During his final days in office, I gave a thumbs-down assessment of Barack Obama’s presidency. Simply stated, he increased the burden of government during his tenure, and that led to anemic economic numbers.
Now the economy seems to be doing a bit better, which is leading my friends on the left to make two impossible-to-reconcile claims.
- It is doing better, but Obama deserves credit.
- The economy isn’t doing better.
I’ve previously explained that the first argument doesn’t hold water. Today, let’s address the second argument.
Writing in the Wall Street Journal, former CEO Andy Puzder claims that Trump easily wins over Obama when you look at the numbers:
For eight years under President Obama, the growing burden of government suppressed the economic recovery that should have followed the recession of 2008-09. Mr. Obama nonetheless has claimed responsibility for today’s boom, asking Americans in September to “remember when this recovery started.” Yet it wasn’t until President Trump took office that the economy surged. …The result is a rising tide that is lifting boats across every class and region of the country. …Today unemployment rests at 3.7%, near a 50-year low. Since the government began reporting the data, unemployment has never been as low as it is today for African-Americans, Latinos, Asians and people with only a high-school education.
It’s certainly good news that unemployment rates have dropped. But labor-force participation numbers still haven’t fully recovered—or even come close to fully recovering—so the data on jobs is not quite as impressive as it sounds.
That being said, Puzder has a compelling indictment of Obama’s performance:
During a typical recovery, the economy grows at a rate between 3% and 4%, and the Obama administration predicted such a surge in its 2010 midsession review. It never came. The “recovery” of those years often felt much like a recession.
Amen. This echoes my criticism of Obamanomics. He made the US a bit more like Europe, so it’s no surprise that growth was weak.
Let’s now look at Puzder’s evidence that Trump has done a better job. He compares the end of the Obama economy with the beginning of the Trump economy:
GDP growth staggered along at 1.5% in Mr. Obama’s final six full quarters in office. …growth doubled to 3% during Mr. Trump’s first six full quarters. …the increase in job openings over Mr. Trump’s first 21 months has averaged an impressive 75,000 a month. Over Mr. Obama’s last 21 months in office, the number of job openings increased an average of 900 a month. …During Mr. Obama’s last 21 months, the number of employed Americans increased an average of 157,000 a month. Under Mr. Trump, the increase has accelerated to 214,000 a month, a 36% improvement. …In Mr. Obama’s final 21 months, weekly earnings rose an average of $1.31 a month. Under Mr. Trump, weekly earnings have increased an average of $1.84 cents a month: a 40% improvement that’s come mostly since tax reform took effect in January. Over that period, weekly earnings have grown an average of $2.31 a month, a 76% increase over Mr. Obama’s last 21 months. …The unemployment rate declined 13% during Mr. Obama’s last 21 months, but from there it has dropped another 23% during Mr. Trump’s tenure.
All of this data is compelling, but I caution my GOP/Trump friends about relying on short-run economic data to make their case.
Or let’s consider a more tangible example. Trump and his supporters used to make a big deal out of rising stock prices, but that argument no longer appears to be very persuasive.
Let’s close with two charts that take different sides. The first one is from MSNBC, which makes a persuasive case that reductions in unemployment under Trump are simply a continuation of the trend.
On the other hand, this second chart, which comes from the White House, shows that economic outcomes are better than what the Obama Administration predicted.
This also is compelling data, and I’ve explained that even small improvements in economic performance are very desirable.
Still, it remains to be seen whether this additional growth is either real or sustainable.
The bottom line is that there’s no reason to expect big economic improvements under Trump, at least in the long run. His good policies on taxes and regulation are offset by bad policies on spending and trade.
Daniel J. Mitchell is a Washington-based economist who specializes in fiscal policy, particularly tax reform, international tax competition, and the economic burden of government spending. He also serves on the editorial board of the Cayman Financial Review.