Donald Trump’s says that America should re-elect him in 2020 because he’s doing such a great job with the economy. Never mind that he’s been caught soliciting and cooperating with foreign interference in elections and obstructing justice, has locked kids in cages, and has been impeached. His foreign policy has also been a disaster. But according to Trump, he’s created “the best economy in history”, and that’s why we should vote for him.
Of course, it’s nowhere near the best economy in history, but it’s still a strong economy. At least that’s what most people believe. But is it really? A closer look reveals that the economy isn’t really all that great, and rather than an asset to Trump’s re-election, it should be a liability.
We can look at GDP growth numbers that have fallen far short of Trump’s promised 4-6% annual growth and clocked in at just 2.1% in the 4th quarter, similar to 2016 levels. We can look at job growth, which Trump loves to brag about, but has actually slowed since he took office. We can look at the slowdown in consumer spending.
But let’s talk about manufacturing. Bringing back manufacturing jobs was one of his top 2016 campaign promises.
Trump has said he will revitalize manufacturing in various iterations (i.e. “I’m going to be the greatest jobs president God ever created”) and laid out how in his June 28 speech on the economy.
“I am going to withdraw the United States from the Trans-Pacific Partnership (and) I’m going tell our NAFTA partners that I intend to immediately renegotiate the terms of that agreement to get a better deal for our workers,” he said. “I will use every lawful presidential power to remedy trade disputes, including the application of tariffs.”
Guess what? Not only has he failed to deliver, but right now, manufacturing is in the midst of a recession.
America’s manufacturing downturn isn’t letting up. Factory activity contracted for the fifth consecutive month in December, registering a worse drop than expected.The Institute of Supply Management’s manufacturing purchasing managers’ index logged its lowest level since June 2009 at 47.2, compared with the consensus forecast of 49. It stood at 48.1 in November. Any number below 50 denotes a contraction.
Often, the president is given undeserved blame or credit for the performance of the economy under his watch. But this recession can be traced directly to Trump’s policies. His trade war is a major culprit.
Last week, the Federal Reserve argued in a paper that import tariffs hurt US manufacturing. “A positive effect from import protection is offset by larger negative effects from rising input costs and retaliatory tariffs,” it said.
This is the Trump Recession. Never mind forecasts of whether or not there will be a recession in 2020. The Trump Recession is happening right now
Worse, that slowdown in manufacturing is hitting places Trump needs to win. Unemployment is rising in Ohio and Pennsylvania for the last six months, albeit from low levels, and manufacturing employment is slowly eroding through the Midwest, including Michigan and Wisconsin. Trade policy is a big reason why, and its fingerprints are all over today’s GDP report.
And that’s not the end of the bad news for Trump. The job numbers Trump has been touting are misleading. While there are a lot of people working, 57 million American workers are part of gig economy. That’s more that 1/3 of all employed Americans. Gig economy jobs don’t provide benefits such as health insurance. It’s also hard to argue that Trump is in any way responsible for the creation of these jobs.