The economy: Has Trump helped or hurt?
Welcome to “‘The Greatest Economy in American History!’” said Catherine Rampell in The Washington Post. That, at least, is how President Trump tweet-greeted last week’s news that the U.S. economy grew at an annualized rate of 1.9 percent in the third quarter. Once upon a time, under President Obama, Trump tweeted that a 1.9 percent growth rate portended “deep trouble for the economy!”…so was he right then or is he right now? The truth is that most economists think 2 percent growth will now be typical for the U.S., but it’s “way lower than you’d expect given the massive fiscal stimulus policymakers have been pumping into the economy.” Government spending has surged under Trump, with the annual deficit now nearing $1 trillion. Trump promised that the GOP’s $2 trillion tax cut in 2017 would boost growth to “4 percent, 5 percent, and even 6 percent.” Instead, corporations have largely used the windfall they got from having their tax rate cut from 35 percent to 21 percent to buy back shares, rather than investing it in equipment and workers. The numbers don’t lie, said Greg Ip in The Wall Street Journal. Trump’s “tax cut has underdelivered,” which can only be good news for the Democratic candidates seeking to replace him and reverse it.
Untrue, said Stuart Varney in FoxBusiness.com. Even at 1.9 percent, our economy is growing “far more vigorously than any other industrial democracy’s,” as most of Europe slides toward a recession. Our stock market is hitting record highs, and U.S. stocks have gained more than $10.5 trillion in value since Donald Trump’s election, benefiting everyone with a 401(k) or a pension fund. (See Making Money.) Meanwhile, “the wages of lower-paid workers are rising faster than any other group’s.” Job growth continues at a steady pace, said The Wall Street Journal in an editorial, with 80.3 percent of prime-age workers being employed, the highest ratio since 2007, and an African-American jobless rate of 5.4 percent, “a new low since records have been kept.”
“Unemployment isn’t falling for everybody,” said Andrew Van Dam in The Washington Post. Thanks to Trump’s reckless trade war with China, which was supposed to help American workers, the U.S. manufacturing sector actually shrank over two straight quarters this year, putting it technically in recession. Investment in new factories and offices plunged by an alarming 15.3 percent in the third quarter, and unemployment is actually rising in manufacturing-dependent states like Michigan, Wisconsin, and Pennsylvania—which of course are vital to Trump’s reelection chances. Mining jobs are down, and so are exports. Trade-war uncertainty is making even nonmanufacturing companies skittish about new investment, said Robert Samuelson, also in The Washington Post. Yet the only policy proposal we hear from the White House is the “monstrously bad idea” of more tax cuts.
Trump’s trade war isn’t the only cause of corporate jitters, said Paul Krugman in The New York Times. Businesses are afraid to invest because they see that “Trump and his team are very strange people who have no idea what they’re doing.” Trump’s grand promise to bring back the old U.S. economy has clearly failed, said Derek Thompson in TheAtlantic.com. But “a very different economy,” fueled by technology firms, service-sector jobs, and consumer spending continues to chug along. The reality is that Trump is “too stuck in the past to help the economy, and too weak to destroy it.” ■