Remember the bold predictions made by the New York Times’ economist and resident expert, Paul Krugman? The Nobel Prize winning economist said that the economic fallout of a Donald Trump presidency would be severe and widespread, predicting that it could “plunge the world into recession.” He penned his view in an opinion piece published the day after the election. Calling Trump both “ignorant and irresponsible,” he said that his election would be the "mother of all adverse effects.” He warned that the new administration could quickly undo the progress that markets had made in the eight years since the financial crisis.
He was wrong.
The Trump economy continues setting records. Employment, real wages, consumer confidence, all moving ever higher. We wait in vain for a correction or apology from Krugman or the Times. They rarely find room to share the good economic news with their shrinking readership. The truth does indeed die in darkness.
Unfortunately, Dr. Krugman is not alone. There is a small, but stubborn fraternity of liberal economic experts who agree with Krugman. They work daily to find (or create) evidence that the booming economy is either a mirage or that former President Obama deserves the credit. Neither vessel holds water.
As philosopher, former colleague and song writer Sonny Bono wrote, The Beat Goes On. Here are three of the “must-read” stories highlighted last Thursday afternoon by Fortune Magazine:
• A red flag to investors: The stock market may be hitting the “triple top.”
• Many economists think the next recession will be before the 2020 election.
• The S&P 500 has performed far worse under Trump than Obama.
Notice the pattern?
The common thread: with Trump as president an economic downturn or disaster is just around the corner. The booming economy and stock market (that Obama created) must wilt before the next election. If it doesn’t, we will be stuck with another four years of Trump and his policies.
Perish the thought!
Now, that last headline is deceptive but technically accurate. Bear in mind that Obama started from a much lower base. The bottom had fallen out of the stock market. In simple math, a 40 percent return on the Dow at 10,000 is less than a 30 percent return on the Dow at 15,000. Trump came to office eight years into to the Obama “recovery," a recovery where the experts told us that we would never again see 3 percent growth. That 1-2 percent was the “new normal.” We were told that all those manufacturing jobs that went off shore were gone and they weren’t coming back. President Obama mocked candidate Trump for promising to bring some of those jobs back. He asked, “what’s he gonna do, wave a magic wand?”
This president continues to prove the establishment experts wrong. He has a secret army of folks who really know how to create economic growth…the American people. Trump knows that they can spend and invest far smarter than the federal government can on their behalf. It’s actually a pretty simple formula: let them keep more of their money and get out of their way. Trump may not have a Phi Beta Kappa key, but he understands this.
It works every time it’s tried.
Witness the recent meltdown of the Wall Street experts and Chamber types over long-simmering trade disputes. Against the best judgement of the experts, Trump demanded a renegotiated NAFTA. He succeeded. They went apoplectic when he began to impose hefty tariffs on the Chinese to get them to play by generally accepted trade rules. President Xi can huff and puff, but he can’t bluff. Trump has the stronger hand. The same experts went into even higher orbit when President Trump threatened Mexico with stiff tariffs unless they became more helpful in solving the immigration emergency on our border. Surprise! They are now becoming part of the solution.
On issue after issue, the establishment experts have been wrong. They can fool some of the people all of the time. But, they can’t fool enough people to change the outcome of the next election. Normal Americans clearly see that this President is a whole lot smarter than many of the so-called experts.
Gil Gutknecht was first elected to Congress in 1994 and was a classmate of Sonny Bono (R-CA).