Data Matters
Fake News (Still) Works
Guess who added more to the national debt …
Of all the reasons for supporting Trump that his fanboys and -girls will admit to strangers¹, the biggest head-scratchers are the economic ones. Red side types who know how political economy works will always use the pre-COVID window numbers. And, yes, since we live in a system where the government influences but does not fully control the economy, it’s fair to use asterisks for exogenous events like pandemics originating in China.
And, yes again, the Biden window has included the huge post-pandemic bipartisan Keynesian fiscal splurge powered inflation bubble.
The embed from thehill.com at the top of this piece is a case in point: I imagine almost all MAGA types who break out in hives over the national debt think Trump shrank it and Biden grew it. Not so. Read the article.
Of course, most of the rabble part of that base couldn’t explain the national debt. They’ve just ingested so much Murdoch propaganda they believe it’s inherently evil. As if their mortgages and car loans were also.
Duh.
(I’ve added a selection of key charts in the Data section below for anyone who likes that sort of detail.)
Don’t listen to the spin, from either side. Yes, the party of the Have Nots will always try to spend more on their base and the party of the Haves will always want to cut taxes for theirs. The fudge is debt, which both parties have been happy to fall back on to dodge actually having to make tough priority tradeoffs that will cause their respective bases to howl.
Note well how Trump tap-dances around Social Security, just like that other actor and (borderline) personality cult red side leader, Reagan.
Data:
All charts from tradingeconomics.com.
Indeed, no question that Biden’s had to eat the big inflation bolus caused by the bipartisan pandemic stimulus spending, half on Trump’s watch, half on his own (see debt chart below). Nobody likes $5 gas. But the trend is in the right direction. Thanks, Jerome Powell.
What does this GDP chart tell us? What I see is a range-bound trend of 2 or 3-ish percent growth, mostly from steady increase in the workforce, see below (sadly, not mostly from productivity, which is really the only metric that translates into standard of living). Except, of course, a trend disruptor from a big exogenous event like a pandemic, and then the snap-back, with some volatility/wiggle until the long term trend is re-established.
Interest rates, which POTUS doesn’t control (although Trump wants to, not understanding the history of the Fed, and why it’s a private entity), function as headwinds or tailwinds on the economy. There’s no question that Trump inherited more favorable weather than Biden when you look at the left and right halves of the chart above.
The same way Trump inherited Obama’s Bull market until COVID in 2020, Biden inherited the bounce-back that began in that same year, until the 2022 quasi-Bear, which then turned back positive in October of that year, running to the present, including new all-time highs. “Prices fluctuate.” One term POTUSes shouldn’t really get much credit or blame for the overall performance of the economy, especially as reflected in an indicator like the S&P. There’s too much inertia, and seldom(/never?) does a party control all three key Houses: the Lower and Upper of Congress, and the White. Let alone the Fed, the private financial markets, the innovation cycle, and of course, the rest of the planet.
This one showing the monthly change in employment doesn’t need much explanation. It is worth noting the long term trend, which is that the monthly delta in this metric stays in a narrow band of a few -10Ks to +100K-ish. Except for big hits to the economy.
The Reagan-O’Neil bipartisan compromise (continued by Bush 41) in the 1980s changed the post-WWII trend. The Clinton 90s slowed and mildly reversed that ballooning expansion of federal debt. The dotcom bust followed by 9/11 resulted in the next bipartisan opening of the spigot under Bush 43 in 2001, in order to prevent an economic collapse.
Then came the Great Recession and the Bernanke-Paulson-Geithner (all appointed during Bush 43) spend-spend-spend/borrow-borrow-borrow rescue plan (still bipartisan) from 2008–2012, which avoided a Great Depression 2.0. During the second Obama term while the economy was cooking, the debt stayed relatively flat, carrying on into the Trump years until COVID required the next rescue spike in 2020.
We’re still working our way out of that one. By we I mean all of Biden, Pelosi, Schumer, McConnell and Johnson, modulo Trump kibitzing to try to trigger another economic crash on his successor’s watch for purely selfish political reasons … to stay out of prison.
