Trump’s Success? Blame the “Recovery”

Trump’s Success? Blame the “Recovery”

This is one of those friend-of-friend stories that no one believes. In this case, I actually know the people involved, so I can tell you it’s true.

It starts with my friend telling me recently about a conversation she had with her husband. He was part of a lunchtime discussion at work about the popularity of Donald Trump when his colleague said: “I don’t understand why people are following Trump. America is doing really well. The economy has recovered. We have plenty of jobs. Why would anyone be unhappy?”

In a certain slice of America, that perception is reality … though in reality, it’s a false perception.

And that’s the story I want to tell you about today — the story of an America that is decidedly not doing well. Not at all. It’s the story of disconnected but indisputable facts, and how, when you put them into the bigger jigsaw puzzle, the resulting picture is a warning sign of the future to come.

It’s not a message many Americans want to hear. I don’t want to hear it. But facts are what they are, and these are the sad and troubling facts about our America today…

Between two-thirds and three-quarters of Americans, depending on income, would struggle to come up with $1,000 in a crisis, according to a new poll from the Associated Press-NORC Center for Public Affairs Research.

A Federal Reserve study in April found that 47% of Americans would struggle to come up with $400.

Stop and think for a moment about the shock value of that number. Half the country — half of what is supposedly the richest country on the planet! — cannot scrounge up $400. How is that even remotely the definition of “rich”?

Jobs Data Don’t Lie

Middle-class jobs have vanished and have been replaced by low-wage service-sector jobs. And by that I mean you cannot blindly believe the glad-handing the media feed you about the wondrous 200,000-plus jobs being created each month. Some of those jobs don’t actually exist; they’re adjusted into existence through the mathematical formulas bureaucrats use to construct monthly employment data. And of the real jobs, I can tell you from taking apart the data every single month that most are in low-wage industries that do not fuel a middle-class life.

Which explains several other trends when you start connecting the dots:

  1. American consumer debt will top $1 trillion this year — that’s according to the Fed. The last time that happened was 2008, just before the world as we know it collapsed. Then, Americans were using their homes as cash machines for boats and vacations and investment property. Today, they’re using credit cards to continue living an unearned, aspirational life. The takeaway is that the American consumer is surviving today only by the good graces of MasterCard and American Express.
  2. The death of mid-tier retailers. The media and the small thinkers want to blame this on the Wal-Martification of Main Street and Amazon’s online retail dominance. That’s only a part of the story. Wal-Mart is not a fashion-forward seller of teen clothing. Amazon is not big on the teen-trend radar, either, nor is it a big seller of skis and camping tents and football helmets and baseball gloves. Stores such as Sports Authority and one-time teen favs such as Pacific Sunwear, Aeropostale, Wet Seal and others have collapsed because middle-class families with teens are shrinking in number, while many of those that remain have less money to spend. I’m not just surmising that, like much of the media tend to do. I contacted the U.S. Census Bureau and asked for household income data for every county in America going back to 1999 (the year, I contend, that the end of America began). I adjusted the data for inflation, as reported by the government, and so it is, then, that I can tell you with 100% assurance that 79.2% of America’s more than 3,100 counties and parishes saw inflation-adjusted median income fall since 1999, and by an average of more than 6%.
  3. Half of Generation X — a cohort ranging in age from 35 to 54 (basically people who should know better and who have been in the workforce for at least a decade) — have saved less than $10,000 for retirement … 30% have saved nothing. They’ve used their entire paychecks to either support an aspirational lifestyle or to simply make ends meet.

Back to the decline of America:

The Congressional Budget Office has warned that an effort to normalize interest rates would almost certainly push America into a debt crisis (which implies a currency crisis) because of the way higher rates flow through more than $19 trillion in federal debt — the highest debt load in the history of the world.

In some areas of the country, foreclosure rates are rising again, and not just in places you might expect, such as the shale-oil patches of Texas and the Dakotas.

Foreclosures in North Carolina — a financial, tech and bio-med hub — more than doubled in 2015. New Jersey and Rhode Island are up, too. For the first time in four years, bank repossessions nationally are rising again.

These are not unrelated data points that exist in a vacuum. Like beads on a rosary, they’re connected — and by more than just a bunch of hopeful Hail Marys.

They’re the unmistakable plot points in a love story in which the heroine, Lady Liberty, succumbs to a financial cancer and the main character — the American people — is left with very little of value.

Stripping Away the Fantasy for Reality

Most Americans, I realize, don’t want to hear any of that. They certainly don’t want to be told that, economically, America is a dark place and getting drearier by the year. We are perennially upbeat creatures, and we don’t want to be told that America isn’t as great as we’ve been led to believe.

Mine, thus, is a minority voice.

And when you are a minority voice, people will sometimes listen to what you say for the amusement factor, but they rarely heed your message (even when it’s based on verifiable facts) because your message and the facts are so radically different from the propaganda that mainstream media report over and over and over and over.

We can’t fathom that tomorrow could be (likely will be) remarkably different than today. So the “status quo bias” that rules the behavioral portion of our brains keeps us anchored to the belief that all is fundamentally good and will largely remain so for all the days hereafter.

The shockingly large support for Donald Trump, however, tells us that all is decidedly not good in America. (And, empirically, Trump cannot make it better, based on the gaping flaws in his ideology and proposals). Trump’s support is proof that America has failed economically — or, more accurately, that the myth of Ronald Reagan (the belief that debt doesn’t matter) was stillborn, and we’re only now realizing that fact.

And it raises what might be the most important question any of us answer as we look to our own personal futures: Are you preparing for the future you’ve been told to believe in … or the real future that’s already unfolding?

Until next time, good trading…
Trump’s Success? Blame the “Recovery”
Jeff D. Opdyke
Editor, Total Wealth Insider

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