On Wednesday, The Observer posted an article titled, “How Trump Got the Economy Booming in Less Than a Year.” That’s a question we need to answer if we are going to continue the boom.
The article reports some of the economic successes:
Early into his administration, Trump’s policies are already restoring growth. Real GDP grew 3.1 percent in the last quarter, up more than 50 percent from the average for the eight years that Obama was president.
In Trump’s first six months in office, more than a million new jobs were created, driving unemployment down to a 16-year low. The stock market set 34 new record highs, with headlines just last week screaming “Dow Races Through 23,000.”
The Conference Board’s Consumer Confidence Index rose to nearly a 16-year high, as did Bloomberg’s Consumer Comfort Index, both contributing to soaring retail sales. The National Association of Manufacturers Outlook Survey rocketed to a record 91.4 percent, the highest two quarter average for manufacturing optimism in the survey’s 20-year history. The Institute for Supply Management reported it’s barometer of manufacturing rose to 57.8, with over 50 indicating expansion of the manufacturing sector.
So how did this happen. Part of the reason for the growth is the promise of pro-growth tax reform based on the Reagan model of lower marginal tax rates. But there is another reason–based on actions, not promises–deregulation.
The article explains:
Trump has already made a lot of progress in removing Obama’s boot on the neck of American energy producers. That is why U.S. shale oil production has already soared to record levels since Trump entered office.
America today has the resources to lead the world as the top producer worldwide of oil, natural gas and coal. Removing America from the Paris Climate Accord, the start of the demise of Obama’s so-called “Clean Power Plan,” and Trump’s ongoing dismantling of the anti-American energy regulation of Obama’s EPA has already liberated America’s energy producers to assume these world leading roles.
Any economy with the world’s number one oil producing industry, number one natural gas producing industry, and number one coal producing industry is going to be leading the world with booming economic growth. And not just in energy but in manufacturing too. Because manufacturing is an energy intensive activity.
The article concludes:
The House and Senate have now passed budgets providing for many of the spending reductions proposed in Trump’s budget. Contrary to outdated Keynesian economics, government spending detracts from rather than adds to the economy, draining resources from the productive private sector, which is why Obama’s “stimulus” never worked.
In the 2010 and 2014 elections, voters decisively expressed what they think of the Keynesian doctrine that increased deficits and government debt contribute to economic recovery and restored growth. Voters first obliterated the House Democrat majority in 2010 and then took away the Senate Democrat majority in 2014.
Wait until America gains the reality of pro-growth tax reform. When it further restores booming recovery, voters will feel vindicated in their judgements and continue their support for the economic policies of the Trump administration.
I am not convinced that all of the voters will be smart enough to realize what has happened to the economy this year. Unfortunately, we have a bloc of voters who will be more concerned with whether or not the government will continue to pay them not to work. Part of the challenge in growing America’s economy is restoring America’s work ethic. That is part of the foundation of the change that needs to come.