The Trump 'Jobs Boom' Is a Convenient Myth - Alan Blinder WSJ op-ed
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If Mr. Trump has any chance of prevailing, it is because roughly half of Americans still believe in his ability to manage the economy. Is that belief justified? The short answer is no. Yes, it’s true that the pre-Covid economy was in fine shape. Mr. Trump was naturally crowing about that, and claiming credit. But was the strong economy of February 2020 a result of his policies? ’Fraid not.
The Trump administration attempted only two major economic-policy initiatives. The first was the failed attempt to repeal ObamaCare—without offering anything to replace it. That terrible idea ended with John McCain’s dramatic Senate vote. Sadly, however, it is still being litigated in the courts. The second big initiative was the tax cuts, which passed in December 2017. With typical braggadocio, Mr. Trump claimed his tax cuts were the largest in history—which, as a share of gross domestic product, was nowhere close to the truth. That said, the tax cuts were large, though highly regressive.
Did they give the economy a big boost? Judge for yourself. The nearby chart shows the downward path of the national unemployment rate from the time unemployment started to decline after the Great Recession (November 2010) to right before the Covid-19 catastrophe slammed the economy (February 2020). Unemployment did trail down, from over 9% to a wonderfully low 3.5% rate. As I said, the macroeconomy was in excellent shape before the pandemic hit. But can you see any break in the trend when Mr. Trump replaced Barack Obama? Or when the tax cuts took effect in 2018?
Data on real GDP growth tell a similarly boring story. Over the 12 pre-Covid “Trump quarters,” 2017-19, the annual growth rate averaged 2.5%. You have to be pretty Trumpy to call that a sharp jump from the preceding 12 “Obama quarters,” when GDP growth averaged—wait for it—2.4%. Mr. Trump, who promised much faster growth, is an economic wizard only in his own mind.
The unemployment graph ends in February 2020 because the roof caved in the next month. It would be patently unfair to blame the pandemic’s arrival in the U.S. on Mr. Trump. But it is totally fair to blame him for the federal government’s disgraceful public-health performance since then. There are doubtless many reasons why the U.S. has suffered about 640 deaths per million (so far) while Germany has suffered about 120. But much of the explanation is simple: They have a leader, in Angela Merkel; we have Donald Trump.
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Yet Mr. Trump and the Republicans continue to dither over another relief package. One day he’s against it, the next day he’s for it. Does he ever talk to Mitch McConnell? Does the allegedly great economic manager even understand what’s at stake? Or is he trapped in his own delusions? Federal Reserve Chairman Jerome Powell recently warned of “tragic” risks if the government doesn’t pass another stimulus package. He also pointed out the starkly asymmetric risks of doing too little versus doing too much... America badly needs a new fiscal package—now. Even more, it needs a new leader.
https://www.wsj.com/articles/the-trump-jobs-boom-is-a-convenient-myth-11603298821 (subscription)
Mr. Blinder is a professor of economics and public affairs at Princeton University and a former vice chairman of the Federal Reserve.
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