President Donald Trump wants everyone to believe that the economy under his watch is one of the strongest in history, especially as the 2020 Election approaches. But Nobel-winning economist Joseph Stiglitz recently explained why it’s a big failure that should result in his ouster.
The economy in the first year of Trump’s presidency in 2017 went rather smoothly. Unemployment hit a low of 3 percent, the stock market hit record highs and hundreds of thousands of jobs were being added every month. But those successes were a continuation of Obama’s economic recovery. You see, through all the bluster, Trump had very few, if any, economic policies. Instead, he benefited from Obama’s policies and took the credit.
And then he signed a massive tax cut bill into law that December and began his global trade war the next year all while trying to strip healthcare from the American people. That’s when Trump’s economy really began. Sure, corporations and the wealthy got tax cuts and the stock market continued rising. But you can’t measure economic success by how wealthy the rich are or by how many records the stock market breaks, as Stiglitz explained in a column this week breaking down how ordinary Americans are fairing under Trump’s watch.
“Today, many corporate bosses are still talking about the continued GDP growth and record stock prices,” Stiglitz wrote. “But neither GDP nor the Dow is a good measure of economic performance. Neither tells us what’s happening to ordinary citizens’ living standards or anything about sustainability. In fact, US economic performance over the past four years is Exhibit A in the indictment against relying on these indicators.
For instance, Stiglitz began by pointing out that Americans are unhealthier than they were decades ago.
US life expectancy, already relatively low, fell in each of the first two years of Trump’s presidency, and in 2017, midlife mortality reached its highest rate since World War II. This is not a surprise, because no president has worked harder to make sure that more Americans lack health insurance. Millions have lost their coverage, and the uninsured rate has risen, in just two years, from 10.9% to 13.7%.
In fact, he compared the health decline of Americans today to the health decline the Russians suffered after the collapse of the Soviet Union.
If the economy is so strong under Trump, why are Americans still having to choose between bankruptcy and saving their lives?
As for the tax cuts, they have not only emptied the treasury, they have resulted in record deficits forcing our country to borrow even more money, and will have devastating impacts on most Americans once fully implemented.
“Trump may be a good president for the top 1%—and especially for the top 0.1%—but he has not been good for everyone else,” Stiglitz continued. “If fully implemented, the 2017 tax cut will result in tax increases for most households in the second, third, and fourth income quintiles.”
The tax cuts were supposed to spur a new wave of investment. Instead, they triggered an all-time record binge of share buybacks – some $800 billion in 2018 – by some of America’s most profitable companies, and led to record peacetime deficits (almost $1 trillion in fiscal 2019) in a country supposedly near full employment. And even with weak investment, the US had to borrow massively abroad: the most recent data show foreign borrowing at nearly $500 billion a year, with an increase of more than 10% in America’s net indebtedness position in one year alone.
Has Trump really brought back manufacturing jobs? Stiglitz also fact-checked that Trump lie and noted that job creation has actually slowed during his term.
Despite Trump’s vaunted promises to bring manufacturing jobs back to the US, the increase in manufacturing employment is still lower than it was under his predecessor, Barack Obama, once the post-2008 recovery set in, and is still markedly below its pre-crisis level. Even the unemployment rate, at a 50-year low, masks economic fragility. The employment rate for working-age males and females, while rising, has increased less than during the Obama recovery, and is still significantly below that of other developed countries. The pace of job creation is also markedly slower than it was under Obama.
Stiglitz then discussed Trump’s disastrous trade wars, which have devastated farmers all while increasing the overall trade deficit, including the trade deficit with China. In short, Trump’s trade wars failed to do what he said they would do. He hurt farmers and American consumers for nothing.
In addition, Trump has also fallen short on GDP growth.
Even judging by GDP, the Trump economy falls short. Last quarter’s growth was just 2.1%, far less than the 4%, 5%, or even 6% Trump promised to deliver, and even less than the 2.4% average of Obama’s second term. That is a remarkably poor performance considering the stimulus provided by the $1 trillion deficit and ultra-low interest rates.
And if that’s not enough proof that Trump’s economy is terrible for a majority of Americans, it turns out that wage growth was better under Obama, something even Trump has inadvertently admitted.
“Trump deserves failing grades not just on essential tasks like upholding democracy and preserving our planet,” Stiglitz concluded. “He should not get a pass on the economy, either.”
Therefore, as much as Trump and the Republican Party want to campaign on the economy, any claim of the economy being strong would be a complete and total lie. An economy is not strong because the wealthy have more money, an economy is strong when the people as a whole are prospering. And that’s simply not the reality today. In fact, things have only gotten worse since Trump took office and a major recession is likely just around the corner if things don’t change fast. The biggest action the American people can take to improve their economic future is to make sure Trump does not get a second term.
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