Who Deserves Credit for the Strong US Economy?
Although US President Donald Trump is prone to hyperbole, he is not wrong to tout the strength of the US economy on his watch. But while Trump's regulatory and tax policies have been good for growth, his efforts to attach his name to the economy all but ensure that he will bear the blame in the event of a downturn.
STANFORD – US President Donald Trump claims credit for “the greatest ever” economy, and constantly contrasts economic conditions today with the historically weak recovery under President Barack Obama. With growth this year over 3%, unemployment at 3.7%, and more job openings than unemployed people, the economy has greatly improved on Trump’s watch. The macroeconomic indicators are the best in decades.
Meanwhile, Obama, too, claims credit for the strong economy, arguing that his policies prevented a far worse downturn following the 2008 financial crisis. Neither Trump’s hyperbole nor Obama’s selective memory comes as a surprise.
American presidents, like star athletes in team sports, get both too much credit and too much blame from voters and historians for what happens on their watch. Most presidential policies must be enacted by Congress, which often alters or blocks them. And many other factors are constantly at work, not least the US Federal Reserve’s monetary policy. So far, the Fed’s policies under its new chairman, Jerome Powell, have been spot on; but that hasn’t stopped Trump from publicly complaining that interest rates are rising too rapidly. While unusual, Trump’s griping pales in comparison to President Jimmy Carter’s nationally televised admonition to the Fed to lower interest rates in the midst of the raging inflation of the late 1970s.