Trump struggling to meet his promises

While campaigning for the US presidency, Donald Trump made contradictory promises to business, the oligarchs who run the country, and working men and women. To those engaged in commerce and the wealthy, he pledged tax cuts, to labouring folk at the other end of the spectrum, jobs.

With a Republican majority in both houses of Congress, Tru­mp has been in a strong position to deliver but has failed. There has been no early spurt in grow­th, touted a “Trump bump.” Ins­tead, the US economy has rem­ained flat and is not expected to drive the country’s growth beyo­nd the 2% average reached since the 2008-09 Great Recession.

While a return to recession is not contemplated, economists disagree on the state of the economy. Trump proclaims his policies will yield an annual growth rate of 4% and boasted that “thi­ngs are starting to kick in now.”

Optimists argue growth could rise to 3-3.5%, basing their assessment on strong job creation in June, low petrol prices and an active stock market. But they have not taken into account the recent fall in the value of the dollar, suggesting that Trump’s promises have not impressed international observers.

To Trump’s chagrin, the US economy is unlikely to improve soon. Economists quoted by The New York Times say that “without a meaningful change in government policies — greater infrastructure investment, an overhaul of the corporate tax code, a new commitment to improve the skills of American workers — there is no reason to expect the domestic outlook to change.”

Trump has not put forward well thought out policies and the divided Republican Congress is unable to enact legislation needed to effect greater productivity. Although unemployment is low — 4.3% — income is either stagnant or falling for households other than those of the wealthy.

While stagnation could be caused by a low birth rate, an aging population and a work force that is growing slowly, Trump and the Republicans advocate measures which could make this situation worse due to their “America First” policy.

Trump seeks to deport three million “undocumented” immigrants, largely from Latin America, who are employed in jobs US workers will not do. The migrants tend crops, pick fruit and vegetables and carry out other menial tasks where pay is low. Without migrants, California, the sixth largest economy in the world, cannot cultivate, pick, sort and export its agricultural produce.

Trump also seeks to reduce the 85,000 visas for highly specialised migrants, the majority from India, who are recruited to fill jobs in the information technology (IT) sector. IT companies argue that there are not enough US citizens to meet rising demand.

Although the national unemployment rate is low, tens of tho­usands of workers have lost jobs in areas where industries have closed down or cut staff. Trump pledged to save their firms and their jobs. He cannot deliver because jobs in many sectors have gone abroad where manufacturing is cheaper than in the US. Shops are filled with goods made in India, China, Vietnam, Cambodia, and other countries where labour earns less.

Some US sectors are obsolete due to technological developments. Trump has visited depressed mining towns in states dependant on coal and promised to save jobs although demand is for workers trained to produce renewable energy such as solar and wind devices expected to make obsolete polluting coal-fired power plants.

For miners who die early of occupational diseases, shutting down the mines is a blessing in the long-term but a disaster in the short-term when they must feed families. Due to Republican determination to cut costs, Tru­mp has not promised to retrain miners for jobs outside coal.

Japanese products

US automobile manufacturers have been overtaken by Japanese firms putting workers in the local automotive industry out of work. Japanese companies have set up operations here, employ US workers and make quality vehicles. Trump can’t comp­lain about the US-made Japanese products as long as firms continue to manufacture in the US but has condemned moves to Mexico by at least one producer.

This firm seeks to make vehicles for that market instead of exporting them to Mexico from the US where manufacturing costs are higher. Trump has made threats against companies proposing this option.

Fearing insecurity under the Trump administration, many families have cut consumer spending and avoided borrowing against their homes to finan­ce purchases. They understand they could lose healthcare coverage provided by the Barack Obama era legislation or face heavy student loan payments.

Due to falling household income, federal tax takings have decreased slightly. Trump’s determination to cut taxes of the rich will, if adopted, seriously reduce the amount of money available for welfare, heath and renewal of the country’s neglected and depreciated infrastructure.

Finally, by rolling back limitations on green house gas emissions, Trump could increase damaging climate change for mid-western and southern states where, scientists estimate, inhabitants who are already struggling could lose up to 20% of their income. Ultimately, thousands could relocate to moderately affected states to seek housing and jobs, increasing pressure on those regions, their inhabitants and resources.