Donald Trump just delivered a record for U.S. median household income and the first full year of higher real incomes since 2000.
President Trump’s ‘Make America Great Again’ economic policies that favor Main Street over Wall Street just delivered a record for U.S. median household income and the first full year of higher real incomes since 2000.
The median household income hit an all-time high of $63,554 in November 2018, based on an analysis of the Census Bureau’s Current Population Survey by Sentier Research. The real, after-inflation, median household income was 3.2 percent above the $61,612 for November 2017; up 5.5 percent above the $60,231 in December 2007; up 15.4 percent from $55,083 in June 2011; and 4.3 percent higher than January 2000.
Despite almost two decades of income stagnation for 99 percent of Americans, establishment economists on the left and the right have viciously attacked the Trump Administration’s ‘Make America Great Again’ (MAGA) policies for cutting taxes, deregulating the economy, maximizing oil and gas production, ending foreign entanglements, renegotiating blatantly unfair trade deals, and slapping China with tariffs.
The Nation published an article in June warning that, ‘Donald Trump’s Trade Wars Could Lead to the Next Great Depression.’ Progressive former senior strategist at bankrupt Bear Sterns and Lehman Brothers Naomi Prins hyperventilated that Donald Trump’s attacking foreign exporting nations for using America as “the world’s piggy bank” was “making the world a less stable, less affordable, and more fear-driven place.”
In the same month, Never-Trump’ conservatives at the Weekly Standard sneeredat MAGA policies in ‘Trumpenomics for Dummies.’ British economist Irwin Stelzer lashed out at Trump for trying to “protect our 19th and 20th Century industries” basic industries, instead of backing “brain replacing brawn as the basis of American economic prosperity.”
In response to MAGA’s unorthodox economic policies that delivered big income gains and drove unemployment down to its lowest levels in almost 50 years, the Trump Administration has had to weather seven interest rate hikes based on the Federal Reserve’s orthodox economic theory that wage growth must be restrained to prevent future inflation.
The Fed had no problem slashing interest rates 19 notches early in the Obama Administration, and then keeping interest rates substantially below inflation in order to create asset bubbles that drove up U.S. rents and home prices. According to an EPI study, Incomes for the top 1-percent spiked to an all-time high average of $1,316,985 in 2015, a multiple of 26.3 times the average income for the other 99 percent of Americans.
While the Federal Reserve has been trying to protect the average American from too much personal income growth, its own Inflation Expectation Rate for the next five years has actually fallen by 20 percent since President Trump took office in January 2017.
Managing Director David Hoffman of Brandywine Global Asset that manages $74 billion recently observed that before the Fed raised the U.S. policy interest rate on December 19th and crashed the stock markets, the Fed Funds target interest rate when adjusted for inflation was already above zero. He warned that the Fed’s policy for the first time in a decade is “no longer broadly promotive of continued strong growth.”
The Fed and critics on both the left and right have fully embraced Keynesian economic theories that argue for government using “targeted” fiscal spending and monetary credit policies to steer the U.S. economy to optimum performance. With the top “1-percenters” controlling the bureaucratic deep state over the last 40 years, they have manipulated those Keynesian “targets” to optimally enhance their own incomes.
Because MAGA economics rejects fiscal and monetary targeting as inherently corrupt, the “1-percenters” understand their entitlement is at existential risk of going away. They must fight, obstruct and slow down MAGA policies before the redistribution of income back to the 99-percent becomes overwhelmingly obvious to most American voters.
The Fed’s interest rate spikes have hammered Wall Street with a global stock market selloff that resulted in the worst December U.S. stock performance since 1931, with the Dow Jones Index down 9.7 percent for the month. After the market value of Apple Computer collapsed by $75 billion after warning of lower earnings due to China’s economy slowing, Dow Index entered a “Bear Market” Dow down 20 percent from its September high.
But “Main Street” is booming, according to the latest Bureau of Labor statistics, with 7.1 million job openings on the last business day of October. The latestSmall Business Optimism Index reported its highest percentage since 1989 of companies under 250 workers planning to raise compensation in 2019 in “response to persistently high levels of unfilled open positions.”