Mismeasuring the Economy: Is an Economy Successful if It Harms Those Living Within it?
The stock market has reached record highs. Unemployment rates have sunk to record lows.
PresidentTrump certainly celebrates these numbers, but are they a sound measure of most Americans’ health and well-being?
Joe Biden recently kicked off his presidential campaign arguing that most Americans are not feeling the benefits of, or sharing in the wealth being produced by, this “strong” economy. Certainly, the Trump tax cuts lined the pockets of the wealthy and did not provide the windfall promised to the average American, with many feeling the tax “reform” hurt them.
Perhaps unemployment rates and stock market averages do not accurately measure how well average Americans are faring in this economy.
Economists worth their salt will tell you that the objective of an economy is, or should be, to produce and distribute goods and services as efficiently and effectively as possible to meet human needs.
Let’s underline that last point: an economic system is effective to the extent it is able to meet human need, which means also that we should measure the efficacy of any economy by how well the needs of the people living within that system are being satisfied.
Adam Smith, for example, argued for the efficacy of capitalism in The Wealth of Nations not primarily because it allowed individuals to amass private fortunes but because he believed encouraging individuals to generate as much revenue as possible was the best way to serve the public good and the welfare of all in the system. In short, he evaluated capitalism as an economic system based on how well it worked for the benefit of all in the system.
So, when we assess the success of our current economy, let’s look at some other numbers that illuminate how well Trump’s economic policies are working to satisfy the basic needs of the majority of Americans.
*Since Trump took office, according to the Congressional Budget Office, over one million Americans have lost health insurance. Additionally, a recent study from the American Cancer Society reveals that 56% of American adults, about 137 million, have experienced serious financial struggle, even if insured, because of high deductibles and otherwise skyrocketing healthcare costs.
The Commonwealth Fund reports that 44 million people are under-insured, which means they often forego necessary care because of costs.
What is the Trump administration to address this major economic hurdle to health and well-being for millions of Americans?
Well, last May 1 while Congress held hearings exploring the possibilities of Medicare For All, the Department of Justice, under the direction of embattled Attorney General William Barr, was busy in court suing to abolish the Affordable Care Act in its totality. If Barr and Trump prevail in this suit, millions of Americans will lose the health insurance they currently have, including 52 million who have pre-existing conditions. Trump and Republicans have presented no alternative healthcare plan, despite promises.
*Moreover, Trump’s proposed 2020 budget called for a trillion dollars in cuts to Medicare, Medicaid, and Social Security, echoing calls by Paul Ryan and Mitch McConnell in October 2018, shortly after passing $1.5 trillion in tax cuts benefitting largely the wealthy and corporations, to cut these programs to address the ballooning deficit.
If the economy were so healthy, would we need to cut these programs so essential to people’s most basic well-being and economic sustenance?
*As I’ve detailed elsewhere, Trump’s education policies make it harder for people to access and afford higher education, which is a key to economic success. These policies impose a great economic burden on families.
*Trump’s tariffs are devastating American farmers. The trade wars Trump has instigated has not only led to the lowest incomes American farmers have experienced in years but also caused a record number of bankruptcies for Midwest dairy farms. Over the past two years 1,200 dairy farms have stopped producing milk and another 212 have simply disappeared.
Trump’s tariffs have been extraordinarily harmful to the U.S. steel industry as well.
While Trump claims in the long run these policies will help the economy, as John Maynard Keynes reminds us, “In the long run, we’ll all be dead.”
What he meant to emphasize in this famous quotation is precisely the fact that economies are supposed to serve the needs of the people living in them, not the other way around.
Trump’s economy is simply devastating people.
*Perhaps less recognizable as an economic issue is the environmental havoc Trump is reaping. If an economy is supposed to serve the health and well-being and meet the needs of those living in it, then we need to see environmental issues as central to our economy.
The Flint water crisis should have made this point clear to us. Trump, however, has rolled back key features of the Clean Water Act and also rolled back Obama-era regulations regarding mercury emissions from coal-fired power plants because of the birth defects and health problems they create.
Harming human health also means, we know, incurring economic costs.
Can we call an economy “successful,” if people living within it are being harmed, not served?
The same goes for climate change. A federal report issued last November, produced by scientists from the government Trump leads, underscored the economic and human devastation being visited upon us because we are not addressing climate change:
“The impacts of climate change beyond our borders are expected to increasingly affect our trade and economy, including import and export prices and U.S. businesses with overseas operations and supply chains. With continued growth in emissions at historic rates, annual losses in some economic sectors are projected to reach hundreds of billions of dollars by the end of the century — more than the current gross domestic product (GDP) of many U.S. states.”
The Trump economy does not make sense even in brutal dollar terms, and it certainly does not make sense in human terms.
It works against, not in support of American lives. A little look behind the numbers reveals the truth of the pain Trump’s economy is inflicting on Americans.