Ask someone to explain their support for Trump and they’re likely to mention the economy. They’ll tell you a story about businesses trapped under high taxes and needless regulations, sputtering along, leaving millions of Americans unemployed and forgotten. Then came the brilliant entrepreneur, Trump, who unleashed an economic boom.
Like most things you hear from Trump-era Republicans, this story of an American economic renaissance exists only in GOP fantasies. Trump’s singular economic achievement as President is that he hasn’t destroyed the long economic boom he inherited, at least not yet.
Just in time for Thanksgiving, here’s a broad review of economic performance under Trump, with comparisons to the Obama years.
Let’s begin with a chart of per capita GDP over the past ten years.
Can you spot the magic moment when Trump changed everything? That’s because it never happened.
Here’s overall GDP growth per quarter since the Bush II years.
First, notice the long term decline in the baseline, which has continued unabated under Trump. Next, look at the peaks of growth achieved during the Obama years. Our economy experienced more quarters of 3%+ growth under Obama (4) than Trump (2). More importantly, the economy experienced only 2 quarters of growth beyond the longterm baseline under Trump. Those both came on the sugar high of the Trump tax cuts. Since Q3 18, growth has tumbled by almost half. Economists are concerned that growth could slow to 0 in Q4 19.
But what about jobs? Hasn’t Trump ended an era of anemic hiring? No. In fact, job creation has slowed slightly in the Trump years.
Here’s a chart of monthly job creation since 2009. See if you can spot the moment when Trump changed everything. Again, it doesn’t exist.
Average monthly job creation was 210K during the Obama Administration. It has lagged at 191K under Trump, and has been slowing in recent months. October’s hiring (128K) tied the lowest October since the Bush II years.
The stock market performed better under Obama.
One of the strangest claims from Trump supporters is that he’s helped the middle class. They’ll make the claim that middle class incomes have been rising. That’s true, but those increases started in 2012, rising rapidly across Obama’s second term, then flattening out since 2017. Wage growth for middle income families has slowed significantly in the Trump years.
As for wages overall, once again, let’s look at the numbers and see if you can spot the miracle moment:
On a month-to-month level, wage growth reached almost 4% under Obama in November 2016, but it flattened out from there and hasn’t broken that mark under Trump.
As you would expect, under both Obama and Trump, no one has experienced wage growth as strong as the top earners.
What’s behind the overall growth in incomes? We’re in our 106th consecutive month of employment expansion. Strong demand for workers plays a part. However, a trend that started in blue states during the Obama years is starting to pay off.
States and cities took the lead in raising their minimum wage. Since 2013, most minimum wage workers owe their income floor not to federal minimums, but to state or local minimums. Today, the effective average minimum wage for an American worker overall is $12/hour. Sorry Alabama and Texas. No help for you, but for lower wage workers elsewhere in the country this change in local laws has helped to support otherwise fragile incomes at the lower end. They still aren’t growing as fast as higher incomes, but in a few geographies they have a chance to keep pace.
Trump promised to revive the manufacturing sector. Didn’t happen. Here’s a look at manufacturing employment over time. That flat bit at the end is the Trump Administration. Bonus learning opportunity here: notice the two great collapses that presaged the end of mass manufacturing in the US. The first was in 1974, and the second in 1979. Remind me again how Reagan or NAFTA destroyed our industrial sector.
Our economy added about a million manufacturing jobs under Obama. It has added about half a million under Trump. It should be noted, though, that the rate of growth flattened to zero this year and reversed last month. Manufacturing is now in a recession.
One of the most galling claims from the Trump swamp is that his Administration has benefitted black Americans. Leaving aside for a moment the atmosphere of terror he has unleashed on people of color, and the steps his administration has taken to kneecap federal efforts toward honest policing, affirmative action, and education reform, let’s just look at the economic numbers.
Amid one of the longest economic booms in our history, average weekly wages for black families have actually declined since Obama left office.
Over the last quarter of the Obama Administration, wage growth from black families was at its highest rate in recent history, almost keeping pace with the highest wage earners. That’s over.
Across the span of the post-crash recovery, black unemployment remained higher than other demographics, but under Obama it was beginning to close the gap. That pattern has reversed in recent months, as black and Hispanic unemployment have actually started to tick back up.
Trump was going to save the coal industry. Let’s play our favorite game again, spot the miracle:
This time there is an inflection in the curve, but it happened under the Obama Administration. Coal mining employment flattened out its decades-long decline late in the Obama years, likely because coal companies were betting that a possible Trump Presidency would herald a revival. It didn’t.
Coal employment has been roughly flat since 2016, which is an improvement of a sort. However, the companies that bet on this trend are going out of business. More than 60% of the nation’s coal is mined by companies that have been in bankruptcy over the past five years.
Coal-fired energy producers are going offline at a staggering rate. A Trump Era surge in coal company bankruptcies is placing employee pensions and Black Lung payments in jeopardy, not exactly the MAGA boom these voters were counting on.
What about the people Trump once described as our “Great Patriot Farmers?” Yup, they’re getting screwed too.
Farmers in the Midwest are taking the hardest hit. Wisconsin leads the country with 48 farm bankruptcies, followed by Nebraska, Kansas with 37, and 31 in Minnesota. By the end of 2019, The farm debt is expected to reach a record-high of $416 billion. Farm incomes hit their modern peak in 2013, under Obama. This year, 40% of US farm income will be government assistance.
Agricultural land values are down 14% in Iowa. Farm debt has risen by 40% since 2012 against only a 17% increase in asset values. Concerns are growing about a wave of suicides in a professional already vulnerable to that scourge. At least Trump has rescued them from Socialism.
Income inequality, which has been worsening for decades, has soared to an all-time record under Trump.
That inequality growth has been fed by Trump’s massive tax cut for wealthy households. But the real story is the concentration of wealth, not income. In 2019, the wealthiest 10% of Americans hold 70% of the nation’s wealth. The bottom 50% hold just 1% of the nation’s wealth.
When it comes to poverty and wealth, Republican Congressional districts are the great takers, while America’s new wealth is being generated in Democratic areas. Places governed by Republicans are getting steadily poorer, while Democrats govern the places, almost exclusively cities, where wealth and incomes are expanding.
The poverty rate was declining sharply in Obama’s second term. Those declines continue, but they have flattened out.
Trump’s policies have hit his base pretty hard. In addition to his failure to revive manufacturing, coal or domestic steel production, his efforts to strip the social safety net are threatening to wreck lives in working communities.
Rural hospital closures have already matched a an annual record this year, and the year isn’t over.
The number of Americans without health insurance had finally begun to decline under Obama, but now those numbers are ticking back up.
Thanks to tariff related impacts, the trucking industry has entered a recession. Many companies made massive investments expecting Trump’s tax cuts to spur new waves of growth. That boom never materialized. What they got instead was an erratic, poorly planned, and devastating collection of tariffs that have undermined demand for freight loads.
The problem extends beyond just trucking, as freight shipment are down across the board.
Hundreds of trucking companies have gone under this year, leaving thousands of truckers unemployed.
The rail freight index, which was recovering slightly late in the Obama Era, is crashing this year under pressure from manufacturing and trade declines.
Instead of working to build the conditions that might foster healthy economic activity, the Trump Administration has invested its energy in a series of stunts more appropriate for a kleptocratic banana republic. Just last week, Trump appeared at an Apple factory in Austin to announce its opening. That factory belongs to an Apple contractor and was built in 2013. It has been manufacturing the Mac Pro for many years.
Trump tweeted a bald-faced lie, “Today I opened a major Apple manufacturing plant in Texas that will bring high paying jobs back to America.” Why did this stunt even happen?
Tariffs Trump has threatened on Chinese products had the potential to impact Apple’s Austin plant and others. Those tariffs were so counter-productive that Apple was beginning to shift some of their production away from the US to China to cope with their impact. In negotiations with the President, Apple won a “federal product exclusion” from Trump in exchange for allowing the toddler in chief to put on his stunt, deceiving his followers. This has been a pattern.
Just after winning election in 2016, Trump pretended to be saving hundreds of jobs at the Carrier factory in Indianapolis. After the TV cameras were packed up, those jobs disappeared right on schedule. After helping to land an enormous, multi-billion dollar tax incentive deal to bring a Foxconn manufacturing plant to Wisconsin, Foxconn has recently admitted that most of the jobs aren’t coming. The company has done virtually nothing to develop the property while state and local governments spent (and borrowed) millions to prepare infrastructure. These stunts are the perfect image of the Trump Administration’s economic record. It’s a con, made for TV.
There’s a subtle lesson hiding in these numbers. Presidents, good or bad, have only a very limited impact on the economy. Much of what we attribute to them is akin to ancient Egyptians blaming their Pharaoh for the weather. Many of the most damaging trends in our economy, like its increasingly lopsided outcomes, have been in motion for decades, and are seen on a similar curve in very different economies around the world.
Most of what a President does to protect our economic health is to set policies that will have very long-term, subtle impacts, and most importantly, to protect our fundamental emphasis on the rule of law. Across the past century, only FDR, Johnson, Reagan and Bush II have taken actions that made a lasting impact on our economic fortunes. When it comes to economic matters, Presidents mostly coast, and that’s usually OK.
So why is there so much talk about the economy around election time? Perhaps more importantly, why will none of these economic realities change any minds? Here’s the most important chart of the lot – consumer sentiment over time broken down by political affiliation.
Notice how the economy was all of sudden performing great, starting in November 2016, if you were a Republican. That’s all you need to know about how this works. People start from their preferred conclusions, then reason backward, picking and choosing their facts, to reinforce those preordained conclusions.
Trump’s efforts to claim credit for an economic boom he inherited, are an extension of his entire persona, riding inherited wealth to cover insecurity and gross inadequacy. The Trump boom is a myth. So far, he has neither wrecked nor improved the economy. Based on the impact to farms and manufacturing from his only major initiative, the only thing that might change his neutral record is a particularly poor step in his trade wars. That cannot be ruled out, especially as his fortunes grow more desperate.