Why voters aren't enraptured by the Trump economy
Maybe it's not all that great after all
In a new Quinnipiac poll, a whopping 70 percent of Americans rank the economy as either "good" or "excellent," which is about as high as the measure has ever risen. Yet only 38 percent give Trump himself a positive job rating, versus 54 percent who turn their thumbs down. A separate CNN poll found a 49 percent approval rating for Trump's handling of the economy specifically, which isn't bad. But it still translated into a meager 36 percent approval of Trump's performance overall.
Keep in mind that unemployment is now bouncing around at 3.8 or 3.9 percent, which is remarkably low for the last few decades. The economy continues to add jobs and grow at a respectable pace. With data like that, history and conventional wisdom say the president and his party should be feeling good about any upcoming election. Yet the public remains unimpressed by Trump, and the Republicans are wringing their hands over an impending blue wave in November's midterms.
By all indications, no one is more vexed by this question than Trump himself. "The Economy is soooo good, perhaps the best in our country's history," he tweeted at one point. "The GDP Rate (4.2 percent) is higher than the Unemployment Rate (3.9 percent) for the first time in over 100 years!" at another. And also: "If the Democrats had won the Election in 2016, GDP, which was about 1 percent and going down, would have been minus 4 percent instead of up 4.2 percent. I opened up our beautiful economic engine with Regulation and Tax Cuts."
A glance at national economic data makes short work of most of Trump's assertions here. The growth rate of GDP has actually outpaced the unemployment rate multiple times over the last few decades. And that growth was closer to 2 percent than 1 percent going into the 2016 election. As for the notion that a victory for Trump's presidential opponent would've pitched the economy into recession? I'm not even sure how to respond to that.
None of this is to deny the impressive topline numbers coming out of the economy right now. But the president's transparently ignorant attempt to oversell the matter smacks of desperation.
Kevin Hassett, the head of Trump's Council of Economic Advisors, did not fare much better.
During a presentation on Monday, he had to walk back his boss' most egregious distortions. But then Hassett took his own stab at overselling the Trump economy. "Economic historians will 100 percent accept the fact that there was an inflection at the election of Donald Trump," he confidently declared. "And that a whole bunch of data items started heading north."
Hassett argued that wage growth was actually higher than standard government statistics show. But as economists Jared Bernstein and Larry Mishel point out, this was an exercise in brazen cherry-picking. Hassett was on somewhat firmer ground when he claimed that business investment had grown under Trump. Except he took the unusual step of averaging his data points over six quarters. Slate's Jordan Weissmann noted this makes the investment uptick under Trump look considerably more dramatic than it is.
More to the point, the downturn in investment late in President Obama's tenure was likely driven by a crash in oil prices — an outside shock that had nothing to do with policy. Zoom out to investment rates over a longer time period than Hassett's presentation, and Trump's economy looks like a return to trend rather than an improvement. The Trump policy that really should've juiced business expansion was the recent GOP tax cut package. But it's hard to find any evidence of major changes in investment, jobs, or wages after the tax cuts passed.
This all suggests "the Trump White House feels a strong economy isn't sufficient reason to vote Republican in the midterms unless it creates a contrast with Obama," Tim Noah writes at Politico.
The economy has been slowly crawling back towards health ever since the end of the Great Recession. If that trend under Trump is indistinguishable from the trend under Obama, it raises the question of what voters got by putting Trump in the White House. In fact, Obama's average approval on the economy specifically was 48.4 percent when he left office — virtually indistinguishable from the 49 percent CNN found for Trump. They both got similar credit for similar results.
There's a lesson in their relatively low ratings, beyond the usual points about partisanship — namely that a humming national aggregate economy does not necessarily translate into improved livelihoods for most workers. Since the recession, nominal wage growth has been anemic compared to past business cycle peaks. Health-care and education costs keep rising while job benefits disappear. Most households are still in rather precarious financial straits. And there's still a large population of "shadow" unemployed the official unemployment rate isn't catching.
No wonder neither Obama nor Trump don't get ticker tape parades down Main Street.
As for Trump's lower overall rating specifically, there's also his avalanche of scandals — from immigration cruelty to the Russia probe — that have nothing to do with economics. At best, Trump has managed to avoid throwing the U.S. economy off course, whether from the continued recovery or the relentless growth of inequality.
It's unsurprising that Americans aren't swooning.