Is President Trump fulfilling Candidate Trump’s promises?
You could argue that it is, based on several surprising and completely unexpected economic developments. Vice President Mike Pence, writing in The Des Moines Register, put it succinctly: “The evidence is clear: America is back.” He added: “That’s no accident.”
Pence and other Trump enthusiasts can point to rising macroeconomic growth. Growth rose 4.1 percent in the second quarter and more than 3 percent for the year. Unemployment fell to 3.9 percent in July. The S&P 500 is up 6 percent since Trump’s presidency, while the rest of the world’s stock markets are down 6 percent. These are numbers any recent administration would brag about.
More notable are the positive trends among subgroups that were underperforming before Trump took office. Former Obama administration chief economic adviser Jason Furman, writing for Vox, notes that over the past three years, “recent wage growth … at the lower end of the pay scale” has been stronger than growth among higher-paid workers. Similarly, Bloomberg columnist and portfolio manager Conor Sen notes that job growth has been strongest among “production workers and the least educated workers.”
Both Furman and Sen contrast current trends with those during the rapid economic growth of 1998 to 2001, when income growth was concentrated at the top of the economic spectrum and job growth was concentrated in office jobs and “medical and educational”—government-funded or highly regulated health care and education sectors.
So maybe rising income inequality isn’t inevitable after all. Or maybe the economic prospects for groups at the low end of the economic scale aren’t as dire as long assumed.
The unemployment rate among youthful millennials—those over 25—is just 5.1 percent, according to Sen, the lowest since the government began tracking it in 1994. So much for the sofa in the basement. Black unemployment fell to 5.9 percent in May, and Latino unemployment fell to 4.6 percent in June, both the lowest since the government began tracking them in the early 1970s.
What’s more, the labor force is expanding, adding 600,000 people in June, notes American University economist Evan Kraft, writing in The Hill. At the same time, the number of people with disabilities is shrinking. All of this suggests that incentives to work are returning to Appalachia and other previously abandoned areas where so many idle people have become addicted to opioids.
Labor employers are scrambling to fill job openings, waiving educational requirements and following the advice of liberal and conservative politicians to give a chance to ex-offenders who have served their time, reports Aaron Renn of the Manhattan Institute.
Historically, Democratic candidates have promised to create economic opportunity for those who start out with disadvantages, especially racial minorities and those from households without a college degree. But recent Democratic presidents, like recent Republican presidents, have seen economic growth concentrated among the wealthy, highly educated, and well-off.
Candidate Trump’s call to “Make America Great Again,” however vague, was taken and was meant to be taken as a promise to deliver other, better outcomes for the underclass. He kept talking about reopening factories, boosting manufacturing, and supporting blue-collar job growth.
As an electoral strategy, it seemed to ignore minority courting and rely on an inexorably shrinking segment of the electorate. But that segment did not shrink enough (and its size was consistently underestimated, as The New York Times’ Nate Cohn has shown) to prevent Trump from winning Obama’s 100 electoral votes in Florida, Pennsylvania, Ohio, Michigan, Wisconsin, Iowa and Maine.
Now, it looks like Trump is delivering the kind of economy he promised, with growth going to lower classes (including blacks and Latinos) rather than higher ones, with reduced economic inequality, and with growth spreading to regions that haven’t seen much of it in decades. Can you recall any mainstream media or liberal economist predicting this outcome?
Of course, you can add caveats. You can say that these numbers are just statistical noise, not harbingers or long-term trends. You can argue, as Furman does, that some of these trends began toward the end of Obama’s term. You can make a broader argument that presidential policies have only constrained economic effects, and that trends like the apparent manufacturing recovery may be more influenced by external factors than by Trump’s policies.
So maybe this isn’t a case of broken promises, but just dumb luck. Sure, you could say the same thing — just dumb luck — about the 100 electoral votes Trump won and did win. But after a while, you start to wonder.
