Trump puts spot­light on progress in econ­omy

Vows bright fu­ture to small busi­nesses

The Washington Times Weekly - - Politics - BY DAVE BOYER

Be­yond the White House staff tur­moil, be­yond the Rus­sia in­ves­ti­ga­tions and the me­dia wars, President Trump still has the econ­omy on his side. For now. The stock mar­ket topped 22,000 Wed­nes­day, set­ting another all-time record high. Cor­po­rate earn­ings for the sec­ond quar­ter are beat­ing fore­casts at the high­est rate in at least nine years.

The un­em­ploy­ment rate is 4.4 per­cent, near his­toric lows. Wages are ris­ing. Sec­ond-quar­ter growth im­proved to a solid 2.6 per­cent, and Mr. Trump con­fi­dently pre­dicts it will soon reach his stated goal of 3 per­cent growth or more an­nu­ally.

“Dow 30,000 is go­ing to hap­pen,” Whar­ton School fi­nance pro­fes­sor Jeremy Siegel told the Bloomberg busi­ness news service.

Mr. Trump, frustrated by a lack of progress in Congress on his agenda and the me­dia’s fo­cus on scan­dal in­stead of the surg­ing jobs and in­vest­ment pic­ture, is only too happy to take credit for the good eco­nomic news.

“We’re set­ting eco­nomic records, and we’re very proud of it,” the president told small-busi­ness own­ers at the White House on Tues­day. “We’re un­leash­ing a new era of Amer­i­can pros­per­ity, per­haps like we’ve never seen be­fore. I think the me­dia’s ac­tu­ally go­ing to be forced to cover it pretty soon.”

Among those in the audience was Al Ro­driguez, who owns 14 Sport Clips barbershop fran­chises in the Pittsburgh re­gion.

“They’re say­ing the right things with re­spect to health care re­form, tax re­form and reg­u­la­tions,” Mr. Ro­driguez said in an in­ter­view. “Tax re­form is crit­i­cal be­cause of the un­cer­tainty of what I’m go­ing to pay ev­ery year.”

Mr. Trump also hinted at more good eco­nomic news, say­ing the gov­ern­ment will re­lease “earth-shat­ter­ing” num­bers next week on domestic en­ergy pro­duc­tion.

Econ­o­mists are di­vided over how much im­pact Mr. Trump and his poli­cies have had on the econ­omy in just six months. Vot­ers are di­vided, too.

A Bloomberg poll two weeks ago found that 46 per­cent of re­spon­dents ap­proved of Mr. Trump’s han­dling of the econ­omy, while 44 per­cent dis­ap­proved. It’s one of the few pol­icy ar­eas where the president en­joys a slight edge in his fa­vor.

On job cre­ation, 47 per­cent in the Bloomberg sur­vey ap­proved of Mr. Trump’s per­for­mance, while 40 per­cent dis­ap­proved.

Econ­o­mists gen­er­ally credit Mr. Trump for a surge in the stock mar­ket that be­gan im­me­di­ately after his elec­tion. His prom­ise to cut the cor­po­rate tax rate from 35 per­cent to 15 per­cent and his ag­gres­sive as­sault to elim­i­nate Obama-era busi­ness reg­u­la­tions have con­trib­uted to a cli­mate of busi­ness and con­sumer op­ti­mism, econ­o­mist gen­er­ally say. The scan­dals of the day in Washington have had lit­tle im­pact on the econ­omy’s mo­men­tum.

The stock mar­ket keeps soar­ing, even as Congress has failed to ap­prove a re­peal of Oba­macare that was sup­posed to cre­ate more room in the fed­eral bud­get for deep tax cuts. Even so, some econ­o­mists say the ad­min­is­tra­tion’s ac­tions have had lit­tle im­pact on the over­all U.S. econ­omy.

Pres­i­dents and the econ­omy

Joel Naroff, president of Naroff Eco­nomic Ad­vis­ers in Hol­land, Penn­syl­va­nia, de­scribes the econ­omy as “the same as it ever was.”

“Ba­si­cally, the econ­omy has not changed speed much dur­ing the first six months of the new ad­min­is­tra­tion com­pared to the first six months of 2016 — or even the pre­vi­ous few years,” Mr. Naroff said. “A new president re­ally can do lit­tle to change the trend in the econ­omy right away. While the Trump ad­min­is­tra­tion has raised con­fi­dence, it hasn’t done much to change the ac­tual op­er­at­ing con­di­tion of the econ­omy through things such as tax or spend­ing changes.”

He said gross domestic prod­uct has risen slightly and the un­em­ploy­ment rate has fallen com­pared with the same pe­riod last year, while con­sumer sen­ti­ment has fluc­tu­ated.

“Job growth dur­ing the first half of 2017 was a bit slower than in the first half of last year, as were wage and dis­pos­able in­come gains,” Mr. Naroff said. “The one un­am­bigu­ous im­prove­ment has been in the eq­uity mar­kets, with the in­dexes well above where they were ei­ther be­fore the elec­tion or one year ago.”

The Dow Jones in­dus­trial av­er­age was 18,332 on Elec­tion Day in Novem­ber and set another record close last Tues­day at 21,963.92 — an increase of 19.8 per­cent. Wall Street in­vestors speak of the “Trump trade” — a bullish in­vest­ment strat­egy based on faith in the busi­ness­man-president’s abil­ity to boost the over­all econ­omy.

But many econ­o­mists cau­tion that the op­ti­mism fu­el­ing growth will fade quickly if Congress doesn’t ap­prove tax cuts as Mr. Trump has promised. Ad­min­is­tra­tion of­fi­cials are say­ing they ex­pect law­mak­ers to com­plete a tax pack­age be­fore the end of the year, although Se­nate Ma­jor­ity Leader Mitch Mc­Connell, Kentucky Repub­li­can, ex­pressed doubt about the prospects for bi­par­ti­san tax re­form be­cause Democrats won’t co­op­er­ate.

“Most of the prin­ci­ples that would get the coun­try grow­ing again, they’re not in­ter­ested in ad­dress­ing,” Mr. Mc­Connell told re­porters.

Mr. Ro­driguez said the prom­ise of tax re­form has been per­haps the key to busi­ness own­ers’ op­ti­mism.

“Ex­e­cu­tion is key,” he said. “I cer­tainly ap­pre­ci­ate what they’re up against with re­spect to health care. But the chal­lenge is get­ting things done. I’m hope­ful they can ex­e­cute and get things done.”

The president tried to re­as­sure small­busi­ness own­ers that the ad­min­is­tra­tion is “pur­su­ing bold tax cuts so that our com­pa­nies can thrive, com­pete and grow.”

“My ad­min­is­tra­tion will be there with you ev­ery sin­gle step of the way,” Mr. Trump said.

While the surge in mar­kets and job growth re­ceive am­ple cov­er­age in the busi­ness me­dia, Mr. Trump crit­i­cizes the main­stream press for largely ig­nor­ing the good news.

In the East Room event with small­busi­ness lead­ers, the president even teased his new chief of staff, John F. Kelly, for not get­ting the press to give more pos­i­tive cov­er­age of the econ­omy dur­ing his first day on the job.

“They don’t talk about it,” Mr. Trump said of the me­dia. “I keep telling Gen. Kelly, ‘Gen­eral, come on, let’s go, you’re chief of staff. They don’t talk about the all-time­high stock mar­ket.’”

Mr. Naroff said it takes as much as a year to as­cer­tain the ef­fects of a president’s poli­cies on the econ­omy, and he chalks up the cur­rent eco­nomic per­for­mance to a re­cov­ery that be­gan dur­ing President Obama’s first term.

“Given the rate of growth dur­ing the first half of this year, it is clear that we are still ex­pand­ing, adding jobs and im­prov­ing wages at the same pace we have seen since the end of the Great Re­ces­sion,” he said. “In other words, noth­ing has changed.”

Mr. Trump pre­dicted that the econ­omy will soon hit the self-pro­claimed tar­get of 3 per­cent GDP growth per year.

“Don’t worry about the 3 per­cent. We’re go­ing to be higher than 3 per­cent in the not-too-dis­tant fu­ture,” he said. “The jobs are com­ing, pour­ing back. Fac­to­ries are com­ing, pour­ing back into our coun­try. Jobs are com­ing back.”


President Trump, flanked by Small Busi­ness Ad­min­is­tra­tion Ad­min­is­tra­tor Linda McMa­hon and daugh­ter Ivanka Trump, spoke about the econ­omy with small-busi­ness own­ers.

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