Back on June 15, Donald Trump made a bombastic prediction.
“If anyone but me takes over in 2020, there will be a Market Crash the likes of which has not been seen before!”, the president shouted, at nobody in particular.
Trump is famous for claiming that anything associated with him is “unlike anything anyone has ever witnessed.” He’s also known to accidentally describe his presidency in authoritarian terms. That stock market tweet (delivered out of the blue on a random Saturday) checked both boxes.
On Wednesday, the president made a similar claim about the economy which, as many market participants tend to forget, is not synonymous with the S&P 500.
“If I hadn’t won the 2016 Election, we would be in a Great Recession/Depression right now”, Trump declared, without presenting any supporting evidence.
He proceeded to employ some of the GOP’s trademark fearmongering about the 2020 Democratic field. “The people I saw on stage last night, & you can add in Sleepy Joe, Harris, & the rest, will lead us into an economic sinkhole the likes of which we have never seen before”, Trump said.
So, that’s the lie. Now, “let’s speak truth” (to quote Kamala).
There is nothing “miraculous” about Trump’s economy. Nothing. Are things going well? Yes. Is there anything (anything at all) anomalous about the GDP numbers Trump has put up? No. Let’s play “spot the miracle”:
Do you see an economic miracle over there on the right-hand side? No? That’s because there hasn’t been one.
On Friday, the advance read on Q2 GDP showed the economy expanding at a 2.1% annualized clip. Good, to be sure. But “tremendous”, “big league” or any other superlative the White House would be inclined to employ in the service of talking up Trump’s purported accomplishments need not apply. In fact, 2018’s 3% growth “miracle” was wiped off the board when the updated figures showed the economy expanded 2.5% on a Q4-over-Q4 basis last year.
As far as the administration’s insistence on the notion that the economy can grow 3% in perpetuity, that too is a myth. In fact, not a single professional forecast out of more than four dozen sees the US economy expanding at 3% this year or next.
Let that sink it: Trump, his advisers and sycophants are the only people on the planet worth mentioning that believe in the 3% growth story.
Of course, when he’s proven wrong (and again, it turns out the economy didn’t actually grow at 3% last year, so he’s already been proven wrong once) he’ll just blame somebody else, namely the Fed.
“Q2 GDP Up 2.1%”, Trump tweeted on Friday. “Not bad considering we have the very heavy weight of the Federal Reserve anchor wrapped around our neck”.
Larry Kudlow concurred. “Look, I think you know, to keep this thing going in the face of severe monetary tightening, I think it’s almost a miracle that the economy is growing as rapidly as it is”, he told his former colleagues at CNBC last week.
It’s a “miracle” all right. A “miracle” the country isn’t completely bankrupt considering it’s being run by a man who, in 1991, singlehandedly accounted for fully 1% of all the losses the I.R.S. reported had been declared by individual taxpayers that year.