Is America great again or what? In the first quarter of 2019, U.S. gross domestic product rose 3.2 percent, which would be making all of Trump’s supporters cheer in delight, except for they’re all busy shouting “no collusion.”
In normal times, in which we are not and to which we will likely never return no matter how much Joe Biden channels Warren Harding’s campaign slogan and calls for a Return to Normalcy, a president sporting 3.2 percent GDP growth would be considered an extremely formidable incumbent very likely to coast to reelection.
Alas, our poor put-upon leader has little time for singing the praises of his magnificent economic stewardship, as he is busy whining to Rupert Murdoch about how some apparently wayward Murdoch spawn does not fully appreciate the demonstrably stable genius of Sean Hannity, Lou Dobbs, Jeanine Pirro and Tucker Carlson.
Given contemporary politico-cultural dysfunction, which makes more sense: Crowing about good (which is to say not unprecedented nor even eye-popping but certainly respectably strong) GDP quarterly growth? Or protecting and nurturing the propagandists battling the glamorous front lines of your assault on any and every recognized reality, a battle in which defeat would mean the erosion of your base and probably jail?
You can see why the Fox News lineup, and not the economy, is Trump’s priority.
But just because Trump is feverishly saving Hannity’s job so that Hannity can in turn publicly worship Trump while Rudy Giuliani snarls on, in a carnival of mutual old white male clustercuddles, all of which leaves Trump too preoccupied to bother looking at the economy, that doesn’t mean we have to ignore it too.
To recap (for those of you who have lives and better things to do than remember that one economics class): gross domestic product = consumer spending + business investment + government spending +/- the trade surplus or deficit. Yes, those aren’t the technical terms eggheads use, but that definition is good enough for a blogpost.
Consumer spending is the biggest part of the U.S. economy, historically accounting for about 70 percent of GDP.
And during the first quarter of 2019, when consumer spending grew by 3.2 percent, consumer spending … slowed?
Many news stories noted the phenomenon but let’s quote Footwear News. Because come on! It’s Footwear News!
…personal consumption expenditures grew only 1.2% for the quarter, following three straight quarters of 2.5% growth or higher. Spending on nondurable goods — a category that includes footwear along with clothing, food and cosmetics — fell 5.3%, the biggest drop since 2009.
So if consumer spending sort of seized up, why/how did GDP grow? This time let’s turn to a less shoe-centric source, Reuters:
Exports surged and imports declined in the first quarter, leading to a small deficit that added 1.03 percentage points to GDP after being neutral in the fourth quarter. Trade tensions between the United States and China have caused wild swings in the trade deficit, with exporters and importers trying to stay ahead of the tariff fight between the two economic giants.
Trade wars can make fluke numbers. This particular quarter, GDP grew even though people are spending less money. A bunch of economists are dismissing the quarter’s report as a sort of meaningless one-off, and still expect yearly economic growth to be a little more than 2 percent, which is to say profoundly typical and not eye-popping at all.
Meanwhile, if people are spending less money, that means there is less money in the economy to … oh, whats that phrase? … oh right… trickle down!
All of which just goes to show, yet again, that economic “growth” does not mean shared prosperity. It’s not the growth, you see, that is important. It’s the distribution.
Or, put another way, “you can’t eat GDP.”