The Capitalist Comeback: The Trump Boom and the Left’s Plot to Stop It
By Andrew Puzder
Making America Great Again: Year One
“From now on, America will be empowered by our aspirations, not burdened by our fears; inspired by the future, not bound by the failures of the past; and guided by our vision, not blinded by our doubts.”
PRESIDENT DONALD J. TRUMP
As with all of life, a presidency is made up of moments. The most significant are moments of truth, when the results of a president’s actions and influence can break through the partisan rhetoric designed to obscure positive accomplishments. No president can have a perfect year. We elect human beings, not gods. Nonetheless, President Trump’s first year in office was filled with moments of truth that benefitted all Americans and will be remembered. His positive effects on the economy have been remarkable.
President Trump’s election immediately ignited long-dormant business optimism. His administration’s rapid regulatory rollback drove economic growth at a pace few expected. Led by President Trump, Republicans looked to pick up that pace with tax cuts that encouraged business investment, reduced the tax burden for working- and middle-class families, and eliminated the perverse incentives that drive our businesses, jobs, and dollars to other nations. As a result, the economy is surging as businesses grow, job opportunities increase, and government shrinks.
With the attention of Democrats and the media focused on scandals that the president’s opponents fabricate (or pay others to fabricate), while parsing his every offhand remark or tweet in search of a word or phrase that might support their “never Trump” narrative, these moments often failed to get the coverage they deserved.
Literally from the day he was elected, business confidence soared like a coiled spring let loose from its restraints. The National Federation of Independent Businesses’ Small Business Optimism Index “blasted off the day after the 2016 election and remained in the stratosphere for all of 2017.” By the year’s end, the NFIB Index reached the highest monthly average in its history, exceeding the record year of 2004.
According to NFIB Chief Economist Bill Dunkelberg, “[w]e’ve been doing this research for nearly half a century, longer than anyone else, and I’ve never seen anything like 2017. The 2016 election was like a dam breaking. Small business owners were waiting for better policies from Washington, suddenly they got them, and the engine of the economy roared back to life.”
The NFIB Index wasn’t the only record-setting survey. In November 2017, the Conference Board Consumer Confidence Index rose to a seventeen-year high. The National Association of Manufacturers’ Outlook Index also hit the highest annual average in its history.
The stock market was similarly enthusiastic. On election night, the BBC interviewed me and asked what I thought about stock market futures dropping 700 points when it became obvious that President Trump would be our next president. New York Times opinion writer and Progressive economist Paul Krugman was predicting that the stock market would never recover.
I told them that, in the morning, I’d be a buyer. I never got the chance.
The next day, the Dow Jones Industrial Average surged up 250 points. It hit record highs more than seventy times in President Trump’s first year, the highest number ever recorded for a single year. On average, the stock market hit a new record high every fourth trading day. The DOW rose 5,000 points in 2017, the largest annual points gain in its 121-year history.
By the end of the year, optimism among professional investors was at 66.7 percent in the highly regarded Investors Intelligence Survey, reported as “the highest reading since April 1986.” According to the year-end CNBC All-American Economic Survey, “for the first time in at least 11 years, more than half of respondents to the survey rated the economy as good or excellent, while a near record 41 percent expected the economy to improve in the next year.” As one pollster for the survey stated, “We’re not measuring a marginal change in the economy, we’re measuring a different economy.”
Much of the initial enthusiasm was based on the anticipation that President Trump would reverse President Obama’s antibusiness policies by aggressively reducing government regulations and cutting taxes. That optimism sustained itself throughout 2017 because he delivered.
President Trump took a machete to the Obama era’s rules and regulations that have been choking American businesses like parasitic vines. In fact, an analysis by the Competitive Enterprise Institute (CEI), a libertarian think tank, found that during his first nine months, Trump was deregulating the economy at a pace greater than any other president.
According to the CEI, Trump reduced the Federal Register’s page count by an impressive 32 percent compared to President Obama at the same time in the prior year. This put him on course to beat President Reagan’s record of a “one-third reduction in Federal Register pages following Jimmy Carter’s then- record Federal Register.” But that reduction took Reagan years to accomplish. Trump had been in office nine months. The CEI concluded that “by this metric, Trump [was] moving much faster,” already making him the “least-regulatory president since Reagan.” He will surpass Reagan to become the most anti-regulation president we’ve ever had.
This will make perfect sense if you were paying attention during the campaign. Candidate Trump said he would “cancel every needless job-killing regulation and put a moratorium on new regulations until our economy gets back on its feet.” He pledged to change the rules so that “for every new federal regulation, two existing regulations must be eliminated.” He told an audience in Detroit, Michigan, that he would “remove bureaucrats who only know how to kill jobs [and] replace them with experts who know how to create jobs.”
He hit the ground running once in office, designating regulatory task forces to identify antibusiness regulations we could do without. All new proposed regulations would have to be approved by a Trump-appointed official. After just ten days in the White House, a new Trump executive order set a policy of getting rid of two regulations for every new one created.
Clearly, these early decisive actions worked.
By the summer, 860 Obama administration regulations were either suspended or gone for good. This was part of the proccess for removing what the administration called “that slow cancer that can come from regulatory burdens that we put on our people.”
In September, the president told a group of manufacturers, “We have taken unprecedented steps to remove job-killing regulations that sap the energy, creativity and dynamism from our country. We are cutting regulations at a pace that has never even been thought of before.”
At a December 14, 2017 press briefing, Trump’s chief regulatory officer, Neomi Rao, announced that for the 2017 fical year (which ended in September), the Trump administration eliminated not just two but twenty-two regulations for each new regulation that was issued. This resulted in a net reduction in regulatory costs of $8.1 billion.
She also stated that the administration was “on track to continue to be better than three for one” in 2018 with “448 deregulatory actions and 131 regulatory actions” on the agenda. The administration projects that those reductions will result in about $10 billion worth of additional cost savings.
If you wonder whether all of this really mattered, ask someone who owns a business. Or just look at the impact on gross domestic product (GDP), which measures the value of all goods and services produced in a period (generally quarterly or annually) and is the most commonly used measure of economic performance.
The key to meaningful GDP growth is business investment. During President Obama’s tenure, the regulatory state expanded, taxes increased, and investment declined, hobbling growth. Obama’s annual GDP growth rate never hit 3 percent in any calendar year (the first president since Hoover who failed to do so). Growth averaged a meager 2.1 percent following the end of the recession, when it should have surged. According to an analysis from the Congressional Research Service, the ten post–World War II recoveries averaged GDP growth of 4.3 percent, about double Obama’s average. For 2016, Obama’s final year in office, GDP growth slowed to an anemic 1.5 percent.
This dismal performance led to predictions of prolonged economic stagnation. In March 2017, Obama administration economist Jason Furman forecast ten years of GDP growth, “around 2 percent a year.” In May, his fellow Obama alumnus Larry Summers said that expecting the Trump administration to deliver 3 percent GDP was like believing “in tooth fairies and ludicrous supply-side economics.”
Of course, they were wrong.
