by John Huppenthal | Oct 30, 2024 | Opinion
By John Huppenthal |
This analysis looks at President Trump’s first three years in office—2017, 2018 and 2019, the pre-COVID era—to get a more unbiased view of the policy impact of his approach.
In Trump’s first three years:
Trump extended economic growth to achieve the longest economic expansion in the history of the U.S.: 10.5 years.
Trump had the largest single year increase in 2019 median household income in history, increasing income by $5,420 to a level, $81,210, that Biden/Harris still haven’t reached.
To do this, Trump created 7.1 million full-time jobs in his first 3 years as president, the jobs that count: full-time jobs, in the pre-COVID era. This is more than an amazing feat because Trump only created 6.7 million total jobs. How did Trump increase full-time jobs by more than his total job increase? By making every job he created a full-time job, and, most importantly, converting 400,000 of Obama’s part-time jobs into full-time.
By comparison, Harris/Biden only created 1.0 million full-time jobs in the last two years, September 2022 to September 2024, the post-COVID era. Most of their job creation has been part-time jobs.
Trump created so many jobs that job openings exceeded the number of unemployed for the first time in history, not only exceeded but went on to double the number of unemployed.
The open job force was so strong under Trump’s first three years that he was stripping 160,000 people per month out of welfare for a total reduction of welfare recipients of 8.5 million, 19% of the total recipients.
The open job force was so strong that, for the first time ever, a million people left Social Security Disability and went from consuming Social Security tax dollars to paying into the system.
Trump pushed the bankruptcy date for the Social Security system back by years through welfare enrollment reduction and increased employment and wages.
Trump’s lowest unemployment rate of 3.5% was the lowest level since Eisenhower, just 0.1%, a tenth of a percent from its lowest level ever.
When Trump’s USMCA treaty was put in place, it created the world’s largest international trade confederation.
Trump set 12 all-time records for Black employment, pushing Black unemployment to its lowest level in recorded history, 5.3%, far below Obama’s lowest rate of 8.0%.
Trump reduced the personal income taxes for all families of four or more making $53,000 or less to zero. In the other 150+ countries of the world, such families are considered rich and pay tens of thousands in taxes. Economists have not begun to understand the full ramifications of this feat. In chess, it’s called checkmate. No other country can get the upper hand.
As a result, the wealth of the bottom 50% of the U.S. increased by $1.4 trillion under Trump. Under Obama’s last four years? 0.8 trillion
In a sane, rational world, Trump would have earned three economics Nobel prizes, setting records for trade, unemployment reduction, economic growth, and achieving economic equality. (That’s equality, not equity).
Trump’s strategy for his second term: the roaring 20s, where growth was 40% as compared to Obama’s 11%. The 1922 Fordney-McCumber tariffs of 40% were combined with a reduction of the personal income tax rate from 76% to 25% under Calvin Coolidge.
I am confident that Trump is eyeing a massive trade deal with China, just like Trump’s USMCA, which has shifted the trade balance of the world.
If Trump is successful at combining a modest and carefully designed broad tariff of 20% or less with equal or greater business tax rate reduction, we are likely to have the roaring 20s all over again. Hard to believe that the U.S. economy of $28 trillion could grow another 40% in the next four years but hold on to your hats.
John Huppenthal was the Arizona Superinterndent of Public Instruction from 2011-2015. Prior to this role, John served as a member of the Arizona State Senate and the Arizona House of Representatives. You can follow him on Twitter here.
by Dr. Thomas Patterson | Oct 11, 2024 | Opinion
By Dr. Thomas Patterson |
Free-market economist Milton Friedman was hardly anti-immigration. He acknowledged that, pre-1914, immigrants came “for a better life for them and their children. In the main they succeeded,” broadly benefiting their adopted country.
But there was an important caveat. “It is one thing to have free immigration to jobs. It is another thing to have free immigration to welfare.” Immigrants dependent on public benefits don’t boost their host country. They have the effect of “a reduction of everybody to the same, uniform level.”
Leftists may not like it, but Friedman was right. We’re about to learn the lesson good and hard.
The tens of millions of “undocumented” immigrants now arriving in America have a much different outlook than immigrants of a century ago. In short, today’s immigrants don’t work that much.
A study of Census data by the Atlanta Federal Reserve reported that while over half of new jobs created in the last two years have gone to illegal immigrants, so many have come that barely half of working age, non-college immigrants are in the labor force. Five of six native Americans 25 through 64 regularly work.
The Border Patrol recorded over 10 million illegal immigrants processed during the Biden years plus countless millions not detected. Yet foreign-born employment increased by only 2.32 million. So, who is supporting the rest? We are.
California is the poster child for dependent illegal immigrants. There they get taxpayer-funded health insurance, food stamps, housing allowances, and myriad other benefits, costing $22.8 billion in state and local taxes alone, according to the pro-immigration Institute on Taxation and Economic Policy. Yet this for a population that generated just $8.5 billion in income.
Moreover, many of the programs are direct federal subsidies which means we all participate in their funding. Beyond all this is the escalation in spending by NGOs and philanthropic agencies to house, clothe, and feed the millions of “newcomers” being bused around the country, again at our expense.
The increased pressure on the federal budget, which immigration “hawks” warned against not long ago, has already been normalized. The discussion has subtly passed from whether illegal immigrants should be included in public benefits to how this should be accomplished. Deportation, once assumed for those who failed their asylum hearings (which most do), is now regarded as logistically and morally impossible.
It’s no mystery why our welfare system is a worldwide magnet. Average benefits received by working age households have risen from $7,352 in 1967 to $64,700 in 2022, adjusted for inflation. Welfare spending now consumes 72.6 percent of unobligated revenues (an accounting which doesn’t count payroll taxes or mandatory interest payments) while defense spending has fallen by half.
Most Americans don’t realize that official poverty statistics distributed by the Census Bureau don’t count as income. 88% of the transfer payments made to alleviate poverty. As noted by Gramm and Arrington in the Wall Street Journal, “The census doesn’t count refundable tax credits, food stamp debit cards, free medical care through Medicaid or benefits from about 100 other transfer payments as income.”
When these benefits are deemed to be income, 80% of those today who are counted as poor are no longer poor and the bottom three income quintiles in the Census Bureau all have approximately the same spending power.
With the abundance of means-tested transfer payments available, the percentage of working age persons in the bottom quintile who work has fallen from 68% to 38%. For about the same income, 2.4 times as many workers in the second lowest quintile actually work—and on average work 85% more hours than those in the bottom quintile.
Welfare beneficiaries in the main aren’t liars or cheaters. They are making rational decisions in an irrational environment. America is unfortunately a nation deeply in debt, living on anticipated income from the future. We spend money as if we still had it. The kids will figure it out.
The driving motive behind immigration policy is still to permanently alter the political landscape. The ultimate victims may be the migrants themselves, attracted by promises that in the long run can’t be kept.
As Friedman pointed out, we can’t enrich others by impoverishing ourselves. We all just become more poor.
Dr. Thomas Patterson, former Chairman of the Goldwater Institute, is a retired emergency physician. He served as an Arizona State senator for 10 years in the 1990s, and as Majority Leader from 93-96. He is the author of Arizona’s original charter schools bill.
by Dr. Thomas Patterson | Jul 19, 2024 | Opinion
By Dr. Thomas Patterson |
Well after 50 years from the end of the Civil War, black Americans in much of the country were not allowed to enter the homes of whites by the front door. Black men could be lynched for looking a white woman in the face. Schools, restaurants, even drinking fountains were all segregated.
Today, no such legal discrepancies exist. Yes, fringe actors still show that vestiges of racism remain and maybe always will. Yet even though Americans of all races mingle peaceably, the income gap between white and black Americans stubbornly persists. Racism itself can no longer provide a satisfactory answer.
Educational disparities account for some of the gap. Too many black children are still trapped in inner-city schools, where unionized teachers often can’t manage to educate even one student per school who acquires basic academic skills.
Unfortunately for the students, individuals who graduate from high school with ninth grade academic skills have the lifetime earning potential of a dropout. You can’t fool the real world with a meaningless diploma. It would be astonishing if there weren’t a sizable income gap when such educational inequities exist.
The overwhelming evidence points to fatherless homes as the main driver of black economic stagnation. In 1960, 24 percent of black children were born to single mothers. By 2018 the figure was 70 percent. Overall, 37 percent of black kids live with married parents, compared with 84 percent of Asians and 77 percent of whites.
Families headed by single mothers are five times as likely to live in poverty than those of married couple-headed families. We all know the depressing statistics for fatherless children—the increased incidence of incarceration and drug dependence, the lower probability of educational achievement, and the high likelihood they will create single parent-headed families themselves.
It’s neither fair nor accurate to blame black fathers exclusively for this social calamity. In fact, black men are often more attentive fathers than their white counterparts. Black fathers were more likely than others to have “bathed, dressed, changed or helped their child every day” according to a National Statistics report.
The problem is not the quality of black fathers but the quantity. Too many black fathers don’t stay to model fatherhood and provide the guidance and structure that children, especially boys, need.
Some critics ascribe this tendency to “black culture” as if something inherent in blacks is the cause. Others claim that poverty causes weak family structures, not the reverse. But history debunks both contentions.
The institution of the black family emerged from centuries of slavery, poverty, and bigotry virtually intact with strong and loyal family structures. By the time of the mid-20th century civil rights movement, family incomes and social standing were also improving. Ironically, it was the Great Society modern welfare state, offering an omnipresent financial incentive for family break-up, that marked the beginning of the decline of the black family, with all its devastating consequences.
Progressives, especially influential academics, and activists like Black Lives Matter argue that the nuclear family should be dismantled because it is…racist!
For example, a 2021 academic webinar promotion stated, “Family privilege is an unacknowledged and unearned benefit” that “serves to advantage certain family forms over others and is typically bestowed upon white, traditional nuclear families.”
So, the fact that more single parent families are black, according to this traditional Marxist interpretation, means that racism is the culprit? Hogwash alert: the number of parents in the family is a far better predictor of economic outcomes than race. You can look it up.
Although intellectual sophisticates preach tolerance of all family relationships, they are more traditional in their personal behaviors. The college educated mostly delay childbearing until after marriage and raise their children in a two-parent household. It’s called “talk left, walk right” or, in other words, hypocrisy.
Rather than stigmatizing families and their fathers, we should support, in meaningful ways, their importance to human well-being. Judging from the results, families without government “help” do a better job overall of rearing and feeding children, of caring for the dependent elderly, and of creating responsible, competent human beings than does government.
We will never close the economic and social gaps until we close the Dad gap.
Dr. Thomas Patterson, former Chairman of the Goldwater Institute, is a retired emergency physician. He served as an Arizona State senator for 10 years in the 1990s, and as Majority Leader from 93-96. He is the author of Arizona’s original charter schools bill.
by Dr. Thomas Patterson | May 12, 2023 | Opinion
By Dr. Thomas Patterson |
There is a bitter fight brewing in Congress over work requirements for welfare recipients.
President Biden labeled “wacko” the Republican proposal in the debt ceiling bill to require able-bodied childless beneficiaries to either work, obtain job training, or do volunteer work. Our great uniter claimed, “Republicans are cutting benefits for folks they don’t seem to care much about.”
The welfare industry chimed in, saying poor people have no transportation options and job training was not available in some areas. Welfare recipients will be thrown into abject poverty if required to work, because apparently, they are incapable of self-sufficiency.
Reform advocates countered that not working is a choice and most people, including low-income people, have more satisfying lives when working and providing for their families.
So which side is correct? They can’t both be, and the answer is important to get right for the future of our nation.
Wouldn’t it be wonderful if we could run an experiment, mandating work requirements in welfare programs to see what happens? Good news – that’s already been done.
In the 1990s, the Newt Gingrich-led Congress passed, and President Clinton, after extensive urging, signed a comprehensive welfare reform bill. The law required able-bodied adults to work or be in a job training program to receive benefits. It also placed lifetime limits on welfare.
By the 1990s, the War on Poverty had been waged for three decades. Many Americans were becoming disillusioned as they saw that poverty was winning.
LBJ’s welfare programs to wipe out poverty had been horrendously expensive and yet poverty levels hadn’t been dented. Instead, millions of low-income Americans had adopted welfare as a way of life, to be passed on through generations.
When the reforms were implemented, welfare recipients weren’t cast into the streets, as Senator Ted Kennedy had predicted. In fact, it was a stunning policy success. Welfare caseloads declined by 60 percent. 70 percent of those leaving began working.
There’s more. Government savings were $100 billion in today’s dollars. Best of all, the child poverty rate plummeted every year from 1994 to 2000. For people leaving the welfare plantation, income increases soon easily exceeded welfare benefits. Moreover, people with jobs enjoyed healthier lives, better marriages, and vastly improved financial futures than those stuck on welfare.
So, welfare reformers declared victory and moved on, unfortunately leaving the same entrenched bureaucracy as before to manage the system. Before long, clients were again being evaluated for program eligibility, not work readiness. Workarounds were offered for those who preferred not to work.
As the bureaucracy oozed back into control, work mandates weakened. Many states quietly removed them altogether, as Arizona did for its Medicaid program.
With the onset of the COVID pandemic, the Biden administration took the opportunity to eviscerate work requirements altogether in federal welfare programs. Thankfully, grocery clerks, truck drivers and cops stayed on the job, but not teachers or welfare recipients.
Now that the pandemic has officially ended, work requirements still have not been reinstated as promised. In fact, Biden refuses to consider such a proposal in the debt ceiling negotiations.
The ending of the pandemic and work requirements have been a boon for the welfare industry. In response to COVID, Congress also increased the Supplemental Nutrition Assistance Program (food stamps) benefit amount and banned states from removing people who were no longer eligible from the Medicaid roles.
As a result, welfare has become more pervasive than ever. 40 million people are now receiving food stamps, even though it’s common knowledge that taxpayers are funding a lot of chips and soda. Medicaid enrollment has soared to 85 million, now that it has been expanded to include working age men above the poverty line.
There are up to 4 million employable adults not working while 10 million job openings are available. This is a great opportunity to get more Americans back to work, yet Democrats seem more interested in keeping Americans dependent on government than in reducing poverty.
We should absolutely have a working safety net, but not a welfare system that keeps Americans mired in poverty. Why not learn from our own history and return again to prioritizing work over welfare?
Dr. Thomas Patterson, former Chairman of the Goldwater Institute, is a retired emergency physician. He served as an Arizona State senator for 10 years in the 1990s, and as Majority Leader from 93-96. He is the author of Arizona’s original charter schools bill.
by Dr. Thomas Patterson | Oct 1, 2022 | Opinion
By Dr. Thomas Patterson |
Suddenly America is facing a severe structural labor shortage. We all feel it, whether we’re trying for reservations at a restaurant that has reduced hours, seeking handyman help, or just trying to get somebody to answer the dang phone.
Nurses and teachers are in short supply. Employers report at least two job openings for each job seeker. Beyond personal inconvenience, when workers produce fewer services and goods for dollars to chase, prices go up and inflation results.
You can partly blame it on COVID. Politicians shut down much of the economy, then shoved trillions of dollars in “COVID relief funds” to those forced not to work.
Unfortunately, the spigot was never fully closed, and many Americans found that sleeping in agreed with them. Europe, Canada, and Japan all rebounded while the U.S. was left with about one million fewer workers.
Adding to the problem, the youth anti-work movement continues to grow. Work is for suckers and victims. Social media outlets praise workers for quitting their jobs. Others are lionized for being “quiet quitters,” idlers who do the least work possible while still collecting a paycheck.
The inspiration for the anti-work cult traces back to the Marxist anti-capitalist movement, a long-time foe of the American work tradition. Their thesis is that capitalist employment is exploitive and therefore, not working is virtuous.
It coincidentally turns out that, for many Americans, government policy has significantly disincentivized work. And for these people, working harder is no longer the way to get ahead.
Writing in the Wall Street Journal, Phil Gramm and John Early explain how this effect is commonly underestimated because of the way income is reported by the federal government. The Census Bureau, inexplicably, does not treat most transfer payments as income.
That’s important because government transfer payments to the bottom 20% of households, income-wise, ballooned by 269% between 1967 and 2017 while the middle 20% realized only a 154% increase in their after tax income.
The results were staggering. In 2017, the bottom 20% of households had $6,941 in “income” and only 36% of working age people actually worked. However, after the transfer payments and taxes are included, as they should be, their total income was $48,806.
The second to the bottom quintile had 85% employment and an average total income of $50,492, actually less than a $2,000 difference from the lowest group. The middle quintile was 92% employed and earned $66,453, but after taxes and transfers that shrank to $61,350, merely 26% more than the bottom quintile.
But wait, there’s more. Family units are smaller in the lowest quintile than the others. Per capita, the adjusted net income was actually $33,653 in the lowest quintile, $29,497 in the next lowest, and $32,754 in the middle.
Sorry for all the numbers, but they tell an important story. For 60% of Americans, working much harder and even earning more money produced a negligible net benefit. Means-tested government programs were just as lucrative. It’s not hard to understand why the percentage of working age people in the lowest quintile who were employed fell from 68% in 1967 to 36% in 2017.
Policymakers seem to believe that incentives don’t matter, but they do. People who choose not to work and live off the labor of others earn some understandable resentment, but they’re not acting irrationally under the circumstance. The heart of the problem is their enablers in Big Government who, for their own political purposes, created this perverse system.
It’s often forgotten that in the 1990s, governments established work requirements for many means-tested benefits. “Workfare” was a generational policy success. In spite of hysterical warnings that “children would starve in the streets,” poverty rates dropped as employment increased.
Unfortunately, the advocates for workfare declared victory and moved on. But welfare bureaucrats stayed put, patiently reestablishing their vision of welfare without requirements. So now poverty is supported rather than reduced. And Arizona was among the states that quietly removed the work requirements for Medicaid and other welfare programs.
But government handouts that replace labor don’t work. They erode self-reliance, worker pride, and self-sufficiency. They threaten our shared prosperity. And most of all, they undermine American values.
Dr. Thomas Patterson, former Chairman of the Goldwater Institute, is a retired emergency physician. He served as an Arizona State senator for 10 years in the 1990s, and as Majority Leader from 93-96. He is the author of Arizona’s original charter schools bill.
