The Retired Investor: Economics According to Trump Supporters Part II

The economic condition of the country has convinced a minority of the population that the only person who can save the country from economic ruin is Donald Trump. The growing budget deficit and persistent inflation are two areas of growing concern for that bloc of voters.

 

However, more and more Americans are paying attention to those areas as we head into 2024. Last week, I pointed out some areas of economic contention between Trumpers and those against him such as illegal immigration. Inflation is another major gripe for Trumpers. That seems to fly in the face of economic facts.

 

The inflation rate has dropped in half over the last year, according to government statistics, but most voters ignore that data. Their main inflation gauge is how much it costs to feed the family and the price of gas at the pumps. Unfortunately for them, inflation continues to thrive at the check-out counters in the supermarket and gas stations. As we know, inflation hurts those within the lower-income groups, many of whom are Trumpers, far more than it does higher-income earners. 

 

The Federal budget deficit is also a major concern. Trumpers and many hard-right congress members are demanding a 30 percent decline in spending. Notice too that continued support for Ukraine and the Israel wars has also fallen by the wayside. For 40-plus years we have been hearing how important it was to finance unending conflicts around the world in the name of Democracy. Many of those Americans who fought and bled in those wars have had enough. To them, the questions continue to be "What about me and mine." Trump, despite his background, answers that question in ways that many can identify with and support. 

 

Of course, the spending cuts they are demanding are in areas that reflect Republican arguments — some traditional, like reducing the size of government, cutting waste, etc., and others directed at the counterculture. However, with the size of the federal debt continuing to climb, many Americans are also beginning to worry that spending should be reduced as well.

 

The overwhelming support for fossil fuels in the face of the obvious impacts of climate change is another area that stumps Trumper critics. It shouldn't. To me, it is all about jobs. About 8.1 million people are employed directly in the energy industry. Countless more receive ancillary benefits from the fossil fuel sector.

 

The top five energy-producing states are Texas, Wyoming, Pennsylvania, Louisiana, and West Virginia.  Any guess who most of those states support? No matter the impact of drought, floods, hurricanes, tornados, etc., for workers in fossil fuels, there is no contest. Losing one's job will take precedence over climate change.

 

Many are so fearful of losing their livelihood that climate change itself becomes deniable. Any threat to their livelihood will be voted down again and again no matter how many initiatives are tabled, or disasters occur. And yet none of us have come up with a viable plan to transition workers into good-paying alternative jobs in different industries. Sure, there are programs available that can retrain and transition workers, but this takes time. Who feeds the family in the meantime?

 

Do these differences make Trump voters bad people? No, it doesn't. The simple fact is that their career paths and life experiences in America have been radically different from your own. There are some areas that both sides can agree on like our debt load and inflation.

 

But face it: forty years or more of widening inequality in America have left a large segment of the population on the sidelines. They have not been able to share or experience the benefits of democracy, and certainly not capitalism.

 

It is not lost on these voters that President Biden was elected to the U.S. Senate in 1972. He, and many like him, governed through countless wars, the exportation of U.S. jobs to Asia, the creation of the Rust Belt, and the death of manufacturing. To this segment of the population, he is part of the problem and has little creditability no matter what he says or does.

 

Biden, on his part, is doing a lot on the economic front. He has staked his re-election bid on "Bidenomics." His administration is spending billions of dollars in public investments while focusing on assisting middle-income workers, rejuvenating the rustbelt, and hiking investments in manufacturing capacity. Those efforts are being ignored, or worse, ridiculed by those against him. Some may forgive him and politicians like him, but none will forget.

 

Some say that over time our democracy swings like a pendulum from right to left and back again. Sometimes, it swings too far (think the 1930s, and again in the 1960s). Over the last four decades, the pendulum has swung to one of those extremes again creating excesses like billionaires in this country whose wealth rivals several countries' GDP. I expect the swing to the right, and towards populism, is just beginning. How volatile it becomes will be up to all of us and how we handle differences. Economics is a good place to start. 

 

Bill Schmick is the founding partner of Onota Partners, Inc., in the Berkshires. His forecasts and opinions are purely his own and do not necessarily represent the views of Onota Partners Inc. (OPI). None of his commentary is or should be considered investment advice. Direct your inquiries to Bill at 1-413-347-2401 or email him at bill@schmicksretiredinvestor.com.