The truth about the Trump eco­nomic boom

It’s real and it’s led the low­est un­em­ploy­ment num­bers since 1969

The Washington Times Daily - - OPINION - By Ron­ald Kessler Ron­ald Kessler, a for­mer Wash­ing­ton Post and Wall Street Jour­nal in­ves­tiga­tive re­porter, is the author of “The Trump White House: Chang­ing the Rules of the Game” (Crown Fo­rum).

For­mer Pres­i­dent Obama has been claim­ing credit for the Trump eco­nomic boom, say­ing he paved the way for Pres­i­dent Trump’s re­mark­able suc­cess. Not quite. By def­i­ni­tion, when eco­nomic num­bers are un­prece­dented go­ing back as far as records have been kept or ex­ceed re­sults for the past sev­eral decades, that means they have sur­passed not only Mr. Obama’s two terms in of­fice but the re­sults of all the mod­ern pres­i­dents. To be sure, the econ­omy re­cov­ered from a deep re­ces­sion af­ter Mr. Obama took of­fice, but it was the slow­est re­cov­ery since the Great De­pres­sion. Rather than paving the way for the Trump eco­nomic boom, the growth in quar­terly gross do­mes­tic prod­uct ac­tu­ally slowed near the end of the Obama pres­i­dency.

In fact, Mr. Obama is the only pres­i­dent since records were first kept un­der the ad­min­is­tra­tion of Herbert Hoover to fail to achieve an­nual GDP growth of 3 per­cent or more.

Thus, the fact that we now have the low­est un­em­ploy­ment level since 1969, the low­est black un­em­ploy­ment since 1972 when records were first kept and the high­est con­sumer con­fi­dence level in 18 years is en­tirely at­trib­ut­able to Mr. Trump and his poli­cies. Dur­ing the eight years of Mr. Obama’s pres­i­dency, the av­er­age an­nual growth in the econ­omy was a pa­thetic 1.9 per­cent, mean­ing mil­lions could not find jobs and may have lost their homes or life sav­ings as a re­sult.

Mr. Obama’s per­for­mance puts him last among 12 pres­i­dents go­ing back to World War II and Harry Tru­man. Mea­sured by net worth, the eco­nomic chasm be­tween black and His­panic fam­i­lies and their white coun­ter­parts widened in the fi­nal three years of Mr. Obama’s pres­i­dency.

It’s not hard to see why. If you watched any of the fi­nan­cial tele­vi­sion channels dur­ing the Obama pres­i­dency, you saw hun­dreds of CEOs of com­pa­nies large and small com­plain that be­cause of the Obama ad­min­is­tra­tion’s cru­sade to im­pose more reg­u­la­tions on Amer­i­can busi­ness, their costs were in­creas­ing, and they were afraid to ex­pand and hire more work­ers.

At the same time, Mr. Obama’s de­mo­niza­tion of busi­ness and his con­stant swipes at en­trepreneur­ship im­posed a psy­cho­log­i­cal re­straint on Amer­i­can cap­i­tal­ism. Dur­ing a talk in Roanoke, Vir­ginia, Mr. Obama di­min­ished suc­cess­ful peo­ple by say­ing no one gets there on his own. “If you’ve got a busi­ness, you didn’t build that. Some­body else made that hap­pen,” Mr. Obama said. Mr. Obama cited the ob­vi­ous fact that ev­ery­one needs teach­ers, roads, and bridges. But to de­tract from the achieve­ment of any suc­cess­ful per­son — whether a stu­dent grad­u­at­ing from col­lege or a Thomas Alva Edi­son, Steve Jobs or Bill Gates — is to at­tack the very essence of the free en­ter­prise sys­tem and what makes Amer­ica a mag­net for im­mi­grants from all over the world.

Be­hind Mr. Obama’s fail­ure on the eco­nomic front was a blind spot to un­der­stand­ing that peo­ple re­spond to in­cen­tives and dis­in­cen­tives. Fun­nel­ing tax­pay­ers’ money through the fed­eral gov­ern­ment has no mul­ti­plier ef­fect and does not give busi­nesses in­cen­tives to ex­pand and hire more peo­ple. Be­cause cap­i­tal­ism re­sponds to con­sumer needs, it is ac­tu­ally the most al­tru­is­tic eco­nomic sys­tem.

Look­ing at Mr. Obama’s ap­proach, I am re­minded of sit­ting in the din­ing room at the Na­tional Ho­tel in Moscow when writ­ing my book “Moscow Sta­tion” dur­ing the Cold War. Since they were gov­ern­ment em­ploy­ees, the wait­ers milled around and chat­ted in groups, ig­nor­ing my wife Pam and me. Why should they wait on us? They were paid by the Soviet Union re­gard­less and got no tips. Sim­i­larly, their bosses had the same lack of in­cen­tive to prop­erly su­per­vise them.

In­stead of de­mo­niz­ing busi­ness, in his first year as pres­i­dent, Mr. Trump touted the ac­com­plish­ments of Amer­i­can cap­i­tal­ism and de­cap­i­tated gov­ern­ment reg­u­la­tions that were stran­gling large and small com­pa­nies. In do­ing so, he achieved even more than his tax cuts to su­per­charge the Amer­i­can econ­omy and give busi­nesses and the stock mar­ket a psy­cho­log­i­cal boost.

On the morn­ing of Mr. Trump’s elec­tion vic­tory, Paul Krug­man of The New York Times pre­dicted that the stock mar­ket would crash that day and “never” re­cover. In­deed, Mr. Krug­man wrote that with Mr. Trump in the White House “… we are very prob­a­bly look­ing at a global re­ces­sion, with no end in sight.” The same day that his story ap­peared, in­stead of col­laps­ing, the Dow Jones In­dus­trial Av­er­age was up 256 points and surged to an all-time high shortly be­fore the clos­ing bell, the strong­est elec­tion-day rally in 24 years. The Dow is now up about 40 per­cent since Mr. Trump’s elec­tion.

In­stead of lead­ing from be­hind, the fa­mous char­ac­ter­i­za­tion of Pres­i­dent Obama’s ap­proach by one of his aides, Mr. Trump leads from strength. In­stead of knock­ing Amer­ica, as Mr. Obama did when he apol­o­gized for Amer­i­can “ar­ro­gance,” Mr. Trump is a cheer­leader for the United States.

Whether al­most to­tally de­feat­ing ISIS, mak­ing progress on de­nu­cle­ariza­tion of North Korea, or achiev­ing un­prece­dented eco­nomic suc­cess, any one of Mr. Trump’s ac­com­plish­ments is re­mark­able. As my home con­trac­tor says, “I don’t care what Trump says; I care about what he does.” Based on re­sults, like Pres­i­dent Rea­gan, who was also re­viled and mocked by the press, Mr. Trump will even­tu­ally be seen as one of Amer­ica’s great­est pres­i­dents.

In­stead of lead­ing from be­hind, the fa­mous char­ac­ter­i­za­tion of Pres­i­dent Obama’s ap­proach by one of his aides, Mr. Trump leads from strength. In­stead of knock­ing Amer­ica, Mr. Trump is a cheer­leader for the United States.


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