by Nick Gier
Trump’s apparent economic success to date mostly reflects fortunate timing. —The Economist, Nov. 11, 2017
Trump is an unprincipled and ill-informed guy who can be flattered, bribed, or simply fooled into giving [foreign leaders] what they want. —Paul Krugman (New York Times 10/15/19)
A weakness on the global stage that tempts other powers toward military aggression risks much more significant disasters. —Russ Douthat (New York Times Oct. 19, 2019
When American presidents make claims about their economic achievements, and when they are criticized for their alleged failures, words of caution are necessary. For example, rising gas prices were pretty much out of their hands; nevertheless, Obama was blamed for that in 2011 and now Democrats are now castigating Trump for the same reason.
With this caveat in mind, I offer the following comparison with qualifications—such as the myth of Obama’s huge debt. A warning to readers. This is a rather wonkish column with lots of data.
Trump has charged that Obama’s employment numbers were “fake,” but he is now drawing on the same government statistics for his claims. The economy is now slowing, and we can expect the Great Truth Defier to play the same game, but with far less credibility, if he had any to begin with.
The Economic Performance Index (compiled by international economists), is based on inflation, unemployment, budget deficits, and economic growth. Noting the changes in these five factors at beginning and end of their terms, Reagan ranks first and Obama second with Clinton, Kennedy, Eisenhower, and Johnson rounding out the top seven. It’s too early to calculate a score for Trump.
Jobs: Obama’s 187,000 per month vs. Trump’s 176,000
Trump claims that he has given the American people that best economy in the nation’s history. As with most of his bloated boasts, this is clearly false. Bill Clinton created 18.5 million jobs, a 15.6% increase, the largest since Ronald Reagan’s 16.5 percent. After Reagan, the best post-war job creators were Presidents Truman, Johnson, Carter, Clinton, and Obama. Over eight years, Obama created 16 million jobs (a 11.6 percent increase) and averaged 187,000 per month, even after losing 8.5 million jobs at the beginning of the Great Recession. Trump wildly predicted that he would create 25 million jobs, but at the current monthly rate of 176,000 (assuming that holds), there will be at most 8.4 million new positions during his one and only term in office.
Economic Growth: Clinton 3.7%; Obama 2.1%; Trump 2.2%
In the post-war period Clinton had the third highest growth rate (3.7%) after Kennedy (5.5%) and Johnson (5.2%). (The Democrats rock!) Trump and his advisers boasted that they would average 4 percent, but growth has exceeded 3 percent in only two quarters. Obama had stronger quarters (4.7%, 3.6%, 5%, and 5.5%), but the overall average, according to Bloomberg economists, was just 2.2 percent. After a temporary growth spurt after the GOP tax cut, the Economist magazine, which is usually right on, predicts that Trump will end 2019 year at 2.2 percent. Some economists are predicting that, primarily because of Trump’s trade wars, we will have a recession. If that happens, Trump will be responsible for ending, after Obama started it, the longest economic expansion in American history.
Obama Reduced Deficit 10% to 3.2%, but now at 4.6%
The first reason why Obama scores high on the Economic Performance Index is that he reduced the annual budget deficit from 10 to 3.2 percent. Under Trump it has now risen to 4.6 percent, primarily because of the GOP tax cut. It will no doubt climb higher as slow growth will fail to produce sufficient revenues to off-set spending. (The GOP Congress from 2017-2019 did not do anything to reduce expenditures.)
The 2019 deficit is estimated at nearly $1 trillion, a little less than double Obama’s last three annual deficits.
The “King of Debt” Gets the Grand Prize
Obama was blamed for the dramatic increase in the national debt, but the Bush, Jr.’s tax cuts, his unfunded wars in Iraq and Afghanistan, and the Great Recession—not Obama’s stimulus or Obamacare—were the main reasons for that. Even pro-business Forbes magazine admits that Obama is not responsible for doubling the debt. Reagan tripled the debt primarily because of huge, mostly unnecessary, defense spending. Trump once called himself the “King of Debt,” and routinely shirked on what he owed. (He deceived Deutsche Bank three times!) He has now added $2 trillion to our debt, and the principal cause is the billions given away to the rich and the corporations. The latter had the gall to admit that they would mostly buy back their own stock rather than invest in the economy, and that is what they have shamelessly done.
Under Obama business investment rose 20%, but it now is in “technical recession” at a negative 6 percent. The service sector has been steady, but last month saw the lowest number of new businesses there since 2009.
Low Unemployment: Obama’s Gift to Trump
Another reason why Obama scored high on the Economic Performance Index is that he brought down the unemployment rate from a high of 10 percent at the end of 2009 to 4.7 percent at the end of his two terms (it is now at 3.5 percent). Trump boasts that he is responsible for the current low unemployment rate for African Americans, but under Obama the rate came down from a high of 17 percent to 8 percent at the end of his presidency. Trump makes a similar claim for Hispanic unemployment, but Obama, at the peak of the Great Recession, brought it down from 13 to 6 percent. It has been reduced by two percent under Trump.
Manufacturing Takes a Dive in 2019
Trump campaigned on the promise of bringing manufacturing back, and it did rise for two years. However, factory output was down almost 1 percent over the last 12 months. The strike by GM workers came after this, and economists attribute this decrease, once again, to the trade wars.
Trump promised that he would win these trade battles and ignorantly claimed that foreign exporters would pay all the costs. Americans of course are paying, and this year’s tariff bill is about $1,000 per family.
Mike Pence loves to boast about what he did for Indiana as governor, but that state lost 5,000 manufacturing jobs during the first year he was vice-president. All this year manufacturing in Indiana was in the negative, with a -.7 percent loss in September. Early in his term Trump offered $7 million in tax incentives to Indiana’s Carrier Corporation, but management still laid off 500 workers.
Obama’s Wall Street Record will be Hard to Beat
When Obama took office in 2009, the S&P 500 had dropped to 805, and at the end of 2016 it was at 2,274, a whopping 182 percent increase. The Dow Jones was at 7,949, but then more than doubled to 18,576 on August 12, 2016. The tech-heavy Nasdaq went from 1,484 to 5,190, an incredible 250 percent. At this point in Obama’s first term the Dow went up 46 percent, but it rose only 25 percent under Trump and has been in a stall since January, again mainly because of the trade wars, not the impeachment threat as Trump claims.
Coal Mining Jobs: 1,900 not 45,000
In July of 2017 Trump boasted that he has created 45,000 new coal mining jobs, and people were scratching their heads (as they usually are) about where he got this figure. He appeared to be talking about a mine that had just reopened in Pennsylvania, but the new jobs there amounted to 44,930 fewer than Trump claimed, namely 70.
When Trump took office there were 50,900 people employed in the coal industry, and as of March 2019 there were 52,800—just 1,900 more. (During the last 6 months of the Obama administration, 1,300 workers were added.) With safety reductions by ordered by Trump, however, mine deaths have doubled, from 7 in 2016 to 14 in 2017, and then 12 in 2018. This is a high price to pay for so few new jobs.
The “King of Coal” is Losing His Realm
Those job numbers are not going to hold because coal-fired power facilities are closing at a record rate. As Reuters reports: “More U.S. coal-fired power plants were shut in President Trump’s first two years than were retired in the whole of Obama’s first term.” The most recent blow to coal production was the announcement that Blackjewel, which is closing two large mines in Wyoming, has filed for Chapter 11 bankruptcy.
Obama’s Foreign Mixed Bag vs. Trump’s Disasters
Most pundits give Obama a mixed report on foreign policy. His major achievements were the Iran nuclear agreement and the decapitation of Osama bin Laden. International inspectors have reported that Iran has honored its word, but now that Trump has cancelled the pact, Iranian scientists have begun to produce weapons grade uranium. The fact Trump has failed to respond to two major Iranian provocations indicates to me that he would not have had the guts to take out bin Laden.
Most commentators criticize Obama for his failure to act aggressively enough in Syria. One of the things he did right there was to form an alliance with the Kurds, who, then, with a loss 11,000 dead and 21,000, were primarily responsible for defeating ISIS in their Syrian strongholds. With the Turkish invasion of their region, the Kurdish fighters and their families are on the run, and the U.S. forces who trained them, befriended them, and gave them battle support have been withdrawn. One political cartoonist has aptly called this “Operation Bone Spurs.”
The “Baby Autocrat” Gets Rolled Again
It is now evident that in his phone call with Turkish president Recep Erdogan, Trump believed his assertion that all the Kurds were terrorists and the Turks should have free reign to destroy them. Russian troops quickly filled the vacuum and they are now standing between the Turkish forces and the fleeing Kurds.
Syrian forces are now moving in to take over one of the last remaining areas not under their control. As Paul Krugman said in a recent column: “Trump is an unprincipled and ill-informed guy who can be flattered, bribed, or simply fooled into giving [foreign leaders] what they want.” Russ Douthat agrees: “A weakness on the global stage that tempts other powers toward military aggression risks much more significant disasters.” Just as the evangelicals call Trump a “Baby Christian,” I call him a “Baby Autocrat,” and he continues to be rolled by the veterans: Vladimir Putin, Kim Jung-un, Victor Orban, and now Recep Erdogan.
P.S. Contrary to Trump’s ignorant and irrelevant statement that the Kurds did not help us in World War II, the fact is that Kurdish troops served in Palestine, Cyprus, Albania, Greece, and Italy.
Nick Gier of Moscow taught philosophy at the University of Idaho for 31 years. Email him at ngier006∂gmail.com.