When Donald Trump entered office, the American economy - the Obama economy - was experiencing the longest expansion in history, wages were beginning to rise, businesses were investing again, and jobs were being created at a good pace. Less than a decade after the worst global economic catastrophe in most of our lifetimes, President Obama’s leadership had given the American economy incredible resilience.
That didn’t all happen by accident. President Obama and his team took office amid as an economy in freefall wiped out trillions of dollars of wealth and cost almost 10 million jobs. Republican tax giveaways and financial industry deregulation created the perfect storm for a global economic meltdown. Obama’s approach to the economy was more than short term cash infusion into the economy, which of course was necessary and which he did plenty. With targeted middle-class tax relief, extended unemployment benefits, and major investments in infrastructure, the Obama administration infused the economy with trillions in cash.
But President Obama knew that the solution to a crisis that has been in the making for decades wasn’t going to be possible without broad, painstaking, systemic reforms that required time to implement. Obama’s approach revolved around three key principles: re-regulating the financial industry, fortifying and expanding the social safety net and funding it by making the wealthy pay more, and creating a new paradigm of globalizing environmental protection and the rights of working people as a core part of a free and open trade agenda.
All three were essential to bringing the US out of the Great Recession, and all three are fundamental to creating economic growth at home and driving an economic agenda abroad based on common principles and open markets. And let’s be clear. Open markets are not simply in the interest of the United States because countries that trade with each other openly tend not to go to war with each other. Open markets are not important only because it is the only thing in recorded human history to actually have reduced extreme poverty. Open markets, when infused with protections for workers and the environment, do more than allow American businesses to sell more and American consumers to buy cheaper. Ultimately, open markets are the best vehicle to export the American idea, not just American-grown soybeans.
Donald Trump and his Republican enablers have taken a diametrically opposite approach, not least because being opposed to Obama is the only thing that has ever motivated them for a decade. As soon as they took charge of the White House and Congress, they moved to dismantle Obama era regulations on industry, give the wealthy a massive tax cuts and shrink the safety net, and launch trade wars with friends and foes alike.
So what happened?
Jobs growth slowed. In the first 30 months of the Trump administration, 21% fewer jobs were created than the final 30 months of the Obama administration. We just found out that half a million fewer jobs were created in 2018 than previously thought.
Economic growth is slumping. Not only is the US economy projected to grow by a meager 1.8% by the end of this year, three out of four economists now expect a looming Trump recession to be fairly close. And consumer confidence is dropping specifically because of Trump’s trade war.
Consumers are paying more. Farmers are being decimated, and government handouts to farmers are no longer enough. Stock markets are tumbling.
Just like the painstaking rebuilding of the US economy under President Obama was no accident, neither is the Trump slump. Trump and Republicans deliberately passed and implemented the policies that brought us to this point of economic weakness and likely a soon-to-come recession.
This is on them.