When I was a little girl, summer began with strawberries and ended with pumpkins. In between we plowed dirt, planted vegetables and pulled weeds on our small farm. Work began in the morning when dew was still on the strawberries, and ended when we could no longer use the tractor headlights to see what we were doing.
Mom and Dad were school teachers, and the money we made from selling tomatoes to Frisch’s and strawberries at the roadside stand paid for piano lessons, a Shasta trailer, and savings for college. We worked hard, but it felt good because we could measure our progress in tangible rewards.
In the fall, when Mom went back to teaching home economics, and Dad biology and government, I would help my mother get the school kitchens and sewing room ready for the incoming students. As the year progressed, she would monitor the students’ annual projects, by visiting them at their homes to see the work they’d done. These ‘home visits’ were eye-opening.
I remember riding along on one visit, and pulling up to a trailer with two angry dogs chained to trees in the front yard, still close enough to the front door to reach us if we tried to knock. The yard was dirt and mud, and there were four cars scattered about in various stages of rusty death. Toys, broken lawn chairs and trash blocked our path. I did not want to leave the car.
Mom honked, and the trailer door popped open. A weary-looking woman quieted the dogs and waived for us to come in. The inside of the trailer was dark, stuffy and dirty – even to a kid. Everyone inside was friendly, but their home made me uncomfortable and sad. It felt like a hopeless place.
That memory came back to me as I watched President Trump deliver his inaugural address. “The forgotten men and women of our country will be forgotten no longer,” he said. “…rusted out factories scattered like tombstones across the landscape of our nation…the crime, and the gangs, and the drugs that have stolen too many lives and robbed our country of so much unrealized potential. This American carnage stops right here and stops right now…We will make America wealthy again.”
In West Portsmouth where my parents taught high school, one in four people lives below the national poverty line today, with less than $24,250 in annual income for a family of four. The area is a bleak and depressing place. In 1995, the Portsmouth area made headlines when an FBI crackdown resulted in 30 insurance fraud arrests, with stories of people staging auto accidents and setting fires for cash. Meth labs were big in the 1990’s, replaced by pain clinics that pumped out OxyContin pills in the early 2000’s, which led to another FBI raid in 2013. Recent articles in the Wall Street Journal and Washington Post featured the area as the epicenter of the addiction crisis.
The depressing picture of present-day America that President Trump painted in his inaugural address sounds like an alternative universe, but he speaks to the people in areas like the one I grew up in, who feel trapped by circumstances beyond their control.
By many measures, the last 8 years have been good to U.S. citizens. The Wall Street Journal pointed out the S&P 500 delivered an annualized return of 16% over the last eight years including dividends – a record second only to the years Bill Clinton was in office – going all the way back to 1928. Oil prices have come down, borrowing is cheap, and profits are up along with the dollar. Even investors who bet against President Obama made better returns in gold and bonds than they did during the George W. Bush administration. But to benefit from all of this, you had to have money to invest, and a credit rating that allowed you to borrow.
Our farm was only a few miles from that trailer in West Portsmouth, but my life was worlds apart from the girl we visited there. It was the early 70’s, but global change had already shut down the Shelby Shoe factory, Williams Manufacturing, and other major employers in the area. The area was depressed long before China exported steel, India opened call centers, and technology reduced the need for people on assembly lines.
President Trump’s theme of “Make America Great Again” resonated with many people who look back fondly on the days of high-paying manufacturing jobs. But as I outlined in an earlier blog, issues like global trade are complicated, and changes to policy have far-reaching consequences we may not fully understand today.
Trump’s decision to abandon the Trans-Pacific Partnership, and his promise to tax cars and other goods imported into the U.S. may reduce the flow of cheaper goods into the U.S., but it will likely raise prices for U.S. citizens who have enjoyed low inflation and lifestyles enhanced by lower-cost products and services for many years.
“Global capital doesn’t have a social conscience,” said Kevin W. Sharer, who teaches corporate strategy at Harvard Business School and served on the boards of 3M, Northrop Grumman and Chevron, in addition to running the biotech giant Amgen. “It will go where the returns are.”
It was true in the 70’s, and it’s true today.