The good and bad of the Trump economy
President Trump resign? Wise gray heads have advised him to do so. But when has he ever taken good advice?
Impeachment? Oh, come off it. With only a few days left, do we really want to go through all that again?
OK, let’s not be so flippant. Is waiting or impeaching the better course of action? Which will better serve to heal a country torn apart by divisiveness?
I believe impeachment will further divide the country, and thus I favor waiting.
While we’re waiting, here’s a quick, incom- plete and personal assessment of the past four years. The discussion below is selective; there is neither time nor space for a more comprehensive review.
The past year was dominated by the coronavirus. Few blame the president for bringing the pandemic upon us.
But we’re entitled to ask how well he rose to the challenge once it was here. His mishandling of the coronavirus contributed to his reelection defeat.
Certainly, his once-daily television appearances with his coronavirus task force, including the vice president and Dr. Fauci, were much too often dominated by his self-applauding, often misleading, braggadocio. That, of course, is Donald Trump — it’s always about him.
Putting that aside, if we compare what happened in the United States to other countries, we get a mixed
message. The death rate per 100,000 population in the U.S. was considerably lower than Italy and the United Kingdom. The U.S. experience was about the same as in Spain, and worse than in France.
Germany, with much praise going to Angela Merkel, had far fewer per capita deaths. We might, however, note that the case fatality rate in the U.S. was lower than that in any of the
above-mentioned countries. And, during the first week of the new year, the deaths per capita in Germany exceeded those in the U.S.
By marked contrast, all of the Pacific rim countries, including New Zealand, Australia, Singapore, Taiwan, Japan and South Korea, were all much less affected by the pandemic.
In the coronavirus crisis, President Trump certainly deserves some blame for misleading the public about the severity and speed with which the disease spread. Perhaps we should we also assign some credit to him for the extraordinarily rapid (Operation Warp Speed) development of a vaccine?
We can also take a look at the economy during the three years of the Trump administration before the pandemic.
The performance of the economy under any president’s term of office is largely determined by three factors. There are the policies the president initiates.
Secondly, there is the state of the economy inherited from the previous administration. For example, Ronald Reagan inherited the high inflation of the later Carter years. He also inherited, and wisely retained, Paul Volcker, a Federal Reserve Bank chairman with the will and determination to tame that inflation.
And lastly, and perhaps most importantly, the economy is affected by the business cycle and other forces, economic, social, political, and random (e.g., the pandemic), that are beyond presidential policy control.
Barack Obama inherited the severe economic downturn called the Great Recession. He, too, retained a well-regarded Federal Reserve Bank chairman, Ben Bernanke, who had a willingness to explore and implement nontraditional policy initiatives.
Donald Trump took from his predecessor an economy that was recovering from an economic downturn, but at the slowest rate in some 50 or so years. But, as columnist Paul Krugman argues, the inherited economy already had low unemployment and was poised for more rapid growth. He attributes all of the initial successes of the Trump economy to the policies initiated by President Obama.
We might, however, be willing to give some credit to Trump for promoting the fracking revolution that has achieved the long-sought goal of energy independence. But fracking is not everyone’s cup of tea (or, should we say, barrel of oil).
Regulations on business were also reduced or eliminated, sometimes with both short- and long-term benefits to the economy but, some would argue, to the detriment of the environment.
The reduction in taxes, perhaps most importantly, the reduction in corporate taxes, was a positive, possibly only short run, stimulus to economic growth. There was an especially welcome relative growth in blue collar and minority worker wages that made some inroads into income inequality. President-elect Biden has already announced his commitment to raising corporate taxes.
Unfortunately, President Trump was all too prone to increase tariffs. Tariffs are a tax on trade and thus reduce the flow of goods and services between and among nations, to the detriment of both American and foreign consumers.