Donald Trump has won several Pinocchio Awards for telling whoppers. Look it up. But I think his claim of turning around a failed Obama economy tops them all. To begin with there was no failing economy to turn around.
In 2009 President Obama inherited the worst economy since the Great Depression. The real estate market had collapsed from unbridled speculation, overextension and bad loans, unemployment was at near depression-era levels and several major Wall Street and Detroit firms were facing bankruptcy due to the deregulated, free-rein policies of the George W. Bush administration. Incidentally, Bush will remain our only president to declare war and cut taxes in the same year. And I still can’t believe he did that.
Obama got a lot of Republican criticism for bailing out Wall Street firms and Detroit auto manufacturers. But a Republican administration would have done the same thing in a heartbeat. These bold moves halted the economic free-fall, thus avoiding mass unemployment. And, amazingly, every last penny was paid back with interest. How much better could Obama’s results have been? Now let’s look at the real facts of Donald Trump’s “economic miracle.”
Let’s start with job growth, Trump’s number one bragging point. We are currently enjoying the 95th straight month of employment growth, the longest on record by far. But this decline in unemployment didn’t begin after Trump assumed office as he would have us believe. It started back in January 2012 in the fourth year of the Obama’s first term and continued in uninterrupted upward growth through the present month. Unemployment has now reached the amazingly low rate of less than four percent. Effectively, everyone who wants a job has one. Of those ninety-five total months of continuous job growth, seventy-four took place under Barack Obama. That’s eighty percent if you care to do the math. Trump turned nothing around, he simply latched on to Obama’s success.
And how about wages? Average hourly wages have risen as unemployment has declined, but not enough to make up for the many years of workers’ income stagnation. And a recent surge of inflation driven by higher oil prices from Trump’s silly tariff war has negated much of these wage gains. As for the creation of new private-sector jobs, those numbers peaked in 2015 under Obama at 2.87 million and have declined slightly since then. But Trump continues to brag that he is doing things Obama failed to do. What could that be other than fudging the truth?
It’s pretty much the same story with GDP (national income) growth. Yes, the Republicans have experienced a healthy GDP production in most quarters of 2017-2018. But in no quarter has it approached the 5.1% increase in the second quarter of 2014 during the Obama administration.
Here are the facts: Trump inherited a healthy economy already on the upswing, falsely declared it a disaster, got by with it, promised to make America great again, and now he’s declaring victory. Victory over what? Noted economist Aaron Sojourner writes, “Trump took the Obama economy and added a Keynesian spending boost (mostly military spending), a move the Republican Congress would never have let Obama get by with.”
The down side of this prosperity narrative is that precious little of this increase has shown up in workers’ paychecks. And they are the ones who put Trump over the top in the 2016 election. They should learn something from this. But I doubt it.
George B. Reed Jr., who lives in Rossville, can be reached by email at email@example.com.