Stocks are having the worst December since the Great Depression

The Dow is down 7.8% and the S&P 500 is down 7.6% this month. That's the worst December performance since 1931.

Posted: Dec 19, 2018 4:26 AM
Updated: Dec 19, 2018 4:29 AM

A year after President Donald Trump's much-touted tax cuts were signed into law, at least some of the results are in, and there are clear winners: Millionaires. Big corporations. And that's about it.

"It's a lot of fun when you win," Trump said at a public ceremony for the bill, but not even the GOP benefited from the tax cuts -- at least, not politically. Many Americans were underwhelmed by the legislation, and didn't see much of an impact on their lives or pocketbooks. Likely recognizing they had a losing issue on their hands, Republicans didn't campaign on them; they still lost big in the midterms.

Electorally, the tax cuts were losers, because for the average American they were insignificant enough to go largely unnoticed. The average Republican politician, though, made out like a bandit. The median Republican senator was worth $1.4 million according to Roll Call when the tax cuts were signed into law. Thanks to the Trump tax breaks, millionaires, including these senators, collectively saved an estimated $17.4 billion according to a report from the Joint Committee on Taxation. The same men who pushed this law through, and their donors and backers likely even more so, also benefited immensely from it.

At the same time, the Americans they are supposed to represent lost out. It's true that some middle-class folks did see an extra $30 or so on their paycheck each month, which is all good and fine for a Friday pizza night. But the tax cuts have now led the Republican Party to push the other half of their financial boondoggle: Cutting social welfare programs.

Around the world, many prosperous and developed nations consider goods like affordable health care and high-quality education to be public and available to everyone, no matter one's income. In most prosperous and developed nations, there is a generally agreed-upon norm of the state providing care and support to those who need extra assistance: The poor, the unemployed, the disabled. In the United States, this is not quite a universal goal. While liberals and many moderates want to expand unemployment and social security benefits, raise the minimum wage, offer paid leave to new parents and those caring for sick family members, and do a better job at supporting the poor, the conservatives we have elected to office do not. The dream of the GOP is to slash what they call "entitlement" programs -- and what many other countries would simply qualify as decency toward your fellow countrymen.

It turns out that when you take billions from would-be tax revenue and put it into the pockets of millionaires, billionaires and massive companies, there simply isn't enough left over to pay for the social programs so many of us, and particularly the vulnerable, depend on -- including Social Security and Medicare. Republicans can do math, and they know this. But this was also the point: Not just to further consolidate resources among themselves and their millionaire friends, but to slash the safety net for the poor, the old and the disabled.

And what do they have to show for it? Not a stronger stock market. Not a population where the average American is wealthier or more economically secure. Just bigger bank balances for themselves and the ultra-wealthy individuals and companies who fund their campaigns. And the tax cuts haven't forestalled the possibility of a market correction that former Federal Reserve Chairman Alan Greenspan said this week should make investors "run for cover." As the Federal Reserve's interest-rate setting committee meets Tuesday and Wednesday, Trump is already on the offensive, warning them "not to make another mistake" ahead of an expected rate increase.

The Trump tax cuts exemplify the fundamental difference in objective between the American left and the American right, one that is only now coming into sharper focus. For Trump and many of his allies, government is yet another avenue for grift and personal enrichment, a pattern he has maintained for his entire life. But now that he's in office, he's not just a greedy grifter; he's a powerful kleptocrat. For the GOP, government is a way of pushing failed ideas that enrich a few at the expense of the many, with the veneer of public service in place only to doll up malignant self-interest and bigotry. Democrats are far from perfect, and there is much fair debate to be had on what the fairest and most effective tax structure should look like, but their goal is clearly not simply to make the rich richer and the poor poorer.

One year after the tax cuts, Republicans should look at them with shame. But then, that would require they look beyond their own bank accounts.

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