Is Obama to Thank for the Trump Economy?
Authored by: Matt Palumbo
The stock market is on a historic tear, unemployment is at records low, inflation remains under control, and the labor participation rate may finally began to tick upwards once again.
But should we be thanking Trump? Not according to the partisans.
- “Here are two words we won’t hear President Trump say tonight about the economy — ‘Thanks Obama‘” says Chuck Schumer.
- “I don’t understand why, well, maybe I do why the folks in the Trump administration won’t admit that the economy was doing well under President Obama,” CNN’s Don Lemon. (Humorously, a conservative guest quipped in response that Trump should thank Obama for not being President anymore).
- In December 2017, Obama himself decided to pat himself on the back for the economic landscape under Trump. “As we took these actions, we saw the U.S. economy grow consistently,” former President Obama “We saw the longest streak of job creation in American history by far, a streak that still continues by the way.”
While I’d agree that the typical person credits the President (regardless of who it may be) far too much for the positive or negative state of the economy, that doesn’t mean we can’t prove that things are better off than had Obama remained in office.
How do we know? We can look at the Congressional Budget Office’s predictions for economic growth in past reports, and compare them to realized growth under Trump.
For instance, in 2016, the CBO projected real economic growth of 2.2 percent in 2017, and 2.1 percent growth in 2018.
Growth came in relatively close in 2017, at 2.3 percent, but 2018 is where things begin to diverge. Remember, it wasn’t until the end of 2017 that Trump signed his tax package – the main catalyst we’d expect for growth under his presidency.
As one writer for Investors Business Daily noted:
Last June (2017), the CBO said GDP growth for 2018 would be just 2%. Now it figures growth will be 3.3% — a significant upward revision. It also boosted its forecast for 2019 from a meager 1.5% to a respectable 2.4%.
“Underlying economic conditions have improved in some unexpected ways since June,” the CBO says. Unexpected to the CBO, perhaps, but not to those of us who understood that Trump’s tax cuts and deregulatory efforts would boosts growth.
Economists agree too.
The Wall Street Journal polled a number of business, financial and academic economists on if Trump in January 2018 on who was more responsible for the current economy, most of which “suggested Mr. Trump’s election deserves at least some credit” for the upturn. Additionally, a majority said the president had been “somewhat” or “strongly” positive for job creation, gross domestic product growth and the rising stock market.
Are we supposed to believe that it’s a coincidence that business confidence and the stock market didn’t begin their recent liftoff until after Trump was elected? The Dow Jones Index’s 1-year gain following Trump’s victory was the largest post-election bull run since 1945.
If the market loved the Obama presidency, it sure has a weird way of showing it.