Trump’s Mediocre Economic Gains, In Three Graphs
Reprinted with permission from DCReport
At Tuesday night’s State of the Union address, Donald Trump claimed repeatedly that he has created a great economy. Trump may have hoped that people forget his towering 2016 claims and promises. My spring 2019 analysis of Trump economic performance was a grade of C , average.
So, what are the facts? Here are some hard numbers to judge Trump claims against reality.
Gross Domestic Product growth in the last quarter of 2019 was 2.1 percent. For the entire year, it was 2.3 percent. That means economic growth slowed.
That’s nothing to brag about. The average growth rate since 1947 has been 3.2 percent.
Voters should remember Trump promised if elected that he would blow away the performances of predecessor Barack Obama and others.
Here’s Trump in September 2016 on GDP growth: “We are looking at three percent but we think it could be five (percent) or even six (percent). We are going to have growth that will be tremendous.”
During the final presidential debate a month later Trump promised that if elected, “We’re bringing it (economic growth) from one percent up to four percent, and I actually think we an go higher than four percent. I think you can go to five percent or six percent.”
Jobs Growth Slows Under Trump
And how about jobs growth? Trump promised jobs galore but jobs growth has slowed significantly.
Obama inherited a collapsing economy. Three million jobs vanished in the first four months of 2009. That awful trend reversed in October 2010 when the economy began growing jobs in an unbroken chain since.
From then through January 2017, Obama’s last month in office, jobs averaged 201,600 per month.
Trump, from February 2017 to the end of 2019, averaged just 191,100. That’s 5 percent less per month.
Another White House announcement boasted that last year showed an average of 176,000 new jobs per month. That’s 25,000 fewer jobs added each month than under Obama, a decline of almost 13 percent.
So much for exceeding expectations.
Wages have increased. But that apparently is due to local and state increases in the minimum wage.
The federal minimum wage of $7.25 an hour was set in July 2009. Inflation has eroded its value to about $6 per hour today.
Trump has said he may, possibly, perhaps, someday consider increasing the minimum wage. Trump’s chief economic adviser, Larry Kudlow, calls the minimum wage “a terrible idea.”
Soybeans Shrivel and Farms Go Bust
How’s it going for soybean farmers since Trump’s gratuitous trade war promoted China to buy soybeans from Brazil?
Family farm bankruptcies, known as Chapter 12 filings, have been on the rise since 2015. But remember Trump promised to improve the lots of America’s farmers, not make them worse.
Trump’s trade war with China has created a boom for Brazilian soybean farmers. Soybeans are America’s second most valuable crop, worth $39 billion in 2018, right behind corn at $51 billion.
In 2019 China grew more than 17 million tons of soybeans, about a third of its consumption. China has started expanding soybean production, which it could quickly multiply. Afterall, the can-do spirit thrives in China, which just built a hospital for Coronavirus patients in 10 days. Ten days.
Should Beijing decide to further expand its soybean farms then American farmers will have permanently lost sales. In turn, American farm incomes will shrink.
To provide cover for his trade war Trump is giving American soybeans farmers $28 billion of taxpayer money. About $19 billion has already been turned over. Don’t expect Trump to mention this Farm Belt welfare as what it is, socialism, and a burden for all taxpayers.
Then there’s the Trump/Radical GOP tax law adopted in December 2017. It slashed the corporate tax rate 40 percent. The lowered individual rates heavily favor the richest Americans.
That law was, Trump claimed, going to spur a massive increase in domestic capital investment, which is a key to more jobs.
After a brief increase in domestic capital investment in 2018, it has fallen back to previous levels. In other words, the Trump tax cut did not do what Trump promised.
Trump also promised voters he could pay off the federal government’s debt if he got two terms. Instead he already has pushed annual budget deficits back to the trillion-dollar level.
So, in light of Trump’s Tuesday night address to Congress, ask yourself if what he says is fact or fiction.