Remember how Barack Obama repeatedly rationalized the economic malaise that defined his presidency by scapegoating everything from the 2011 Japanese tsunami to ATMs?
This was Obama in 2011, when it was already clear that his economic policies were failing:
There are some structural issues with our economy, where a lot of businesses have learned to become more efficient, with a lot fewer workers. You see it when you go to the bank and use an ATM – you don’t go to a bank teller. Or you go to the airport, and you’re using a kiosk instead of checking in at the gate.
Well, news flash: We’ve added a lot more kiosks since that time, particularly in locales where liberals counterproductively hiked minimum wage requirements. Yet somehow, America’s economy has turbocharged since President Donald Trump entered the White House.
In fact, the Trump economic acceleration has occurred despite real headwinds, such as an economic slowdown in Europe, China and elsewhere across the globe, as well as the federal government’s partial shutdown earlier this year and the Federal Reserve Board’s foolish rate increase last December, which Chairman Jerome Powell acknowledged when the evidence of the error immediately accumulated.
The latest occasion for recognizing the stark contrast between Obama and Trump arrived last week, when the Commerce Department announced that the American economy grew an astonishing 3.2% in the first quarter of 2019.
That exceeded economists’ consensus forecast of growth well below 2%, with some banks forecasting 1.1% growth. That growth rate also occurred despite such handicaps as the government report that the winter government shutdown artificially reduced growth by 0.3%, among other headwinds noted by The Wall Street Journal:
Yet the government shutdown took some 0.3% off growth and that won’t be repeated in the second quarter. Auto sales took 0.49% off GDP in the quarter, but sales rebounded in March heading into the second quarter. Overall consumer spending contributed a relatively small 0.82% to GDP, perhaps due to the fall in consumer confidence after the stock market swoon in the last months of 2018. With job growth strong and wages rising, consumers should contribute more to the expansion the rest of the year.
In other words, the Trump economy continues to flourish despite substantial headwinds, and promises even greater future growth, whereas Obama scapegoated insubstantial factors to excuse his economic malaise.
And for readers who don’t preoccupy themselves with quarterly U.S. economic data, here’s why our 3.2% growth number is particularly significant and symbolic.
Post-World War II, the U.S. has averaged 3.3% economic growth per year. Then came the Obama Administration. Not once during his presidency did we even reach 3% growth, let alone the post-war 3.3% average. For the first time in our history, we completed ten years without reaching 3% during his tenure, and we averaged just 1.88% annual growth under Obama.
That wasn’t what Obama promised us, of course. While selling his trillion-dollar “stimulus” package, the Obama Administration predicted that unemployment would never exceed 8%, and that economic growth would hit 4.3% for both 2011 and 2012. Instead, unemployment exceeded 8% for the longest consecutive monthly period in recorded U.S. history, and as noted earlier we never even hit 3% growth.
By the end of the Obama Administration, he and his apologists predictably changed their tune.
Instead of promising superlative results from Obama’s economic policies, they began assuring us that 3% growth was no longer possible, due to “secular stagnation,” the new impossibility of productivity gains, Baby Boomer retirements and other various excuses. Sub-3% growth was, according to them, the “new normal.”
In that vein, Obama and his apologists mocked Trump’s promises to return to 3% growth through deregulation, tax cuts and reversing Obama economic policies. Lawrence Summers, Obama’s chief economic advisor, ridiculed the idea in May 2017:
Apparently, the budget forecasts that U.S. economic growth will rise to 3.0 percent because of the administration’s policies, largely its tax cuts and perhaps also its regulatory policies. Fair enough, if you believe in tooth fairies and ludicrous supply-side economics.
Or recall the words of New York Times columnist Paul Krugman, one of leftists’ favorite economists, who wrote in January 2018, “Expect a lot of boasting, but 3% growth is still nonsense.”
Well, we’ve achieved exactly that.
In just his first full calendar year as President, Trump’s economic policies of deregulation, tax cuts and more limited government brought us 3% growth for 2018, the first year in which his tax cuts took effect.
Additionally, median incomes are finally rising at a more respectable level after stagnating under Obama, and stock markets have reached new record highs.
And now, despite mainstream economists’ predictions of an economic slowdown, our economy actually accelerated to 3.2% in the first quarter of 2019.
So yes, Mr. Summers, we do believe in the supply-side economics that Presidents John F. Kennedy, Ronald Reagan and Donald Trump have repeatedly proven effective, yet which you continue to label “ludicrous.” The question is when people like you will smell the coffee and admit otherwise.