Economies in mirror appear larger than they are

During the 2016 presidential race, Donald Trump promised Americans that, as their president, he would usher in “tremendous” economic expansion of as much as six percent. While that growth rate has not materialized, the USA’s gross domestic product (GDP) grew at an annual rate of 4.1% in the second quarter of 2018. That’s respectable growth, so president Trump boasted that “we have accomplished an economic turnaround of historic proportions.” That’s true if you look back only the year and a half that Trump has occupied the Oval Office. However, if your historical perspective is longer, the proportion of the GDP’s growth is not so large after all (click chart below to view full size).

Quarterly GDP change higher than 4 percent
Highlighted quarters had greater than four percent GDP growth (annualized)

Other than Q2 2018, the GDP has grown less than three percent each quarter since Trump’s inauguration. In comparison:

  • There were four quarters during president Barack Obama’s term in which the growth rate exceeded 4.1%—once even surpassing five percent. And Obama had to start his term with the economy mired in the Great Recession that president Bush handed off to him.
  • The GDP growth was larger yet during president Bill Clinton’s administration. Trump’s best quarter so far would have been only the thirteenth best quarter during Clinton’s term, when eight quarters were larger than five percent and one even reached 7.5%. Now that’s HUGE by historic proportions!

It’s also important to understand that the Bureau of Economic Analysis reports quarterly results on an annualized basis. That means the growth rate it reports for each quarter is the amount the GDP would grow if the rate in the given quarter were to be sustained for an entire fiscal year. So the 4.1% annual growth rate Trump is touting is much larger than the actual rate the GDP has grown for any full year he has been POTUS.

Yes, growth was strong in Q2 2018. But the GDP only grew 2.2% (annualized) in the first quarter of this year. Therefore, for the GDP to achieve an actual growth rate of 4.1% for the full fiscal year 2018, the quarterly growth will have to average over five percent (annualized) in both of the remaining quarters of fiscal year 2018. It would be nice for the economy to grow that fast this year but, with the growing headwinds of an escalating trade war, it will be a very tall order.

So Americans should be pleased to see the strong growth the GDP underwent last quarter. But they need to keep in mind that it’s only a snapshot of a single quarter. In retrospect, the growth of the GDP appears larger than it was.

Capitalism can coexist with a socialist democracy

When asked if he’s a capitalist, Senator Bernie Sanders says he is not. He doubled down on that claim during the Democratic debate last night when he reasserted it. Instead, Sanders claims to be a democratic socialist.

I think this is a tactical error on Sanders’ part. There’s nothing inherently wrong with being a democratic socialist but Sanders should not disavow capitalism. Sanders should more explicitly recognize that the two philosophies are not mutually exclusive.

He implied as much when Sanders stated that:

“Everybody is in agreement that we are a great entrepreneurial nation. We have got to encourage that. Of course we have to support small- and medium-sized businesses.”

Capitalism is defined as an economic and political system in which a country’s trade and industry are controlled by private owners for profit, rather than by the state. But this system can exist side-by-side with Bernie Sanders’ view of democratic socialism. Neither has to be (or even should be) an all-or-nothing system.

Sanders only proposes socializing those sectors that capitalism does not do well. For example, private health insurance companies (like those used in Obamacare) have almost a 25% overhead because of the cost of advertising, executive salaries, stock holder dividends, and administrative overhead. Medicare, which is a single-payer system like Sanders proposes, has only a nine percent overhead.

He also proposes using tax dollars to rebuild America’s aging and crumbling infrastructure. If the federal government didn’t do it, no capitalist company would rebuild our highways, bridges, sea & airports, power grid, schools, and telecommunications networks. But without rebuilding the national infrastructure, American companies will be unable to be compete globally in the heart of the 21st century.

While Sanders proposes socializing those sectors and a couple of others, he does not advocate eliminating free enterprise. He explicitly says that we need to support small- and medium-sized companies, calling them the backbone of our economy. He does not call for eliminating investment banking. He just thinks investment banking needs to be regulated like it was under the Glass-Steagall Act because it was the deregulation of the banking industry that led to its near collapse in 2008. Sanders demonstrates that he is a believer in capitalism.

The countries that Bernie Sanders cites as examples of successful socialist democracies all have robust capitalism in their economies. Too bad Sanders doesn’t clearly state that they do. It’s fine for him to say that he is a socialist democrat because he is. But Americans would be more accepting of it if he also said that a foundation of capitalism that builds a strong middle class is critical to a healthy socialist democracy.

Bullshit hater

I find myself regularly defending President Barack Obama against Republicans and other conservatives. So it comes as no surprise that I’m sometimes accused of being an Obama-lover. I’m told that I drink the Kool-Aid served up by the “liberal media.”

As much as I find myself defending President Obama, what is surprising is that I’ve actually criticized him about many serious issues over the years:

  • I’ve been critical of the Affordable Care Act—better known as Obamacare—since it became law because I see it as a government handout to health insurance companies.
  • I opposed Obama’s approach to recovering the housing market when he presented his homeowner affordability and stability plan shortly after taking office.
  • I consider the fact that the detention center at Guantanamo Bay in Cuba is still in operation to be a failed promise by Obama to close it down as soon as he became president.
  • I believe Obama continues to violate Americans’ right to privacy by authorizing the NSA to gather information about our communiques en masse as they are transmitted over public communications networks.
  • I strongly oppose the assassinations by drone strikes of people, including American citizens, in countries that are not at war against the USA without allowing the person assassinated due process.

The list could go on but that’s not the point of this article. I think there are plenty of legitimate criticisms that can be levied against President Obama and there is also no lack of grounds and reasoning to defend those criticisms. That’s why it disturbs me to see the endless string of criticisms of Obama coming from the Right that have no validity whatsoever.

A recent example was the speech President Obama gave after the mass shooting at Umpqua College last week. Conservatives quickly denounced the president for opportunistically politicizing the incident to press a gun control agenda. I think a reasonable case can be made that the incident should not be used by the president to advance his agenda. But in almost the same breath, conservatives deride the president for not calling for religious tolerance, as he would have if the shooter had been a Muslim, and instead demands gun control—never mind that he publicly stated no one in the USA should ever be targeted by a shooter because of how they worship. But conservatives can’t have both. If the president uses the incident to call for religious tolerance, he’s politicizing it.

The completely groundless criticism we probably hear most frequently from the Right is that the economy is worse off now than it was when President Obama took office. Do these people not remember that the USA’s economy was teetering on the brink of a total collapse at the end of 2008? The American economy lost 2.6-million jobs that year but has gained almost 8-million of them in the intervening years. The unemployment rate was 7.6% then but is now 5.1%. The Dow Jones Industrial Average was around 7,000 when Obama took office but now it’s almost 17,000 and the S&P 500 has increased 157% since then. The Consumer Confidence Index was around 25 when Obama took office and is now over 100. Of course, the most telling statistic is GDP because it’s the basic indicator of a recession. It was contracting before Obama took office and has grown every year since then. By almost every major metric used for the health of the economy, it is in far better shape than it was when George W. Bush handed it off to Obama.

Although it has nothing to do with issues that impact everyday American lives, conservatives often deride President Obama for using the pronouns “I” and “me” excessively in his speeches. The implication is that Obama is narcissistic and self-serving in the presidency. But an objective count paints a very different picture. Just 2.5% of the total words Obama has used in news conferences were first-person singular pronouns—only Herbert Hoover and Franklin D. Roosevelt used them less often since 1929.

Although it’s an older example, conservatives also criticized President Obama for withdrawing from Iraq prematurely. They should have been pointing the finger at George W. Bush instead. It was the Bush administration that established the agreement with Iraq to complete a full withdrawal by the end of 2011 before Obama was elected president.

There will probably be criticisms of President Obama’s patriotism, faith, and birthright citizenship ‘til the day he leaves the Oval Office. Republicans have outright accused him of not loving America and intentionally harming the country. To this day, 43% of Republicans still believe Obama is Muslim. Of course, only Obama himself knows the truth on his patriotism and faith but publicly he has always proclaimed his love for his country and professes to be Christian. He has also released his long-form birth certificate showing he was born in Hawaii (PDF).

The list of invalid or outright false criticisms of President Obama could also go on. They are everywhere in the media and when I see groundless attacks in social media, I find it difficult to resist defending Obama against them. But it’s not because I’m an Obama-lover—it’s because I’m a bullshit hater. Make a legitimate criticism of Barack Obama and I’ll join you in the criticism.

Homo evolutis

I call this blog The Progressive Zone because I like to think of myself as a progressive person. Unfortunately, when some people hear the word “progressive,” they equate it to being liberal. My conception of progressive is neither liberal nor conservative—or maybe it’s a little of both.

When Juan Enriquez shares mindboggling science, he explores a number of examples of what I consider to be “progressive.” Watch Enriquez’s TED presentation then read the rest of this post.

As you saw, none of the science Enriquez shares is “liberal” in the negative sense some hold of socialist government or late-term abortions and the like. In fact, the economic concept presented at the beginning is actually fiscally conservative. But no one would deny that both the fiscal approach and the science is progressive—at least according to my concept of progressivism.

Enriquez paints a picture of the kind of future we will get if progressive thought is used to get us there. The question it raises is, do you find this kind of world scary? There are likely many people who would be intimidated by the thought of humankind becoming Homo evolutis. After living more than twenty-five years in a paralyzed body, I find it exciting!