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PostComparing Trump's and Obama's Economic Performance (Paul Pitlick, USA, 08/27/19 8:05 am)
I have some quibbles with David Duggan's assessment (August 25th) of the state of the economy. For example, David's statement, "Sure, everything [in the economy] could come tumbling down, but they've been saying that for decades." Actually, the reason "they've been saying that for decades" is that everything did come tumbling down in 2008, remember? Fortunately, we were smart enough to elect Democrats in 2008 to rescue us. I'm offering not just opinion here, but facts--please see linked graphs.
1. All Employees: Total Nonfarm Payrolls (PAYEMS)
(source: https://fred.stlouisfed.org/series/PAYEMS Federal Reserve Bank)
Republicans seem to forget what happened towards the end of the Bush presidency. Which allows them to forget that job creation during the Bush years was zero (as in 0, nil, zip, nada), after 20 million jobs created in the Clinton years, and followed by 14,000,000 in the Obama years. Notice that although there was some growth in 2005-2007, it was gone by the end of 2008. Since jobs started growing again in 2009, it has been a straight line. So David seems very happy with the job creation under the current administration. I'm happy about that also, but it looks to me like it's no different than it was 4 years ago--so why isn't he equally happy about that? That also speaks against how the new economy has been unleashed from all those shackles Republicans keep whining about--they must have been released 10 years ago! I didn't draw a graph for unemployment during the Obama years. It was down to almost-record lows when he left office, but of course he will get no credit for that.
2. Federal Surplus or Deficit [-] (FYFSD)
(source: https://fred.stlouisfed.org/series/FYFSD , again, Federal reserve Bank)
The deficit wasn't too bad until the Republicans took over in 1980. After Clinton took over, deficits fell, and a surplus was even achieved towards the end of the Clinton years, only to be blown open by the Bush tax cuts. There was then some minor improvement until the crash of 2008, when Mr. Obama was stuck with a >$1 trillion deficit to begin his term. Again, under a Democratic president, the deficit was being scaled back until the Trump tax cuts kicked in. I read that we are again heading toward another >$1 trillion deficit this year. We are still waiting for the economic boom to materialize as a result of the tax cuts, which hasn't happened in the past--shouldn't we try to learn from experience?
3. Dow Jones Industrial Average (DJIA)
(source: https://fred.stlouisfed.org/series/DJIA , Federal Reserve Bank)
Similar to the job picture, the Dow was lower at the end of GWBush's term than it was when he took over. It had tripled when Clinton was president and increased by 250% under Obama--over 8 years, both of these are in the ballpark of 30-40%/year. After 3 years+ under the current administration, the Dow has gone from ~20000 to ~27000, up about 35%, or about 12%/year. Not bad, indeed, that's way better than negative, but not nearly as good as the Democratic predecessors.
Indeed, David, it all did come tumbling down 10 years ago, but how quickly we forget. There are two things a person could say about Mr. Obama. The first thing I would say is that I'm glad the he and his team figured out what to do to get us out of the rut the Republicans drove us into. The second thing is that his legacy is fixed. Although the Republicans denigrate everything about what he did, he was in charge when the economy began the longest expansion on record--it was his game. Anybody can claim anything they want, but the facts speak for themselves--they are set in stone. The current administration isn't even into its 4th (and hopefully last) year, and a lot of things can happen. In order to equal his predecessors' records, job growth will have to continue along its current line for another 4+ years, the federal deficit will have to start coming down again, and the stock market will have to go up to about 50000 (250%). Not impossible, but you almost need to ingest a hallucinogen to imagine that happening under the chaos of the current regime. Drain the swamp? This administration is the swamp.
This has gone on long enough. Concerning David's point 1, it sounds like David wants us to get into more wars in Eastern Europe and the South China Sea. Obama apology tour? In my travels, most people I've met didn't like Bush and/or Cheney, liked and admired Obama, and view Trump as a pathetic joke. Concerning point 3, while crime may be rising in some places, it is falling in many others. Restricting legal abortion services will lead to more deaths from botched illegal abortions. I was practicing medicine in the days before Roe. I don't want us to be driven back there! We already have trouble with our reproductive services--the US has the highest maternal mortality in the developed world, and we aren't improving, while most other places are.
JE comments: You've convinced me, Paul. To be sure, Obama's numbers are so impressive because of the abysmal place we were in 2009. Presidents always get to "own" a recession, but they cannot necessarily prevent them.
A question for our economist colleagues: How are the Trump tax cuts really impacting business investment? As Tor Guimaraes pointed out, many companies are sitting on piles of cash but using it only for stock buybacks and acquiring other companies. Or worse--offshoring their production.