"Lies, Lies, Lies..."
The ‘greatest economy ever’ is the one no politician can create.
It’s where people are free to decide where, how and when to spend
their time and money. Only then do they get what they really want...
by Bill Bonner
Poitou, France - "The news this morning, Cryptopolitan: "US debt hits all-time high over $35 trillion." Another milestone... on the road to Hell. Mentioned yesterday were claims that we have the ‘greatest economy ever.’ Both Donald Trump and Joe Biden have said so. Both claim to be its creator. Herewith, a paternity test.
In the first place, the ‘greatest economy ever’ is the one no politician can create. It’s where people are free to decide where, how and when to spend their time and money. Only then do they get what they really want... which is what an economy is meant to provide. Every interference - taxes, war, tariffs, subsidies, regulations, inflation - subtracts from the greatness.
This point is puzzling and frustrating to mainstream economists. They think GDP growth is all that matters. Or low unemployment. Or low inflation. They think these things are policy choices... and they pretend that they - the elite - know how to get them.
But imagine that they come up with the idea of digging a huge transcontinental canal... from Los Angeles to New York. To get the job done, they hire millions of people to work on it... and pay them each $100,000 per year. The project is, of course, cockeyed from the get-go. It would actually lower the real wealth of almost everyone... by diverting time and resources from things that people really want to things almost no one wants. But the key metrics - GDP growth and employment - would soar. It would be the ‘greatest economy ever.’ Of course, they’d have to pay for it with printed-up credit dollars. But the inflation effect would be downstream, not immediate.
By the Numbers: If you look at real GDP growth per person, you see that Donald Trump’s administration trailed Kennedy, Johnson, Truman, Reagan, Clinton, Carter, Ford, Nixon, and Obama, with an annual gain of 1.03%, compared to nearly 4% for the Kennedy/Johnson years. But there’s more to the story. The Covid hysteria showed up on Trump’s watch. It was a medical concern. Trump turned it into an economic disaster. He forced millions of people to stop working... greatly lowering output.
Then, to make up for lost real wealth, he provided phony wealth - trillions in ‘credit dollars.’ Even with so much cash sloshing through the system, however, the economy was weak. Growth in final sales (more reliable as a measure than GDP... people can decide to buy, or not) were actually weaker under Trump than they had been under Obama, 1.52% compared to 1.74% - the lowest increase in final sales in the last seventy years.
His supporters maintain that we get a more accurate view by looking at his pre-Covid performance. But even there, Trump’s results were poor. Final sales through the first quarter of 2020 were still lower than those under Obama in his last quarter. Nor was there any real improvement in the jobs metric. Obama’s second term saw an increase of 215,000 jobs per month. Trump, pre-Covid, added 185,000 per month.
A better measure of ‘employment’ is the hours worked, not number of jobs. Here again, no cigar from Donald Trump. David Stockman: "To wit, during Obama’s second term the index of total hours work rose by 1.80% per annum compared to 1.67% during the Donald tenure through February 2020. So, again, the Trump growth rate for the period prior to the Lockdowns was well below the 2% average between 1964 and the year 2000, not evidence of the Greatest Economy Ever.
The whole idea that the president ‘creates’ jobs... or boosts GDP... or makes people better off - is mostly baloney. A president only makes people better off by helping to get the government off their backs so they can produce/trade/save/spend as is their wont. In this regard, a tax cut is generally a plus. But only if it is brigaded together with a spending cut. Otherwise, it just shifts the burden from the present (taxation) to the future (inflation)."
But sticking with the statistics - if only to show that even in their own terms, neither Trump nor Biden presided over the ‘greatest economy ever’ - we see that at the end of The Donald’s term there were three million fewer people with jobs than there had been when he started.
Finally, after Trump failed to create the greatest economy ever, Joe Biden tried his hand. He began in the typical manner - by flooding the economy with more credit dollars. Between Trump’s first stimmie... and Biden’s cherry-on-the-cake ‘Inflation Reduction Act’... the feds pumped some $8.12 trillion in free money to America’s money-hungry millions.
The world had never seen so much stimulus. You’d think the economy would be white hot, right? Well, in May of this year, real disposable income per capita stood at $50,491. That was actually lower than the $50,635 figure for May 2021. In other words, the biggest burst of stimulus Planet Earth has ever seen produced zero increase in real wealth for most people.
And between 2016 when Donald Trump entered the White House... through to the end of this year (we are anticipating)... the feds will have almost doubled the nation’s debt. This ‘investment’ - nearly $17 trillion - supposedly produced the two greatest economies the US had ever seen.
Lies, lies, lies..."
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