Skip to comments.Itís okay to admit that Trump deserves some credit for the economy
Posted on 09/11/2018 9:30:12 AM PDT by 2ndDivisionVet
Monday afternoon. in lieu of a normal White House press briefing, we were greeted with the odd spectacle of Council of Economic Advisers Chair Kevin Hassett greeting the press corps with charts and graphs designed to make it clear that Donald Trumps election is responsible for 2018s rosy economic conditions. The lecture he prepared was fairly unpersuasive on a number of levels, starting with the extent to which Hassett found himself trying to back-date the inflection point to Election Day 2016, well before any actual Trump policies had taken effect.
But in an administration whose messaging is normally nonstop risible nonsense, Hassett stands out for a tendency to stick to ideas that are at least plausible and worth debating. And while his arguments about a Trump-induced boom are overstated, its a mistake for Trumps critics to overcorrect by pretending his policies have nothing to do with the good news weve seen this year.
The truth is, Trumps policymaking success helps settle a long-running argument between the liberal and centrist wings of the Democratic Party thats been raging ever since the passage of the first stimulus bill in 2009 is it more important to address deficit reduction or to provide a still-depressed economy with additional stimulus?
The progressive diagnosis of the situation was that as late as 2016, the economy remained in a somewhat depressed state and would benefit from additional fiscal stimulus. Trump took over in 2017, pushed for and obtained an increase in military spending, and in exchange gave Democrats $128 billion in additional domestic spending. (The money went mostly to infrastructure, child care, opioid treatment disaster relief, and college tuition subsidies.) He cut taxes, and sat back and watched the pace of economic growth accelerate while deficit scolds brayed ineffectually.
Rather than churlishly refusing to admit this helped, Trumps critics should learn the lesson. Many of us were right all along and others were wrong and should own up to it.
Trump inherited a growing, depressed economy
The claim by Trumps detractors that he fundamentally inherited a growing economy is, of course, true. This is a special point of emphasis for Obama administration veterans who had the misfortune of picking up the baton from the Bush administration in the middle of a chaotic financial crisis with aggregate demand collapsing globally. Trump has been governing on a kind of easy mode, and the dark picture he painted of the state of the economy in 2016 was nonsense.
At the same time, the economy he inherited remained in some ways depressed due to the lingering effects of the Great Recession.
Dont take my word for it. In the spring of 2016, the Obama Council of Economic Advisers annual report referred to the the yet incomplete labor market recovery as one of the main challenges facing the country. The same report also argued at some length in Chapter 6 that this incomplete labor market recovery could be effectively addressed through a new round of fiscal stimulus targeting federal infrastructure.
The Obama administration couldnt get congressional Republicans to agree to this, but my guess is that had Hillary Clinton won she would have adopted Bill Clintons suggest to tempt them with a corporate tax cut gimmick, and we would have gotten a modest regressive tax cut and a big increase in spending and economic growth would have accelerated somewhat. Instead, Trump won so we got a big regressive tax cut and a modest increase in spending and economic growth accelerated somewhat.
In other words, given that Democrats were saying pre-Trump that a little extra fiscal boost would help get us to full employment, theres no rational basis for denying that Trump providing a little extra fiscal boost is helping get us to full employment.
Democrats remember this next time!
None of this is to say that Trump is secretly an amazing president or that the 2017 Tax Cuts and Jobs Act is a fantastic piece of legislation.
Speaker of the House Paul Ryan and Senate Majority Leader Mitch McConnell, having starved the economy of needed fiscal stimulus for six years, which inflicted enormous suffering on millions of jobless Americans who could otherwise have found work, executed an unprincipled pivot on deficits largely to blow Americas fiscal capacity on tax cuts for rich people. Thats what Ronald Reagan and George W. Bush did, too. Its not a good idea. Using the money to address real social needs a child allowance, clean energy, preschool would be a much better idea.
Republicans have their priorities, and they are not Democrats priorities. Thats why we have competition between political parties.
Rather than quibble about credit, what Democrats need to do is remember the lessons of the past the next time they get to govern. Republicans who complain about the deficit when the Democrats are in the White House arent yearning for a grand bargain, they just disagree with Democrats priorities.
Similarly, the reason CEOs grouse about Democratic presidents while hailing similar economic performance under Republican presidents is that CEOs are wealthy older white men with conservative political opinions who like it when the GOP controls the White House. Getting obsessed with their whining isnt going to help anyone.
Fiscal stimulus when the labor market is short of full employment works just ask Donald Trump.
Obama gave us $1T deficits for years. It didn't help.
Trump is helping the economy on many fronts. Lumping it all into "fiscal stimulus" is just twisting the narrative into "Big Government Fixes Everything", which we know is a lie.
Gunnery Sgt Hartman: “Well thank you very much! Can I be in charge for a while?!?!?!”
RE: Its okay to admit that Trump deserves some credit for the economy
They talk as if telling the truth is a bad thing.
Also, what do they mean by “some credit”? This is the UNDERSTATEMENT of the year.
Until Obama’s speech the media didn’t even like to report goid news about the economy.
And at least one Democrat entertainer or politician is on record saying Trump’s economy should fail if that’s what it will take to oust hin.
This economist thinks that promoting spending is the cure to recession. Its the same critique that such people tried to make about Reaganomincs back in the day - not that the tax cuts worked but that the deficit caused the boom.Now, I knew I was in for it when the hostile critics dubbed our economic plan Reaganomics. They said we couldn't do it. But while the naysayers complained, we went to work.
Today inflation has fallen from more than 12 percent to 1.8 percent for the last 12 months. Interest rates are down. Mortgage rates are down. And we've seen the creation of almost 11.7 million joqbs in less than the last 4 years -- more jobs than Western Europe and Japan put together have created in the past 10 years. You know, I really, though, found out our economic plan was working when they stopped calling it Reaganomics. - Ronald Reagan
The recovery from the 2007 collapse happened in 2009, before the Obama stimulus money was spent, and before his regulations began to hit.
It was then cut off at the knees by Obama’s policies, and then held there - with additional hits such as Obamacare - until the policies were repealed.
The tax cuts have had an effect in that businesses expect to earn more money in the future and are investing, but the main effect hasn’t really even hit yet. This burgeoning growth is primarily just the government knocking it off with some of the anti-business harrying. There’s still a lot more repealing to go, and most of the feedback from the tax cuts are yet to come.
Hopefully that all will mitigate the feedback from the Fed restoring more normal interest rates (an extra Trillion in debt-servicing from normal interest rates on a ridiculous run-up in debt).
“...Hassett found himself trying to back-date the inflection point to Election Day 2016, well before any actual Trump policies had taken effect...”
The mere fact that a pro-American businessman had been elected was all it took to get the markets shifting in the right direction.
That’s also the day I began contributing to my 401k again.
What a moron.
Exactly. The tax cuts stimulate business and tax revenue. Keynesians never give up though. I hate them....
Technically yes, but GDP growth of under 1% is not a good thing in a time of rising spending, and the 0bama administrations were certainly that. Trump's economy is not coasting on any fictional 0bama push, it is riding on re-negotiations of bad treaties, strategic tariffs, reversal of the flow of jobs overseas, and increasing consumer confidence that is a consequence of the popular conviction that the government isn't going to punish success by increased taxation. 0bama offered none of those and is trying to claim credit that he doesn't deserve for their fruits.
Its okay to admit that Matthew Yglesias is a leftist propagandist masquerading as a 'journalist'.
Matthew Yglesias operates according to the following guideline: "leave no leftist talking point behind, no matter how wrong and foolish it may be."
Government stimuli are never good in the long run; they just rob from one to give to another.
Tax cuts are pretty much always good, along with reducing stupid regulations.
To reduce the deficit, government must cut spending - PERIOD.
0bumma did none of those. All his people confidently predicted the economy under DJT would crash.
THEY WERE ALL WRONG.
If the economy is so bad why is Obama trying to take credit for it?
Community organizers always take credit for the hard work of others.
A press briefing? LOL!
The press is just another name for the propaganda department of the DNC.
Unpersuasive to you because economically thinking-wise, you're all of a sliding scale of socialists, communists, Marxists and Bolsheviks. And a few adherents of Pol Pot.
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