Iowa meltdown another example of "big-idea" BS

As we still are awaiting the final numbers from Iowa, I wanted to forward a great article from David Dayen at the American Prospect on what he calls The Bullshit Economy.

We have endured the more comprehensive bullshit of the financial industry marking corporate progress by manipulated stock prices and air rather than productive advances for society. We had a financial crisis based on bullshitters telling us housing prices would endlessly rise. We have the bullshit of the private equity industry extracting value from companies through the skillful use of debt and other financial engineering, without regard for whether the companies succeed or fail.

The story of Shadow, makers of the app that utterly failed to deliver in Iowa, is a perfect example of the bullshit economy. It starts by being a tech solution to a non-existent problem. Iowa counties are compact; the largest one has a landmass of 973 square miles, and it’s close to twice the size of the average county in the state. Even there, no major city is more than a 30-minute drive from the county seat, Algona. Even with that ancient technology of the car, you could have each of the 99 counties report final results within a couple hours of the end of the caucuses.

Somehow, the Iowa Democratic Party got sold that they needed to improve upon this, to “disrupt” the caucus reporting. Already, the party had to increase what they would keep track of and tabulate, reporting the first set of results before the 15 percent viability threshold, the second set afterwards, and how that translated into delegate counts. It wasn’t clear why anyone needed to adding another layer of complexity into this with the app. But the app’s backers must have been persistent, getting $60,000—really nothing for the purposes of app development—to design a tool to forward the results to a central repository.

Which is a common thing in consultant-driven corporate culture these days – have the appearance of DOING SOMETHING that seems progressive and advanced, even if it doesn’t help to get the job done or speed the process along. The consultants get their cut, and the promise of some kind of future improvement is all that is needed.

Our president knows this con(fidence) game well.

Dayen notes that this mentality pervades in our 2020 economy, where hustling and grifting seem to be more important than the actual product itself. This is the case in the Bubbly stock market, where coked-up hedge funders and VC types keep using low interest rates to plow cheap money into companies based on hopes rather than earnings (leading the market to go up nearly 500 points today because...China says it'll pump out even more money to combat the economic damage from coronavirus?) And it's the case with a well-connected DNC vendor in Iowa who promises a NEW AND IMPROVED app to speed along reporting of caucus results. Results that we're still waiting on 2 days later.

So there we have it: an unnecessary app that narrows the supply chain of votes to the central tabulator, and when the supply chain fails it creates chaos. We see this all over our economy; useless services, narrow supply chains, magnified fiascos. As long as confidence men lie to the right people, they can gain entry and take on enormous responsibility, until it all falls apart. We live in a country where you can spout New Age consultant speak, charm a large foreign investor, and make off to your guitar-shaped living room with over a billion dollars, paid effectively to go away. That’s WeWork guru Adam Neumann’s story, and increasingly it’s our story.

The Iowa disaster is a sign that our economic structures are breaking down, that private enterprise has become a shell game, where who you know matters more than what you can do. The bullshit economy has bled over into politics, with the perfect president but also the perfect amount of grifting and consultant corruption and unbridled tech optimism. This has long been part of politics—anything with that much money sloshing around will invite a little corruption—but the combination of political grift, the ardor for public-private partnerships, and the triumph of ambition over talent has created a fetid stew.

And as long as the con artists don’t face consequences, both in business and in politics, then we will continue with these superficial and sub-optimal outcomes in our BS economy.

Wisconsin continues to lead - in farm bankruptcies. And GOPs have no real answers

The final numbers for 2019 on US farm bankruptcies are in, and it shows the crisis deepened last year.

American farmers have struggled amid U.S. trade talks with both Mexico and China, with soybean exports especially hit hard by retaliatory tariffs by China first imposed in 2018. The hurt in the nation's heartland prompted the White House to set aside $28 billion over the past two years for farmers caught in the crossfire of President Donald Trump's trade war.

Still, despite the billions in farm aid, 595 family farms declared bankruptcy in 2019, up nearly 100 filings from the previous year and the highest count since 2011, according to data from the American Farm Bureau.

Last year's 20% spike lags only the 33% surge seen in 2010, the year after the recession, the bureau found in its search of a decade of bankruptcy data from U.S. courts.

The most recent rise in farm bankruptcies was to be expected, the bureau said in its findings, citing factors including a multi-year downturn in the farm economy, record amounts of farm debt, and headwinds on the trade front.

Farms in Wisconsin generated the highest number of bankruptcy filings last year — 57— followed by Georgia with 41, the bureau reported. Farm bankruptcies were at or above decade-high levels in 10 states: Iowa, Illinois, Kansas, Minnesota, Nebraska, New Hampshire, Ohio, South Carolina, South Dakota and Wisconsin.

You can look at the actual data on Chapter 12 farm bankruptcies here if you want.

We also knew that more than 10% of Wisconsin's dairy farms went out of business in 2018, and new numbers out today indicate that 34 more closed up during January. The decline has leveled off a bit in recent months, but we've still lost more than 2,000 farms since Donald Trump took office in January 2017.

The question is whether this rash of farm bankruptcy and closings in Wisconsin is going to continue. Milk prices jumped more than $5 per hundredweight in 2019, so the revenue picture should look better for the dairy farmers that remain. But that money is likely going to have to be used to pay debts in addition to operating costs, as described in this AP story from Ivan Moreno.

Technology has played an important role in agriculture for years but it's become a life and death matter at dairy farms these days, as low milk prices have ratcheted up pressure on farmers to seek every possible efficiency to avoid joining the thousands of operations that have failed.

“If I use 100 bags of seed on a field and I change the way I distribute the seed, I can yield more without a single extra dollar of input,” said Matt Wichman, Rosendale [Dairy]’s director of agronomy. Such tools “are becoming so economically viable that anybody that’s of a decent scale is adopting these,” Wichman said.

Technology can mean survival, but it involves a perilous gamble: Will the machines produce savings fast enough to cover the debt they incur?

“The last five years have really been treacherous,” said Randy Hallett, who has 85 cows in Casco, Wisconsin, and has spent $33,000 on new milking equipment. He would invest more if his operation could afford it. “I broke even, mostly.”

And those debts aren’t going to be paid off in a year, so if we see another drop in milk prices in the coming months, the squeeze will get worse.

After Governor Evers introduced a package of plans in his recent State of the State address to try to deal with the state's crisis in agriculture, Speaker Robbin’ Vos and the rest of the Assembly Republicans revealed some plans of their own today to try to help the state’s farmers.

Republican lawmakers were vague on some of the specific details in the bills, which Vos said will be unveiled later this week, but he said the overall state investment will be "significantly bigger" than the $8.5 million package of bills proposed by Evers last month in his State of the State address.

“We would probably like to do something that is bigger and bolder than what he first proposed," Vos said. "It would probably cost more money than the $8.5 million because while that is something that is definitely helpful to farmers, it is probably too small an effort to make a substantial difference”

Vos said one of the biggest criticisms of Evers' bills are they are more long term focused, rather than providing quicker solutions. The bills discussed by Republican lawmakers Tuesday could entail a targeted tax credit and health insurance deduction options for farmers.

In other words, it’ll be added giveaways to agribusinesses that already get quite a few tax breaks, and some writeoffs for health care that many farmers are already likely to have. And this tweet confirmed those suspicions of who this WisGOP package will help.

DBA applauds state Republicans’ plans for #agriculture support. #DairyForward https://t.co/6Sv4BqSxIV @SpeakerVos pic.twitter.com/3jFy9VJHan

— Dairy Business Association (@DairyForward) February 4, 2020

The GOP proposals won’t do a thing to combat the real problems hitting Wisconsin farmers – overproduction from Big Ag resulting in lower prices for products, and higher debts resulting from the need to become bigger to stay afloat. It’s an insulting response if you think about it, but Robbin’ Vos always cares about the needs of corporate donors over results, so from that perspective it adds up.

I don’t believe for a second that the trade agreements with Mexico, Canada, or China, will do much of anything to change the problems that Wisconsin farmers are dealing with. And the proposed giveaways by Wisconsin Republicans reiterate the "bigger is better" mentality that has led to bankruptcy for a sizable number of the state's smaller farmers. And until we have policies that break up the hold that Big Ag has on our political system which gives them favorable treatment in today's ag economy, the family farmer will continue to struggle in this state.

Why Iowa? Seriously, WHY?

My thoughts on Iowa tonight? Barring some weird result, IT MEANS LITTLE. And it's a stupid system with barriers to participation that doesn't make it all that relevant to where the country is as a whole.

Now that the DMR poll in #Iowa is buried due to flaws, that should be the death knell for having this little state with an outdated system getting major attention.

And great stuff from MSNBC on how so many people chase polls, which is why they are weapons.#wiunion #Resist

— JakeEdwards (@JakeMadtown) February 2, 2020

And I was glad to see the great Charlie Pierce say similar things over the weekend, as he called for Iowa to stop being given such an outsized influence for this important job.

Pierce also noted that the goofy reallocation process that comes with the Iowa caucuses allows for some spinning of the expectations game, and that while it was a good thing that the newspaper poll had to be canceled after some candidates weren't included in the choices, Pierce says it' yet another reason Iowa need to go to the back of the line for a while.

And good for all concerned. This is the correct decision, both ethically and politically. (I do sympathize with the authors of hundreds of pre-written Sunday news stories that got crisped by the announcement.) But what the hell is the sense in a system where one poll from a good mid-sized newspaper wields so much influence over the presidential nominating process that it throws into a panic a system that already is complicated—and undemocratic—in the extreme? To wit, from Politico:

Sanders and his team have made clear their intention to tout the results of the first round of caucus voting Monday, even though the Iowa Democratic Party stresses that the only number that matters is the final delegate count. Aides with two top-tier campaigns told POLITICO they worry the Sanders campaign or other pro-Sanders forces — which will be receiving unofficial precinct results from allies in real time — will disseminate that information through social media or publicly claim victory after the first vote, an act that could distort the eventual results in a variety of ways.

A claim of victory after the first vote could encourage supporters of weaker candidates to leave the caucuses early without realigning with another candidate. Or it could create an artificial bandwagon effect by encouraging some caucus-goers to jump to Sanders’ side under the belief that he will be the victor. Either scenario stands to hurt the campaigns that are more reliant than Sanders on the realignment round that happens after the first preference vote is cast. During realignment, supporters of candidates who failed to hit a 15 percent threshold in the first vote are freed up to switch to another candidate.

It is a longstanding rule of the shebeen that taking advantage of a loophole in the rules is not in any way “cheating.” Of course the Sanders campaign is planning to do this. I’d be amazed if every campaign doesn’t have a similar plan. The idea of releasing results halfway through a complicated process is fundamentally stupid. It’s a system that is begging to be gamed even more than caucuses are generally. The earlier you can declare, plausibly, “I win!” the better for your campaign. And this is an open invitation for that sort of thing. You’ve had a nice run, Iowa, but it’s time to become South Dakota again, at least for a while.

Yep, it's absurd that this state that has less than 1% of the US population is supposed to be some kind of trend-setter.

For a blunter description, I'll give you Drew Magary (formerly of Deadspin), who spent part of his childhood in Minnesota, and finds the whole Iowa charade to be absurd BS. In a post on Medium, Magary says it's silly that this nothing state gets major attention for the most important job in the world, and it also allows Coastal elites to spin garbage about What It's Really Like in the Heartland.

Iowa indulges all of our political system’s shittiest habits. It allows rural white people to pretend like their voices are never heard despite the fact that we hear NONSTOP from Iowans thanks to the current setup. It allows the media to go on their regular pilgrimages to bowling alleys and off-brand gas stations, so they can say they sloughed off their supposed elitism and got to know true middle American folk. It allows the most cynical candidates in the field to champion their own, lobbyist-approved form of languid pragmatism and scare voters off of bolder and better changes to the system. And it allows candidates to disproportionately concentrate all their money and resources on a single place, allowing a shitheel like Mike Bloomberg to barge in with massive ad buys and gain undeserved entry into the broader election discussion. We could fix all this by holding every primary on the same date (think of the ratings!), or by adopting a proposed rotation system, where every state gets a turn to be Iowa for once. But neither party’s establishment seems all that interested in doing so. This is the system that favors them. They like it this way.

As Joe Biden and Pete Buttigieg have already proved, candidates don’t really have to tack left or tack right to position themselves during primary season anymore. They all tack Iowa now. That’s a mandatory part of the process that diminishes the needed influence of other early primary states (Nevada and South Carolina, both far more diverse than Iowa) and every OTHER state as well. And it’s particularly dangerous right at this moment, with President Trump potentially ramping up a war with Iran, the kind of horrifying shoot-first-ask-questions-20-years-and-trillions-of-dollars-later war against brown people that always plays well in the Heartland. Iowa gets to have influence over how Democrats respond to this looming bit of Armageddon. WHY? Why the fuck does Iowa get to be the weather vane election after election? Why are entire parties forced to care so much about it? Why should I, or any other American, have to care about Iowa’s feelings when Iowa probably gives zero fucks about mine? What makes it so goddamn special?

I’ll tell you what makes it special: nothing. Nothing at all. Its football team isn’t even very good. And the fact that I live in a country that gets constantly reminded that Iowa’s unimportance is important will never stop being a fucking drag. Iowa is not a perfect microcosm of this country. It is the polar opposite of that. What it has become, instead, is a perfect microcosm of how the system has become so mutated that Billyjoejimbob from Ames gets to have more influence over who gets to be president than hundreds of millions of other Americans. It’s an enormous, needless monkey wrench in a democracy already packed with them. Maybe the rest of us deserve electoral firsties for once in our lives. Iowa has already had its say, and all the rest of us heard was bullshit. Fuck that place. Fuck it good.

Especially when it leads to this type of stuff.

Biden people in Clive high-fiving because they hit viability threshold by ONE person. One woman screamed “CARTER” at some dude and he ran over at the last second. Glad we choose presidents with a series of lightly-regulated, barely-managed high school lock-ins. pic.twitter.com/FH8d5KQZ6l

— Peter Hamby (@PeterHamby) February 4, 2020

Wake me up when Super Tuesday gets here, when states with metro areas above 1 million have actual secret ballot elections.

Manufacturing rebound in January? Construction down to end 2019? Weird reports today

Couple of mixed messages in the economic news today. The first was a surprise turnaround in the manufacturing that was reported for January.

A closely followed survey by the Institute for Supply Management rose to 50.9% last month to 47.8%, topping the key 50% threshold for the first time since July. Readings over 50% indicate more companies are expanding instead of shrinking.

Economists surveyed by MarketWatch had forecast the index to come in at 48.5%....

What happened: A gauge measuring new orders jumped 4.4 points to 52%, also the highest reading since last July. Production turned positive again, though employment is still contracting in part due to a shortage of skilled labor.

Well that’s a change from what we have been seeing recently, especially given that we saw the ISM Manufacturing report out of the Chicago region decline to a multi-year low in the same month. So let’s look into the national ISM report that shows growth, and see where we get it.

Looking at the numbers, it indicates that the big reasons for the jump are increases in orders, production, prices and exports. All of that is notably different from what we’ve been recently seeing in other data, and it makes me want to see if the Commerce Department’s data on new orders and related manufacturing numbers back this up in January.

On the flip side, we got more evidence that 4th Quarter GDP might be revised down later this month, as the Commerce Department said construction spending declined for December, and making for a decline in 2019 for the entire year.

Construction spending during December 2019 was estimated at a seasonally adjusted annual rate of $1,327.7 billion, 0.2 percent (± 0.8 percent)* below the revised November estimate of $1,329.9 billion. The December figure is 5.0 percent (±1.3 percent) above the December 2018 estimate of $1,264.8 billion. The value of construction in 2019 was $1,303.5 billion, 0.3 percent (±1.0 percent)* below the $1,307.2 billion spent in 2018.

Some of the numbers are a bit jumpy for construction, as the numbers are adjusted to account for December having less activity in the sector due to weather, but the decline was pretty widespread, with only residential construction and highway work going up.

US construction, Dec 2019 vs Nov 2019 (annual rate)

Residential construction UP $7.6 billion (+1.4%)
Highway and street constr UP $3.0 billion (+3.1%)

All other private constr DOWN $8.4 billion (-1.8%)
All other public constr DOWN $4.4 billion (-1.9%)
TOTAL CONSTRUCTION DOWN $2.2 BILLION (-0.2%)

Like a lot of things in the economy these days, it is uneven with significant differences across sectors (and likely geographies too, although the construction numbers don't break it out that way). And these two reports add to the general "meh" that the Main Street economy has been showing over the last few weeks.

Wisconsin still suffers from a decade of school defunding, and voucher theft is making it worse

I wanted to draw attention to something that came out in the last week from the Wisconsin Budget Project, who gave an overview of the damage done to the state's public schools over the last decade.

In 2021, the state will invest less in public school districts than it did in 2011, something that has been true of every year in between as well. In 2021, Wisconsin school districts will receive $75 million less in state aid than in 2011 in inflation-adjusted dollars, or 1.2% less than in 2011.

Over time, the budget cuts to public school districts have accumulated. Between 2012 and 2021, the state provided $3.9 billion less in state aid to school districts than it would have if state aid had been kept at 2011 levels.

In another measure of how lawmakers have shifted state aid away from school districts, the share of state tax revenue dedicated to districts has declined since 2011. That year, the state devoted $3.81 out of every $10 in tax revenue to school districts. In contrast, the state is projected to spend just $3.12 out of every $10 in tax revenue on school districts in 2021, a decline of 15% since 2011.

That being said, there is one area that Republicans have decided to invest in when it comes to K-12 education - for vouchers that go to private/religious schools. And many of those vouchers are funded by taking even more money away from the public schools.

Over the past decade, the state increased the amount of public money going to private schools and charter schools that operate independently from school districts. To offset the cost of funding these separate school systems, state lawmakers redirected state aid that would otherwise go to public school districts. The total cost of that redirected state aid has risen sharply, increasing from $133 million in 2012 to $223 million in 2020, an increase of 68%. These separate school systems also receive additional state funding that does not represent a direct loss of funding for school districts.

That's what the GOP was promoting with that vile photo op with Mike Pence and Betsy DeVos at the Capitol last week. They were asking to give more money nationwide to DeVos's "Jesus Rode a Dinosaur" schools, using the claim of "giving opportunity to Children of Color" as their cover story.

Lieutenant Governor Mandela Barnes noted how those kids were being used as props by GOP politicians that won't lift a finger to care about their lives in any other way,

In case this hasn’t been mentioned, the rally in the Capitol today was the most interaction many of those adults will ever have with black and brown children.

— Mandela Barnes (@TheOtherMandela) January 28, 2020

It's pathetic, and that de-investment in poor communities around Wisconsin is a conscious choice by [WisGOP] lawmakers. The Wisconsin Budget Project adds that another choice made by WisGOP over the last 10 years is to cut taxes to lower the amount of money available to put into public education.

State lawmakers have enacted more than 100 tax cuts since January 2011, some of which are extremely slanted in favor of the rich and powerful. One example is the Manufacturing Credit, which in 2019 gave 21 tax filers—each of whom earned over $30 million—an average estimated tax cut of $1.9 million each, according to figures from the Legislative Fiscal Bureau. The Manufacturing Credit, which results in manufacturers paying virtually no state income tax, reduced state revenue by $283 million in 2019. To put that amount in context, it is more state money than the school districts of Waukesha, Appleton, and Madison got that year, put together…..

The tax cuts have drained money from public schools. If lawmakers had declined to pass new tax cuts and instead appropriated that money in the same proportion as other state tax money is spent, the result would have been an additional $727 million available for public school districts this year. Even just eliminating a single tax cut—the Manufacturing Credit—and dedicating the revenue to public schools would increase state support well past 2011 levels.

And of course, many of the tax cuts have been offset with higher taxes as a result of school referenda, and/or higher wheel taxes and other local fees due to the cuts to local government, both of which were a result of these choices of funneling money out of public schools and into vouchers, tax cuts, and other kickbacks to GOP donors.

But it's all cool if the results are better, right? Except the results aren't better, as the Wisconsin Policy Forum reminded us this week.

According to data from the state Department of Public Instruction, the share of high school students statewide whose ACT subject test scores indicate they are prepared for college courses in English, math, and science declined between 2017-18 and 2018-19, as shown in Figure 1. These numbers are also down relative to the 2014-15 school year, the first year in which all Wisconsin high school juniors were required to take the ACT. Meanwhile, the percentage of students with college-ready reading skills increased slightly in the 2018-19 school year, returning to the same level as two years earlier.

Despite the decline in the share of students meeting college readiness benchmarks in three of the four categories, it’s important to note Wisconsin high schoolers still fare better on their overall ACT scores than nearly all other states that require all students to take the test. But within those statewide scores are gaping disparities, particularly on the basis of race, that demand urgent attention.

Those 5 years correspond to an unprecedented expansion of vouchers into every corner of the state, with the number of children receiving vouchers growing every year. And yet Republicans plan to double down on even more vouchers and even more money-funneling away from public K-12 education in the coming years.

Maybe we shouldn't do that, and instead take us back toward what was working before 2011 - strong investment into public K-12 education, and not stealing from taxpayers to send them to vouchers that only care about a small subset of students at the expense of everyone else.

What's your piece of the pie of wealth? Likely not much, if anything

Tony Dokoupil did a recent segment on CBS this Morning to give an illustration on what Americans think the wealth gap in this country is, and what the actual wealth gap is. In addition to many people not understanding the difference between income (paychecks) and wealth (asset values vs debts), they were shocked to see how the super-rich get an overwhelming amount of the pie when it comes to wealth in our country, while most of us barely get anything.



It's rare and refreshing to see corporate media admit just how absurd the distribution of wealth is in this country, and that, along with Dokoupil's creative use of a pie, is why I've seen this clip passed around quite a bit in the last few days.

It's also remarkable to see Dokoupil interview private equity a-holes on the subject, who try to justify their BS jobs and their oligarch clients. You can tell that even the hedge funders know this system is absurd, likely because they're one of the few people who know just how rich these people are, and it's telling that all they can put up as a defense of the system is a straw man about "well, do you want a socialist economy where everyone's the same?"

No, hedge fund guy, we're not asking for everyone to have the same wealth. But what the typical American knows in their heart is that most of those guys (gender intentional) really aren't that special, outside of perhaps a proclivity toward being a soulless sociopath. But the rich get advantages and security and the ability to take risks because of their wealth that we can't, and that their desire to grab more and more wealth often translates into economic choices that limit the ability of the rest of us from moving up the ladder (or even getting out of debt).

While many people reference the "greed is good" speech from the 1987 movie Wall Street, it's this other speech from Michael Douglas that's my favorite in the film. It's not only telling that Charlie Sheen's character walks in on Gordon Gekko having a meeting with Asian businessmen (because the interest of big money doesn't care about borders or the specific needs of individual places), but that Gekko could give this speech today, and I don't think it would be very different other than the dollar amounts.

"“The richest 1% of this country owns half our country’s wealth. Five trillion dollars. One third comes from hard work, two thirds from inheritance, interest on interest accumulating to widows and idiot sons… and what I do: stock and real-estate speculation. It’s bullshit. You got 90% of the American public with little or no net worth. I create nothing. I own. We make the rules, pal. The news, war, peace, famine, upheaval, the price of a paperclip. We pick that rabbit out of the hat while everybody wonders how the hell we did it.

Now you’re not naive enough to think we’re living in a democracy, are you, Buddy? It’s the free market, and you’re part of it.”
- Gordon Gekko

By the way, Dokoupil is pretty good on this "news guy out in public" thing. I remember him hanging out at Brewers bar on Opening Day in April 2016 discussing that week's Wisconsin primary with fans, and he also did this one.

Soft econ reports for Dec and Jan make lower revisions likely

I know that Wall Street fear about the coronavirus is likely the big reason behind a large decline in stocks to end January. But soft readings on personal income and spending for December didn’t help.

Personal income increased $40.7 billion (0.2 percent) in December according to estimates released today by the Bureau of Economic Analysis. Disposable personal income (DPI) increased $30.6 billion (0.2 percent) and personal consumption expenditures (PCE) increased $46.6 billion (0.3 percent) (table 5).

Real DPI decreased 0.1 percent in December and Real PCE increased 0.1 percent. The PCE price index increased 0.3 percent. Excluding food and energy, the PCE price index increased 0.2 percent (table 9).

That’s pretty lame, especially the drop in real disposable income, which is the 2nd decline in the last 3 months. And personal income was revised down for the previous two months as well. Not really what you want.

There is one caveat with the income numbers, as personal income growth was limited was due to the end of the farm subsidies that were given out from DC to defray the problems resulting from other policies.

The increase in personal income in December primarily reflected increases in compensation of employees and personal interest income that were partially offset by a decrease in farm proprietors’ income (table 3). Farm proprietors’ income decreased $36.2 billion in December, which included a decrease in subsidy payments associated with the Department of Agriculture’s Market Facilitation Program.

If you look at that Farm Proprietor’s stat month-by-month over the last 4 years, you can see how Farm income dropped in the last half of 2017 and most of 2018, and the spikes that came with the Trump Farm subsidies in December 2018 and 2019.

The mediocre income and spending figures add to December’s rise in the trade deficit for goods. Both of these bits of information came out after Q4 GDP was released on Thursday, which had a preliminary reading of 2.1%. That tells me that the next reading in February will be lower, quite possibly below 2%, because it was a drop in imports that was the largest "increase" in GDP out of any factor measured.

And when you add in a bad PMI report on Midwest manufacturing, it doesn't lend itself to a uptick in that growth level for next year.

The numbers: Manufacturing activity in the Midwest sank in January to the lowest level since December 2015, according to a survey of businesses released Friday by MNI Indicators.

The Chicago Purchasing Managers Index fell to 42.9 this month from 48.9 in December. Any reading below 50 indicates deteriorating conditions.

Economist surveyed by Econoday had expected a small dip to 48.5.

That sure isn't going to help things in this part of the country, and is a bad sign for 1Q 2020 overall.

A larger indicator will come later next week when we get the January 2020 jobs report, along with the benchmark revisions for most of 2019. And given that job growth through 2019 was originally overstated by more than 500,000 jobs, it seems likely that we will see total job growth for last year fall to its lowest level in 8 years.

Let's keep an eye on this new data coming in on past economic performance, because it might mean that the already-tepid figures from late 2019 are even slower than we already know.

EDIT- Here's UW's Menzie Chinn with a nice response to anyone saying "Promises made, promises kept."

If you were wondering...Fm the campaign era Trump Pence website: "Boost growth to 3.5 percent per year on average, with the potential to reach a 4 percent growth rate." pic.twitter.com/uuNAgvI3kx

— Menzie Chinn (@menzie_chinn) February 1, 2020