In a new book by former Obama adviser Ben Rhodes, Mr. Rhodes quotes President Obama after President Trump’s victory: “I’ve got the economy set up well for him.” After last Friday’s blockbuster jobs reports, Obama’s self-congratulatory line was repeated countless times in the media, Stephen Moore and Arthur Laffer note in the WSJ.
In that it is hard to find a single economic indicator that is not pointed in a bullish direction, “the left is now forced to argue that Mr. Trump’s economic success is really the continuation of a trend that began under President Obama.” Messrs. Moore and Laffer ask and answer, “Is it true?”
Yes, but not in the way Mr. Obama and the Trump haters think. As advisers during the 2016 campaign, the two of us told Mr. Trump over and over that he could get America back on a path of 3% to 4% annual growth. After seven years of the weakest recovery since the Great Depression, we felt confident that simply turning the policy dials from antibusiness to pro-business would have an enormously stimulative effect. Mr. Trump agreed—and that’s precisely what he has done as president.
Mr. Obama might be justified in taking credit for today’s economy if his successor had adopted and carried on his policies. Instead, Mr. Trump has reversed nearly every Obama rule, edict and law that he can legally overturn. At its core, the Trump economic strategy wasn’t complicated: systematically repeal Mr. Obama’s “accomplishments”—the tax increases, the regulatory blitz on business, the welfare expansions, the war on American fossil fuels, and so on. As a result, the economy would pop like a cork pulled from a shaken champagne bottle.
Liberal economists were convinced that the economic sky would tumble should Donald Trump got into the White House.
- Former Treasury Secretary Larry Summers: “if he (Trump) were elected, I would expect a protracted recession to begin within 18 months.”
- From the Washington Post: “A President Trump Could Destroy the World Economy.”
- Democratic financier Steve Rattner on MSNBC: “If the unlikely event happens and Trump wins, you will see a market crash of historic proportions.”
- Paul Krugman, after election day: “We are very probably looking at a global recession, with no end in sight.”
It’s a little rich that liberals who warned the economy would melt down under Mr. Trump are now insisting that growth was in the cards all along. If the economy and the stock market had crashed, it’s obvious they’d be sanctimoniously denouncing Trumponomics as a tragic failure.
Moore and Laffer give a final reason to dismiss the idea that Mr. Obama deserves credit for the Trump boom: the economy was decelerating, not accelerating, during 2016.
The growth rate for Mr. Obama’s last year in office was an anemic 1.6%. But the economy turned on a dime the day after the election. Employers and investors realized that the Obama era was over, and they knew intuitively that good things were on the way. Consumer confidence, business confidence, and the stock market all soared. In June 2016 only 32% of Americans rated the economy as “good” or “excellent.” Today 62% do.
Mr. Moore and Mr. Laffer’s book, Trumponomics: Inside the America First Plan to Get Our Economy Back on Track, will be out this fall.
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