Was Trump’s Pre-Covid Economy Stronger than Obama’s?

There is one issue in which Trump has beat Biden in polls most of the year. That is, who would be better at building the economy? Most people don’t blame Trump for Covid-19, even if they blame his handling of it. But is Trump’s good rating really justified?

Forbes business magazine started a series of articles in February, comparing the last three years of the Obama presidency with the first three years of Trump. They chose those years because it wouldn’t be fair to Trump to include the first five years, in which the economy blasted like a rocket from the Great Recession crash. Likewise, it wouldn’t have been fair to Trump to include the Covid-19 crash in Trump’s numbers.

GROWTH RATE

A Forbes article bases its findings on GDP growth.

Obama’s last three years had better growth than Trump’s three years.

Obama’s last three years in office had growth rates of at least 2.17% and as high as 3.06%. For Trump the high point was 2.83% in 2018 when the tax cut seems to have had the largest impact and even fell short of Obama’s 2014 and 2015 growth rates of 3.06% and 3.05%, respectively. In 2019 the adjusted growth rate was only 1.99%.

JOBS

OK, that’s accountant stuff. What about jobs on the ground?

Obama created 1.6 million more jobs than Trump over a three-year period

It is harder for companies to find workers and it is later in the business cycle. However, Trump’s boasts about how many jobs he has added don’t include that he has generated 6.5 million jobs under his Presidency vs. the 8.1 million, or 1.6 million fewer than Obama did under the same timeframe. On average Obama created 43,000 more jobs per month than Trump.

MANUFACTURING JOBS

Trump ran on a promise of bringing back manufacturing. How has that worked out?

Manufacturing jobs hurt by the trade wars

Manufacturing jobs rebounded in Trump’s first two years in office, but their growth rate slowed dramatically in 2019. The decline is at least partially due to the trade wars impacting global growth and the U.S. economy experiencing slower growth last year.

TRADE DEFICIT

Another promise was to reverse the trade deficit, but that hasn’t happened yet.

Trade deficit has grown despite the trade wars

During Obama’s eight years in office the trade deficit ranged from $384 billion in 2009 due to the Great Recession to $550 billion in 2011 as the U.S. economy recovered earlier than the rest of the world. Under Trump the trade deficit has grown to over $600 billion the past two years despite trying to decrease it via the trade wars he has started.

EXPORTS TO CHINA

Goods to China has actually eroded.

U.S. goods exports to China have fallen, hurting companies and farmers

After Canada and Mexico, China is the third largest buyer of U.S. goods. A result of Trump’s trade war with China is U.S. companies and farmers selling fewer goods to it. After peaking in 2017 at $130 billion, goods exports to China have fallen $23 billion or 18% to $107 billion in 2019.

BUDGET DEFICIT

Obviously, the pandemic has played havoc with our deficit. But even before the pandemic, Trump was ruling over a massive increase in debt.

Unprecedented deficits when the economy is growing

The Federal deficit is forecast to be 4.6% of GDP in fiscal 2020 while the economy’s real growth rate is a projected to be 2.2%. This growth rate is in-line with the economy growing at essentially 2.1% the last three quarters. . .

When you compare the last three years of Obama’s Presidency vs. Trump’s first three years, Trump’s deficits will be almost $1 trillion greater at $2.47 trillion to $1.51 trillion for Obama. It doesn’t look like Trump’s tax cuts will pay for themselves.

There is no question that the economy was strong before Covid hit. But the question is, was it Trump’s doing, or was he just continuing Obama’s economy?

Obama’s 2009 Recovery Act Kicked Off Over 10 Years Of Economic Growth. . .

The National Bureau of Economic Research or NBER determines the length of economic expansions and recessions. The recent growth period started in July 2009 and has lasted for 127 months through January 2020. This surpasses the previous record of 120 months from March 1991 to March 2001, which then led into the Great Recession that Obama inherited. . .

Each of the last three years of Obama’s economy were stronger than Trump’s 2019 when adjusted for trade, inventory impacts and government spending. To get an overall view of Trump’s economy this article has 10 economic metrics of his three years in office.

To be fair to Trump, it’s harder to keep an economy going, since the boom-bust cycle is inherent in the capitalist system—allowing the affluent and large corporation to gobble up “shoestring” entrepreneurs and smaller companies, which have become overextended. Slower, steady growth is, therefore, more healthy for the economy—and small businesses—than a boom that will lead more quickly to the crash.

However, considering that the economy is the one area in which voters credit Trump with success, it’s amazing that Biden’s people don’t ask people to compare Trump’s numbers with the Obama-Biden numbers. It’s probably because people don’t like or understand numbers. Also, all numbers on the economy can be argued.

There’s an old saying, “if you put all the economists in the world, end-to-end, they still couldn’t reach a conclusion.”

Charts and graphs courtesy of Forbes.com