By Rick Patelunas
President Trump brags that he and his Republican enablers have created the biggest economy the world has ever seen. Trump takes credit for the longest recovery on record and the lowest unemployment levels in decades. And there’s the record stock market that Trump points to as an example of his economic success. Like much of what makes up the Trump brand, the claims range from misleading to outright lies.
Biggest Economy – False
The size of an economy is measured by Gross Domestic Product (GDP). GDP is the total value of goods and services produced in a country during a specific time, usually one year. A complicating feature when comparing countries is that each country has its own currency and exchange rate. Purchasing Power Parity (PPP) was developed to equalize prices and provide a standard comparison between countries. Using PPP, China has the largest economy in the world. The US is second.
Another way to view GDP is total GDP divided by the number of people in a country. When China’s total GDP is spread amongst its large population, its GDP per person, or per capita, doesn’t make the top fifty in the world. The US is only 11th in per capita GDP.
Longest Recovery on Record – Misleading
Trump is correct that the pandemic ended the longest recovery on record in March 2020. The recovery lasted 128 months. Under President Obama, the recovery lasted 91 months, and under Trump, 37 months. A little over 70 percent of the longest recovery occurred before Trump even took office. What makes the time frames interesting is that Trump seems to take credit for the entire 128-month recovery, yet, he claims no responsibility for the last five months under the COVID-19 pandemic.
Lowest Unemployment Rates in Five Decades – Misleading
Again, Trump is correct that when the pandemic hit in early 2020, the unemployment rate was at its lowest level in decades. Following the depths of the Great Recession, jobs grew for 113 months. Similar to the longest recovery, jobs grew for 76 months under Obama and 37 months under Trump. Nearly all the job growth since the Great Recession has been wiped out in 2020, but according to Trump, that is the responsibility of the pandemic.
Record Stock Market – For the Wealthy
The stock market has seen record highs during Trump’s presidency. The stock market measures the prices of company stocks; thus, a higher stock market reflects higher prices to own companies. As the stock market gains at the same time COVID-19 infections and deaths surge, it’s obvious that the market and the real economy are not the same thing. As Nobel laureate Robert J. Shiller explains, “After all, stock-market movements are driven largely by investors’ assessments of other investors’ evolving reaction to the news, rather than the news itself.”
More importantly, who does the stock market benefit? First, consider that the top 1 percent of wealthiest Americans own over 50 percent of US stocks. Then consider that as pandemic deaths pass 150,00 and millions are out of work, five men in America increased their wealth $101.7 billion in just the three months between March and June. That takes time to sink in. Five men increased their wealth almost as much as the $110 billion projected state budget shortfalls for 2020.
Horry County – Struggling
In 2018, Horry County was one of seven counties in South Carolina’s 7th Congressional District with unemployment higher than the state average. As of May 2020, Horry County’s unemployment rate stood at 18.6 percent. In the first quarter of 2019, Horry County had second lowest wages in the country. Using the latest US Census Bureau data, 14.3 percent of people living in Horry County are below the poverty line and 17.2 percent of people under 65 have no health insurance. Even before the pandemic, too many people in Horry County were on the fine line between struggling and going over the cliff.
While the nation suffers and looks for direction, the economy is supposed to be Trump’s strong point. Without the momentum of Obama’s economic legacy, what’s next?
The Democratic-controlled House passed a COVID-19 relief package on May 15th and after two months, Senate Republicans released their relief package. The day after it was released, Trump said it “is sort of semi-irrelevant.” Louisiana Republican Senator John Kennedy said “I’d like to know what’s in the bill.” Trump failed to provide any policy objectives when interviewed by his friend Sean Hannity of Fox News.
Those are the comments from Republican leaders before negotiations with Democrats even start. There has been no Republican economic plan beyond tax breaks for the wealthy. There has been no Trump leadership during the pandemic. With Trump more concerned about Dr. Fauci throwing out the first pitch and being the public’s trusted source for truth on the pandemic, it looks like more of the same – misinformation, lies and chaos.