Who Gets The Real Credit for the Economy?
This summer, I had the opportunity to interview Andy Puzder on PRI’s “Next Round” podcast. In chatting with him about his new book Capitalist Comeback, the former Trump nominee for Secretary of Labor and I were both astounded at the speed of the economic turnaround after Donald Trump was elected.
So when President Obama tried to take credit for the current prosperity in his speech at the University of Illinois, I recalled what Puzder said on the podcast: “In retrospect, I think the economy had been repressed like somebody had their hand on a spring….the Obama administration increased regulation, increased taxes, and refused to allow America to develop its energy resources. But as soon as the hand was lifted and American businesses knew they were no longer going to be repressed, when that hand came off the spring, [the economy] just sprung.”
It was only a couple of years ago when economists of all stripes were lamenting the sclerotic recovery after the Great Recession. U.S. GDP growth was averaging less than 2 percent, small business creation was at record lows, and job growth was weak.
Take manufacturing. Puzder recalled that manufacturing jobs plummeted following the recession and hit rock bottom in January of 2010. “While jobs were being created during the Obama administration – about 11,000 a month — in the last two years of the administration, that trend took a significant reversal. About 5,300 jobs were created on average in 2015, and we actually lost 2,750 jobs on average a month in 2016. The trend had definitely gone negative.”
Even more worrisome, by the end of the Obama administration, people began dropping out of the labor force because they couldn’t find jobs.
“If President Trump had continued President Obama’s policies, then you could say that Obama is due some of the credit,” said Puzder, “but in fact, Trump reversed all of Obama’s economic policies.” President Trump reduced regulations, cut corporate tax rates, and unleashed energy production by reviving the Dakota Access and Keystone XL pipelines. The results speak for themselves:
- An unemployment rate of 9 percent – an 18-year low
- GDP at 2 percent
- A stock market at record highs
- Jobs in goods-producing industries — mining, construction, and manufacturing — have grown the fastest rate in more than 30 years
And what about California? Since 2012, California had climbed out from the 10th largest economy in the world to the fifth largest economy today.
Sorry President Obama, but the credit goes to Donald Trump for getting government out of the way. But as Andy Puzder told PRI audiences, the ultimate salute goes to the American people. “We’ve seen the kind of tremendous economic growth that you can only see when the American free-enterprise system is set loose and American’s entrepreneurs are allowed to do what they do best, which is grow, create jobs, create wealth, and spread prosperity.”
Now if government would only cut spending…
Rowena Itchon is senior vice president of the Pacific Research Institute