Trump inherited a growing economy.
If you look at the Federal Reserve Family Finance Report which details American earnings between 2016 and 2019, you will notice the income gap between the richest and poorest has declined for the first time in ages. From other sources you can see that median household net worth and income have also increased. So it's undeniable that we have had a relatively strong economy these last few years pre coronavirus. However considering Trump took office in 2017, the gains detailed in this report were clearly underway prior to Trump taking office. You can look back even a few years further and see how Trump's administration presided over the same upward trend the economy was already headed on during the Obama years.
For virtually each measurement, the trend lines continued almost seamlessly from the second half of Obama’s presidency into the first three years of Trump’s tenure. Average real GDP growth was roughly the same (2.6 percent) for the first 11 quarters under President Trump (ending September 2019) and for the last 11 quarters of the Obama administration. During the last two years of the Obama administration, annual median household income increased $4,800. This is three times more than the $1,400 increase during the first two years of the Trump administration despite a tax cut for the middle class -- which I'll get to in a moment.
So while most people acknowledge the president has little to nothing to do with the economy overall, we have data to back up the fact that Trump has not been some mastermind presidential businessman; he did not "turn the economy around" or do anything remarkable. He simply presided over a time of growth that would likely have continued heading in that direction anyway. I do think Trump sparked confidence with investors that led to some bullish gains, but a lot of those gains would have been erased at the first sign of trouble (in this case, Covid-19) as they always are with market ebbs and flows.
I also think it's worth noting that Trump has ripped Fed Chairman Jerome Powell a new asshole at every single turn and has done nothing but heap criticism at him while simultaneously taking credit for the booming economy.
It's dishonest for the GOP to credit tax cuts for gains during Trump's presidency.
The tax cuts not take effect until 2018. By that time, unemployment had already dropped, household incomes had already increased, and millions of new jobs had already been created if you look at the data. There has also been no measured relationship between the size of the tax cut companies received and their subsequent investments as far as I can tell.
Furthermore similar gains could have been made years earlier had it not been for an insanely obstructionist Republican Congress. Obama repeatedly tried to get Republicans to sign on to additional spending and tax cuts for the middle and lower class, but the GOP refused every single time. You had Ted Cruz, Rand Paul, Mitch McConnell, et. al insist that higher deficits were philosophically unacceptable and financially ruinous. Even when the Obama admin proposed a moderate stimulus plan in 2016 that would have targeted infrastructure, Republicans would not budge. However under Trump the GOP has presided over the largest two-year deficit in U.S. history outside of a recession with no care in the world. They've exposed themselves (again) as deficit frauds.
Trump's trade war has been detrimental to the U.S. economy, especially in some states.
As most people know, protectionism is often bad economic practice but great for politics, because it can rally enthusiasm from critical Rust Belt swing states that have large manufacturing sectors and have been hit hard by globalization. However a new St. Louis Fed study shows why this logic is misguided. The TLDR is that the U.S. manufacturing industries that more heavily rely on imported products (and are therefore subjected to import tariffs themselves) include Rust Belt states that specialize in these trade‐exposed industries, such as Michigan and Ohio which import a lot of aluminum and steel for their manufacturing sector. Michigan in particular was affected negatively by Trump's trade war. Estimates say that it has cost several hundred thousand jobs in this key swing state. The Trump administration was also forced to provide billions of dollars in new federal subsidies to farmers. So if we look at the explicitly DIRECT impact the President had on the economy, it would arguably be negative in the short term.
With that said -
- Everyone still says the economy is the #1 issue in America regarding presidential elections. Should it be?
- What should voters be considering when presidential candidates campaign re: economic policy proposals?
