Trying to revitalize his struggling reelection campaign, President Trump has been unequivocal in describing the robustness of the US economy under his watch before the coronavirus outbreak devastated it.
“We built the strongest and most prosperous economy in the history of the world,” he said at an Arizona rally on Tuesday.
Unequivocal, but untrue.
While the record-long economic expansion that began in 2009 continued under Trump and unemployment was near historic lows last winter, it wasn’t the best period in American history, let alone the world’s. Though economists say it’s difficult to declare the top US stretch, several were better, including the early 1950s, when growth approached 9 percent one year — triple the best annual performance under Trump — and the unemployment rate hit a record low of 2.5 percent.
By his own standard from the 2016 campaign — achieving 3 percent or more economic growth in at least one calendar year of a presidential term — Trump’s stewardship has been no better than Barack Obama’s.
“It was a good period. It definitely wasn’t the best in history,” Michael Bordo, an economics professor and director of the Center for Monetary and Financial History at Rutgers University, said of the pre-pandemic economy. “That’s a huge exaggeration.”
The frequent boasts by Trump are an attempt to run on an exaggerated characterization of the economy of the past instead of the downtrodden economy of the present. Trump warns that only he can lead a bounce-back and even claims that one has already begun with the lifting of lockdowns he encouraged despite warnings from public health officials that relaxing social distancing and other restrictions could lead to the type of virus resurgence now taking place in numerous states.
“Unless my formula is tampered with, we will soon be in a stronger position than we were before the plague came in from China,” Trump said at a White House event on June 16.
There is another formula Trump is hoping to alter: defeat for presidents who deny economic reality.
“The American people understand what a bad economy is. They feel the pain,” said Allan Lichtman, a political historian at American University. “You can try to explain it away all you want, but it’s never worked well.”
Herbert Hoover prematurely declared the Great Depression over in 1930, and his vice president boasted that “good times are just around the corner.” They lost big in 1932 as the Depression continued to rage. George H.W. Bush said that “I happen to think the economy is better than most of the people in America think” as the country struggled with unemployment that rose to nearly 8 percent in 1992. He lost that year to Bill Clinton, whose campaign mantra was “it’s the economy, stupid.”
Lichtman has used a system of 13 metrics he calls “the keys to the White House” to correctly predict the winner of every presidential election since 1984. Short-term and long-term economic performance by the party in power are two of the keys. They were positives for Trump before the pandemic hit, Lichtman said, but now will most likely be negatives after second quarter economic data are released this summer.
“The keys are based on reality. They’re not based on what candidates say,” he said. “Good times don’t guarantee a win, but bad times pretty much guarantee a loss when combined with other factors.”
If those two economic metrics turn negative for Trump, they would join existing negative ones, including on social unrest, scandal, and lack of foreign policy success, to predict a loss in November, Lichtman said.
The US economy contracted at an annual rate of 5 percent in the first three months of this year, ending the longest expansion in US history. That was before the pandemic fully hit the country. Forecasts are that the economy has contracted at a stunning 35 percent annual rate from April through June. That would be by far the worst quarterly performance since the United States began tracking the figures in 1947 and virtually guarantee an overall economic contraction in 2020.
Unemployment shot up to 14.7 percent in April as nearly 21 million jobs were lost. The rate improved to 13.3 percent in May after the economy surprisingly added 2.5 million jobs. But the Bureau of Labor Statistics noted the rate likely was understated by about 3 percentage points because of a classification error that appears to be related to the challenge of conducting the household survey during the pandemic.
The downturn came as the economy remained stuck in a rut of middling performance despite Trump’s boasts. Growth was 2.3 percent last year and was expected to be about 2 percent this year before the pandemic. That was the same lackluster level as during most of the recovery from the Great Recession and alone gives lie to Trump’s claim that he presided over the greatest economy ever.
During the 2016 campaign, Trump and Republicans hammered Obama for being the first modern president not to have at least one year in which the economy grew by 3 percent or more. Hoover was the last one. But Trump almost certainly won’t reach that mark, either, in his first term. The best year of growth during his administration was 2.9 percent in 2018, which equaled Obama’s 2015 mark, according to Commerce Department data.
Bordo described the pre-pandemic economy under Trump as doing “pretty well” and growing “at a reasonable pace,” a far cry from the superlatives the president has used.
“To say that it’s the best of all time, it’s not true,” Bordo said.
Multi-year periods of the 1950s, 1960s, and 1990s all featured much stronger US economic growth, he said. And although there was much less 19th century data, the 1870s probably was a stronger period as well. Worldwide, post-World War II Japan, France, Germany, and Italy, as well as China during the past 30 years, all had stronger economies than the United States under Trump, Bordo said.
Trump also has touted near record-low unemployment. The rate dropped to 3.5 percent in four of the six months ending in February, the lowest since 1969. But the economy in the late 1960s and early 1950s featured even lower unemployment rates combined with more robust economic growth. And Trump inherited a strong jobs market from Obama, with a steadily declining unemployment rate at the end of 2016 that had been reduced by more than half from a high of 10 percent in 2009.
Job growth actually has slowed under Trump without even taking into account the large pandemic-related losses. The US economy created more jobs — 8.1 million — in the last three years of Obama’s administration than the 6.6 million created in the first three years of Trump’s.
Trump also frequently boasts that the unemployment rate for Blacks, Latinos, and Asian Americans hit record lows during his administration before the pandemic. That is true, although as with the overall unemployment rate, the declines continued trends that started under Obama. Those rates also had risen above their record lows in the months before the pandemic hit.
“What happened in the first three and a half years of the Trump presidency is just a continuation of the recovery that took place in the Obama years,” said Steven C. Pitts, associate chair of the UC Berkeley Labor Center. An expert on the Black labor market, he said the record-low Black unemployment of 5.4 percent under Trump wasn’t widely celebrated because it remained much higher than for whites and didn’t come with strong wage growth to help eat into wealth inequality.
“While the economy was expanding and we saw lower and lower unemployment rates, you didn’t see a subsequent increase in wages for Black workers and workers overall,” Pitts said.
In polls, voters give Trump higher marks for his handling of the economy than for his overall job performance. But since the pandemic, those numbers have declined. According to Gallup, Trump’s economic approval rating dropped to 47 percent this month from 63 percent in January, which had been the high of his presidency.
Still, polls generally show voters believe Trump would do a better job on the economy than presumptive Democratic nominee Joe Biden. A CNBC poll released Thursday, for example, showed Americans favored Trump over Biden 44 percent to 38 percent when asked who has the best policies for the economy, the only issue on which the president led.
Trump is trying to drive that point home as he overstates what he accomplished before the pandemic and promises an economic rebound later this year. But Lichtman said voters will judge Trump not on his rhetoric but on how the economy is actually performing this fall.
“You can’t talk your way out of a bad economy,” Lichtman said.