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Who's Really to Thank for Booming Economy: Donald Trump or Barack Obama?

September 27, 2018 in Economics

By Michael D. Tanner

Michael D. Tanner

Economic growth is up, unemployment is down, and President
Donald Trump and former President Barack Obama are fighting over who should get the credit. Both
are offering a certain amount of truth on behalf of their claim,
along with a healthy dose of hyperbole and more than a little
statistical cherry-picking.

Trump, for instance, inherited an economy that was in the
process of bouncing back after a long recessionary trough. This
makes it hard to disentangle the results of his policies from the
broader trend.

It is fair, for instance, for Obama to suggest that the
recession ended and the economy started growing again on his watch.
In fact, if you were to chart various economic indicators on a
graph, you would be hard pressed to find exactly where the Obama
presidency ended and Trump’s began. To cite just one example, the
U.S. economy created nearly 4 million jobs in the last 18 months of Obama’s
term, virtually indistinguishable of the first 18 months of

Both are suggesting that
it is the president — and government more generally —
that drives America’s economic engine. They are both

Of course, Obama was starting from the nadir of the Great
Recession, so economic and job growth should have been expected.
And many economists suggest that the increased taxes, onerous
regulations enacted in bills such as Dodd-Frank and the Affordable
Care Act, as well as the perception that Obama was anti-business,
slowed the economic recovery. In terms of economic output, this was
the slowest economic recovery since World War

Moreover, it is noteworthy that growth had slowed during Obama’s
last year in office, dropping from 2.3 percent in the second quarter of 2016 to just 1.8
percent in the final quarter.

Donald Trump’s economy

Meanwhile, economic growth under Trump has averaged 2.9 percent, and will likely top 3 percent this year. That’s
considerably more than the 1.5-1.75 percent growth rate predicted by the
Federal Reserve Bank of San Francisco when Trump took office.

The economy has also added 3.6 million jobs since the start of
Trump’s presidency, and unemployment has declined from
4.8 percent to 3.9 percent
. Unemployment rates for women,
African-Americans and Latinos are all at multi-decade lows. Real disposable income —
which barely rose during Obama’s tenure — is now growing
about .3 percent. And small-business optimism has reached its
highest level ever recorded.

On the other hand, it is far too soon for many of the
president’s initiatives, such as tax and regulatory cuts, to have
fundamentally altered …read more

Source: OP-EDS

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