THE TRUMP "CRASH AND BURN" TRAIN WRECK - A FATAL, HISTORIC BUST - WITH DONALD DRIVING THE TRAIN...

   

NOTE:  14 DECADES OF THE US ECONOMIC SYSTEM SUFFERED THE LARGEST LOSS IN GDP SINCE 1880!

Reports today from the US Bureau of Economic Analysis announced that history was made in the 2020 2nd Quarter!  A new, first time record of an ECONOMIC CRASH was achieved by Team Trump with a DECREASE IN GDP (Gross Domestic Product) by 1/3.... 33%!  This is the highest annualized economic loss - since the data has been recorded in 1880!  Unlike the Trump announcements that the US Economy is recovering with an expansion of jobs and opportunity, instead, the US Bureau of labor announced yet another 1.4 million NEW UNEMPLOYMENT APPLICATIONS ere filed last week.  This comes on top of the week before reporting another 1.4 million jobs lost.  More than 40 million lost were lost since the start of this year - 2020. Today's announcement records a new - and painful - record of economic "blood in the streets."  Compared to the Great Depression GDP decrease of 28.6%, this 2nd Quarter loss of 32.9% is worse.  

RECENT CHART DISPLAYING 2016-2020 - TRUMP DAYS BY QUARTER... 

This chart reports a more recent record of the progression of the GDP Quarterly reports from 2016 - the last presidential election year - to this quarter 2020.  Note the curve visible above in 2018 - once the Trump policies, trade wars, arguments with allies, and withdrawal from the Far East Trade Agreements and more. 

WESTERN/EASTERN HEMISPHERE CRIPPLED

Numbers shrink in 2018 as farming sales decrease and bankruptcies go through the roof.  Employment hangs on - barely - but the manufacturing piece barely survives as Trump attacks Europe, NATO, Latin America over immigration, and nations in the Far East. Come the viral "invasion" - ignored by Trump who sold snake oil through his ignorance and against advice and counsel, the economy tumbles.  The First Quarter of 2020 falls by 5%.... and the Second Quarter CRASHES BY 33% - 1/3 OF THE GDP EVAPORATES!  This economic shock is four times the worst quarter during the Great Recession and the sharpest economic contraction in modern American history! And, with yet another 1.4 million Americans filing for unemployment last week! And, another 829,000 jobless workers filed for support through the Pandemic Unemployment Assistance Program for contractors and gig workers not typically covered by traditional unemployment insurance. the Bureau of Economic Analysis notes that "economic fallout was driven by a decline in consumer spending." Let's take a look....

*Spending on goods and services PLUNGED at an annual rate of 35% - a record.

*Investments in Buildings, Equipment, Intellectual Property:  DOWN 49%.

*Exports of American Production:  Farming and Manufactured: DOWN 64%.

*Farming Bankruptcies: Set a new national record. 

*Corona Virus Data:    4.5 million cases logged;
                                      153,000+ deaths to date - 4 times the lives lost in 10 years Viet Nam. 
                                      Increased viral rates in 30 states; hospital overload. 

          THE INITIAL NATIONAL PLAN: THREE STEPS TO ECONOMIC RECOVERY.

Step 1: Support businesses and corporations through grant and forgivable loans so that they can remain afloat and keep their employees funded and alive as fuel for the economy.

Step 2: Support those with unavoidable job loss, layoff, or un-paid furlough through extended unemployment, a supplemental benefit of $600 a week, a one-time payment of $1200 per person, and create a separate fund to support others in construction and more who are not engaged in standard unemployment - a Pandemic Assistance Fund. Taken together with Step 1, these will maintain the "bubble up" consumer spending that drives almost 70% of the economy. 

Step 3: Invest in developing cures and a vaccine. Currently underway, funded, and long horizon. 

The goal of all of this is to maintain the underpinning of the GDP - consumer spending - the lifeblood of the US Economy. And, keep the Stock Market well fueled and rising. In theory, families were empowered to pay the rent and buy groceries.  The Federal Reserve Chair Jerome Powell said, "it has kept people in their home. It has kept business in business." Corporations and large employers kept afloat, and the Stock Market survived - so far. Sadly, as the number of Covid19 cases increased, ER space shrinks, and and the number of deaths rise. Cures/vaccines are not in sight.

WHAT IS THE CURRENT PLAN? 

THE TRUMP COGNITIVE TEST

With 1/3 of the economy going up in viral "smoke" today, what can we do?  What should we do? In the Great Depression of the 1920s-30s - a century ago - the nation experienced an even less painful loss. Our recovery then took us more than a decade...and the addition of many economic stimulus initiatives to bring the nation back from the brink of complete collapse.  Add to a substantial change in social supports and job expansion through both public and private sector expansions, World War II - the largest single combat period and loss of life in history - pulled US unemployed men off of the bread lines, employed their wives in factories in support of gearing up for the war with necessary materials and equipment, and re-tooling America's manufacturing base to support our military and the armies of our allies in Europe and in Asia as well. After the war period, we adjusted to the return of millions of our troops through Veterans Aid in education, health care, and housing supports as well as the return of their wives to their shared homes to raise the "baby boomers" conceived after the war.  That left vacant positions that needed the Veterans to fill the jobs the new Moms left behind. School, work, and fatherhood helped rebuild the nation! So, learning lessons of economic adjustment and building a massive increase in a new middle class from those who marched in bread lines, in military training, and on the front lines, what do we do now against a backdrop of an unemployment rate exceeding the Great Depression and a shrinkage of GDP of 1/3 - 4% points higher than the dark days of the early 1930s? 

TRUMP TRAINER REPEATING HIS "TEST" ANSWERS 

Right now, the Trump/McConnell plan is nowhere. Although the Pelosi-led Democratic House adopted a full plan 2 months ago - the Heroes Act, McConnell has refused to post it for a US Senate vote to date.  In fact, he has not been able to craft a Republican Senate plan with Trump's support so far. Trump, on the other hand, tweets,  greets, briefs, and eats.  Oh... he takes "important tests" too... and plans for the election.... Once McConnell drafts the Republican Plan, he will need to sit down with the House Democrats to negotiate a package that may be able to be adopted and sent to the White House for Trump's signature.  Time will tell....

Turn the clock back to the last economic collapse and the debate that took place in the late 1920s and the 1930s - the Great Depression.  With Republican Conservative Herbert Hoover in charge, the post Stock Market collapse depression went unaddressed.  The Democrats, on the other hand, were proposing a series of protection and recovery plans in the Presidential Election of 1932 and crushed Hoover and the Republicans , gaining control of the White House and the Congress as well.  During his first 100 days, FDR crafted new initiatives and numerous Executive Orders that crafted the New Deal aimed at relief, recovery, and reform.  Primary objectives were to ignite jobs with the CCC and WPA, encourage the recovery of manufacturing and farming, and to protect those in desperate need with Social Security.  With Ration Books, support for Soup Kitchens, and expanded infrastructure jobs via the Civilian Conservation Corps and the Work Progress Administration, FDR literally "invented" a bottom-up, bubble-up economic platform that led a recovery for the first several years.  In 1937 and 38 we slipped backward into a recession and by 1939 to the 1940 election the the New Deal was expanded into additional programs. Organized under the National Recovery Administration (NRA), the "New Deal" launched. Banking and financial relief included the Federal Emergency Relief Organization, the Emergency Banking Act, the Recovery Finance Corporation, the FDIC, FTC, and the SEC. Labor related agencies included the NLRB, FLSA, and job intensive PWA, WPA, CCC, and the Agricultural Adjustment Administration to name a few. Re-building from the bottom up was the foundation of the New Deal programs.  The secondary basis and goal of this initiative was to grow the demand-side of the economic equation and cause an necessary increase in supply.  That would grow the economy and the GDP as consumers grew as did their purchasing power.  Come the Second World War, manufacturing demands hit the roof and jobs grew in the millions - fast - along with the demand for troops.

FAST FORWARD TO TODAY.  What is the lesson to be learned? Simply put.... bubble up, not trickle down....  Address the cause - in this case, the viral "invasion" by a battle to defeat the invaders!  Invest, recruit, insist and persist in developing a cure and a vaccine to prevent a recurrence of the Corona-19 virus. Repair the wrecked economy through empowering working families to pay the rent or the mortgage, pay the bills, buy groceries, purchase needed materials, machines, and autos, pay for education and more.  All this through short-term financial support and growing economic opportunity and jobs through needed investments. First stop - INFRASTRUCTURE REPAIR AND EXPANSION.  Learn from the CCC, WPA, and PWA that jobs - and pay - help uplift our people and inject new income and skill development into our economic fabric - the assets that our economy needs to resume and recover.  The more you invest, the faster we will grow as consumer demand increases.  The greater the demand, the more supply is needed.  The greater the supply needs are, the more business expansion will occur and the more job opportunity will grow.  With job growth comes more demand and need... etc, etc, etc.

It's time.  As in the election of 1932....  we must remove the blockage that prevents progress.  We must defeat those who stand in the way of our recovery.  We must take charge, make change, cure our ills, and rebuild.  

TRUMP AS A GRADE SCHOOL STUDENT

Tick-tock.....   November, 2020.    

Bobby J