Face It People, The Trump Economic Boom Is Here
Have you noticed, that through the mist of Russia, James Comey, Charlottesville and now 2 monster hurricanes, that the US economy is booming faster than it has since the late Clinton years, well have you?
This is undeniable.
In the last year of The Obama Admin, the US economy was decelerating, with a dismal 1.6% growth rate. The economy revved up to a 3% growth rate in Q-2 this year. And recent estimates for Q-3 GDP indicate growth, at around 3.4%.
It is easy to read too much into short-term trends, and, yes, they can reverse sharply. But the new bounce in the step of the economy is confirmed by many other indicators, almost all of which point straight North.
The DJIA is up more than 3,000 points, starting with the 257-point rally the day after the election, and the net wealth of Americans, mostly through their pension funds, has increased by more than $4-T.
Last month the University of Michigan, which tracks consumer sentiment (MSI), reported that confidence soared to near its highest level in at least 10 years.
Other surveys by the National Federation of Independent Business and the National Association of Manufacturers also find a flurry of optimism.
You hear these same sentiments anecdotally from employers. Everywhere I go I ask CEOs, “How is business?”
The answer is almost always 1 of 2 words: “good” or “great.”
A construction executive told me recently, “It was like on Election Day a light switch was flicked on and our business started improving and it has not stopped.”
Just a few months ago many economists were warning that the economy and the stock market were tapped out and that a recession and a stock market correction were overdue.
Former US Treasury Secretary Larry Summers predicted that slow growth was “the new normal” for America.
The Obama brain trust could only squeeze out 2% growth from the American economy even in a good year, so there was no way President Trump could do any better or as good.
I was one of the advisers during the campaign who urged President Trump to aim for 3 to 4% growth unrelentingly.
It was obvious that the economy was not running out of gas, but just the opposite.
The post-Great Recession recovery was running $2-T behind an average recovery and $3-T below the trend line from the pace of the Reagan Expansion.
Liberals have taken note of the economic revival and are scrambling to invent plausible explanations without having to assign any credit to President Trump.
The latest spin is that this is the “Janet Yellen Economy” driven by the Fed’s low interest-rate policies.
But if the Fed’s Zero-interest-rate policies of the last 8ht years (2009-2016) are the engine for growth, why did the spurt only start happening once Donald Trump was elected?
The Trump Presidency has ended what economist Larry Kudlow calls Washington DC’s war against business.
The Obama-era regulatory rampage has come to a Halt.
Some 16 Obama-era regulations have been suspended so far.
A notable dividend from these policies is the improbable comeback in coal. After being declared a dead industry by liberals last year, coal production is up more than 12% this year, which means not just more mining jobs but more hiring in trucking, steel and manufacturing as well. That’s a microcosm of The Trump Effect.
Again, these are short-term numbers, and business owners and the stock market are counting on the Trump Tax Cut, especially in the aftermath of the Obamacare repeal whiff. The lower corporate tax rate would mean trillions of dollars in higher stock values.
So far, 8 months into his presidency, love him or hate him, Donald Trump has shifted the economy and wealth creation into a faster gear. If Republicans, and hopefully pro-business Democrats can pass a meaningful tax cut this fall, The Trump Boom may just be getting started.
By Stephen Moore
Paul Ebeling, Editor
Editor’s Note: Stephen Moore is a distinguished visiting fellow at The Heritage Foundation