Debate Over Trump’s Economic Policies Grows
Is the U.S. economy still experiencing a “Trump Bump?” As usual, it depends on who you ask. While the White House can certainly tout some of the encouraging stats that have come out since President Trump’s election in November and inauguration in January, more recent developments have economist and pundits pondering the long-term viability of his policies.
First the good news: economic growth in Q4 has been adjusted upward from previous estimates. As USA Today reports, the latest data shows gross domestic product (GDP) increasing at 2.1% annually compared to the 1.9% that was projected. Additionally that S&P 500 is currently up around 5% from the beginning of the year.
The Federal Reserve also seems content with the growth the U.S. economy has seen in recent months. On March 15th the Fed raised interest rates for the second time in three months, showing a vote of confidence. In fact San Francisco Fed president John Williams said in a speech this week that the economy was back to normal, even calling it a “Goldilocks economy” — in other words “just right.” He also predicted that the unemployment rate would fall to 4.5% by the year’s end.
Meanwhile President Trump’s latest plan to boost the economy has become a source of controversy (as are most things he does, it seems). Last week the President signed an executive order aimed at rolling back Obama-era regulations intended to help curb climate change. The White House cited economic growth as the reason for the order. In fact the President invited coal miners to the signing, telling them, “You know what this is? You know what this says? You’re going back to work.” A spokesperson also made Trump’s intentions explicit, saying “I think the president has been very clear that he is not going to pursue climate change policies that put the U.S. economy at risk. It is very simple.”
Despite Trump’s agenda to prioritize the economy and U.S. jobs over potential environmental implications, some have suggested his efforts might actually hurt the economy. For example Sierra Club executive director Michael Brune wrote in a statement, “The best way to protect workers and the environment is to invest in growing the clean energy economy that is already outpacing fossil fuels, and ensuring no one is left behind.” Similarly Andrew Winston of the Harvard Business Review added some hard numbers to that argument, saying, “There are already a lot more people working in the clean economy than in fossil fuels, with renewable energy jobs outnumbering coal and gas jobs 5 to 1 in the U.S. (where there are only 66,000 coal miners).” As a result, some have compared this emphasis on coal to other efforts by the Trump administration to keep manufacturing jobs in the U.S. even though new technologies pose a threat the longevity of those positions.
Ultimately it will be a while before we can truly comprehend a) how strong the economy’s growth is and b) how President Trump’s ongoing policies will affect that growth. It’s also important to remember that Trump hasn’t even reached his 100th day in office yet — that comes April 29th, along with a threat of a government shut down. Thus, for all the speculation that’s arrived with each of the President’s numerous executive orders, actual data will be harder to come by for some time, meaning that “Trump Bump” question will have to go answered for now.