Like most things these days, Libs refuse to acknowledge that the booming “Trump economy” exists. Invariably any lauding of Trump’s economic or stock market successes elicits the response that Trump has benefitted from Obama’s head start. Is his true? Has Trump been piggybacking on the Obama recovery? Opinions vary ... but here are the facts:
Dow Jones Industrial Average
Day Obama Elected — 9323
Day Trump Elected — 17,888
Day Obama Inaugurated — 7550
Day Trump Inaugurated — 19,827
Today. 29,423
Percentage Increases
Trump Election Day till now — 64.5% (over 3+ years)
Obama Election Day till Trump Election Day — 91.9% (over 8 years)
Clearly, so far Trump is ahead (assuming his recovery continues ... which, given the coronavirus outbreak, may be in jeopardy.) Comparing these stock market records deserves acknowledgement of some contributing and detracting factors:
- Obama benefitted from the Fed injecting $3.7 trillion into the money supply and reducing interest rates to near zero. (monetary stimulus)
- Obama benefitted from $10 trillion of deficit spending (front-end loaded fiscal stimulus)
- Trump has also deficit spent about $3 trillion (much used to rebuild the military)
- Trump has had the Fed reduce the money supply by about $400 billion
- The Fed has increased interest rates by 1.5 percentage points under Trump
- Trumps has increased GDP growth by about one percentage point and reduced unemployment rates by about 1.2 percentage points despite substantial headwinds from his trade wars with China, Canada and Mexico. He has also expanded average worker’s salaries to over 3% annually. and, finally, started the employment participation rate growing again.
We report. you decide.
Afterwards: Interestingly, the DJIA peak under Bush was 14,000 ... right before the Barney Frank induced sub-prime mortgage crisis. Counting from this high, Obama only experienced the stock market expanding by 28.8%.
6 comments:
Significant to your argument is the fact that actions of the Fed are actually responsible for economic growth, balanced with staving-off inflation. Trump knows that low interest rates fuel short term growth. He has called the Fed "our biggest Enemy" worse than China. And driving the deficit into the stratosphere.
I wish Trump would hold back on the deficit growth. But he is no faster than Obama. Fed never increased interest rates under Obama ... but 5 times under Trump until they reversed course this past Spring. If you don’t think that Quantitive Easing increased economic growth under Obama then you were studying with the same professors as AOC. By the bye, inflation is 1.5% ... below the Fed target of 2%.
So you agree that the Fed determines economic growth, not the President.
Econ 101. GDP growth is helped by monetary stimulus (Fed expanding money supply and lowering interest rates ... like under Obama) ... and fiscal stimulus (lower taxes (Trump), deficit spending (Trump and Obama) ... and population growth and productivity expansion. Of the first two, fiscal stimulation is, by far, the most effective. Monetary stimulus works but it is like pushing a rope.
You, like AOC, get a C-.
Then you ask ... how did she graduate cum laude in economics from BU. Beats me. Maybe she was shtoffing her profs?
That is higher than my actual grade in Econ 101 in College. Thanks.
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