Trump’s Critics Dead Wrong (Again) on the Economy

Last week’s blockbuster jobs report, with more than 265,000 jobs added when including upward employment revisions, was very welcome news to almost all Americans. The exception would be the economists of the left who, throughout Donald Trump’s now-five-and-a-half years in the White House, keep getting the economy dead wrong.

Just a few months ago, a gaggle of economists on the left, led by Nobel Prize winner Paul Krugman, started warning of “stagflation,”  a witch’s brew of high inflation and high unemployment at the same time. He wrote that “any statement that things aren’t as bad as they were in the 1970s should come with the caveat ‘so far.'”

The liberal Center for American Progress told us we were already in the danger zone, claiming that “the Trump administration’s agenda has generated stagflation: slower growth and faster inflation.”

These are the same false claims made during Trump’s first term, when some critics warned his policies would cause “a second Great Depression.” Instead, incomes for American families soared in real terms by more than $6,000. So far this term, median household income is up $3,000.

The nation’s unemployment rate of 4.7% is one of the lowest in the industrialized world and indicates that for most American workers who want jobs, they are out there. Employers are complaining of a shortage of trained applicants for jobs, which gives workers an ability to bid up salaries.

Meanwhile, there is a construction boom going on in America driven by new spending on plants, factory equipment, road building and data center construction.

Manufacturing is roaring back. The Institute for Supply Management’s manufacturing index, which tracks factory activity across America, has registered the sector’s fourth straight month of expansion — the best numbers in four years. In sum: America is MAKING things again.

Then there is the bull market in stocks. Despite some recent selloffs, this rally has sent all the major indexes — the S&P 500, the Dow and the Nasdaq — soaring to record or near-record highs. Given that most Americans have their retirement income invested in U.S. companies, this is good news for nearly all American workers.

The aforementioned Krugman warned last week (before the strong jobs numbers came out) that Congress needs to repeal the Trump economic agenda. We need, he said, a “de-MAGA-fication” of the American economy.

Which policies exactly?

It’s true that some of the tariff policies have bumped up prices. But three mega-MAGA Trump policies — all of which Krugman and the Democrats in Congress opposed — paved the way for this economic comeback. First, the Trump tax cuts have stimulated business investment and hiring. They’ve also saved the average family more than $2,000 in a lower tax bite.

Second, deregulation has saved American businesses nearly $1 trillion by cutting costs from thorny and expensive rules. Those cost savings will help drive down prices.

And third, the pro-America energy production policies have turned the USA into the world’s largest oil and gas superpower. Gas prices would be at least $1 a gallon higher without the domestic drilling boom.

Yes, prices remain stubbornly high, and we are all feeling the pain at the pump and the grocery checkout counter. Consumers and voters are still in a cranky mood.

But the rapid rise in investment spending by businesses and the America-led AI and tech boom are likely to drive productivity up and prices down.

If history is any judge, it’s wise to bet on the Trump economy and against his critics — who have a perfect record of being wrong.

So on the eve of our 250th birthday, America is once again the world’s alpha male economy. The rest of the world looks at the U.S. economy with envy. China is falling behind.

Stephen Moore is a former Trump senior economic adviser and the cofounder of Unleash Prosperity, which advocates for education freedom for all children.

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