We shouldn’t thank Trump for this prosperous economy
Of all the statements President Trump likes to make, his favorite is the ostensible achievement of economic prosperity under his administration. His son, Donald Trump Jr., recently took to the opinion pages to uphold his father's economic policies that he claims are “sincere efforts to improve the lives of those formerly forgotten Americans.”
The unfortunate part is that after three years of his father's America First agenda, there is little that voters have to be thankful for.
It is certainly true that the U.S. economy has per- formed well for many Americans throughout Trump's tenure in office. The latest jobs report showed steady employment growth in December, at a time when the unemployment rate is already at a record low 3.5%. Gross domestic product has also climbed at standard pace since Trump's victory in 2016.
But the economy has been in an expansion now for the last 12 years, and Donald Trump has only been president for three of them. You don't need a degree in economics to realize this is a continuation of the recovery that began during the Obama years.
That's not a partisan statement. One of the things every student learns in their first economics class is that the president doesn't have much influence over the economy. That's not to say presidents don't have any discernible effect, but the upshot of their policies is much less immediate and impactful than voters tend to realize.
The thing is, while this has remained true for every past president, it looks like Trump is the first to break the mold. Donald Trump may be the first president in history who can claim full responsibility for a global economic slowdown, not because of natural fluctuations in the business cycle, but his own destructive policy choices.
In the U.S. and around the world, the manufacturing industry is already in a recession as a result of the president's ongoing trade wars, causing business investment and confidence to plummet. For these reasons, the World Bank recently cut its 2020 global economic forecast to the weakest level since the 2008 financial crisis.
What's more, he's effectively raised taxes on the middle and lower class, because tariffs are regressive taxes on consumers. The Federal Reserve Bank of New York estimates that the average American household is paying $831 a year in tariff costs, totaling $3.2 billion a month.
Ideally, the federal government would retain those funds, but Trump has decided to issue them as welfare payments to farmers at risk of bankruptcy from — you guessed it — the trade wars.
And let's not forget that for all the Republican ballyhoo over the years about government debt, Trump's 2017 tax cuts have persistently achieved record level deficits, topping $1 trillion in 2019.
An investor might interject that the stock market has performed exceptionally well under Trump's administration, and surely this is a sign that the president has made the economy great again. This is not the case.
The stock market is merely one market, for one financial asset in the entire economy. While share prices often reflect a firm's health, it is a terrible indicator of national economic performance, and it tells us almost nothing about the status of labor's share of the economy.
Despite the Trump family's bromides, it's hard to find anything from the past three years that voters have to be grateful for economically. Behind the curtain, the president is bankrupting the federal government, plunging the world into trade wars and all the while pulling us closer to recession.
But by that time, the Trump family could be gone. It's American workers that will have to pick up the pieces.