This quote is attributed to James Carville, a strategist in Bill Clinton’s successful campaign for president in 1992 against the incumbent George H.W. Bush.
As in 1992, one of the most important issues in the 2024 election was the economy. People
were suffering under post-Covid inflation and blaming it on Biden and his
policies (although America fared better with inflation than most advanced countries). Trump was promising prosperity for all with lower prices on eggs on
day one. At a rally in October Trump proclaimed “We will begin a new era of soaring incomes. Skyrocketing wealth. Millions
and millions of new jobs and a booming middle class. We are going to boom like
we’ve never boomed before”.
Let’s take
a look at the economy after the first month of Donald Trump.
By most economic measures, the economy Trump inherited from Biden was in great shape. Some said it was the best in decades, maybe since pre-Reagan. This was astounding considering the drumming it had taken during Covid. Economic pundits kept talking about a possible recession even after it was clear that there was no sign of one. A January 23 article published by The Center for American Progress listed 5 points about the economy under Biden:
1. Economic growth surpassed expectations
2. Stronger productivity growth returned despite a global
slowdown
3. Inflation was tamed without a recession
4. Workers benefited from the strongest labor market in
generations
5. Households saw substantial wealth gains, especially for
disadvantaged groups (eg Blacks)
Job creation was a hallmark achievement of the Biden administration. More jobs were created during the first three years of his term than any other president, although the percentage increase was greater for Jimmy Carter. Incredibly, America showed increased employment in each of Biden’s 48 months in office, something that has never been seen before. The unemployment rate in December was at a record low 4.1%. Eli Amdur in Forbes January 13, 2025 “Frankly, Joe Biden built and sustained the strongest, healthiest, most resilient job market in American history”.
In the first
8 weeks of Trump 2 the economy has not fared so well.
Inflation,
which was decreasing during the last year of Biden’s administration, has turned
around and is now increasing. Economists at Goldman Sachs are projecting higher
inflation in 2025 mostly due to Trump’s tariffs, predicting core inflation
(excluding food and energy) to reach 3%. Consumer confidence has dropped in the
last month and people are spending less.
But the
most dramatic change in economic indicators has been the stock market. This is
the trend that is of most interest to Trump and his billionaire buddies since
50% of stocks were owned by the wealthiest top 1% of Americans, and 93% by the
top 10%. Unemployment only interest them in how it affects labor costs.
Most indexes
had grown following the November election to a record high in February, in
anticipation of Trump’s presidency. Faced with the reality of Trump's policies, they have dropped to below
pre-election values, mostly in the last week, losing $4 trillion in value. The
precipitous drop is largely due to Trump’s tariffs creating an escalating trade
war with China, Europe, Mexico and Canada.
Donald
Trump has been forced to admit there are problems with the economy but tries to put a positive
spin on it while lowering public expectations. In a speech last week he
acknowledged that tariffs would cause “a little disturbance….We are OK with
that. It won’t be much”.
Then on Sunday Trump was asked on Fox News about a possible recession. Trump’s reply did not rule it out which lowered public confidence and contributed to stock market losses.
“I hate to predict things like that. There is a period of transition, because what we’re doing is very big. We’re bringing wealth back to America. That’s a big thing. … It takes a little time, but I think it should be great for us”.
Still, the Republicans
do their best to spin the news into a positive to reassure their base. Speaker
Mike Johnson was asked recently on NewsMax about the effect of Donald’s tariffs
on the stock market. His reply:
The President has already proven
what he can do on the economy. This is not theoretical. Look at the first term
of the Trump administration prior to Covid… After the first two years of the Trump
Administration we had the greatest economy in the history of the world, not
just in the U.S. Every demographic was doing better; all boats were rising, we
had a thriving U.S. economy. We were booming and that’s because of the policies
and strategies that President Trump led and delivered. We made America the
first priority. That is what he is doing again. Now he has to reshape and shake
things because it’s in a real mess. The last four years was a disaster.
Note the
exaggerated strength of Trump’s first term as the “greatest in the history of
the world” and the dismissal of Biden’s as “a disaster”. And Johnson claims to
be a Christian. He is either guilty of lying, or willful ignorance.
They may be fooling the Republican base but not the rest of Americans. And certainly not most Canadians. Ontario Premier Doug Ford said today on MSNBC about his response to Trump’s tariffs on Canadian steel and aluminum:
“It shouldn’t be this way – we should
be booming, both countries, right now. If we go into a recession, it’s self-made
by one person. It [will be] called President Trump’s Recession”.
Sources
https://www.americanprogress.org/article/the-biden-administration-handed-over-a-strong-economy/
https://www.cbsnews.com/news/inflation-trump-tariffs-economists-forecast-2025/
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