When the American public listens to the republican President Donald J. Trump braggadocio about how the economy is booming under his watch with soaring stock prices, low unemployment numbers and an uptick in GDP numbers, they would never guess that the president’s economy is not measuring up to President Barack Obama’s performance in almost every other economic metric.
In addition, because of the republicans’ partisan 2017 “trickle down economics” tax cuts, and the US Congress republicans apparent intransigence in governing with compromise, that there are bound to be some economic hiccups in the president’s portrayal of the “best economic numbers” ever in the near future.
As per a 9/27/17 Politico report by Tyler Fisher, “The Congressional Research Service published a paper in 2012 that found no correlation between top tax rates and economic growth. Congressional Republicans protested the findings, and the service briefly withdrew the paper.”
These same republicans forget the reasons that the republican President Ronald Reagan had to increase taxes 11 times after he and fellow republicans passed its 1981 trickle down economics tax cuts plan.
These tax increases came in the form of adjustments and corrections made over time to the 1981 tax cuts bill. Some of this was due to divided government and President Reagan’s administration having to work with Democrats. But, some was due to the realization that the budget deficits were too large and tax revenues were needed to pay for increased national defense spending. Also, President Ronald Reagan’s administration began to better understand (despite the rhetoric) that there was not just a bunch of waste that could be easily cut from the government.
Here’s the rest of the story…
On January 18, 2018, Chuck Jones of Forbes penned the following report, “Trump’s Economic Scorecard: One Year Since Inauguration”
Excerpts:
“This Saturday (1/20/18) is the one year anniversary of President Donald Trump’s election. Over the past year, the stock market has boomed, GDP growth has improved and unemployment is at an almost 17-year low. However, job gains were lower than any of the past six years and wage growth was less than last year.”
“President Trump inherited an economy that was on a good trajectory with solid job growth and low unemployment. Trump’s own mark on the economy will be based on the long-term impact of his new tax laws.”
“The biggest economic questions going forward are how much growth will tax reform generate, and what will Trump do with various trade agreements such as NAFTA? These could determine what happens to the U.S. economy and the stock markets over the next few years.”
“Below are a few of those indicators:.”
Design: Nick DeSantis, Forbes StaffThe Trump stock market rally remains strong
“To keep these market returns in perspective, Obama’s first-year stock market returns were also strong. Trump’s Dow 30 increase of 25.1% beat Obama’s 18.8%, but when looking at the broader S&P 500, Obama’s 23.5% bested Trump’s 19.4%.”
“Of course, tying the success of a president to stock market performance is a risky move for any White House.”
Design: Nick DeSantis, Forbes StaffGDP growth helped by higher inventories and trade
“GDP growth was 3.0% and 3.1% on an annualized basis for the June and September quarters, respectively, but an increase in inventory and better trade helped. When viewed on a year-to-year basis for the past four quarters, growth was 2.3%.”
Design: Nick DeSantis, Forbes StaffUnemployment rate continued its downward trend
“The unemployment rate peaked at 10.0% in October 2009 and has been on a downward trajectory since then. 2017 was the eighth year in a row that it has fallen.”
Design: Nick DeSantis, Forbes Staff2017 job gains were less than any of Obama’s last six years
“There were 2.06 million jobs created last year, which was lower than any of Obama’s last six years. Prior to then, the economy was either in or at the initial stages of recovering from the Great Recession.”
Design: Nick DeSantis, Forbes StaffHourly wages
“The 2.5% hourly wage rate growth was a bit less than 2016’s 2.9% and mirrored 2015’s. While a good number of companies are handing out bonuses due to the tax reform bill passing (or maybe having to pay up to keep employees from leaving), the key test to the package’s impact will be in wage growth over a few years time frame.”
Design: Nick DeSantis, Forbes StaffManufacturing jobs
“Manufacturing job growth bounced back to the levels seen in 2011 and 2014. However, if wages rise too much companies could invest in automation, which would keep large increases in check.”
Design: Nick DeSantis, Forbes StaffCoal jobs
“There were 800 coal jobs added in 2017. If natural gas prices remain low and the alternative energy industry continues to grow (and it employs more people than the coal industry), a significant rebound in coal jobs is not in the cards. This remains a very small industry when you consider that there are only 50,500 coal miners.”
Design: Nick DeSantis, Forbes StaffFederal deficit
“Similar to the unemployment rate, the federal deficit reached a peak in 2009 and started a downward trend until 2015. However, it increased in 2016 and is expected to continue to grow due to the tax bill passing.”
Design: Nick DeSantis, Forbes StaffTrade deficit
“The trade deficit rose to a level that it hasn’t been at since 2008. One probable explanation is the United States’ continued economic growth, which allows consumers to buy more overseas goods. This could put more pressure on Trump to fulfill at least some of his tougher campaign trade promises.”
Gronda Morin 
Since it is possible to do anything one likes with economic factors by stressing on one factor or another, the only true way is to measure is how the entire population feel about their ‘ structural’ well-being.
This may not be scientific, analytical or statistically sound but then the measuring feelings aren’t (Unless you’re a fan of Asimov’s original Foundation SF trilogy)
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Dear Roger,
For the vast majority of Americans, the reality that the republicans don’t want to deal with is that Americans are worried for their safety, about the president’s mercurial ups and downs where they can be blown to smithereens because of the president’s quick impulsive trigger finger on his tweeting machine and on the US nuclear button.
For some reason, if the economy is okay, the other concern becomes much more important.
Hugs, Gronda
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I suspect there are in place a number of strategies in place to stop him doing anything stupid in that department.
However, if the majority of people are afraid he can and will, then this is the Reality, which if Life wasn’t testing enough places another burden upon an already stretched population.
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Gronda, as discussed before, a President gets too much credit and blame for the economy. They do provide headwinds or tailwinds. Trump supporters who are falling all over themselves for this miraculous success that Trump has brought need to be reminded that we have had 103 consecutive months of economic growth, the second longest period in our history. And, as you note, we have had seven years in a row of 2 million plus job increases. Yet, Trump has only been President for twelve of those months.
Trump has provided some headwinds and tailwinds, sometimes both. The tax cut will cause some growth as projected, but not enough to cover the revenue loss. The dilemma is we are borrowing from our future to have an increase today. So, there will be short term tailwinds, followed by headwinds as the market peaks.
The other tailwind is the reduction in some regs, but a Nobel laureate economist said yesterday it is not having many new ones that is perked up companies. The same economist said, we are trading that for less environmental and consumer protection, will have some future headwinds as that cost comes home to roost.
A definite headwind is the binary, zero sum game (I win, you lose) way of looking at trade. Our retrenchment from agreements and leadership role will have a negative effect on jobs, growth, and security. The approval of the US has fallen to 30% from 48% when Trump took office. But, what scared me most is the economist also said he fears the US retrenching from investing more in science. This will hurt innovation and future discoveries may be made off our shores.
What I said above is troubling, as the President will be patting himself on the back for things he really did not create (another economist said 70% of the recent stock market growth is due to growth in other countries), but the concerns will show up later. The other thing that scares me is when the market does correct itself, we may have used prematurely some levers that could be used later.
Keith
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Dear Keith,
The economy is cyclical and a correction is bound to be coming. You and a lot of economists are right to say, “The other thing that scares me is when the market does correct itself, we may have used prematurely some levers that could be used later.”
In the past, trickle down tax cuts plans have resulted in negative economic consequences to where I don’t see why the most recent tax cuts bill won’t suffer the same fate like in KS.
The truth is that in November 2018, Democrats will be talking about republicans’ priorities “the 2017 trickle down” tax cuts bill favoring by 86%, the very rich or favoring legislation that saves the lives of its peoples as in passing and fixing of DACA, CHIP, funding for community health centers, aid to PR.
Hugs, Gronda
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Reblogged this on Filosofa's Word and commented:
Today, Donald Trump wrote an OpEd for the Washington Examiner, extolling his many ‘accomplishments’. One of those was the economy, as he is taking credit for an economy that was doing quite well before he came on the scene. He rides the coattails of the accomplishments made during President Obama’s 8 years in office. Please read our friend Gronda’s post to see how Trump’s economy compares to that under President Obama … thanks Gronda!
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Dear Jill,
The economy has yet to react to the republicans December 2017 “trickle down economics” tax cuts bill. In the Reagan era, the President had to raise taxes 11 times to correct for the some of the unintended consequences from the 1981 republicans’ ‘trickle down economics” bill.
The President Bush’s 2003 (JGTRRA) “trickle down economics” tax cuts bill where high-income taxpayers benefited most from these tax cuts, with the top 1 percent of households receiving an average tax cut of over $570,000 between 2004-2012 (increasing their after-tax income by more than 5 percent each year), did not result in an improved economic growth, but instead ballooned deficits and debt and contributed to a rise in income inequality. Remember the 2008 economic meltdown?
By the time September/ October 2018, the economic report card may look very different from the economic picture of today.
Thanks a million times over for all of your support and for this reblog.
Hugs, Gronda
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Ah yes, and let us not forget President George H.W. Bush’s promise of “No New Taxes” that rapidly fell by the wayside! Yes, my friend, if this shutdown lasts more than about 10 days, the economic picture is bound to change. Even if it doesn’t, the tax cuts to the wealthy will have an effect that is not what Trump anticipated. And still, his followers sleep. Sigh. Hugs!!!
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Agreed, while the wealthy did do better, even more so with the upcoming tax cuts and more corporate welfare… tell that to the average man on the street. Trump’s “base” certainly won’t measure up to Wall St. stats!
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