The Auto Loan Crisis Is Back, Too

High interest rates, chip shortages, and high auto prices are resulting in the worst auto loan market in three decades.

 

Higher car prices and rising interest rates are hindering car owners’ ability to afford their vehicle payments, as 6.1% of subprime auto borrowers are at least 60 days past due on their loans, the highest percentage in data dating back to 1994, according to Bloomberg, which cited Fitch Ratings.

The 6.1% of borrowers behind on auto loans last month marks a surge from the 2.6% reported in May 2021, after the federal government significantly lowered interest rates in the wake of the Covid-19 pandemic.

Higher vehicle prices and borrowing costs—along with continued higher than usual inflation—have fueled the rising number of Americans behind on their auto loans, a problem that might persist given forecasts from Federal Reserve officials who believe high interest rates will continue through 2026.

Margaret Rowe, a senior executive at Fitch, told Bloomberg subprime borrowers can be the first indication of “where we start to see the negative effects of macroeconomic headwinds.”

Generation Z and millennials may account for a significant amount of the borrowers behind on their auto loans, as the two generations recorded auto loan delinquency rates last year that were significantly higher than pre-pandemic levels, according to an NBC News report that cited TransUnion.

Interest rates for used cars are 13.5% on average for those with fair credit but can rocket up to around 21% for those with the worst credit, according to Bankrate.

Rising car prices have in part been caused by a pandemic-induced computer chip shortage, and some chip shortages could continue into 2024, according to J.P. Morgan.

I know we've managed to avoid a recession so far with this week's stellar GDP report and we have more protections in place than we did fifteen years ago, but I'll be damned if this doesn't all feel like the Great Recession is coming. More likely, the massive economic damage from Trump and Covid is only playing out now and the medicine is painful, but the alternative really is another Great Recession, and if we don't stop the guy who got us into this mess in 2019 and he wins in 2024, we are absolutely sunk as an economy.

We've avoided the crack-up for now, but it's going to take years to dig ourselves out of the Trump mess. If we put ourselves back in it, we're not coming up for air.

Ridin' With Biden, Con't

America's economy grew at the fastest pace in nearly 40 years but I'd bet you a majority of Americans believe we're in a recession right now thanks to our broken media.

The U.S. economy grew by 5.7 percent in 2021, the fastest full-year clip since 1984, roaring back in the pandemic’s second year despite two new virus variants that rocked the country.

The growth was uneven, with a burst of government spending helping propel a fast start, even as a surge in new cases and deaths in the second half of the year created new pressures. The economy grew by 6.9 percent from October to December, the Bureau of Economic Analysis said Thursday, a sharp acceleration from 2.3 percent in the previous quarter.

In a powerful rebound from 2020, when the economy contracted by 3.4 percent — its worst result since 1946 — 2021′s strong growth created a record 6.4 million jobs. But it also brought a host of complications, helping fuel the highest inflation in 40 years and creating supply chain snarls as consumers hungry for products overwhelmed the global delivery system. To beat back rising prices, the Federal Reserve is now shifting its strategy and preparing for interest rate hikes this year, convinced it has given enough support to help the labor market and now must keep the economy from overheating further.

Although the omicron variant had begun surging by the end of 2021, economists didn’t expect to see any fallout in Thursday’s data. Rather, forecasters anticipated that the GDP report would represent a year of blockbuster growth despite the unpredictability of the pandemic economy, from labor shortages to supply chain backlogs to inflation.

Earlier in the year, economists worried that global supply chain problems would keep businesses from being able to fully stock shelves. But a rush by companies in the final months of 2021 to bolster their inventories ultimately drove GDP much higher.

Many, such as Georgia hospitality software firm Agilysys, are building up inventories to guard against disruptions in supply chains. The company, which specializes in technology such as hotel check-in systems, has increased its inventory levels by 175 percent in the past nine months to “mitigate supply chain risk,” Chief Financial Officer Dave Wood said on a recent earnings call.

But even that silver lining comes with the reminder of how parts of the economy remain extremely disrupted.

“We’re hitting on all cylinders producing goods, and that’s good,” said Ben Herzon, executive director at IHS Markit. “But it’s also bad, because the economy wasn’t really set up to produce goods at the level that it’s producing now. That’s one of the reasons we’re seeing some of the problems on the supply side.”

 

But you'd think we were in worse shape now than in the Trump Depression. 

Ridin' With Biden, Con't

Another home run month for the labor economy as the Biden administration continues to rapidly dig out of the Trump Depression hole that cost us 22 million jobs.

The American economy added 531,000 jobs in October, the Labor Department said Friday, a sharp rebound from the previous month and a sign that employers are feeling more optimistic as the latest coronavirus surge eases.

Economists polled by Bloomberg had been looking for a gain of 450,000 jobs. The unemployment rate declined to 4.6 percent, from 4.8 percent.

The October gain was an improvement from the 312,000 positions added in September — a number that was revised upward on Friday, along with the August figure, providing a more upbeat picture of the last few months.

The increase in employment was broad, with sizable gains at restaurants and bars, as well as in factories and offices. And in another sign that conditions are gradually returning to normal, the proportion of employed people who worked remotely at some point last month fell to 11.6 percent from 13.2 percent.

“This was a strong employment report that shows the resilience of the labor market recovery from the pandemic,” said Scott Anderson, chief economist at Bank of the West in San Francisco. “I think we will see a pretty strong bounce back in economic growth in the fourth quarter.”

Hiring has seesawed this year along with the pandemic, especially in vulnerable sectors like hospitality and retail, where workers must deal face to face with customers. White-collar employees have fared better, because many can work remotely.

Some employers are complaining of a shortage of workers, as many people remain on the sidelines of the job market. The labor force participation rate — the share of the working-age population employed or looking for a job — was flat in October, at 61.6 percent, and up slightly among those 25 to 54.

The stubbornly low participation rate underscores the damage the pandemic has done to the economy, and why it will take time to recover, despite strong months like October.

 

Still, even with the lower workforce participation numbers, we'll climb out of the hole next summer. Rememeber, the Trump regime's "recovery" stalled out last winter when we were still ten million jobs in the hole. It's Biden's policies that got us more than halfway out from there in just 9 months.

Give it another nine months and we'll be back in business, hopefully after today's infrastructure plan vote in the House.

Orange Meltdown, Con't

"America's CEO" ran the country like a business, which apparently entailed trashing the place, blaming everyone else, and running away with the loot.

It was the whopping-yet-still-disappointing 6.5% annualized growth number for the second quarter that got most of the attention when the U.S. gross domestic product report came out Thursday. But the data release from the Commerce Department’s Bureau of Economic Analysis also included revisions to GDP and related measures back to 1999, making this an opportune time to take another look at economic growth under Donald Trump and his predecessors.

This is, let’s be clear from the start, not a perfect way of measuring presidential economic performance. There are lots of things that determine economic growth rates other than who is in the White House, and when a president does make a difference the results may be felt long after he’s left Washington. Still, it’s a widely used metric and Trump was downright obsessed with it, so here goes.






OK, maybe that GDP obsession didn’t work out so well for Trump. The chart starts with Dwight Eisenhower because his was the first presidency for which the BEA has full quarterly GDP data. Annual GDP numbers go back to 1929, and if you measure from Herbert Hoover’s first year in office (1929) to the year he left (1933), annualized growth was negative 7.4 percent. So Trump did a lot better than that! But his was the worst GDP performance since then (measured the same way as with Hoover, annualized GDP growth was 9.1% under Franklin Roosevelt and 1.8% under Harry Truman).

This does seem a bit unfair, given the pandemic and all. Trump didn’t always rise to the challenges posed by Covid-19, but thanks in part to legislation he signed and a vaccine-development program his administration put in motion, the U.S. economy has experienced one of the world’s quicker recoveries. Lots of other presidents have suffered economic setbacks due to events outside their control, of course, and you can’t just ignore a quarter or two because they were affected by bad economic luck. But there is something to be said for trying some other ways of measuring growth during his term.

One is to adjust the timing. For the above chart I’ve taken real GDP in the quarter a president entered office and the quarter he left, and calculated the compound annual growth rate from one to the other. Here’s what it looks like if you shift that back or forward by a quarter.



It looks a lot better for Trump (not to mention Barack Obama, and Gerald Ford) if you shift a quarter later, although this still puts him behind everyone but George W. Bush. There’s an argument for shifting the measurement period even later, given how long it can take for the effects of economic policies to be felt, but there’s also a point beyond which that starts to get a little ridiculous, plus we don’t have the data yet to do that for Trump.

 

Trump was the worst in my lifetime by far, economically, morally, and criminally.  And unless you've hit the century mark yourself (and if you have, gratz!) he's been the worst economic president at least in your lifetime too.

The criminal and moral part isn't up for debate.

Automatic For The People, Con't

In the grand tradition of American labor history, workers with the advantage as demand rebounds from the Trump COVID depression are finding that businesses and corporations are no longer considering raising wages to attract workers, they're instead turning to automation and computers to get rid of minimum wage jobs completely.

 

When Kroger customers in Cincinnati shop online these days, their groceries may be picked out not by a worker in their local supermarket but by a robot in a nearby warehouse.

Gamers at Dave & Buster’s in Dallas who want pretzel dogs can order and pay from their phones — no need to flag down a waiter.

And in the drive-through lane at Checkers near Atlanta, requests for Big Buford burgers and Mother Cruncher chicken sandwiches may be fielded not by a cashier in a headset, but by a voice-recognition algorithm.

An increase in automation, especially in service industries, may prove to be an economic legacy of the pandemic. Businesses from factories to fast-food outlets to hotels turned to technology last year to keep operations running amid social distancing requirements and contagion fears. Now the outbreak is ebbing in the United States, but the difficulty in hiring workers — at least at the wages that employers are used to paying — is providing new momentum for automation.

Technological investments that were made in response to the crisis may contribute to a post-pandemic productivity boom, allowing for higher wages and faster growth. But some economists say the latest wave of automation could eliminate jobs and erode bargaining power, particularly for the lowest-paid workers, in a lasting way.

“Once a job is automated, it’s pretty hard to turn back,” said Casey Warman, an economist at Dalhousie University in Nova Scotia who has studied automation in the pandemic.

The trend toward automation predates the pandemic, but it has accelerated at what is proving to be a critical moment. The rapid reopening of the economy has led to a surge in demand for waiters, hotel maids, retail sales clerks and other workers in service industries that had cut their staffs. At the same time, government benefits have allowed many people to be selective in the jobs they take. Together, those forces have given low-wage workers a rare moment of leverage, leading to higher pay, more generous benefits and other perks.

Automation threatens to tip the advantage back toward employers, potentially eroding those gains. A working paper published by the International Monetary Fund this year predicted that pandemic-induced automation would increase inequality in coming years, not just in the United States but around the world.

“Six months ago, all these workers were essential,” said Marc Perrone, president of the United Food and Commercial Workers, a union representing grocery workers. “Everyone was calling them heroes. Now, they’re trying to figure out how to get rid of them.”  

Checkers, like many fast-food restaurants, experienced a jump in sales when the pandemic shut down most in-person dining. But finding workers to meet that demand proved difficult — so much so that Shana Gonzales, a Checkers franchisee in the Atlanta area, found herself back behind the cash register three decades after she started working part time at Taco Bell while in high school.

“We really felt like there has to be another solution,” she said. 

So Ms. Gonzales contacted Valyant AI, a Colorado-based start-up that makes voice recognition systems for restaurants. In December, after weeks of setup and testing, Valyant’s technology began taking orders at one of Ms. Gonzales’s drive-through lanes. Now customers are greeted by an automated voice designed to understand their orders — including modifications and special requests — suggest add-ons like fries or a shake, and feed the information directly to the kitchen and the cashier.

The rollout has been successful enough that Ms. Gonzales is getting ready to expand the system to her three other restaurants.

“We’ll look back and say why didn’t we do this sooner,” she said.

 

No, a year from now I figure we'll all be back at the office for good, only you'll see a lot fewer help wanted signs. Restaurants may come back, but fast-food is going to automation even more quickly than anticipated. 

Wait until Amazon starts replacing warehouse workers with robots in a couple of years. Grocery stores, fast food, banks, retail logistics, all of it is going to automation this decade. We're going to have to find a way to deal with that, and increasingly the answer is going to be "an unemployable underclass".

Biden's Jobapalooza, Con't

Another grand slam month of jobs created under President Biden, but The Former Guy™ got us into such a depressionary hole with COVID and incompetence, that we still have months, if not years, to go.

The US economy added 850,000 jobs in June, when adjusted for seasonal changes. It was far more than economists had expected and a signal that American job growth is accelerating.

It was the biggest monthly jobs gain since August 2020, when the economy added 1.6 million jobs.

The hospitality and leisure sector grew the strongest, having the most ground to cover after the pandemic devastated the travel and service industries. That sector added 343,000 jobs. More than half of them were at restaurants and bars.

It was a "bright" jobs report, even though there is still plenty to worry about, wrote Kate Bahn, interim chief economist at the Washington Center for Equitable Growth, in a tweet. It "just means it's good foundation to grow," she added.

America's once-strong labor market is still far from being back to normal, down 6.8 million jobs compared with February 2020. According to the report, 6.2 million people reported that they didn't work at all or worked less because their employer had been affected by the pandemic.

The unemployment rate stood at 5.9%, up from 5.8% in May, the Bureau of Labor Statistics reported Friday. 

Even though the labor force participation rate was unchanged at 61.6%, the number of people quitting their jobs voluntarily to look for another position jumped by 164,000 in June. 

It's a tale of a job market in imbalance: Employers are struggling to attract and retain staff as the reopening spurred a hiring surge, because some workers are still not ready to return to work. Many fear infection, or worry about adequate care for their children or elderly relatives. The expanded jobless benefits that were created to soften the pandemic blow also allow people to take longer in choosing the right job for them, rather than to rush back into the labor market. 

All of this is creating an unprecedented mismatch between worker supply and demand. 

Although many economists rejected claims that pandemic-era jobless benefits are keeping people comfortably at home and away from work, various states have cut the special programs ahead of the September deadline. 

But that didn't move the needle much in June. Early data from states that ended those programs shows that didn't push workers to resume their job search, said Cailin Birch, global economist at The Economist Intelligence Unit, in emailed comments. 

"Most states will phase out these benefits in September, which could have a more noticeable impact," she added. "More than this, however, we expect an additional few months of economic growth, more progress on Covid vaccinations and the resumption of in-person education in September to be the main factors driving a stronger increase in labor-force participation in the fall."

 

So things are improving, but slowly at best. We'd need another 10-12 months like June to get back to  February of 2020. That's how many jobs were destroyed under Trump.

Last Call For The Foxconn Flees The Chicken Coop

The biggest "deal" of Tangerine Tyrant's unfortunate era was the $10 billion Foxconn electronics plant in Wisconsin that was supposed to generate thousands of jobs, and prove that Republican economic policies were the key to American competitiveness in a global future. Instead, as I pointed out in October, the plant was all but abandoned before Trump lost the 2020 election, and now that Joe Biden is President, the massive tax boondoggle legacy of Gov. Scott Walker is a complete bust now, and Wisconsin taxpayers are stuck with billions in bills and a handful of jobs.

Taiwan electronics manufacturer Foxconn is drastically scaling back a planned $10 billion factory in Wisconsin, confirming its retreat from a project that former U.S. President Donald Trump once called “the eighth wonder of the world.”

Under a deal with the state of Wisconsin announced on Tuesday, Foxconn will reduce its planned investment to $672 million from $10 billion and cut the number of new jobs to 1,454 from 13,000.

The Foxconn-Wisconsin deal was first announced to great fanfare at the White House in July 2017, with Trump boasting of it as an example of how his “America first” agenda could revive U.S. tech manufacturing.

For Foxconn, the investment promise was an opportunity for its charismatic founder and then-chairman, Terry Gou, to build goodwill at a moment when Trump’s trade policies threatened the company’s cash cow: building Apple Inc’s iPhones in China for export to America.

Foxconn, the world’s largest contract manufacturer of electronic devices, proposed a 20-million-square-foot manufacturing campus in Wisconsin that would have been the largest investment in U.S. history for a new location by a foreign-based company.

It was supposed to build cutting-edge flat-panel display screens for TVs and other devices and instantly establish Wisconsin as a destination for tech firms.

But industry executives, including some at Foxconn, were highly skeptical of the plan from the start, pointing out that none of the crucial suppliers needed for flat-panel display production were located anywhere near Wisconsin.

The plan faced local opposition too, with critics denouncing a taxpayer giveaway to a foreign company and provisions of the deal that granted extensive water rights and allowed for the acquisition and demolition of houses through eminent domain.

As of 2019, the village where the plant is located had paid just over $152 million for 132 properties to make way for Foxconn, plus $7.9 million in relocation costs, according to village records obtained by Wisconsin Public Radio and analyzed by Wisconsin Watch.

Foxconn, formally called Hon Hai Precision Industry Co Ltd, said the new agreement gives it “flexibility to pursue business opportunities in response to changing global market conditions.” The company said “original projections used during negotiations in 2017 have at this time changed due to unanticipated market fluctuations.”

After abandoning its plans for advanced displays, Foxconn later said it would build smaller, earlier-generation displays in Wisconsin, but that plan never came to fruition either.

Prior to Tuesday’s announcement, Foxconn Chairman Liu Young-way told reporters in Taipei that the company currently makes servers, communications technology products and medical devices in Wisconsin, adding that electric vehicles (EVs) have a “promising future” there. He did not elaborate.

Liu had previously said the infrastructure was there in Wisconsin to make EVs because of its proximity to the traditional heartland of U.S. automaking, but the company could also could decide on Mexico.

Hon Hai shares fell as much as 1.6% on Wednesday morning, underperforming the broader Taiwan market which was down 0.7%.

 

So the Foxconn failure will at most produce 10% of the promised jobs, and still end up costing the state billions in tax incentives.

Hoocoodanode?!?

The Great Biden Jobs Job

The US economy added nearly a million new jobs in March alone as President Biden and the Democrats are getting America back to work after the Trump Depression.

Job growth boomed in March at the fastest pace since last summer as stronger economic growth and an aggressive vaccination effort contributed to a surge in hospitality and construction jobs, the Labor Department reported Friday.

Nonfarm payrolls increased by 916,000 for the month while the unemployment rate fell to 6%.

Economists surveyed by Dow Jones had been looking for an increase of 675,000 and an unemployment rate of 6%.

A more encompassing measure of unemployment that includes discouraged workers and those holding part-time jobs for economic reasons dropped to 10.7% from 11.1% in February.

The labor force continued to grow after losing more than 6 million Americans at one point last year. Another 347,000 workers came back, bringing the labor force participation rate to 61.5%, compared to 63.3% in February 2020.

There are still nearly 5 million fewer Americans employed than a year ago while the labor force is down 2.2 million.

Leisure and hospitality, a sector critical to restoring the jobs market to its former strength, showed the strongest gains for the month with 280,000 new jobs. Bars and restaurants added 176,000 while arts, entertainment and recreation contributed 64,000 to the total.

Even with the continued gains, the sector remains 3.1 million below its pre-pandemic total in February 2020.

With students heading back into schools, education hiring boomed during the month as well. Local, state and private education institutions combined to hire 190,000 more employees for the month.

Construction also saw a healthy gain of 110,000 new jobs, while professional and business services added 66,000 and manufacturing increased by 53,000.

In addition to the powerful gains for March, previous months also were revised considerably higher. The January total increased 67,000 to 233,000, while February’s revisions brought the total up by 89,000 to 468,000.

So yes, with the upward revisions in January and February, we added over a million new jobs this month.

 

One million. And yet we still have millions to go to get us out of the mess Donald Trump, the "CEO of the United States" made. We'll need another five or six months like this just to get back to a year ago, and for a generation of younger workers, a lifetime of economic damage has already been done.

But never tell me again Republicans have any idea what it means to grow an economy.

Last Call For Tales From The Trump Depression, Con't

Joe Biden continues to clean up Donald Trump's mess, as new weekly jobless claims, while still ludicrously high thanks to Republican mismanagement of the economy, are finally going down towards pre-pandemic levels.

The number of Americans applying for jobless aid fell to its lowest level since the coronavirus pandemic erupted a year ago. Some 684,000 people applied for unemployment benefits in the week ending March 20, the Labor Department said Thursday. The number, adjusted for seasonal variation, is a drop of 97,000 from the week before.

Another 241,000 people applied for Pandemic Unemployment Assistance, a federal program for the self-employed and gig workers.

"Today's unemployment report shows a slowly-improving labor market, as for the first time in over a year, the Department of Labor has reported fewer than 1 million new claims for benefits," Andrew Stettner, senior fellow at the Century Foundation, said in a statement.

Prior to the pandemic, a typical week saw around 250,000 new unemployment claims, and the number never topped 700,000, even during the depths of the Great Recession. Economists predict that fewer people will file for benefits in the coming weeks as more people receive vaccines and businesses reopen.

"[W]e expect claims to fall sharply as the economy reopens fully across the second quarter," Ian Shepherdson of Pantheon Macroeconomics told investors in a note.

 

We're still in the Trump Depression, folks. It's taken three multi-trillion dollar stimulus packages just to keep the country from sinking beneath the waves, a government GDP boost of more than 50% of 2019 numbers just to get to the point of massive food bank car lines and only 10 million jobs lost for good.

But things are finally starting to stabilize. A lot of work still has to be done, and a lot of things still have to go right. Luckily, we're finally in a position where that can begin to happen.

 

Tales From The Trump Depression, Con't

We still have a long way to go in order to emerge from the Trump Depression, all while American businesses in the age of COVID are learning exactly how they can automate to replace and remove workers in the years ahead. It should come as no surprise then that it's Black and brown workers who are being left behind as the new jobs of the future are being created today.

The mass disruption of the workplace because of the pandemic is accelerating employers’ move toward job-displacing automation, and neither the government nor the American labor force is prepared for the sweeping fallout.

The hemorrhaging of jobs is refueling a national debate over how to give workers the skills to survive the brutal market and fill the millions of positions that automation will inevitably also create — albeit at a far slower pace than positions are being shed. Lawmakers, labor unions and the U.S. Chamber of Commerce are all calling for more spending on workforce training. The employment and training programs now available — there are no fewer than 43 spread across the government — are inadequate, uncoordinated and underfunded, they say.

“We’ve fast-forwarded 10 years of change in the space of less than 10 months,” said Andy Van Kleunen, CEO of the National Skills Coalition, a policy research group that promotes workforce training. “We don’t really do a good job making it easy for someone who has lost their job due to no fault of their own, particularly in an industry that’s downsizing, to get into a new occupation in a new industry," he said. "We just need a whole reboot of that.”

For President Joe Biden, this could be one of the most far-reaching economic issues that he will face, and failing to resolve it would undercut his vow to restore the U.S. labor market. Biden, who has strong support from organized labor, is pledging to expand partnerships between unions, businesses and community colleges, scale up work-based learning programs and build out individual career services.

Yet despite the bipartisan calls for action, it may be a struggle for Biden to convince Republicans to agree to fund a large-scale and expensive overhaul of how the government tackles reskilling workers. Even the $1.9 trillion economic relief package he has proposed contains no new funds specifically for job training. Congress has invested only $345 million in workforce development to address Covid-19, according to the House Education and Labor Committee, compared to the nearly $6 billion it appropriated to respond to the Great Recession.

This “is not just an opportunity lost if we don’t help people get the skills for the jobs that are being created, it’s going to be a real drag on the economy,” said Neil Bradley, executive vice president and chief policy officer at the Chamber of Commerce. “It’s going to mean a lot of suffering for a lot of individuals.”

Forty-three percent of businesses anticipate reducing their workforce because of new technology, according to the World Economic Forum's Future of Jobs survey. In December, searches for automation engineering equipment on Thomas, a product-sourcing platform, were up more than 300 percent from the previous year. And research firm Gartner found in February that Covid-19 had caused seven out of 10 boards of directors to accelerate their digital business.

The lightning-fast shift has created a more urgent demand for worker training than ever. With an estimated 97 million new job categories that could arise from automation, companies estimate that 40 percent of workers will require reskilling.

Though automation typically affects blue-collar workers most in manufacturing and food service, the rise of other technologies like artificial intelligence is poised to imperil white-collar employees, too.

Still, Black and brown workers are bearing the brunt of the impact: Lower levels of education and other barriers to opportunity mean that minority workers are more likely than whites to be employed as cashiers, cooks, and in other occupations susceptible to automation. Even pre-pandemic, 23 percent of Black workers were in danger of losing their jobs by 2030 due to automation, by one estimate.

 

Shocker.

 

It's already bad enough that "essential workers" are going to be replaced by automation in the next decade, but without retraining the workforce, America is going to be a massive wasteland of unemployed. Yes, I expect the Biden administration to eventually raise the minimum wage , but it won't help if the jobs are all automated out. 

We're going to have to come to terms with this and quickly, or we're looking at another lost decade, and it's one tens of millions of us will never recover from in our lifetimes.

Sunday Long Read: Reciting The Lordstown's Prayer

Our Election Day Sunday Long Read comes to us from Steven Greenhouse at The Guardian as he profiles Lordstown, Ohio and the voters there facing a historic choice. Two years after GM closed its major Chevy Cruze plant in Lordstown, four years after Donald Trump won Ohio by eight points based on his promises to keep the auto plants and steel plants open and jobs pouring in, the people of the Mahoning Valley are considering that Trump may have screwed them over and left them and the state holding the bag. 

Before Covid-19 hit, Trisha Amato spent her weekdays behind a modest, ebony-colored desk, running the “transition center” that helps laid-off General Motors workers pick up the shards of their lives. GM announced it was closing its mammoth plant in Lordstown, Ohio, in November 2018 and ever since Amato has been ladling out advice to the 1,700 laid-off workers on such matters as how to obtain jobless benefits and how to qualify for government assistance to pay for college courses.

The GM plant, the size of more than 100 football fields, had long been the heart of Lordstown – as recently as 2016, it employed 4,500 workers, and in its 53-year history, it produced 16m vehicles. Built alongside I-80, the hulking plant has long been a monument to America’s industrial might, or perhaps one should say its fading industrial might.

Deep-voiced, with long, auburn hair and broad shoulders – she, too, had worked at the plant – Amato has problems of her own, saying that she can no longer afford health insurance for herself and her two daughters on her transition center salary. Amato, who is divorced, felt betrayed when GM said it would shut the plant – the company had received $60m in state subsidies, and had promised in return to keep the plant open through 2027.

Many of the GM workers were also angry at Donald Trump. During the 2016 campaign, he repeatedly proclaimed that he would make American manufacturing great again and would bring back jobs that had gone overseas. That message resonated in Lordstown and nearby Youngstown, part of the Mahoning Valley area that has been dragged down for decades by one factory and steel mill closing after another. Trump’s repeated promise to bring back factory jobs played well not only in Ohio, but also in Michigan, Pennsylvania and Wisconsin, helping win over many blue-collar voters, who were key to his narrow victories in those states. Blue-collar workers in those states could again play a decisive role in this year’s election, with many still supporting Trump, but some souring on him – perhaps enough to flip those states to Joe Biden.

In July 2017, Trump spoke in Youngstown and told the crowd that on his way in from the airport, he had seen the carcasses of too many factories and mills. He bemoaned Ohio’s loss of manufacturing jobs, but then boldly assured the crowd: “They’re all coming back!” He next told his audience, many of them workers worried about plant closings: “Don’t move! Don’t sell your house!”

Laid-off GM Lordstown workers still rail about that speech. Many moved to other cities to find work; many lost money selling their homes. “Some of my hardest days of the last few years came when everybody left,” Amato told me. “They had to sell their houses.” Hundreds of longtime Lordstown workers moved to take jobs at GM plants in Indiana, Michigan, Missouri, Kentucky, Tennessee and Texas – all so that they could continue receiving good United Auto Workers (UAW) wages (around $30 an hour) and accrue additional years toward their pensions. Many in this diaspora make the four- to 10-hour drive back to the Mahoning Valley once or twice each month to visit their families.

“It’s all just a mess,” said Amato. “The ones who left, they’re angry.” GM offered to transfer Amato to its plant in Wentzville, Missouri, but she turned it down because her 19-year-old daughter was in high school and her 79-year-old father was ailing.

During the 2016 campaign, Trump had considerable support in the Lordstown plant even though surrounding Trumbull County is traditionally a Democratic stronghold and even though UAW members, stretching back to Franklin Roosevelt’s time, have tilted heavily Democratic. Union officials estimate that 30 to 40% of Lordstown’s workers voted for Trump. “They felt he was the lesser of two evils,” Amato said. The sentiment was, “Let’s not have a lifetime politician in there. Let’s get some change.”

“Since so many of the steel mills closed, there isn’t much here economically,” Amato added. “They were hoping or praying that Trump would bring something here.” The workers were wowed, she said, by his promises to bring back jobs and his being a seemingly successful businessman.

Asked whom she supported in 2016, Amato told me: “I backed Trump,” but she followed that with a quick, nervous laugh. “I thought he stood for more of what I stood for.”

She, too, felt that Trump was the lesser of two evils. Hillary Clinton was an excellent first lady, she said, but to her mind, Clinton, by 2016, had become yet another career politician. “She just changed,” Amato said. “It comes down to character, and I wanted to believe Trump has a better character.”

Amato admits that she woefully misjudged Trump. “After he was elected, he really opened his mouth. He started tweeting and saying things that I feel are crazy. He doesn’t know when to stop.”

Upset at herself for backing Trump, she said: “I feel like I’m living in a reality TV show.” She added: “Trump, he’s a clown.”

She had thought it would be good to have a businessman as president. “But maybe he’s not such a good businessman,” she acknowledged, pointing to his numerous bankruptcies. “He doesn’t understand where the blue-collar workers are coming from. I don’t think any of the big politicians understand that. Trump, especially, doesn’t understand what it is to struggle.”

 

Like a lot of 2016 Trump voters, Amato goes on to say she won't vote for Trump, but she doesn't know if she'll vote for Biden or at all (she would have voted for Mayor Pete "in a heartbeat" though.)  I don't blame her for not wanting to vote for a septuagenarian white dude, but it really is a binary choice right now.

Biden, or not voting for Biden.  That's the choice.

Vote like your country, your state, your county, your city, your home depends on it.

Because it does.