‘Trump-onomics’ is mostly boastful baloney

 

Bill Knight column for 9-14 15 or 16

 If President Trump has an economic philosophy – “Trump-onomics” – it might be seen as tax cuts for the rich, deregulation for corporations, and odd tariff stunts unpopular with economists, business and consumers.

Plus, as with most anything, he takes credit for anything positive and avoids blame for everything else.

“I built the greatest economy the world has ever seen,” he said in April.

Ah, no.

Trump seems to claim his term began with a recession and he created a boom. The opposite is true.

In his first three years, Trump’s economic record showed a bit less employment growth than Obama’s, about the same improvement in Gross Domestic Product, a slightly better stock market, and comparable wage increases. Still, in 2018, Trump boasted of “an economic turnaround of historic proportions,” conflating 94 consecutive months of job growth with the 18 months during his own administration.

“The real economy, as opposed to the financial markets, is still in terrible shape,” wrote Nobel Prize-winning economist Paul Krugman, “more deeply depressed than it was at any point during the recession that followed the 2018 financial crisis.”

Some facts:

* Pre-pandemic, Trump’s economy was OK, but not exceptional, much less “historic.” However, his Tax Cuts and Jobs Act of 2017 added trillions to the national debt.

* Obama’s administration DID start with a recession sparked by the financial meltdown.

* Economic growth in the three-plus years since Trump was inaugurated has averaged 2.5%, up slightly from the 2.3% in Obama’s last three years – far lower than George W Bush, Bill Clinton or Ronald Reagan (much less Dwight Eisenhower).

* Last week, there were 884,000 jobless claims, exceeding expectations of 850,000. This month, the official jobless rate is more than 10%. In the last few years, businesses added a monthly average of 185,000 jobs under Trump (before COVID-19); Obama averaged 216,000 a month.

*Trump’s tariffs have hurt farmers, manufacturers, suppliers and consumers. Moody’s Analytics last year said Trump’s trade war with foreign friends and foes alike resulted in some 300,000 lost jobs.

 

“The president inherited a growing economy with low unemployment, which was primed for the sort of middle-class surge that the country last enjoyed in the late 1990s,” wrote Jim Tankersley, author of “The Riches of This Land: The Untold, True Story of America’s Middle Class.”

“He could have uncorked a new wave of shared prosperity that would have pulled millions of workers into the economic stability that we have come to call the American Dream,” he continued. “He did not.”

Wall Street’s “comeback” has occasionally set records in recent weeks.

So?

If there’s a “trickle-down effect,” it’s not helping the economic drought most people feel. A Federal Reserve study said 4 in 10 American adults would have difficulty coming up with enough to handle a $400 emergency., and according to New York University economics professor Edward Wolff’s 2016 analysis of Federal Reserve data, “84% of stocks owned by U.S. households are held by the wealthiest 10% of Americans.”

“It was jarring, even macabre, to watch the market soar while tens of thousands of Americans were dying of COVID-19 and millions were losing their jobs as a consequence of the nation’s economic shutdown,” said journalist and critic Michael Steinberger, author of Au Revoir to All That.”

“The market seemed impervious to bad news,” he wrote in the New York Times magazine.

An inflated stock market is what former Federal Reserve Board chair Alan Greenspan in the ’90s called “irrational exuberance.” Now, it’s been dubbed a “mania” fueled by the Fed and investor speculation that will end badly in coming years, longtime hedge-fund manager Stanley Druckenmiller said last week on CNBC.

“Companies … go up 50%, 30%, 40% on stock splits,” Druckenmiller said. “That brings no value, but the stocks go up.”

Many people have recognized the phony-baloney optimism, or calculated lies. Gallup reported that 48% of Americans felt the economy is worsening (and that poll was in January, before the pandemic hit).

At a Sept. 1 campaign speech, Vice President Mike Pence bragged that “our economy is on the ballot.”

He’s correct. The claims are exaggerated or false, and the fake boom should be busted.