James Carville, an advisor to Bill Clinton, famously said “It’s the economy, stupid!” indicating that Americans in the long run vote with their pocket books. Clinton, of course, won, aided by the inclusion of a third party candidate, Ross Perot, who probably pulled votes from George H.W. Bush more than from Clinton, but the truth of Carville’s statement remains. In the end, every American votes for what will help his or her own family.
In 2020 we will see another presidential election and the anti-Trump faction is out in force already. Senators Kamala Harris, Corey Booker, Elizabeth Warren, former vice-president Joe Biden, and a slew of other Democrats have either thrown their hats in the ring or been suggested as possible candidates. The Democratic field should be large, their primary debates contentious.
But there are two factors that could carry President Trump back into office in a wave of red votes despite whatever candidate the Democrats field: the prosperity and the safety of Americans.
From the moment of President Trump’s victory in 2016, some economists predicted he would usher in a recession, perhaps another depression, with the Stock Market plunging to new and drastic lows. But instead, the Stock Market almost immediately began to rise, hitting highs of over 26,000 compared to the 18,000 it sported at the end of Obama’s term. There have been corrections, as anyone conversant with the skyrocketing Stock Market would have predicted; some normal corrections, some precipitated by the Feds repeated raising of interest rates, some by the president’s tough stance on foreign trade. Yet, today the Stock Market has gained much of what it has lost, standing today at 24,207.16, vastly better than Obama’s 18,000.
As for the rest of the economy, we have continued to see unprecedented growth. Unemployment has sunk to 3.9%, meaning that we virtually have no unemployment since in November 2018 there were 800,000 more jobs than individuals looking for work. Woman, Hispanics, and blacks are seeing the lowest unemployment for their demographics in history. A slight uptick in the jobless rate is due to the fact that workers who had given up on finding a job during the Obama administration are now finally going to unemployment offices in an effort to reenter the workforce.
The same experts claimed that the 1percent GDP growth that we saw at the end of the Obama years was the new norm and that it was unrealistic to imagine that we could every reach 3 percent again. Yet the U.S. economy has exceeded 3 percent growth for two quarters in a row and is on track to reach an average of 3 percent GDP for an entire year. The last time we had a full year of 3 percent GDP was in 2005.
During the Obama years, we were told that our country was no longer a country of manufacturing, with virtually all jobs being in the service industry. But that proved to be false. President Trump’s Tax Reduction and Jobs Act lowered the cost of manufacturing in the U.S. and encouraged a number of companies to return to the States to build new plants or to expand existing ones. The repeal of overreaching regulations on businesses has also helped industry so that through the President’s efforts, 1 million new jobs have been created in construction, manufacturing and mining, all jobs benefiting the middle class
The latest report by the Bureau of Labor Statistics indicates that 312,000 new jobs were created in the month of December alone, 301,000 of them in the private sector. Most of the new jobs created during the Obama administration were public sector jobs, jobs which require tax dollars to pay workers’ salaries. In all, about 2.6 million new jobs were created in 2018, real, full-time jobs that house and feed families.
More good news is that wages also went up in December by 0.4 percent, making wage growth for 2018 an encouraging 3.2 percent. In the wake of the Trump tax rate cuts to a maximum of 37 percent for individuals at the top end of the salary spectrum and 21 percent for businesses (a bill every single Democrat in Congress voted against!), not only is the job market for the middle class the best it has been in 50 years, but wage increases for lower and middle income groups have gained more than for the rich.
Nor does the tax bill benefit the rich more than the middle and lower class earner as Democrats have claimed. The bill eliminated loopholes that allowed the rich to avoid paying much of their tax bill. Now, the deduction for state and local taxes, which are especially high in strong Democratic states like California, New York, and Illinois, have been capped as have been mortgage deductions. While they publicly complained that this tax bill would benefitthe wealthy, Democrats quietly opposed the closing of these loopholes precisely because they would hurtthe wealthy in New York, Chicago, and California who write big checks to the Democratic Party.
Many Democrats, like media darling Representative Alexandria Ocasio-Cortez, are promising their constituents free college, free Medicare for all, and a guaranteed salary for all even if they don’t work, and they claim they will pay for it by raising taxes on the wealthy. Yet, when the top rate was 70 percent in 1980, the richest 1 percent of the population only paid about 20 percent of all income taxes. Their lawyers found loopholes and tax free investments to lower their tax liability. In 2016, the most recent year for which we have data, with a top tax rate of 39.6 percent, the top 1 percent paid almost 40 percent of income taxes. The higher the tax rate, the less the wealthy actually pay and the more that has to come out of the pockets of the middle class.
Unfortunately, Democrats don’t care much about how much taxes people pay. Obama was asked in 2009 why he supported a capital gains tax increase even though history has proven that this would lower federal tax revenues. His answer was that he still favored it because it was “the fair thing to do.” His constant mantra of “income equality” echoes those sentiments but is so close to socialism that it is anathema to true Americans. You work hard so that you can have more money to provide for your family and for yourself, not so that the government can take it all away from you and give it to someone who would rather shoot drugs than hold down a job. Who wants to lose 70, 80, even 90 cents out of every dollar to the government? I may envy the person whose talent allows him to earn $1,000,000 a year, but I don’t believe that his work should pay my bills! That is neither fair nor American!
If the economy keeps on as it is going now, President Trump’s chances of being reelected for a second term are very good. Even those who do not like his tweets will be reluctant to put the economy into the hands of a tax and spend Democrat who will undo all of the good the middle class is now enjoying.