Why the Left Has Been SO Wrong About the Trump Boom

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Time Magazine‘s latest cover story is a classic. It blares: “The Wrecking Crew: How Trump’s Cabinet Is Dismantling Government.” The New York Times ran a lead editorial complaining that team Trump is shrinking at an “unprecedented” pace the regulatory state.  
 
Meanwhile, last week the stock market raced to new all-time highs, we had another blockbuster jobs report with another fall in the unemployment rate, and housing sales soared to their highest level in a decade. 
 
Are the editors at the Times or at Time so ideologically blinded that they are incapable of connecting the dots?
 
The U.S. economic revival of three percent growth already has defied the predictions of almost every Donald Trump critic.  I vividly remember on the campaign debating Hillary Clinton’s economic gurus who accused Trump and his advisers like me of “lying” when we said pro-growth policies would speed up the economy to 3 to 4% growth.   
   
Jason Furman, who chaired the Council of Economic Advisers under President Obama, told reporters earlier this year that the chances of reaching 3 percent growth over a decade were about 1-in-25 – which is what the political experts said was Trump’s chance of winning the election.  Another Obama economist Alan Krueger called the 3% growth forecast “extremely rosy.”
 
Larry Summers, a top economic advisor to Barack Obama, questioned the “standards of integrity” of the Trump economic team forecast 3% plus growth. “I do not see how any examination of U.S. history could possibly support the Trump forecast as a reasonable expectation,” he wrote in The Washington Post.
 
Congress weighed in too.  “This budget relies on absurd economic projections and pretends revenues that no credible economist would validate,” Rep. Pramila Jayapal, D-Wash., announced at a House budget hearing.
       
The sharp-penned Paul Krugman of the Times declared the 3% Trump growth forecast as an act of “economic arrogance.” He mocked the Trump forecast saying that the productivity improvement necessary for faster growth was as likely as “driverless flying cars arriving en masse.”
 
A  Los Angeles Times business article from earlier this year was entitled: “If Trump thinks he can get more than 3% economic growth, he’s dreaming.”
 
Admittedly, we shouldn’t read too much into six months of very good economic data (with 3 percent growth) or the booming stock market. These trends can always reverse course quickly. Trump’s more restrictive policies on trade and immigration could harm growth potential. 
 
But so far the Trump haters have missed the call on the trajectory of the economy. Doubly ironic is that the same Obama-era economists – Summers, Kruger, and Furman – who are trashing Trump’s increasingly realistic forecast of 3% growth – are the ones who predicted 4% plus growth from the Obama budgets. Obama never came anywhere near 4% growth and at the end of his term growth was trickling down at a pitiful 1.6%. 
 
The same people who accused Trump’s team of “low standards of integrity” for predicting 3% growth were the ones who forecast much faster growth from Obama – while he was RAISING taxes. Amazing.
 
Under Obama, ‎free enterprise and pro-business policies were thrown out the window. What was delivered was the weakest recovery from a recession since the 1930s. Middle America felt it, which is why Trump won these forgotten Americans. The economy’s meager growth rate of 2% left a $2 trillion growth deficit by 2016. 
 
One reason that economist Larry Kudlow and I and others assured Donald Trump that 3 to 4% growth is achievable was that Trump could capitalize on the underperformance of the Obama years. Business investment fell almost two-thirds below the long-term trend line under Obama – thanks to higher taxes on investment. Now, partly in anticipation of the tax cut, business spending keeps climbing.
 
Maybe the liberal economists and their shills in the media should show some humility. They should acknowledge they have been dead wrong about how much Obamanomics was going to grow the economy and about how Trumponomics would crash the economy and the stock market. Or better yet, maybe the rest of us should all just stop listening to them.
 
Stephen Moore is a senior fellow in economics at the Heritage Foundation.  He served as a senior economic advisor to the Trump campaign where he helped draft early versions of the Trump tax plan.

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