers that he broke the law by tweeting about them before they were announced officially by the U.S. government.  

Not only does this show how ignorant Trump is about the operations of our government but it also shows that he considers the economic news very helpful to him politically.

He is right in the sense that two key factors influencing midterm election results in the past have been the sitting president’s job approval and the strength of the economy.

Advertisements

Clearly Republicans are counting on the strong economy to carry them to victory in November, but recent news is not as positive as they would like to believe.

There are many current factors that will influence economic performance for the rest of 2018, such as:

  1. Trump’s trade wars,
  2. Global instability,
  3. Rising gas prices,
  4. Rising inflation,
  5. The stagnant stock market,
  6. Rising interest rates, and
  7. The exploding federal deficit.

None of these things are good news for Trump and the economy.

The fact that Donald Trump is focusing on such distracting issues as a North Korean summit and a Mexican border wall show that he is trying to get the American public to think about things other than his lies and broken campaign promises.

The main thing Americans care about is their own pocketbooks, and their own feelings of security.  Despite his boasting, Trump has done little to make most voters feel better.

  1. The trade wars and new tariffs will raise prices on many products Americans buy, and they will also cause the loss of jobs.
  2. Trump’s international policies, such as dropping out of the Iran nuclear deal, increase global uncertainty which can cause stock prices to fall and the price of gasoline to rise.
  3. The GOP tax cut has not given American workers the promised benefits as corporations are buying back their own stock instead of increasing wages.  Studies show that gas price increases have taken away all of the tax cut benefits for American workers.
  4. The tax cut, by exploding the federal deficit, has caused interest rates to rise.  Rising interest rates will hurt economic growth, depress stock prices, and make borrowing more expensive for Americans.  
  5. The GOP tax cut has also over-stimulated the economy so inflation is now increasing, and this makes everything more expensive.

If you add up all of these factors, what Trump has done since taking office has not helped Americans, but has hurt them by increasing their uncertainty and increasing prices for almost everything.

Another political consideration is that Trump inherited a great economy — with many years of sustained job gains and growth — from former President Obama.  The majority of Americans believe that Obama, not Trump, deserves credit for the current state of the economy. But they blame Trump and Republicans for higher gas prices, higher interest rates, higher tariffs and stagnating stock prices.

Steve Bell, a former Republican staff director for the Senate Budget Committee, had this to say:

“There’s a lot of stuff happening underneath the topline numbers that’s troubling to me. What Trump has done — it may not show up for a while — he’s probably begun the end of this economic recovery. When you impose tariffs, what you are doing is increasing prices for the folks at home and therefore lessening their purchasing power.

On Friday, Canadian, Mexican and European leaders condemned Trump’s tariff announcements and have announced they plan to impose their own tariffs on U.S. exports.  

According to Mark Zandi, chief economist at Moody’s Analytics, the tariffs and retaliation from trading partners will probably cost the U.S. economy roughly 250,000 jobs.  “There are a lot of fissures out there, and some of them are starting to blow,” Zandi said.

Zandi also said the tax cuts haven’t made a “meaningful impact yet on consumer spending or business investment.”

“If we don’t see it in the next month or two, we have to question the stimulus we’re getting,” he added.

What is clear is that there are many questions about the current state of the American economy. Voters also have many questions about the economic leadership currently in charge in Washington, D.C.. The November elections will be a referendum on Trump and the GOP Congress.

While Republicans brag about and cheer about what they say is great economic news, they may get a wake up call and find out at election time that the majority of Americans do not have all that much to cheer about.