The secret behind Trump's economy: Absolutely nothing
Can President Trump take credit for the current economy?
In early 2016, then-candidate Donald Trump blasted unemployment figures provided by the Bureau of Labor Statistics. “Don’t believe these phony numbers when you hear 4.9(percent) and 5 percent unemployment,” Trump told his supporters at a New Hampshire rally. “The number’s probably 28,29, as high as 35. In fact, I even heard recently 42 percent”.
Fast-forward 14 months after great unemployment numbers and (*now former) Press Secretary Sean Spicer said, “I talked to the President prior to this and he said to quote him very clearly: ‘They may have been phony in the past, but it’s very real now.’“
With many in Washington stretching the truth to outright lies and President Trump lauding the economy, this brings up two questions:
- Can President Trump take credit for the current economy?
- And what has he done to boost the economy?
The answers may be surprising.
As President Barack Obama entered the White House the winter of 2009 in the midst of the Great Recession, the fear of a complete economic collapse gripped America. Within the first 30 days, the American Recovery and Reinvestment Act passed. The roughly $800 billion stimulus package included government spending and tax cuts to jumpstart the economy.
In Obama’s first year, millions of Americans lost jobs. The country understood this was a crisis inherited by Obama. Regardless, the millions of jobs that disappeared in his first year as president while the economy was slowly turning around are still included against the number of jobs created during his presidency. Democrats can point to the fact that decisive action was taken to turn the economy around in the form of a stimulus bill, support for a crumbling banking system and an auto industry bailout among other initiatives.
The American economy is like a freight train and we’re all riding it regardless of whether we like the destination or the engineer. When a train engineer hits the brakes, it can take more than a mile for the train to come to a complete stop. Likewise, we have all been stopped at a train crossing as we impatiently wait for a train to slowly pick up speed. When Obama came into office, he had to completely stop an economic train headed in the wrong direction and slowly move 180 degrees. When President Trump took the nation’s reigns, the train was already moving at a good clip in the right direction and picking up speed.
Fast-forward eight years to an economy Trump is eager to take credit for building. According to the Bureau of Labor Statistics, unemployment in America was at 4.8 percent on Trump’s January inauguration day and currently hovers at 4.3 percent. This reflects a steady trend of decreasing unemployment since it hit a peak of 10 percent in October of 2009. Trump has bragged inaccurately about rising wage growth which has been close to stagnant over the last 12 months, while most economists agree will eventually increase with falling unemployment.
In 2016, the DOW Jones Industrial Average (DOW) hit an all-time high 26 times throughout the year. Through early August of this year, the DOW has hit an all-time high 34 times.
During Trump’s first full quarter in office, gross domestic product grew at 2.6 percent, which the President described as “a number that nobody thought they’d see for a long period of time.” However, real GDP growth was higher in eight of the last 18 quarters according to data from the Bureau of Economic Analysis.
The Trump economy has been solid and even gaining momentum, but it is also something he inherited. The economic train engineer switched from Obama to Trump as the engine was already up to speed and gaining force.
As Trump’s predecessor had to include the loss of jobs and stock market in historical figures, it is fair for Trump to include job gains since his inauguration. Aside from cutting a few regulations, tweets about the economy, and some blustery comments about cutting taxes, there has been no clear economic policy or action coming from the White House.
Once the economic train is speeding along, the best solution is to get out of the way. With the seemingly endless amount of distractions and inability to enact legislation since inauguration day, Trump has done nothing to influence the economy and that may be the best policy – do nothing.