Flyover America is fast on its way to feeling betrayed… again.
There was never a chance the Donald could or would “Drain the Swamp,” let alone MAGA.
We’ve known from Day One that Trump lacked a real program to rectify America’s ailing Main Street economy. And this has nothing to do with the Deep State’s vengeful resistance.
What’s happened in recent months was just one last rip of Wall Street’s army of gullible speculators and momentum-chasing robo-machines.
This “Trump Bubble” will prove to be the most lunatic mania of modern times. And it’s getting close to time for that consternated and inevitable chorus of “What were we thinking?”
Well, “we” were “thinking” on a decade of easy-money muscle-memory and buying the effing dip…
That worked on Wall Street – for insiders like Goldman Sachs and other big gambling houses speculating on carry-trade leverage in the options market, for example.
If you survived the plunge that happened between the Lehman Brothers bankruptcy in September 2008 and the March 2009 bottom, there were literally 50 buyable dips in the years of fabulous riches that followed.
That one-way market was the work of the Federal Reserve and its global horde of Keynesian central bankers.
Now comes the reckoning.
The cratering of the Trump Bubble is just the beginning of the Donald’s comeuppance.
That’s because this “booming” economy is no more real or sustainable on Main Street than Wall Street’s last rip. Here are the data.
Total labor hours employed (that’s the blue line) are up by only 7% over the last decade-plus. And even those are heavily weighted to the low-pay, part-time economy in leisure, hospitality, retail, temp, and personal services gigs.
Industrial production (the brown line) has only expanded by 3% in 11 years. Median real household incomes are up by about 2%. And single-family housing starts are up by only 5% after nine years of the cheapest mortgage rates in recorded history.
Folks, these aren’t annual growth rates. They’re 11-year cumulative gains. They amount to less than 1% annualized rounding errors in the great scheme of things.
The “headline” unemployment number always checks in around 3.9% at the end of a long expansion. And it’s not worth the paper it’s printed on anyway.
Meanwhile, that 4.2% second-quarter gross domestic product (GDP) print was actually the perverse and unsustainable feedback from the Donald’s misbegotten Trade War and the GOP’s Fiscal Debauch.
What’s lurking beneath this quickly dissipating stock market and GDP euphoria is the same failed economy the Donald inherited.
It’s just older.