“The coal industry is back,” Trump declared.
Alas, it was an illusion — or, as Trump might put it, a hoax.
Last week, the Commerce Department reported that during the third quarter of 2018 — the period during which Trump took his Charleston victory lap — West Virginia’s gross domestic product grew exactly 0.0 percent. As in, zilch. As in, the worst in the nation.
Quarterly figures are volatile, but clearly, two years into the Trump presidency, both West Virginia and the coal industry remain in bad shape. Coal-plant closures nationwide reached a near-record in 2018, production was off sharply, and U.S. coal consumption hit a 40-year low. Jobs in coal have barely budged, from 51,000 at the end of 2016 to 52,700 today.
West Virginia’s poverty rate, meanwhile, rose to 19.1 percent, among the nation’s highest, in 2017, the most recent year of reported data. The state is being propped up by temporary jobs (often held by out-of-state workers) to construct pipelines for natural gas. And the national economy, though humming along, isn’t near the level of growth Trump promised his debt-expanding tax cuts would deliver.
Trump pulled out of the Paris climate agreement, led a rollback of environmental regulations such as the Obama administration’s Clean Power Plan, attacked renewable energy and sought bailouts for failing coal-fired power plants. He quickly claimed success. “Coal production up 7.8% in past year,” he tweeted in October 2017.
The main threat to coal, however, wasn’t a regulatory “war” but market trends favoring natural gas and renewables. Inevitably, reality overtook Trump’s hype.
Last week, owners of one of the largest coal-fired power plants in the country said they would resume plans to shut the Arizona plant down after negotiations to save it had stalled. Days earlier, the Tennessee Valley Authority said it would shutter a Kentucky plant despite pleas from Trump.
U.S. utilities last year closed an estimated 14.3 gigawatts of coal-plant capacity, double the closures of the year before and nearly matching the record 14.8 gigawatts that were retired in 2015, according to S&P Global Market Intelligence.
West Virginia’s coal industry has been a bit luckier because demand for its metallurgical coal has been healthier, but signs suggest that demand is now cooling. The state’s unemployment rate remains among the nation’s highest. Earlier GDP growth — the state’s 2.2 percent in 2017 matched the national average — reflected higher global prices for metallurgical coal and natural gas. “The typical West Virginian is not better off,” Ted Boettner, director of the West Virginia Center on Budget and Policy, told me.
The national economy, though performing far better overall than the coal industry and West Virginia, is also falling short of the hyped promises that Trump has made.
During the campaign, Trump said of annual economic growth: “We’re bringing it from 1 percent up to 4 percent. . . . I think you can go to 5 percent or 6 percent.” In December 2017, he saw “no reason why we don’t go to 4 percent, 5 percent and even 6 percent.” White House forecasters assumed a decade of 3 percent annual growth, which would require much higher growth in boom years to offset downturns.
But last week, the government reported 2018 growth of 2.9 percent — despite the maximum stimulative benefit of Trump’s $1.5 trillion tax cut and a boost from massive deficit spending in an already expanding economy.
Certainly, 2.9 percent growth is good — equaling the best year of Barack Obama’s presidency, 2015. And manufacturing job growth has accelerated under Trump. But this isn’t close to the “4 percent, 5 percent and even 6 percent” Trump predicted, and forecasters see growth slowing this year and in 2020.
As Bloomberg News reported, a just-published study by economists from the Federal Reserve Bank of New York and elsewhere found that Trump’s trade policies were costing U.S. companies and consumers $3 billion a month in tax costs and businesses an additional $1.4 billion in other losses. Another study, by a group that includes the World Bank’s chief economist, found that “workers in very Republican counties bore the brunt of the costs of the trade war.”
They, like the coal miners, the steelworkers and West Virginians — those whom Trump’s trade adviser recently dubbed “Trump people” — are the ultimate victims of Trump’s economic hoax.