The Economy Under Trump

How much credit does Trump deserve, personally, for the economy of the United States?

While the man talks a hard line about how he has been behind the economy, is he responsible? In truth, his words as to the economic transformation are out of step with the underlying reality. While the citizens of the USA did show a 16 point rise in their confidence in the economy during Trump's first year in office, they too, are being duped by the rhetoric.

The essential truth is that while the economy displayed steady growth over the past 12 months, the same was true of the 72 months (6-years) or so that came before that. In fact, the economy has improved worldwide. Foreign markets (in which the USA government had no input into) have soared too, and several are also at all-time highs.

Yes, according to the statistics, while the economy was growing by leaps and bounds over the last six years. And the perceptions of the citizens concerning the economy also begin changing over 6-years ago. Even more strikingly, Gallup’s weekly numbers show that the Republican turnaround in perceptions mostly happened before Trump announced his run for office.

So why should the credit go to Trump rather than to give former President Barack Obama credit?

The fact is that the only people giving Trump credit are the Republicans. It wasn’t that something changed in the economy when Trump was elected. No, the rise in the economy was already well underway. It was because the Republicans gave Trump credit for it and then decided to start praising the economy. Something they did not want to do when a Democrat was in office.

Actual economic conditions have improved — but only at a modest pace that is entirely continuous with previous trends, not just in the US, but worldwide.

Economic Talk is a Diversion

Look, government politics is much like buying a home. It is not what the real estate agent is telling you as to the benefits of the home, but in reality what they are not telling you.

Trump ran his campaign on trashing the Democrats and Obama in particular. Trump said many times that “Ninety-four million Americans are out of the labor force!” That was true at the time if you included babies, students, homemakers, retirees and the disabled, but today, 95.5 million Americans are out of the labor force.

Trump also stated that “Over 43 million Americans are on food stamps,” This year, it’s still just under 43 million, which usually happens as the number of food stamp recipients goes up and down over time.

Yes, just like the overzealous real estate agent, the talk is all about the positive and nothing about the negative. If you want to know the truth, you won't find it in the White House briefings, or from a politician, or even from the media. You have to do your own 'unbiased' research.

Is the USA great?

The United States is the only high-income country to have millions of citizens who lack health insurance. The US has a relative child poverty rate that’s off the charts by the standards of other developed countries. The US has no guaranteed paid parental leave or paid vacation. And the US remains one of the world’s highest per capita emitters of greenhouse gases even as the world hurtles toward an environmental crisis. Under those circumstances, efforts to pitch the notion that “the US is already great” end up falling flat not just — or even primarily — with skeptical swing voters but with Democrats’ base that yearns for transformative change to aspects of the American welfare state and of American political economy.

Republicans have no such qualms. The Republican Party donor class is very, very excited about high stock market valuations. The valuations lead directly to large payouts for top executives and corporate income tax cuts (which lead to high stock market valuations and thus to more payouts for top executives). And are very glad to embrace the narrative that all is now well with the American economy. That gives an incumbent Republican presiding over decent growth a straightforward, uncomplicated pitch to make — things are right now, and they are excellent thanks to me.

It’s largely forgotten now, but back in mid-2000 (a time of more rapid wage growth than what we saw in 2017, incidentally), it was commonplace in conservative circles to proclaim that we were living through a 'Bush Boom' touched off by his game-changing tax cuts and deregulation. That story, obviously, eventually ended in tears, as a poorly supervised financial system channeled inequitably shared growth into an unsustainable pyramid of debt that eventually collapsed. But they were good times while they lasted.

Be very careful what and to whom you listen. The truth is not easily found.

Leave a Reply