Sunday, June 10, 2018

It's the Trump Economy, Stupid - Daniel John Sobieski

by Daniel John Sobieski

Those who claim that Trump merely inherited a rising trend line from Obama ignore their own predictions of economic disaster after Trump won.

That’s the common sense opinion of two key economists who argue that you can’t have every economic and environmental policy you put in place repealed by your successor and then claim as yours the economic growth that results:
Economists Stephen Moore and Arthur Laffer wrote in The Wall Street Journal Friday that President Donald Trump deserves credit for the economy’s improvement, not former President Barack Obama.
Moore, a senior fellow at the Heritage Foundation, and Laffer, the chairman of Laffer Associates, write that “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.”
Trump didn’t need a “stimulus.” All he needed was to remove the shackles from America’s entrepreneurs and let nature take its course. He let entrepreneurs know that they could take risks without fear of being punished for their success. Winners and losers would be determined by the talents of the participants and not bureaucrats who wasted billions on “shovel-ready” jobs that didn’t exist. It was Trump who let the economic dogs out.

Obama didn’t cut taxes, didn’t slash regulations, didn’t rein in the EPA, didn’t free American energy, or end the war on coal and fossil fuels. All these raised the cost of doing business if business could be done at all. He gave us Solyndra, the poster child for the failure of a command economy. He gave us ObamaCare and its punitive taxes such as the now-repealed individual mandate which put the economy into hibernation as businesses were unable to hire or expand without punitive costs.

At one point it got so bad that the Obama administration actually required businesses to “attest” on their tax forms that they weren’t shedding employees or making hiring and employment decisions to avoid ObamaCare taxes and regulations under penalty of perjury:
On Monday, a Treasury Department unconcerned with the necessities of the free market said that businesses will need to "certify" that they are not shedding full-time workers simply to avoid the mandate and its costs.
Officials said employers will be told to sign a "self-attestation" on their tax forms affirming this, under penalty of perjury.
ObamaCare has created a class of employers known as the "49ers," companies who decide to stay out of health care reform's clutches by not exceeding, or by slimming down to, 49 employees, one fewer than the 50-employee threshold for providing health coverage.
There is also a class of employees known as the "29ers." Their hours are limited or reduced to one fewer than the 30-hour threshold for being considered a full-time employee for whom coverage must be provided…
The CBO has announced that under ObamaCare the projection of hours worked will represent "a decline in the number of full-time-equivalent workers of about 2.0 million in 2017, rising to about 2.5 million in 2024."
Trump removed this and other job-killers that kept the economy in hibernation. This is his economic boom caused by his policies and no greater proof is found than in the manufacturing job numbers, jobs that Obama famously said, in a speech to Carrier employees, would never come back.

In June, 2016, Obama mocked Trump’s desire to keep employers like Carrier from leaving the country. Obama called them the “jobs of the past” and in effect said good riddance to them:
In June, President Obama participated in a PBS townhall and was asked about Trump's promise to keep Carrier's Indiana plant in the U.S. The townhall participant -- Eric Cottonham, a member of the Steelworkers Union employed by Carrier -- asked Obama if anything could be done to stem the tide of jobs flowing out of the country, as Trump had recently promised to do.
"I see here you’re doing a lot of things, but in Indianapolis, there’s nothing there for us," he asked. "I mean, what’s next? I mean, what can we look forward to in the future as far as jobs, employment, whatever? Because all of our jobs has left or in the process of leaving, sir.”
"Those jobs of the past are just not going to come back," Obama told Cottonham.
Instead, Obama advised workers losing their jobs to learn how to adapt their skills to "some of these new technologies," in particular, the "clean energy sector."
"Let's focus on those," he suggested. "The days when you just being able to -- you just being willing to work hard and you can now walk into a plant and suddenly there’s going to be a job for you for 30 years or 40 years, that’s just not going to be there for our kids because more and more, that stuff’s going to be automated."
Fast forward to Trump’s election and another speech with a slightly more optimistic message -- president-elect Trump announced a deal had been reached with air conditioner manufacturer Carrier to keep 1,100 manufacturing jobs in Indiana rather than being shipped to Mexico. Suddenly the business climate was friendlier.

In his Carrier speech, Trump announced the promise by Carrier and its parent company, United Technologies, to spend upwards of $16 million to renovate its Indiana plant in a firm commitment to next-generation manufacturing. Trump said in his speech:
So, United Technologies has stepped up. And I have to say this, they did it in such a nice and such a professional way. And they’re going to spend so much money on renovating this plant. And I said, Greg, say that number. You know, he said $16 million. Well, the minimum number is 16. It’s going to be, in my opinion, a lot more than that.
Whatever the number, it will surely bear more fruit than Obama’s failed investments in “the clean energy sector.” It is Solyndra, not Carrier, that is the poster child for crony capitalism, an investment in failure to reward an Obama donor.

Not only did Carrier stay but also others who left have returned. The economy is hitting on all cylinders. As Larry Kudlow, assistant to the president for economic policy and director of the White House’s National Economic Council, notes:
The U.S. economy has been growing close to 3 percent over the past year -- a rate once thought impossible -- and is on track to get even growthier in the second quarter. Business is booming as corporate spending on new capital equipment has surged in 2017 and 2018. Hiring and wages are rising, too. Household net worth has soared to an almost unimaginable level of $100 trillion.
The most recent jobs figures show extraordinary job growth and an unemployment rate of 3.8 percent, the lowest level since 2000. Since the president took office, 3 million new jobs have been created, including more than 300,000 manufacturing jobs. The share of the workforce filing new unemployment claims is at a record low. Small-business confidence stands near 35-year highs.
And we see in Mays jobs report, the fruit from Trump’s economy:
Businesses added 223,000 jobs for the month, pushing the unemployment rate down to 3.8% -- its lowest rate since April 2000 and matching the lowest rate ever, first set in 1969, according to the Labor Department…
And it's happening in a broad swath of industries: education, health care, retailing, restaurants, hotels, construction, you name it. Oh yes, and wages rose to an average $26.92 an hour, a 2.7% gain from a year ago.
Looking at the separate household measure of jobs, a different measure kept by government, there were 128.657 million full-time jobs in the U.S. in May. That's a 904,000-job increase in one month, the largest jump in the data's history. All told, 155.474 million Americans have jobs, a record.
Those now who claim that Trump merely inherited a rising trend line from Obama ignore their own predictions of economic disaster after Trump won and began dismantling Obama’s economic policies. The policies in place are not Obama’s and neither are the successful results.

Daniel John Sobieski is a freelance writer whose pieces have appeared in Investor’s Business Daily, Human Events, Reason Magazine and the Chicago Sun-Times among other publications. 


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