Who deserves credit for the booming economy? This is not a petty argument. How voters answer the question could well determine whether Democrats retake the House of Representatives come November.
Trump and Obama (and their admirers) are slugging it out, both claiming that it is their policies that have led to the ongoing economic expansion, steady job growth and higher stock prices.
Happily for President Trump, the pros agree with him. A recent survey of economists suggest it is President Trump, and not Obama, who should be taking a bow.
The Wall Street Journal asked 68 business, financial and academic economists who was responsible for the strengthening of the economy, and most “suggested Mr. Trump’s election deserves at least some credit” for the upturn.
A majority said the president had been “somewhat” or “strongly” positive for job creation, gross domestic product growth and the rising stock market.
The pros cite the White House’s push for lighter regulation and the recent tax bill as critical to a pro-growth environment; more than 90 percent of the group thought the tax bill would boost GDP expansion over the next two years.
A year ago in the same survey, economists awarded President Obama mixed grades. Most saw his policies as positive for financial stability, but neutral-to-negative for GDP growth and negative for long-term growth. By contrast, Trump was seen as neutral to positive for long-term gains.
Why would Trump rate higher than Obama with this group? Economists point to the upturn in business confidence that accompanied Trump’s election, and tie that to increasing business investment. Spending on capital goods accelerated sharply over the first three quarters of last year, growing at an annualized rate of 6.2 percent.
Such outlays will spur productivity gains and lead to wage hikes, creating a virtuous circle complete with rising consumer confidence and spending.
Unhappily Trump, voters have not yet caught up with the experts. Democrats have done an excellent job of trashing Trump’s policies, issuing hysterical alarms over the supposed dangers of deregulation (toxic water, foul air!) and vilifying the GOP tax bill.
Democrats are terrified that the tax cuts will be a pleasant surprise to those who believed House Minority Leader Nancy Pelosi (D-Calif.) when she called the bill Armageddon, and when Senate Minority Leader Chuck Schumer (D-N.Y.) declared it a “kick in the gut to the middle class.”
They are even more terrified of the bonuses and raises being handed out by employers large and small, who credit the tax bill for those unexpected benefits. Democrats are trying to convince voters that those $1,000 bonuses and pay hikes are “crumbs” as multi-millionaire Nancy Pelosi recently said.
Maybe $1,000 is “pathetic” to Pelosi, but for a great many Americans, it is a big and welcome windfall.
So far, Democrats are winning the messaging war, using President Trump’s unpopularity to sour Americans on everything the White House does.
In a recent Quinnipiac poll, a record 66 percent of those surveyed graded the economy as “excellent” or “good” but 49 percent of those surveyed credited Obama while only 40 percent named Trump.
That poll, though, seems biased. Only 23 percent of those questioned were Republicans, while 34 percent described themselves as Democrats, and 38 percent said they were Independents. It also asked the questions in a way that appeared likely to elicit an anti-Trump response.
As the months pass, it will be increasingly difficult for Democrats to separate rising wages and faster growth from the tax bill sponsored by Republicans and the rollback of regulations, which has encouraged an upturn in business investment.
Even the New York Times, no friend to President Trump, has described the “wave of optimism” sweeping over Americans business leaders, saying it is “beginning to translate into the sort of investment in new plants, equipment and factory upgrades that bolsters economic growth, spurs job creation — and may finally raise wages significantly.”
The Times ran the piece on New Year’s Day, pretty much guaranteeing it would attract few readers, but still.
More than two million workers have now received bonuses and or raises, with their bosses telling them the benefits are flowing from the GOP tax bill. That number will continue to grow as other companies are pressured into sharing the proceeds from lower taxes. This is a powerful and persuasive movement that is gaining momentum every day, which is probably why Democrats are so foolishly belittling the payouts.
A vast majority of Americans feel more optimistic about their prospects than they have in a decade. Will they really want to rock the boat come November and throw out the party at the helm? We shall see.