Trump and the Economy: How Much Credit Does the President Deserve?
There seems to be a major split in America right now. No, not between Democrats and Republicans; the apparent disconnect between politics and the economy. As The Washington Post rightly points out, for all the non-stop “this is a new low” news coming out of the White House these days, things are quiet (for the better) on the economic front. Of course this econ news drought will likely end when third-quarter GDP is announced later this week — a noteworthy report as it could give us an idea of the harsh hurricane season’s impact on growth. In the meantime, let’s take a closer look at where the U.S. economy sits and how much our Commander in Chief has (or doesn’t) have to do with it.
In the aforementioned Post piece, Jared Bernstein argues that part of the reason President Trump has been able to continue forward in the face of daily condemnation from the media elites and falling approval rates among the normals is that the economy is relatively stable. However, he also warns that, at some point, constant strife in Washington could take a toll on the economy at large. Among the list of reasons why this could happen include Trump’s threat to pull out NAFTA and impose other trade restrictions/tariffs along with the Republican’s lack of political capital needed to push tax reform through. Yet Bernstein writes that, contrary to popular belief, president’s have little control over the economy.
At the same time, President Trump has not only taken credit for the economic wins of late but has also been known to embellish the numbers or diminish his predecessors’. For example last month the President took to his favorite medium (Twitter) to say, “Virtually no President has accomplished what we have accomplished in the first 9 months- and economy roaring.” Naturally claims like this tend to perk up the ears of economists and writers, leading MarketWatch‘s Rex Nutting to put together a few charts together to show 9-month stretches were the economy grew at a better clip than during Trump’s first three quarters in office. As you might expect, he found several instances of jobs, GDP, and the stock market growing faster than they are today. Still, Nutting points out that we are in a bull market and the economy is doing well, summing up his piece by saying, “Everything is good, but it’s not the greatest ever.”
Similarly the Associated Press has taken Trump to task for some of his misstatements, most recently fact-checking the economic assertions made during an interview with Fox Business. During that interview Trump said, “In the last quarter we (hit) 3.2 (percent). As you know the previous administration didn’t hit it for the year for 8 years. In eight years didn’t hit it at all.” First the AP points out that the economy actually grew by 3.1% last quarter — a figure slightly lower than the President stated. More importantly the economy reached similar growth levels under President Obama, besting 3% in eight quarters during his term. While these might seem like minor details to some, it does raise concerns that the President is either purposely inflating “his” economic accomplishments or is simply unaware of the situation.
Regardless of the criticizable hyperbole on Trump’s part, the truth is that the economy is growing. That said, this had been a long time coming as the U.S. continues to recover from the Great Recession. Would it be going too far to say the economy is thriving in spite of President Trump and not because of him? Perhaps… but it’s also not far off.