Can Trump get the economy started again?

By Scott Benjamin

In December 2019, just six months ago, a CNN poll reported that 76 percent of the people surveyed were more confident about the economy than any time since February 2001, about a month after former Democratic President Bill Clinton left office and the nation was still in an extended economic expansion.

Washington Post economics columnist Robert Samuelson reported on June 3 that a recent Congressional Budget Office forecast compared to the one that had been prepared in January indicated "a stunning $7.9 trillion over an 11-year period, with the figures adjusted to eliminate inflation."

Samuelson stated, "Economist Mark Zandi of Moody’s Analytics believes that the CBO’s forecast may be too optimistic. 'I don’t think the economy will ever fully get back to the GDP growth rate [before the pandemic], which CBO expects by the end of this decade,' he said in an email. He cited many factors that could slow growth: “diminished globalization — including less trade, immigration and foreign investment — and a much more precarious [budget] situation.”

When Clinton left office the United States was near the end of the longest economic expansion in its history. That record was eclipsed in July 2019 by the expansion that started in 2009 under former Democratic President Barack Obama and continued through February under Republican President Donald Trump.

The president's re-election prospects on November 3 appear to hinge largely on his response to the tension related to the recent killing of George Floyd in Minneapolis and how he handles the pandemic and the subsequent economic recovery.

In a phone interview, Tom Gilmer of Madison, the Republican nominee in the Second Congressional District, said, "The president's handling of the pandemic has given more confidence to the stock market, which has remained stable as it awaits the reopening of the economy."

Wall Street Journal columnist Gerald Seib wrote recently that "one prominent Democratic strategist frets privately: 'I worry they will think they need a businessman to get us out of that.' Mr. Trump already is honing this argument: I led a roaring economy once, and I can do it again."

The national unemployment rate was at 3.5 percent before the pandemic, the lowest in more than 50 years. It had been at 3.8 percent during Clinton's last year in office.

However, there was a $236 billion budget surplus during Clinton's final year. Even before the pandemic, the CBO had forecast a deficit of more than $1 trillion under Trump.

The Hill reported last year that former Massachusetts Gov. William Weld, who was then seeking the 2020 Republican presidential nomination ,criticized the president for burdening the economy with deficits "of a trillion dollars every year" following his supply-side tax reform of late 2017.

However, some observers believe that Trump has been more ambitious on reducing America's trade deficit than any president in generations. The last time America had a trade surplus was 1975, when Gerald Ford was in the White House.

Wall Street Journal foreign affairs columnist Walter Russell Mead has stated that Trump "proclaimed an 'American first' foreign policy that sought to upend decades of U.S. trade and alliance policy."

His immediate predecessor, Democrat Barack Obama, negotiated the 13-nation Trans-Pacific Partnership (TPP), which encompassed 40 percent of the global economy. However, it never got to a vote in Congress.

Trump took a harder line with America's trade partners in negotiating the United States Mexico Canada Agreement, which has been approved in the Democratic-controlled U.S. House.

"It was a great step forward in making trade fair," said Gilmer.

Vincent Davis Hanson, who wrote "The Case For Trump (Basic Books, 400 Pages). stated that the president "concluded that [foreign countries] put their own workers' interests first and for a reason. If deficits were so good or at least of no importance, then why did America's competitors seek to avoid them? 'We close up factories and Mexico opens factories. What the hell are we doing?' "

Mead recently wrote that he believes that former Vice President Joe Biden, the apparent Democratic nominee, will not ambitiously embrace free trade in the way that Obama did with the TPP.

UCLA Political Science Professor Lynn Vavreck, the author in 2009 of "The Message Matters" (Princeton University Press, 232 pages), told Los Angeles Times political columnist Doyle McManus last year that it is difficult for the opposition candidate to win if the economy is strong in a presidential election years.

With unemployment at 13.3 percent in May after reaching 14.7 percent nationally in April - the highest rate since the Great Depression - will voters focus on the current plight of the economy or give the president a high level of credit for lowering the unemployment rate before the pandemic. And, if so, are they confident that Trump can bring it roaring back?

The Washington Post reported June 3 that former Vice President Joe Biden, the apparent Democratic nominee, who called himself a "pragmatist" during the primary campaign now offers former President Franklin Roosevelt, the architect of "the New Deal" of the depression era of the 1930s, as a role model.

The Washington Post stated that Biden has said he would even consider invoking wartime powers "to force banks to make loans to struggling companies."

The economic rebound over the next five months will probably be the signature issue in the presidential campaign.