President Trump loves to claim credit for the positives and deny any blame for the negatives that have occurred since his election. He likes to brag about matters that, if true, require no expression of fact, i.e. his being a stable genius. Such things are self-evident, or lacking, as the case may be.
He reminds me of the old Road Runner cartoon and Wile E. Coyote.
The latest claim is the positive increase in the Stock Market. Now, there is no question the market is booming. But the factors which impact such growth are infinitely more complex then Presidential tweets and as yet to be fully appreciated tax cuts.
But, for comparison purposes, let’s see how Mr. Trump stacks up.
Here’s a fascinating analysis, http://www.macrotrends.net/2481/stock-market-performance-by-president, and remember historical market numbers are easy to verify.
At this mark in the Obama Presidency, the market was up 25.8%. Mr. Trump is at 27.3%. That’s as far as we can measure to this point. So how is it Mr. Obama was able to nearly match the performance and be the reported “big spender” in government Mr. Trump and others portray?
Because he wasn’t, more on that later.
As a point of interest, at the same point in the Reagan administration, the market was down 8%. At the 2-year mark, the market under Obama was up 48.6%, 16.1% under Clinton, and 13.6% under Reagan.
Gives one pause. To put a final perspective on it, at the end of the four previous administrations, the market performance was as follows.
Clinton + 228.9%
Obama + 148.3%
Reagan + 147.3%
GW Bush -26.5%
Mr, Trump claims the tax cut will benefit businesses and spur economic growth al la Reaganomics.
Let’s look at that. The last President to have a balanced budget was Clinton. The Office of Management and Budget estimate the budget will be balanced again in 2027 (this was projected BEFORE Mr. Trump assumed office and based a variety of complex economic, social, and financial factors.)
Federal spending grew more under Reagan than Obama. https://mises.org/blog/federal-spending-grew-more-under-bush-and-reagan-under-obama
Any success of Reaganomics was as much to do with increased government spending as his perceived tax cuts. One aspect everyone forgets about during the Reagan years was Strategic Defense Initiative (SDI aka Star Wars).
While the SDI program never achieved the expected level of success, one can argue it stimulated the development of Silicon Valley and other technology gains.
Now Mr. Trump has succeeded in passing similar tax cuts with the idea that this will stimulate growth. Trump touts the benefit of reduced government spending as another stimulus to economic growth.
The analysis of the previous effort by President Reagan would say otherwise in the absence of government spending.
It remains to be seen how Trumpenomics works out. But a review of the past does not bode well. Mr. Trump lacks the ability of Reagan to build coalitions (his ability to work across the aisle with Democrats), the calm, analytical manner of President Obama, or the characteristics of a statesman given his casual references to nuclear war as a realistic national policy.
I fear we are in much trouble given all of the complexities of the world.
One thought on “The Continuity of a Lie: Failed Reaganomics Morphed into Trumpenomics”
Stock market is great if you’re invested in it, and protected against a loss when it tips the other direction. In actual news that affects my area, Union Metal closed in December (300 jobs) Affinity Hospital, a for-profit hospital suddenly shutting it’s doors with 3 week notice (800 jobs, countless people going to 2 other hospitals who were taken by surprise) and the Hall of Fame Village, touted as Disneyland for football, has stiffed their subcontractors to tune of nearly a million dollars. Now this HOF thing is pure BS: sports complex, hotel, retirement home for NFL players, and they hired a former Disneyland executive to oversee this. THIS IS THE NFL! and they’re stiffing the locals.
Not excited about the measly tax cut since it means zero.