Up or Down - President Trump Owns The Economy & He Has A Lot To Be Proud Of

[HARDCORE]

By Robert Romano

Right at the outset, let me say, you can’t talk down the economy. It’s either doing well, or it’s not, and by every measure, the Trump economy is doing just fine.

Certainly, the numbers are better than in 2012 when former President Barack Obama was facing reelection.

2018 finished out the year at 2.93 percent growth in the Gross Domestic Product, the strongest showing since 2005, edging out 2015’s 2.91 percent by a nose. The first two quarters of 2019 have delivered mixed results of 3.1 percent and 2.1 percent annualized, respectively.

Not terrible, and certainly no worse than any year put up by Obama, who in 2012 got reelected with just 2.2 percent growth.

Unemployment at 3.7 percent is still at its lowest point in 50 years since 1969, that is, other than the three other times we’ve hit that level in 2018 and 2019.

At this point in the Obama presidency, unemployment was 9.0 percent. Ultimately, Obama got reelected with 7.8 percent unemployment in the final reading before the 2012 election.
Almost 5.2 million jobs have been created since Jan. 2017 when President Donald Trump took office in the Bureau of Labor Statistics’ household survey.

That blows the Obama out of the water. At this point in his first term, the Obama economy had not produced a single job. To be fair, it was still shedding jobs from the recession as he came into office.

When you consider labor participation among working aged adults 16-to-64-years-old, we’ve seen marked improvement during the Trump administration after two decades of decline. Labor participation among that demographic was almost 77.4 percent in 1997. And then it began a steady decline through the 2000s and the 2010s before it finally bottomed in 2015 at 72.7 percent, according to the Bureau for Labor Statistics.

But now, through 2018, labor participation among working age adults is once again rising, with 2.2 million more 16-64-year-olds in the labor force, and labor participation rising to 73.6 percent.

Wages are accelerating during the Trump administration, coming in at 2.7 percent growth in the second quarter and averaging 2.66 percent since the beginning of 2017.

Wages averaged 1.97 percent growth per quarter during the Obama administration.
These are all major improvements. The reason Obama got reelected in 2012, when considering the economy, was because the numbers, after bottoming at the end of 2009, were all moving in the right direction by the time he was nearing the end of his first term.
Of course, what goes up must eventually come down. It’s called the business cycle for a reason, and now some are starting to worry that we’re nearing the end of that cycle with certain recession signals begin to go off. They’re not wrong, but that’s still speculative.

Those making a prediction there might be a downturn before Nov. 2020 will either be right or wrong. Trump owns the economy either way. That’s just the way voters treat incumbents in office. So, own it, Mr. President. You have a lot to be proud of.

Robert Romano is the Vice President of Public Policy at Americans for Limited Government.

[Boats]

Predicting a recession? Might as well predict the weather
By: Niall Feguson - Boston Globe - 8-19-19
RE: https://www.bostonglobe.com/opinion/...nes:newsletter

Edward Lorenz, the pioneer of chaos theory, famously suggested that the flapping of a butterfly’s wings in Brazil could set off a tornado in Texas. Even a tiny disturbance, he argued, can have huge effects in a complex system governed by nonlinear relationships.

But since 2016 we’ve seen the opposite. President Trump, far from being a butterfly in the Amazonian rain forest, is the 800-pound gorilla right at the center of the world. If anyone can cause chaos — in practice as well as in theory — it’s him.

Elected, unexpectedly, to the most powerful job in the world, he has spent the past two-and-a-half years not just flapping his wings, but wildly swinging his fists, as if intent on starting a global tornado. And yet the consequences of the gorilla’s antics have been remarkable for their smallness. Prophesies of political and financial disaster have proved wrong.

Until now.

August is the month when a large proportion of the people in the Northern Hemisphere (around 90 percent of the world’s population) either go on holiday or work half-heartedly. Unfortunately, history consistently refuses to go on vacation in August. Indeed, I increasingly suspect history of having become a workaholic.

This August has produced a mighty storm of geopolitical and economic mayhem. It has taken longer than expected for the 800-pound gorilla to smash what is sometimes (misleadingly) called the liberal international order or the pax americana. But he has done it now. Or so it seems.

In Asia, Hong Kong teeters on the brink of another Tiananmen Square-style massacre. Meanwhile, the North Korean regime is firing rockets like a drunk teenager on July Fourth. And in the Middle East, rumors abound of an imminent showdown between Iran and Israel and its allies.

These political risks coincide with multiple signs of a global economic slowdown. Britain’s economy shrank in the second quarter, but don’t blame Brexit, because so did Germany’s, and Italy’s did only slightly better. Trade within the eurozone is down sharply.

Most worrying is the fall in long-term interest rates. Last week the yield on 30-year US government bonds fell below 2 percent for the first time ever. Long-term bond yields are now below short-maturity debt — an inverted yield curve, in the argot of Wall Street. Such an inversion has preceded every US recession since the 1960s. The only people who seem not to have noticed are American consumers, still shopping ’til they drop, according to the latest retail sales data.

So is chaos coming to Main Street? Back to Professor Butterfly. It was back in 1972 that Edward Lorenz gave his famous lecture, “Predictability: Does the Flap of a Butterfly’s Wings in Brazil Set off a Tornado in Texas?”

“Two particular weather situations,” he argued, “differing by as little as the immediate influence of a single butterfly, will generally after sufficient time evolve into two situations differing by as much as the presence of a tornado.”

However, Lorenz added an important caveat: “If the flap of a butterfly’s wings can be instrumental in generating a tornado, it can equally well be instrumental in preventing a tornado.” In Lorenz’s view, this was what made long-range weather prediction so very difficult.

The same applies even more to economic forecasting. In 1966 the Nobel laureate economist Paul Samuelson — like Edward Lorenz, a professor at MIT — joked that declines in US stock prices had correctly predicted nine of the last five American recessions. I know economists with much worse batting averages. They predict a financial crisis every year, and once a decade they are right, at which point the media hails the stopped clock as a prophet. Economic forecasters are in fact far worse at their jobs than weather forecasters.

Of 469 downturns in national economies since 1988, according to Andrew Brigden of Fathom Consulting, the International Monetary Fund had predicted only four by the spring of the year before they began. As for the great financial crisis of 2008-’09, only a handful of economists saw it coming.

That means that we should treat with skepticism those who confidently predict a US recession next year. And if there is one, we should treat with even more skepticism those who blame it on Trump.

The real point about the gorilla effect, remember, is how little the swinging of the gorilla’s fists has really mattered since he climbed atop the White House. Just like the butterfly, the gorilla may have prevented as many tornadoes as he caused. Indeed, Trump’s economic policies have almost certainly been, on balance, more conducive to economic growth than the opposite. True, he has imposed tariffs, but he has also presided over a sugar-rush of deregulation, deficit spending, and monetary easing.

As the sugar wears off, and the United States follows the rest of the world into a slowdown, if not a recession, all Trump’s opponents will have an incentive to blame him. But perhaps the truth is that the gorilla and the butterfly are not so very different in our complex, interconnected world. The only difference is that the gorilla insists it’s all about him.

“You have no choice but to vote for me,” Trump declared at a rally in New Hampshire on Thursday, “because [otherwise] your 401(k) [retirement savings plan] is down the tubes. Everything’s going to be down the tubes. So whether you love me or hate me, you’ve gotta vote for me.”

That’s a line that could come back to haunt Trump if everything goes down the tubes before November of next year, when Americans will decide if he’s a one- or two-term president. But if he gets lucky, and the economic weathermen are wrong again, it might just get the 800-pound gorilla four more years of fist-swinging.

About this writer: Niall Ferguson is a senior fellow at the Hoover Institution at Stanford University.