It’s the latest fad: Say that President Trump’s economic record is actually less impressive than President Barack Obama’s. Say that Trump is only benefiting from the policies that Obama spent eight years constructing.
Unfortunately, for its proponents, the fad is false. Trump’s economic record is manifestly superior to Obama’s, and it’s not even close.
True, this doesn’t seem so obvious at first glance.
As an array of media outlets and pundits are pointing out, the last three years of Obama’s presidency saw more new jobs created than the first three years of Trump’s presidency. Trump’s critics say that this is proof of Obama’s superior economic stewardship.
But not so fast. There are three major problems with this thesis.
First off, as any serious economist will point out, it is far harder to create jobs in an economy with ever reducing slack. This is to say, an economy in which means of human and capital production are more fully engaged. It’s one thing to create jobs right after a recession, but it’s a very different thing to keep creating jobs when the economy is doing well.
Still, that’s exactly what Trump is doing. The unemployment rate is at lows not seen for 50 years, and minorities are benefiting greatly. Wages continue to rise, and those seeking work continue to find it. Productivity is also growing at the fastest pace in nine years.
This is not to say that Trump’s trade wars haven’t negatively affected manufacturing and the economy at large. Nevertheless, the economy at large is thriving.
Another problem with the Obama-is-responsible-for-Trump’s-economy mantra is that it flies in the face of what was being said just before the election. Assessing a June 2016 Moody Analytics report (written by a Democratic Obama ally), which predicted economic calamity under Trump, the New York Times observed that “[the report’s] underlying assumptions about what Mr. Trump would do as president and how the effects of those policies would ripple through the economy are plausible, and squarely within the mainstream consensus view among economic forecasters about how the economy works.”
Similarly, an October 2016 Federal Reserve Bank of San Francisco predicted that “once the economy recovers fully from the Great Recession, GDP growth is likely to be well below historical norms, plausibly in the range of 1.5% to 1.75% per year. The preferred point estimate in Fernald (2016), who examines these issues in even more detail, is for 1.6% GDP growth.”
That’s a whole percentage point lower than the economy’s actual growth under Trump.
But there’s another factor to consider here. Namely, that whatever we think about Trump, the statistics strongly indicate that Obama’s economic stewardship was a failure. As was noted by CNN and others back in 2016, Obama’s economic recovery following the 2009 recession was the slowest on record. CNN’s report suggested this was partly due to the retirement of baby boomers. But if that’s true, why has the economy kept adding jobs under Trump? After all, we still have a lot of baby boomers retiring!
Where does this leave us?
Well, the data should send Trump’s critics back to the drawing board. Considering Obama’s economic record in November 2016, Derek Thompson saluted an economy made “steady and boring.”
Fine. But I’ll take Trump’s dynamic and exciting economy any day of the week. I suspect many others agree with me.
