Trumpistas in 2016: “Sumner, you just don’t understand. You professors live in an upper middle class bubble, where you don’t see all the suffering out in the real America. The economy is not doing well; it’s doing horribly. Things are so bad that average people are turning to meth, to opioids.”
Trumpistas in 2018: “Sumner, you just don’t understand. Trump has made America great again—the economy has never been better. Look at the stock market. Look at the black unemployment rate. As Trump says, America is doing great.”
I’m willing to concede that I just don’t understand, so please help me to learn.
Are we really doing better than ever? Better than the LBJ years, when RGDP growth averaged 5% over 21 quarters, instead of peaking at 4.2% for one or two quarters? Maybe so. After all, we really are richer than in the 1960s. But if that’s your criterion, then wouldn’t the same apply to Obama’s second term, when real median household income reached an all time record in 2016?
Today the Census bureau released the income data for 2017, and it showed another 1.8% increase in real median household income, to a new record of $61,372. Pretty impressive. But it’s also true that this measure rose by an even more impressive 3.2% in 2016, and by an extremely impressive 5.2% in 2015.
They also announced a reduction in the poverty rate, from 12.7% to 12.3%. Again, pretty impressive. But the rate fell from 13.5 % to 12.7% in 2016. And it fell from 14.8% to 13.5% in 2015.
There are many ways of looking at a picture as complex as the US economy. In 2016, I saw an amazing wealth generating machine that produces living standards that earlier generations (and most other countries) can only dream about. Trumpistas saw economic carnage everywhere they looked. Both are valid arguments, depending on what data points you want to emphasize. You can even claim the economy is doing better under Trump than Obama.
What is not a valid claim is that we’ve suddenly gone from being a disaster to being great again, because of a few upward tweaks in some data points. Tweaks that are not dramatically different from what occurred in previous years and decades. All the problems in the Rust Belt are still out there. Either the Trumpistas were lying in 2016, or they are lying today. (I say they were lying in 2016–we’ve always been great.)
PS. In a previous post I noted that people in south Orange County seemed friendlier than in Boston. In fairness, I should note that this might partly reflect my “white privilege”. People in south Orange County are certainly not as friendly to a visiting high school football team from Santa Ana, a city that is 80% Hispanic. In that respect, my daughter’s Newton, Massachusetts high school was superior to the Aliso Niguel high school.
My wife and I like to visit Santa Ana, which is less boring than Mission Viejo. You might wonder how we dare visit a city full of “rapists and murderers”. Here’s Wikipedia:
In 2011 Forbes ranked Santa Ana the fourth-safest city of over 250,000 residents in the United States.
That ranking partly reflects traffic safety, but its crime rate is also fairly low. (Ranking 11th safest in terms of violent crime.) Ironically, I almost ran someone over in Santa Ana a few days ago. A motorcycle merging onto the freeway flipped over right in front of me, and the guy tumbled into my lane. Fortunately, I was going a bit slower than normal (I had just merged, and was only up to about 60mph.) I slammed on the brakes and came to a stop about 10 feet from the guy. Drive defensively!
PPS. Commenter Ben Cole will like this:
“Just run the presses — print money,” Trump said, according to Woodward, during a discussion on the national debt with Gary Cohn, former director of the White House National Economic Council.
And this made me smile:
As a candidate, Donald Trump pledged to balance the federal budget and lower the national debt, promises that are proving difficult to keep.
Actually that’s fake news. Trump didn’t promise to balance the budget; he promised to run budget surpluses that were so enormous that the national debt would be entirely paid off in 8 years. And yes, I’d say if you increase government spending and sharply cut taxes, causing the deficit to suddenly double to $1.1 trillion (in 2019), despite 3.9% unemployment, then it would prove “difficult” to keep your promise.
As an analogy, if a person who goes to AA each week suddenly goes out and buys an entire crate of Jack Daniels, it might be difficult for them to keep their sobriety promises.